[CrashList] The Oil-quake rumbles on
M A Jones
jones118 at lineone.net
Wed Sep 20 02:50:09 MDT 2000
Guardian: Sense of crisis as Labour's worries grow
In the bunker
Special report: New Labour in power
Patrick Wintour, chief political correspondent
Wednesday September 20, 2000
Already shell-shocked by the petrol crisis that had brought the country
close to paralysis, ministers were braced for a hit in the weekend polls.
None, however, had foreseen the scale of the turnaround, or that the
position would worsen on Monday night with the Guardian's ICM poll. One
minister said: "The public is incredibly difficult to read at the moment. We
seem to be going through one of those collective outpourings."
Tony Blair's aides yesterday tried to protect the prime minister from the
sense of crisis, leaving him alone as much as possible at Chequers to focus
on writing next week's conference speech, probably his most important since
he became leader six years ago.
But the political atmosphere worsened with the claims in a book by the
journalist Andrew Rawnsley that Mr Blair and the chancellor, Gordon Brown,
had lied over their handling of the Ecclestone affair.
Margaret Beckett, the leader of the house, was wheeled out to discuss the
fuel crisis and the Guardian poll on Radio 4's Today programme, only to find
herself being questioned over the Rawnsley allegations.
She claimed she knew nothing of the claims and had not read the newspapers,
dismissing the affair as an old story.
As the day wore on, Labour's rebuttal team worked on knocking down the
Rawnsley allegations point by point, producing detailed transcripts and
original letters, and challenging the veracity of his unsourced quotes.
But inside the beleaguered Treasury, the mood darkened as Mr Brown
recognised he had to admit he had discussed the Ecclestone donations with
the prime minister. Meanwhile, at yesterday's meeting of Labour's national
executive committee, anxious members expressed concern that the sudden
reversal in the opinion polls is not just a short-term blip.
The warnings did not just come from the usual leftwingers, such as Dennis
Skinner and Mark Seddon, the editor of Tribune. They also came from normally
loyalist union stalwarts, such as Diana Jeudah from the shopworkers' union
Usdaw, Jeremy Beecham, Labour's senior figure in local government, and Derek
Hodgson, general secretary of the Communication Workers' Union.
The party leadership was told bluntly that last week's crisis over fuel
revealed a gathering disaffection with the government on other issues,
including pensions. Mr Skinner argued passionately that an announcement
restoring the pensions link with earnings would change the climate. He
warned that some of the party's difficulties stemmed from the perception
that "this government is still sitting on a war chest which makes contending
groups in society believe there is money to be had".
Overall, the NEC members made it clear that if extra cash is to be dispensed
the priority has to be pensioners rather than cuts in fuel duty.
However, inside Downing Street there is equal alarm about fuel duties.
Ministers are seriously at odds over how to make concessions on duties and
the speed with which they need to be made. With the Conservatives today set
to announce a proposed specific cut in fuel duty and the Liberal Democrats
already pledged to a five-year freeze, the government is in danger of being
left behind. There is also a fear that if the government digs in its heels,
only to make concessions later, William HagueÕs current fragile poll lead
might harden, and even grow.
"The longer we delay the inevitable the worse it will be for us, one
participant said. One proposal being floated yesterday was for the
chancellor to make a clear indication, perhaps in November, that he will cut
petrol duties in the Budget in March if oil prices do not fall
But some Labour MPs with a European perspective were also pointing to the
dangers of concessions. They point to the salutary lesson of the French
socialist prime minister, Lionel Jospin.
Mr Jospin is still being punished by his electorate, even though he bowed to
the demands of the farmers and truck drivers.
In the long term, it is argued, Mr Blair will benefit from being seen to
stick to his principles. These views, naturally enough, are most strongly
heard inside the Treasury and some of the big spending departments. The
chancellor would like to use next week's conference as the moment in which
to launch the fightback and open a challenging debate on the funding of
However, this is partly a matter of striking the right tone. Mr Brown feels
passionately he is right and that, at the same time, he is upholding the
democratic process by insisting he will not make changes outside the budget
Downing Street is now trying to reopen lines of communication with the
established road haulage groups such as the Road Haulage Association and the
Freight Transport Association.
David Green, the director general of the FTA, met the deputy prime minister,
John Prescott, last week and will meet transport ministers again tomorrow.
Mr Blair's aides know he needs to do more to highlight the international
nature of the oil crisis. He needs to be able to show that this is a crisis
made in Opec, and not in Downing Street.
Paradoxically, the international rise in the price of oil will increase the
anger of the truckers, but reduce Mr Blair's personal responsibility. With
protests breaking out all over Europe, the European commission has called an
emergency meeting of European transport ministers.
There are also fears that Iraq will use the crisis to cut back production,
or even provoke another military confrontation with Kuwait. Iraq exports
about 2.3m barrels a day of crude oil into a world market desperate to cut
A cutback by Iraq could push the price up to $40 a barrel. If that happens,
Mr Blair's current problems would be dwarfed.
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