John Humphrys: A Failed Coup – What next for Brown and Labour?

If cats are supposed to have nine lives, how many should prime ministers expect? At least three, if the experience of Gordon Brown is anything to go by. This week’s failed coup attempt against him almost certainly means the Prime Minister will survive to lead Labour into this year’s general election. But what does it say about his leadership, the attitude towards him of his cabinet colleagues and the party’s chances in that election?

The attempted coup came out of the blue, or almost. Disillusion with Mr Brown among many Labour MPs has never gone away. Hopes that he would prove himself the leader who could secure the party a fourth term in office have never materialised. Rather, the nagging belief that another leader might save many Labour MPs their seats and even prevent the Tories from coming to power has never disappeared. But not enough significant figures seemed prepared to do much about it.

James Purnell’s resignation from the cabinet last June failed to prompt others to follow his example. Single voices, such as that of Charles Clarke, the former Home Secretary, have consistently called for the Prime Minister to go or be toppled. But nothing has ever come of these now familiar calls and almost everyone, including most political commentators, had reached the conclusion that the matter was closed. It was to be up to the voters, not Labour MPs, to decide the Prime Minister’s fate.

So the coup that was mounted at lunchtime on Wednesday was a great surprise even to those who had been wanting something like this to happen for a long time. Two former cabinet ministers, Geoff Hoon and Patricia Hewitt, wrote to their colleagues in the parliamentary Labour party to say that something had to be done.

Ostensibly, their proposal was not that Mr Brown should be got rid of but rather that the issue of whether or not he should survive should itself be got out of the way. They suggested that Labour MPs should be allowed a secret ballot on the issue next Monday. They said: “This is a clear opportunity to finally lay this matter to rest. The continued speculation and uncertainty is allowing our opponents to portray us as dispirited and disunited. It is damaging our ability to set out our strong case to the electorate. It is giving our political opponents an easy target.”

But although that was the stated aim and purpose of their move, few mistook its real design: to oust the Prime Minister. In short, it was an attempted coup.

It fizzled out almost as quickly as it was mounted. Only a few backbenchers publicly supported the plan. Many others rounded on the rebels, accusing them of taking leave of their senses (or much worse). No ministers joined the coup by resigning. By the evening Mr Hoon himself conceded that it had failed: he and Ms Hewitt had provided MPs with the opportunity to deal with the problem, he said, but they had chosen not to take it. Lord Mandelson, the deputy prime minister in all but name, said the move made by his ‘friends’, Hoon and Hewitt, had been a misjudgement because it was the ‘settled view’ of the Labour Party that Mr Brown should lead it into the election.

If the purpose of the rebels was what they said it was – to close the issue of the leadership once and for all before the election – then they have probably succeeded. But Gordon Brown is still there. So although the coup has failed it is not quite the end of the matter. For the very attempt has revealed several things and created new difficulties for the Prime Minister and his party.

In the first place, the very fact that the coup should have been attempted at all shows the depth of unhappiness with Mr Brown in the party. Both Ms Hewitt and Mr Hoon (a former chief whip, no less) are very experienced politicians. They would not have taken this risk, a risk not only with their own reputations but with the public standing of their party, had they not been convinced both that Mr Brown really did need to be got out of the way if Labour were to have any hopes in the forthcoming election, but also that a significant number of people in the party agreed with them. The fact that they failed to rally enough support to succeed does not itself contradict either point. Their opponents in other parties can now claim that Labour is a divided and unhappy party. And they are doing just that.

In addition, the coup, even though it failed, exposed the far from robust confidence in the Prime Minister on the part of his cabinet colleagues. Some came out in his support straightaway. But many took their time and when they did issue statements backing their leader those statements were widely read (and, it would seem, intendedly so) as lukewarm.

In particular, the Foreign Secretary, David Miliband, regarded by many people as the most likely figure to succeed Mr Brown should he fall from power, waited six hours before committing himself, and then simply said: “I am working closely with the Prime Minister on foreign policy issues and support the re-election campaign for a Labour victory.”

It is widely believed that the rebels thought that up to six senior cabinet ministers had been ready to back them. That none of them in the end did so is perhaps because each was waiting for another to take the lead, hence the delay in their muted endorsements of Mr Brown. If that is so, then they may be accused of wishing to wound but being afraid to strike.

The fact is, though, that both the Prime Minister and the Labour Party have been wounded. For the episode has allowed the opposition parties to claim that neither is fit to govern and that a general election needs to be called as soon as possible. David Cameron, the Tory leader, argued that with the country facing so many difficulties, from the war in Afghanistan to the state of the economy and the public finances, it cannot afford to have a government at war within itself and preoccupied with the issue of who should lead it.

Mr Brown may hope that time will help and that we shall all soon have forgotten this dramatic but brief episode. Perhaps we shall all quickly become preoccupied again by the much more pressing issue of how to survive what’s turning into the coldest winter many can remember. But he knows that he does not have much time left before he faces the voters and he can be in no doubt that the events of this week have done him and his party no good at all.

What’s your view about the attempted coup? Were Patricia Hewitt and Geoff Hoon right to mount it or not? Does their move make you think there is deep unhappiness with Gordon Brown’s leadership in the Labour Party or not? What do you make of the refusal of backbench Labour MPs and ministers to support it? Do you share the view that the slowness of many cabinet ministers to back the Prime Minister and the tepid nature of some of their endorsements exposes their disillusion with him or not? Do you think Mr Brown is now safe until the election or not? Would it make any difference to how you would vote if Labour had another leader? And do you agree or not with David Cameron that we need an election as soon as possible?

Let us know your views.

John Humphrys – 2010: Year of Decision

This post is taken from my colleague John Humphrys’ YouGov blog.

It’s the time of year when pundits like to make predictions about what’s going to happen in the year ahead. Few of them get it right and economists, more than any, tend to get it wrong. No one really knows what state the British economy will be in a year from now. But of one thing we can be certain: 2010 is a year in which there will be a general election, whose result is likely to affect what happens in the economy. What electoral outcome do we want?

That question is not simply about which party we would prefer to form the next government, although that is what the parties themselves will be banging on about between now and polling day, expected in May though possibly coming as early as late March. It’s also about whether or not we want to give one party exclusive control of our government or whether we’d actually prefer parties to share power. The polls suggest we might be heading for the first hung parliament since February 1974.

Some commentators think a hung parliament is the best thing Gordon Brown can hope for. Labour, they argue, is too far behind in the polls realistically to expect to be able to form a majority government, especially as the party will have been in power for thirteen years and the ‘time-for-a change’ argument will have more traction with voters.

Nonetheless, the Prime Minister is clearly campaigning to secure a fourth outright victory for Labour. In his New Year message he said that only his party could promise a ‘decade of shared prosperity’ and the Tories risked destroying a recovery that is still fragile.

Oddly enough, David Cameron, the Tory leader, did seem to show more interest in the consequences of a hung parliament in his message. Indeed, that message was widely interpreted as an attempt to cosy up to the Liberal Democrats, with whom, he said, the Tories now had few differences. What is perhaps strange about this is that the polls still suggest that the Conservatives have a good chance of winning a majority on their own. It may be that Mr Cameron was just flying a kite and that from now on we shall hear from him the more traditional line of a party leader: that his party alone should be trusted with running the country.

As for the Liberal Democrats themselves, Nick Clegg, the party leader, accused both the other parties of merely “parroting the language of change” and made clear that he was going to fight the election on his party’s convictions rather than with any thought of which other party he’d prefer to end up in bed with.

But if a hung parliament is looking more likely than it has for years, would it be a good idea? Some people argue that it would be about as bad an outcome as can be imagined. Indeed Ken Clarke, the Tories’ shadow business secretary and who has been an MP since 1970, went so far as to say that an election result that produced a majority Labour government would be better than one that gave no single party outright power. His leader quickly disagreed with him but it may be that Mr Clarke’s memory of the February 1974 parliament (when Mr Cameron was eight years old) led him to this view.

The reason many people are so alarmed by the prospect of no party ending up with a workable majority is that they believe that, without one, the ensuing government will fail to govern. That is particularly dangerous, they say, because of our economic predicament. Although there are disagreements between the parties about when the government’s huge financial deficit should be cut down to size, everyone agrees that it will need to be done sometime. But that’s bound to involve substantial cuts in government spending. And they are very difficult to bring about, as this week’s publication of hitherto secret government documents about Mrs Thatcher’s battles on the subject back in 1979 make clear.

The problem with hung parliaments in Britain is that even if two parties make a deal to sustain a government in power, either through coalition or through less formal agreements, there is no guarantee that such a deal will last. That’s because Britain’s constitution does not impose fixed-term parliaments. It’s always up to a prime minister to call an election pretty much when he or she wants. That means that during hung parliaments all parties are likely to act more with their own impending electoral interests in mind rather than according to the national interest. That’s what happened after February 1974 when Harold Wilson ran things in a way he hoped would maximise his party’s chances in the election he subsequently called in October.

In our current predicament the danger is that the financial markets would respond to an election result that produced a minority government that they expected to carry on electioneering rather than governing by selling government bonds and taking flight from sterling.

On the other hand, advocates of coalition governments point out that in other countries they have produced stable government and the basis for economic prosperity. Lord McNally, the leader of the LibDems in the Lords, cites Germany as an example. But Germany has fixed-term parliaments, so perhaps coalitions would work here only if the parties involved found some copper-bottomed way to guarantee that their government would stay in power for several years, possibly by legislating for fixed-term parliaments.

Between now and the election it’s likely that this sort of talk will be heard only from commentators. The politicians themselves will be intent on harvesting as many votes as possible for their own parties and no doubt claiming that they alone have the policies the country needs.

What’s your view? Have you already made up your mind how you’ll vote in the 2010 election or are you still open to persuasion? What attracts you and what repels you in the cases put by the three main parties? Do you think Gordon Brown is right to say that Labour alone can promise a decade of shared prosperity? Is David Cameron correct when he says that there is no longer much separating the Tories from the Liberal Democrats? Is Nick Clegg justified in arguing that his party alone offers change? In principle, and aside from the issue of which parties might be involved, do you think a hung parliament would be a good thing or do you share Ken Clarke’s view that even a majority government formed by the party you don’t support would be better than a hung parliament? Do you think we should have fixed-term parliaments or not? And what do you think the outcome of the 2010 election will be?

Happy New Year!

John Humphrys: After Copenhagen, what hope for the planet?

This blog first appeared on my colleague John Humphrys’ YouGov blog.

It is not often that senior politicians use words such as ‘chaos’, ‘farce’ and ‘fiasco’ to describe negotiations they have been involved with, especially when those negotiations concern matters of vital importance. Usually they dress up the weakest of agreements in the clothing of achievement and triumph, saying that because of their own brilliance and far-sightedness the world will now be a safer and happier place.

But not this time. The outcome of the Copenhagen climate change summit is so much more dismal than even the more pessimistic pundits predicted that almost no one is trying to pretend otherwise. But does this mean that the initial hopes were always far too unrealistic? And is there any hope that a more effective deal may still be struck?

The UN-run Copenhagen conference was set up as the successor to the Kyoto treaty on climate change signed in 1997. Kyoto was an attempt to get international agreement to curb the rise in the earth’s temperature as a result of the increasing volumes of man-made gases accumulating in the atmosphere as a consequence of industrialisation. An almost universal scientific consensus argues that man-made emissions threaten to raise the temperature to a point that will cause untold damage to the human occupation of the planet by the end of this century.

Copenhagen, it was hoped, would be different from Kyoto in two particular ways. First of all, it was hoped that an agreement would be made which the United States, the world’s biggest economy and up to now the main contributor to greenhouse gas emissions, could sign up to, as it had not done with Kyoto. And secondly, the new deal would include curbs on developing nations (as Kyoto had not), especially the fastest-growing developing countries such as India and China, now itself the greatest producer of emissions.

The goal was, in simple terms, a legally-binding treaty which would set a limit of a rise in temperature of 2 degrees Celsius (the maximum thought compatible with holding off disaster). It would also impose a limit on emissions consistent with such a target and provide funding by the rich, developed countries for poorer, developing countries to compensate them for the constraints such targets would place on them in the ways they could try to grow their way out of poverty.

But almost none of this came about. Hopes for a legally-binding treaty were dead before the conference even began. And at the close the formal UN conference actually agreed on nothing at all – it merely ‘noted’ an ‘accord’ agreed between five countries, the US, China, India, Brazil and South Africa. That accord simply acknowledged the validity of the 2 deg target, agreed on the need for emission cuts to meet it (without spelling out what they should be or how they should be imposed), and called on developed countries to fund the payment of $10bn a year from 2012 rising to $100bn a year in 2020 to developing countries. But quite who was going to provide that funding was left unclear.

President Obama called the accord an ‘important breakthrough’, but even he acknowledged that far more still needed to be done and few other leaders have even tried to claim that degree of success.

Since the failure of the conference, blame has been flying in all directions. Nnimmo Bassey, chair of Friends of the Earth International, said: “Instead of committing to deep cuts in emissions and putting new public money on the table to help solve the climate crisis, rich countries have bullied developing nations to accept far less. Those most responsible for putting the planet in this mess have not shown the guts required to fix it and have instead acted to protect short-term political interests. ”Muhammed Chowdhury, a negotiator for the G77 group of 132 developing states, said: “The hopes of millions of people from Fiji to Grenada, Bangladesh to Barbados, Sudan to Somalia have been buried.”

Nearer home, the energy and climate change secretary, Ed Miliband, accused China, Sudan and several left-wing Latin American countries, of trying to ‘hold the world to ransom’ by preventing a deal being reached. He said the way the UN conference had been run was a ‘chaotic process dogged by procedural games’ and that reform of the UN system was needed if progress was ever to be made. Gordon Brown said: “Never again should we face the deadlock that threatened to pull down [the] talks. Never again should we let a global deal to move towards a greener future be held to ransom by only a handful of countries.”

So what chance is there now of any future deal? A successor meeting to Copenhagen is already scheduled for Mexico City in December 2010, but it seems unlikely that reform of UN procedures will have been agreed by then, let alone sufficient coming together on the substantive issues.

Some people argue that it was always beyond the scope of diplomacy to reach the sort of global deal needed. Nation states, they argue, always look after their own interests first, and those are always interpreted in a short-term way, perhaps especially so among democracies where political leaders face elections in which short-term pain is likely to loom larger than long-term gain.

Such critics have argued that the whole Kyoto/Copenhagen approach is the wrong one to follow. Instead of trying cut emissions, they say, we should instead by concentrating our efforts on mitigating the effects of a climate change we cannot do much to prevent. Such an approach would be more effective, less expensive and allow for the genuine uncertainties that exist about the speed of climate change and the precise consequences it will bring in its wake, they claim.

But supporters of the emission-cutting approach say that that is just a cop-out put forward by people who would rather not face up to the danger that is staring us in the face. Prevention, they say, is always better than damage-limitation, so we have to keep trying to cut emissions.

But the failure of Copenhagen has raised real doubts in the minds even of those who believe the world does need to cut its greenhouse gas emissions as to whether a UN-based attempt to reach a global agreement can work. Some of them are beginning to put their faith instead in the two biggest polluters, the US and China, doing a deal between themselves to curb emissions which, after all, they both recognise will harm them too. The trouble with that, though, is that the rest of the world will have to go along with what the big boys agree and that may end up being not too much to everyone else’s liking.

What’s your view? Are you disappointed by the result of Copenhagen or is its failure what you expected? Who do you think was to blame for the failure? How much faith do you put in the accord agreed between the US, China, India, Brazil and South Africa? Do you think there is any future for a UN-based attempt to halt global warming? Could a bilateral deal between the US and China offer any hope? What do you make of the argument that we should be concentrating less on trying to reduce greenhouse gas emissions and more on trying to mitigate the effects of global warming? And ultimately do you think it will be possible for the human race to find a way to prevent global warming becoming a real threat to human life on the planet, or do you think it is beyond us?

Let us know what you think.

John Humphrys: Darling’s Package – Prudence or Electioneering?

This post also appears on my colleague John Humphrys’ YouGov Blog

Chancellors of the Exchequer always have to be high wire artists. In essence their job is to balance economics and politics. But seldom can a chancellor have had a more difficult balancing act to pull off than Alistair Darling did this week. That’s because both the economic predicament the country finds itself in and the political prospects for the Labour government, facing an election in months, are so dire. The question is whether his pre-budget report, delivered on Wednesday, matched the demands of each or whether one was sacrificed for the other.

Labour’s political woes are clear enough. The party is languishing at below 30% in the polls, on average a good 10% behind the Tories. Although the gap has been narrowing a little recently, and although the party enjoys a built-in advantage in the way the voting system works, few Labour MPs are confident that they have much chance of holding power after the next election which has to be called by June.

The economic predicament is acknowledged by everyone to be dire. The chancellor announced on Wednesday that this year the economy will shrink by 4.75% — the worst year since 1921 or, in other words, a worse fall in output than in any single year during the great depression of the 1930s. Britain’s is the only major economy that was still shrinking during the third quarter of the year. The government’s finances are in a similarly dreadful state. During this financial year the government will have to borrow £178bn, or 12% of national income, the worst fiscal deficit in British peacetime history.

Mr Darling made clear what he took his task to be. It was, in the short-term, to do everything to sustain economic recovery while in the medium term to set out a credible plan for sharply reducing the government’s dependence on borrowing. He wants the annual deficit to be cut by half by 2014. So how well did his measures fit this task?

The tax rise that got the most headlines was the widely-trailed tax on bankers’ bonuses. All bonuses over £25,000 will be taxed at 50%. It’s probably the most popular tax ever introduced (except among bankers). Public outrage at banks continuing to pay huge bonuses even after many of them have had to be bailed out by the taxpayer meant that the chancellor had to do something.

But in relation to his larger task the move is largely irrelevant. The tax will raise only £550m at the most; banks may try to get round it by paying the bonuses as salary instead; and in any case the tax will be applied only for five months. So some banks may just sit it out and pay up later. Nonetheless, some in the City are squealing and warning that many bankers will up sticks and do their business elsewhere, so jeopardising future tax revenues.

On the bigger picture Mr Darling was adamant that he would do nothing to harm the fragile prospects for growth in the next year. His earlier temporary measures to boost growth, by cutting VAT and providing a stamp duty holiday on house purchases, come to an end anyway at the end of this year. So not only did he postpone his belt-tightening plans till 2011 but he said he would go ahead with his plans actually to increase public spending next year.

Cynics will note that although this was justified in terms of protecting economic growth it also suits Labour’s electoral needs: impose the pain only after the election.

And pain there will certainly be. From 2011 3.9m public sector workers will have their pay increases capped at 1% even though inflation may by then be quite a bit higher. The government’s contribution to their pensions pot will also be hit. On public spending after 2011, the chancellor said that ‘frontline services’, especially in education and health, would be protected, though no one seems to know quite what ‘frontline’ means. But he was silent on how the axe would fall on other spending departments. Independent analysts believe that areas such as housing, transport and higher education are likely to hacked by between 10% and 15%.

But perhaps the most significant delayed kosh was the announcement that national insurance contributions would increase by a 1% point (half of it previously announced) from 2011 for everyone earning over £20,000. The Tories said they would strive to avoid this. The shadow chancellor, George Osborne, said: “Now we know what Labour’s class war means – a tax on anyone earning over £20,000”. Another Tory, echoing an old Labour soundbite, said it was “a tax rise on the many not the few”.

Others attacked the move as a tax on jobs. Richard Lambert, the director general of the CBI, said: “The chancellor has made a serious mistake imposing an extra jobs tax at a time when the economic recovery will still be fragile. Increasing national insurance contributions will hold back job creation and growth.”

But if Labour’s response to our economic plight is open to criticism, what about the Tory response? Their view is that an attack on the deficit needs to be made more quickly. They argue that without a more credible plan to reduce Britain’s borrowing needs there is a real danger that the country will lose its top triple A credit rating in the financial markets with the result that interest rates will have to rise more than they would otherwise in order to persuade others to lend to us. That itself, they say, would harm growth.

For the moment the markets seem to have responded calmly to the chancellor’s package so that there is no immediate risk of Britain following the path of Greece, which earlier this week had its credit-rating cut. But some commentators think the chancellor’s projections on deficit reduction are not realistic. They are based on forecasts of modest economic growth of 1.5% next year but of 3.5% in both 2011 and 2012. In the words of one economist, these forecasts are “highly ambitious”. And the markets will remember that as recently as a year ago, Mr Darling was predicting only a 1% fall in output for this year, and eighteen months ago he was actually forecasting growth of 2.5%. The outcome will be a shrinkage of almost 5%. So the markets could soon take fright at the prospects.

That puts the Tories in the spotlight just as much as Labour. For although Mr Osborne says tougher measures need taking sooner he has been reluctant to announce yet what public spending he would cut and by how much. He is committed to protecting spending on health and overseas development but he too seems to want to wait until after the election before making clear precisely where the axe will fall.

Labour says, though, that the Tories readiness to cut spending more quickly threatens economic growth. The chancellor said: “the choice facing the country is between securing recovery and wrecking it”.

Meanwhile the Liberal Democrats’ verdict on Mr Darling’s statement was that politics was winning over economics. Their spokesman, Vince Cable, said: “What we needed was a national economic plan and what we got is an election manifesto.”

What’s your view? Do you think the chancellor’s package was directed more at Britain’s economic needs or at Labour’s electoral difficulties, or do you think he got the balance right? Do you think the tax on bankers’ bonuses is a good idea or not? Do you think he is right or not to postpone the belt-tightening measures until 2011? Do you think his specific measures – curbing public sector pay and raising national insurance contributions – are right or not? Do you think his plans for reducing the government’s borrowing needs are credible or not? How worried are you that Britain may lose its top credit rating? Are the Tories right or not to want to cut the deficit more quickly? Do you think George Osborne needs to be clearer where the Tories would cut government spending or not? Where would you cut spending? And has the chancellor’s package affected the way you intend to vote when the election comes?

Let us know your views.

John Humphrys: Afghanistan – Obama Makes Up His Mind

The following appeared on John Humphrys’ YouGov blog.

It has taken a long time coming but President Obama’s decision about what to do regarding Afghanistan has finally been made. On Tuesday he announced a massive escalation in American troop numbers in the country. Thirty thousand more US military personnel will be sent there over the next six months bringing the total American military presence to a hundred thousand.

The President wants other NATO countries to deploy several thousand more troops as well, and Gordon Brown has announced that Britain would be sending 500 more, raising the British contingent to 10,000. Germany may send another thousand. Are these decisions right? And will they work?

President Obama’s commitment to the war in Afghanistan goes back to his election campaign last year. Politically it was essential. He had already come out strongly against the war in Iraq. Had he also expressed doubts about the American presence in Afghanistan, he would have risked appearing ‘soft’ on the United States’ military role in the world. Iraq was George Bush’s war and now Afghanistan has become Obama’s.

But from the very beginning of his presidency it was clear that the Afghan campaign was being lost and he admitted as much. During the last year the Taliban insurgency has become more confident and NATO casualties have been growing, mostly British and American. Support for the war in both countries has been falling.

None of the options facing the president was attractive. Essentially he was faced with the classic choice between cutting his losses by pulling out or doubling his bet by increasing American military involvement.

He asked his military chiefs for a reassessment and a recommendation and his top general in Afghanistan, Stanley McChrystal, concluded that NATO needed to increase its forces by 40,000, the bulk of which were always going to come from the US.

The president has taken his time deciding what to do, even at the cost of being accused of dithering. But after at least nine meetings of his war council he made his decision. In effect it rubber stamps  General McChrystal’s request. The 30,000 extra US troops will be sent more quickly than expected and will be deployed in the difficult south and east of Afghanistan, especially in the provinces of Kandahar and Helmand, where their presence will ease the burden on existing British forces.

But the president coupled this decision with a commitment to a future withdrawal. He hopes American troop numbers will start to fall from July 2011 and will be reduced almost to nil by January 2013 when, if he is re-elected, he will be beginning his second term. Gordon Brown hopes British troop numbers can start to fall as early as next year, when Britain will have its own election. How likely is this to happen?

The overall goal of the campaign is to keep the Taliban out of power in Afghanistan and to prevent them from gaining influence in neighbouring Pakistan or even overthrowing the government there. As Pakistan is a nuclear power the necessity for that is obvious enough. But the need to defeat the Taliban is justified too on the grounds that a Taliban-controlled region would be a training ground for Islamic terrorists bent on bringing death and destruction to the west.

The role of the increased troops is most of all to train Afghanistan’s security forces so that they will be able to do the job of containing the Taliban themselves. President Obama aims for the existing 95,000 Afghan army troops to increase to 134,000 by October next year and to 240,000 by 2013. He wants the Afghan police force to rise from 92,000 to 160,000 by 2013. In the meantime it’s hoped the larger number of US and other NATO troops will help stabilise the country and persuade so-called ‘moderate’ Taliban to be bought out and become cooperative rather than hostile.

But there are plenty of reasons to think this strategy may not work. In the first place, many think the training targets are too ambitious. 25% of Afghans trained as soldiers tend to walk away from the job and the police force is known to be heavily infiltrated by Taliban supporters, as became tragically evident earlier this autumn when one of them turned his gun on five unarmed British soldiers.

Secondly, the hopes for increased stability depend on popular support for the Afghan government of Hamid Karzai. But this simply does not exist. He is widely believed to have stolen the presidential election earlier this year and his government is almost universally regarded as corrupt. Indeed the US ambassador to Afghanistan, a former general Karl Eikenberry, urged President Obama not to send more troops while the Karzai government was still seen to be so corrupt. The Americans would be regarded as propping up a hated regime rather than trying to serve the people of the country. That could only help the Taliban.

Thirdly, many sceptics argue that by declaring a timetable for withdrawal, President has played into the hands of the Taliban. They argue that the Taliban will conclude that America is not ultimately serious and that all they need to do is wait and the Americans will be gone. Some reports suggest the Taliban already have shadow governments in place in thirty two of the thirty four Afghan provinces.

And finally, the sceptics point to history. No occupying force, they argue, has ever succeeded in Afghanistan, from Alexander the Great, through the British in the nineteenth century, to the Soviets in the 1980s and to the Americans now. Indeed this week a veteran Soviet general said of his own campaign: “The war, all ten years of it, went in circles. We would come and they [the forerunners of the Taliban] would leave. Then we leave, and they would return.” And another said of the planned increase in American troop numbers: “More soldiers is simply going to mean more deaths.”

What troubles many observers, and probably President Obama himself, is that the dilemma he has faced this autumn is likely to face him again at the point when he hopes to take troops out of the country. For it seems unlikely that by then the Taliban will have been routed and the country become a stable place. His spokesman has said that this increased deployment is the last one. But if, come July 2011, the war has not remotely been ‘won’, what choice will he make then? Will he be prepared to say to the widow of the marine recently killed in Afghanistan that America is to go ahead withdrawing anyway, implying that her husband’s sacrifice was in vain? Or will he decide, as now, that such a sacrifice must not be in vain and that therefore another surge is needed?

President Obama’s critics say this is just the pattern of events that led America into the quagmire of Vietnam.

What’s your view? Do you think President Obama is right to send 30,000 more American troops to Afghanistan? Is Gordon Brown right to send 500 more from Britain too? Do you think the overall strategy in Afghanistan makes sense or not? Do you think the country’s own security forces can be trained up to take over the role of keeping order in the country? Do you think the perceived corruption of President Karzai’s government poses a real difficulty to the strategy or not? How realistic do you think both President Obama’s and Gordon Brown’s timetables for withdrawing troops are? And what do you think the final outcome of our involvement with Afghanistan is likely to be?

Let us know your views.

Funding the Banks: The Government Stumps Up More

The post below is copied from John Humphrys’ YouGov blog.

‘Ever since the banking crisis broke two years ago the figures involved have seemed off the scale of normal economic calculation. The talk has been not of millions or even billions but tens of billions or more. Now the government is pouring around £30 billion more of taxpayers’ money into the banking system. Is our money being well spent?

On the face of it this new handout may seem to many people evidence that previous bail-outs have not worked and that the banks have an unlimited appetite for our money which the government has an unlimited willingness to satisfy. But that is not how the government sees it. In its view the new money offers a better deal for the taxpayer and is in any case less than it previously indicated might have to be found.

The fact that the government has had to revisit bank funding should surprise no-one. Its initial emergency measures, first to take over Northern Rock and then to take large stakes in the Royal Bank of Scotland and in Lloyds TSB, were always going to have to come under the scrutiny of the EU’s competition rules. Now the competition commissioner, Neelie Kroes, has come back with instructions of what needs to change in order for the banks to comply with the rules. This week’s announcements on extra government funding are at least in part a response to this and to the restructuring which is being required.

The bald facts are these. Northern Rock is being split into two banks, a “good” bank and a “bad” bank. The good bank will be sold off to the private sector and the government will keep hold of the bad bank, hoping that in time its toxic assets, which no one wants at the moment, will prove not to be so toxic and so be sold in turn. The government has not written off the possibility that it will lose no money in the long run through its entanglement with Northern Rock.

Another £5.9bn will be invested in Lloyds and £25.5bn in RBS, taking its share in the Scottish bank up from 70% to 84%. But these headline figures conceal changes which the government claims will end up giving the taxpayer a better deal.

In the case of Lloyds, most of the new capital the bank is raising will come from the private sector. It wants £13.5bn in total of which the government will provide £5.9bn, keeping its share in the bank at 43%. But perhaps the most important aspect of the new arrangements is that Lloyds will now not have to join the government’s toxic asset insurance scheme.

This was a scheme set up by the government earlier this year in the depths of the gloom about the banking system. The fundamental worry about the banking system was that the banks were carrying on their books an essentially unquantifiable but huge quantity of assets (that’s to say, loans to other parties) which could well turn out ‘bad’ (i.e. they would never be repaid). The sheer scale of these ‘toxic’ assets threatened to bring down the system. So the government set up an insurance system, whereby the banks paid the government a premium and the government took on the risk. If all these assets had indeed gone bad, then the government would have been liable for hundreds of billions of pounds.

In the case of Lloyds the value of the toxic assets being insured was £260bn. Under the new arrangements, however, Lloyds has avoided joining the insurance scheme. Instead, the bank’s shareholders (including, of course, the government) retain the risk. The bank is to pay the government £2.5bn as a premium for the implicit cover it enjoyed since earlier this year so that, net, the government is injecting only £3.4bn into the bank. But it keeps its 43% share and instead of being liable for all of the £260bn of Lloyds’ potentially toxic assets, it is now liable for only 43% of them. That’s why the government is claiming it is a good deal.

By contrast RBS is staying in the insurance scheme but in conditions the government claims are more favourable to the taxpayer. RBS’ s estimated toxic assets have been reduced from £325bn to around £260bn and it will have to find the first £60bn (rather than the initially proposed £40bn) of any assets that go bad. The government hopes that its injection of £25.5bn of new capital will make it more secure, but it also putting on standby a further £7bn should the bank get into trouble.

As for the EU’s concerns that these largely government-owned banks have too much competitive advantage, the solution is that they must sell off some of their assets. RBS is being required to sell its insurance businesses and 312 branches. With sell-offs in Northern Rock and Lloyds too, to new entrants to the banking sector, such as Tesco and Virgin, it is estimated that 10% of Britain’s banking sector will be up for sale and it is hoped that the new entrants will make banking more competitive in Britain.

But the new arrangements also require the banks to cut their costs which is why RBS announced 3,700 job cuts earlier this week. The unions strongly objected, not least because they argued that government funding ought to be protecting jobs not destroying them.

Government funding for the banks has been objected to on another ground. If the government is pouring all this money into the banks, it is asked, why are the banks in turn not increasing their borrowing to firms and individuals? After all, so the argument goes, the justification initially given for claiming that the banking system was a special case and needed government support even when other industries were allowed to go to the wall, was that banks provide the fuel of the whole economy and that fuel is bank-lending. Yet bank-lending is continuing to fall.

The government’s answer to this is that in a recession bank-lending always falls but that the availability of credit has in fact increased as a result of all the measures the government has taken to keep the banking sector going. That increased availability will be welcome once the economy starts to grow again. This answer, however, concerns a greater worry for the government and ultimately for the taxpayer.

Britain’s economy alone among major industrialised countries is continuing to contract. In the third quarter of this year it shrank by 0.4%, a figure that shocked many commentators. So long as we go on shrinking then demand in the economy will remain constrained and bank-lending will continue to stagnate no matter how available credit may be.

The government forecasts that there will be a return to growth at the turn of the year, but others think that so long as levels of debt in both the personal and corporate sectors remain as high as they are, demand will not increase. Furthermore, it’s feared by some that once the government’s emergency measures, such as the VAT cut and the stamp duty freeze, end early next year the economy could be kicked back into a ‘double-dip’ recession.

Should that happen the banks could find themselves in new trouble. The assets they had hoped would not turn bad might then do so and the banks’ capital might prove insufficient. In that event the government might have to put its hand in its pocket yet again. As Vince Cable, the Liberal Democrats’ treasury spokesman, put it: “It’s all very precarious. If there is a double dip recession we could be back in trouble again.”

What’s your view? Do you think the government has been right to bail out the banks in the way it has? Do you think this week’s measures offer a better deal for the taxpayer or not? Do you think the government could still end up making money for all its investments in the banking sector or do you the taxpayer will end up losing money? Do you think it is a good thing or not that the banks receiving state aid are broken up to some extent and more competition created in the banking sector? Do you think RBS’ s redundancies are justified or not? And do you think this will be the end of the bailing out of the banks or do you think there’s still more to come.

Let us know what you think.’