The MT Diary

Too cheap, Gordon; my dark horse in the primaries; Swiss lurch; sterling opportunity.

by Howard Davies
Last Updated: 31 Aug 2010

The foreigner, I find, is rather perplexed by what is going on in British politics. Wherever I go, puzzled folk ask why Gordon Brown is struggling. How can a man elected by acclamation a few months ago have gone from hero to zero in a matter of weeks?

What's really behind it all? Dodgy donations? But the numbers seem so pitifully small. At least under Blair we were talking seven figures for a decent handle to your name. Now, we are down to £950 for the Scottish leaderene, and only five grand for Brown's deputy. Our leaders should reflect on how bad this makes us look overseas. They really ought to hold out for higher sums, whether they need them or not.

The Americans just will not believe that any self-respecting politician can run an election campaign for less than $50m. This year's presidential race may be the most expensive on record. The Democrat race is wide open, with Hillary Clinton and Barack Obama slugging it out, and John Edwards by no means excluded. His protectionist rhetoric is striking a louder chord, and not just with blue-collar workers.

Meanwhile, on the Republican side, it's anybody's game. Mitt Romney and Rudy Giuliani have strong support, and not just among Mormons and New Yorkers. Actor Fred Thompson has name and face recognition over there, where it matters, even though he is quite unknown outside the States. And my dark horse Mike Huckabee has been running strongly in Iowa.

The Republicans have been hunting for a plausible right-winger with views acceptable to the Christian right. Huckabee sounds all the buzzers. A Southern Baptist minister from Hope, Arkansas, would you believe, he supports creationism, the death penalty and detention without trial at Guantanamo, and is against abortion and gay marriages. He's also a 'recovering foodaholic', so may snag the obese vote. He has not, as far as we know, met David Abrahams, but it can only be a matter of time.

The European, by contrast, is par- ticularly intrigued as to whether the kerfuffle surrounding Brown's government will make any difference to the ratification of the Constitutional Treaty. She has heard about David Cameron and William Hague and their views on the EU and doesn't like the sound of them. Withdrawal from the European People's Party attracted more attention on the continent than it did here.

Since the Tories are flavour of the month in London, no-one except the Daily Telegraph made a fuss when Hague said that if a treaty were implemented that lacked democratic legitimacy, 'we would not let matters rest there' if elected. This seems to mean a post-ratification referendum, a dangerous commitment, which Cameron has previously avoided. Would a Tory government really wish to mount a divisive Euro referendum in its first months in office?

In Spain, I was asked to explain. They seem to read El Telegrafo in Madrid. Search me, I said, and changed the subject by asking what would happen to the treaty there. No need for a referendum, they answered, and ratification is a formality. After all, isn't the treaty exactly the same as the one they approved last year?

Oddly, the Spangles don't seem to have spotted the famous red lines to which Brown attaches such significance. Strange how they can be so ignorant of the big changes made over the summer, on British insistence, which invalidate the Government's earlier commitment to a vote.

In Switzerland, of course, my next port of call, they could give a damn about the EU and all its works. Swiss politics has taken a lurch to the right, with Christoph Blocher's Swiss Peoples' Party the big winner in the recent elections, now with 29% of the popular vote. His campaign centred on a 'Federal Popular Initiative for the Deportation of Criminal Foreigners' - which comes out as one word in Swiss German, I think. In case anyone missed the point, there was a poster with a group of white sheep grazing on a Swiss flag, kicking an unhappy-looking black one into touch.

This was not great PR for the Confederation, and also meant that delicate attempts by the business community to massage public opinion towards a more favourable attitude to the EU have been put on hold. The good news is that the next Conservative government here will still find a little bit of EFTA to link up with if they wish. Though relations with Blocher and his sheep will need careful handling, should we say.

But Switzerland, with its robust franc, is the last place to go this winter. The airlines of the North Atlantic are chokka with shoppers taking advantage of the $2-something pound. Can this last? I find it hard to believe. Anatole Kaletsky in The Times, often good at calling a market turn, thinks sterling has no visible means of support. The Emperor's old clothes - high interest rates, strong FDI inflows and the international earnings of British banks - look a little threadbare, and the new ones are, well, as substantial as those in the fairy tale.

So spend, spend, spend, the length and breadth of Manhattan and Disneyworld. This could be the last chance to do so for a little while. But don't make my mistake of bringing back DVDs, which won't play on any machine in the Davies household. My sons don't seem to see them as a bargain, even at half-price.

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