Analysis: Energised Brown still unconvincing

Gordon Brown hopes to make a difference for "hard-working people"

Thursday, 11, Sep 2008 12:00

The government's much-vaunted energy package will make a difference, but is struggling to live up to its billing.

It was perhaps inevitable that the threat of a windfall tax hanging over energy companies would lead to support for such a move in the build-up to its announcement.

Mr Brown looked at a "range of solutions", he admitted in this morning's monthly press conference from Downing Street, but ruled out a windfall tax.

Instead he boasted of extracting £910 million from the energy companies, which will go towards long-term solutions like wall and loft insulation to improve energy efficiency.

It's fundamentally a long-term move which is unlikely to make a difference this winter. He wants all homes to be insulated by 2011 but has sought to react to short-term needs by taking more immediate action through other means.

Half a million low-income households will not see their prices rise. Lower social tariffs will be received by the end of the year for 600,000 low-income households. And, as was outlined in the Budget, pensioners will receive an extra £50 alongside their winter fuel benefits and those over 80 will receive £100 more.

The frustration for many of those responding to the news is that it does not go far enough. Lobby groups wanting to hold the government up to its commitment to eradicate fuel poverty and reduce carbon emissions are left gnashing their teeth. And opposition political parties are delighting in negotiations having taken so long, arguing an early-autumn package is simply too late to make a difference this year.

Mr Brown's premiership has been dominated by the tension between his natural inclination towards long-term solutions and the politically required short-term fixes needed to try and boost his poor polling numbers.

This morning that came to the fore yet again. But unlike in previous crises, like the 10p income tax fiasco or the collapse of Northern Rock, it appears the prime minister is gaining confidence in trusting his longer-term instincts. "I don't underestimate the importance of saying to people, look, the world has changed," he said. "We've got to make the best use of our energy."

Whether people will realise this is the case remains to be seen. It is blurred, to a large extent, by the extent to which he is forced to prevaricate over the global economic situation. This was painfully the case today. On the one hand he accepted it was his job to preside over the economy. "Of course I accept responsibility," he said. Mr Brown then went on to lay out the reasons why there is nothing he could do to stop shifts in the global economy. You would not be blamed for pointing out this seems a little contradictory.

Nevertheless, again, Mr Brown is making progress in his arguments. He spelled out in detail why the economy is in a better shape than it has been in previous recessions. Essentially he claims he ensured during his tenure as chancellor that the economy would not be in a much worse position than it is now.

"The world economy's going to double in the next 20 years, whatever happens. The question is which countries are going to benefit from that. I think we are well-equipped to do so."

The current favoured argument by the Conservatives and Lib Dems that Mr Brown failed to put away something for a "rainy day" continues to rage. Perhaps the most illuminating part of today's press conference focused on whether the prime minister would break one of his golden rules, of public spending not exceeding 40 per cent of GDP.

Astonishingly, Mr Brown dodged the question. "You only report on these things at these times [pre-Budget report and Budget]," he said.

"The right thing to do is to keep the economy moving forward, to enable people to stay in jobs, to see that money is being spent on the economy by continuing our investment programmes. Facing these difficulties we are taking the right decisions to spend and invest."

This was more than a no-comment: it suggests the extremities of recession are enough to convince Mr Brown it is worth saving that card for if things get really bad. The political fallout from such a decision would be immense, far exceeding the impact of today's announcements. Mr Brown might be re-energised by the latest of his relaunch measures. But the menace of recession continues to loom over his premiership.

Alex Stevenson