Big issues are being ignored as the election campaign reaches boiling point

The prime minister was undoubtedly a liar, Lisa conceded. But he has “balls of steel” and would get Brexit done, declared this Labour heartlands voter, who became an instant source of inspiring folk wisdom for the beleaguered Tory commentariat. They had been itching for something to write about other than the party’s lacklustre campaign glitches and Dimbleby had saved them an investigative train fare to the wilds beyond the M25.

Lisa was on the right track. She just got both her metal and her anatomy wrong. World King Boris hasn’t got balls of steel, he’s easily spooked by firm pushback or a gratuitous act of treachery by Michael Gove. What he does have is a neck of brass which he regularly polishes by attacking his opponents for campaign behaviour which strongly resembles his own.

Laxer immigration rules, scandalous ties with furtive Russians and their money, candidate gaffes on Twitter, pacts with other parties and – above all – wild promises of painless increases in public spending, Team Johnson hurled abuse at Corbynite Labour as if it was not just as guilty. More so in several instances, especially if we take into account the core Tory self-belief that it is the economically responsible and patriotic party, one which also promised for years to cut net immigration below 100,000 a year. The Tory kettle’s chutzpah towards the Labour pot has not passed unnoticed by cartoonists or, let’s hope, the voters.

What these self-styled Global Brits and left-wing internationalists haven’t yet produced rival visions for is the world beyond Dover. With presidents Trump, Xi and Putin hacking away at the post-war order, president Macron of France suggests that Nato is “brain dead”. Germany’s chancellor Merkel – one of too few East Germans who have excelled since the Berlin Wall came down 30 years ago – contradicts what sounds like visionary Euro-federalism or born-again Gaullism. But she has long warned that Europe must do more for its own defence and security now that it can’t rely on Washington. Something may be stirring.

A new European Security Council (ESC), as an adjunct to Nato is one idea, cheaper than an EU army too. What do the Brits think? It is another depressing feature of the 2019 campaign that it is hard to imagine any of the UK contestants making a substantial speech on the subject as – at random – a Hague or Hurd, Blair or Brown, a Rifkind but not a Raab – might have done just a few years ago. The painful inadequacy of Stop the War’s Jezza and his team is matched by Bent Bananas Boris and his eminently forgettable ministers, mostly purged or cowed.

Yet a post-Brexit debate with “our European friends” on defence and security cooperation is precisely what the World King should flag up this month. It would be evidence that he is not wholly self-interested and shallow or a shill for a Putin-Trump New World Disorder like his self-appointed coalition partner, Thirsty Nigel, a proclaimed admirer of both titans. It is all the more astonishing that a proper row has not yet been made of Number 10’s scandalous pre-polling day suppression of the intelligence committee’s ‘Russian Connection’ report.

The skullduggery has now been condemned by senior retired officials and spies, even by Hillary Clinton and should serve to remind us that it’s not getting safer out there. In its tilt towards its ancient foe, Russia, Nato’s southern lynchpin, Turkey, shows how alliances can change rapidly. Bismarck understood that better than those of us raised in the trenches of the Cold War. But few dogs bark. As with the entertaining but trivial allegations of cash-for-cuddles with Jennifer Arcuri and much else, Fleet Street’s wolf pack has been doped for the duration.

With Labour keen to divert voters attention towards “Anything but Brexit” and Tory HQ keen to focus on Boris’s simplistic “Get Brexit Done” pledge (“this stage anyway”) there’s not much interest in the Eurozone’s current economic debate either. Yes, I know we’re supposed to be leaving but even Brexit’s Little Englanders say they want a healthy trade partnership with a thriving EU, those who don’t say the 27 are doomed and that, in any case, they prefer to be taken advantage of by the Trump administration.

Yet wider engagement would bolster Sajid Javid’s justification for abandoning the Osborne-Hammond debt/deficit reduction rules. Arguably it would help John McDonnell’s bolder spending ambitions even more. Christine Lagarde, outgoing head of the IMF and former French finance minister, is taking over at the ECB from Mario (“whatever it takes”) Draghi, and there’s a handover debate emerging. Cautious German policy-makers remain nervous at the way Draghi printed so much electronic money (quantitative easing – QE) to soften the bankers’ recession of 2008-9 and have resisted calls for higher public spending to stave off the next one.

Now that monetary options like QE are exhausted, even doughty bodies like the IMF have been saying states should deploy the fiscal levers – tax and spend – while interest rates on borrowing are still low (or minus). That injunction is aimed especially at countries with a 1.9% budget surplus like Germany. Senior CDU leaders resist it. But the coalition’s SPD finance minister, Olaf Scholz, (fighting a left-wing challenge for the job of party chairman) is edging towards spending some of that surplus to boost Berlin’s export-flagging economy and soothe voter discontent in left-behind eastern provinces. The CDU is wobbling.

Of course, Germany’s trade and budget position is far healthier than Britain’s, as is its stability. Even Moody’s, one of those credit agencies which triple-A rated the banks until they crashed in 2008, is now warning that the UK’s credit status is on “negative watch”. So it must be time to worry. Stung by taunts that he is chancellor in name only (Chino) Javid has let it be known that he fought off Number 10’s demands for big tax cuts as well as a spending splurge – very Trump – but he’s still promising an extra £20 billion a year on what is euphemistically called investment.

That’s a lot less than Labour’s promise of an extra £55 billion a year, double the current rate and close to 5% of GDP, a figure – so headlines in the Daily Toady were quick to proclaim – would take it back to 1970s levels, in a very different world. Even discounting the fanciful £1.2 trillion figure cooked up by Tory HQ to cost Labour’s past and present plans – not yet finalised in the official manifesto – that would seriously increase the debt-to-GDP ratio.

Gordon Brown got it below 40% of GDP (in Japan it’s a crippling 230%) but the rescue of the bankers’ crash pushed it back above 80% until pre-Boris austerity painfully started reducing it, mostly at the expense of the weak. Labour has all sorts of wheezes to sidestep this sensitive yardstick, like targeting the government’s net assets as well as liabilities – the added value of the roads and hospitals, railways and runways, the money would create. They call it “holistic”.

The concept is the work of clever economists like Oxford’s Simon Wren-Lewis (try his Mainly Macro blog) and former Treasury heavyweight Richard Hughes, who joined the progressive Resolution Foundation in April and whose learned papers can be found on the think tank’s site. Technology and better auditing makes assets easier to tot up than when the Domesday Book was compiled. Labour would also use a rolling five-year target for monitoring that part of the budget deficit devoted to current spending, which some economists say is more sensible than the new Tory dodge to ease the rules and allow 3% of GDP to be spent on Boris’ infrastructure promises.

At a time when Q3 economic growth has just “recovered” to 0.3% – an annual rate of 1% – there are serious doubts if we have the skills (all those Polish brickies going home?) and planning (HS2 and London’s third runway both in doubt) capacity to build ambitious programmes (Crossrail is falling behind again), let alone the money. When professor Wren-Lewis’s blog strays on to politics he can sound unduly optimistic about Labour’s prospects. Nor was I convinced by his claim on November 8 that the shadow chancellor’s plans are more sustainable than Javid’s because the Tories haven’t pledged to raise taxes or factored in the economic cost of a hard Brexit which a Jeremy Corbyn government would avoid. Yeah, right.

In any case it won’t be us which decides what’s sustainable after December 12. In normal times a new governor of the Bank of England to succeed Mark Carney, whose twice-extended tenure will end on January 31, should have been appointed by now – six months after his announcement. Like so much else the job has become embroiled in Brexit with suggestions that former Boris economic advisor, Gerard Lyons, might get the job for which is he conspicuously (“who needs experts?”) unqualified.

The new man – or woman – may walk into a firestorm if the bond markets decide – as they are showing signs of wondering – that risky Britain should pay more for the privilege of excessive borrowing, what Carney (and Tennessee Williams) called “the kindness of strangers”. Inflation may finally return to haunt us too. Labour half-admits as much. Another of McDonnell’s ideas is that he won’t so much cap borrowing itself, but cap the percentage the state pays to service the borrowed debt.

Does that mean he’d slash programmes if interest rates shot up? That’s what governments are eventually forced to do. But in his old 1980s life as GLC finance chairman (until Ken Livingstone was forced to sack him) the shadow chancellor took a more kamikaze view. I occasionally wonder if Team Corbyn’s sweeping radicalism isn’t another 1983-style “longest suicide note” – designed for an election they expect to lose but hope to retain control of their party on the slogan “pure but impotent”. It is surprisingly attractive to many who recoil from the messy compromises of government. That’s why one dopey Labour candidate wants to “celebrate” the death of triple election winner, Tony Blair.

In such volatile times the outcome still depends on the coming month. When Farage announced his initial retreat on Monday, Labour claimed it was the first instalment of a Brexit Party reverse takeover, a secret compact to deliver a hard Brexit next year and possibly a peerage for Lord Thirsty. Optimists noted that his bluff had been already called by Dominic (“no prisoners”) Cummings and that Brexit Party support had been flagging in the polls. Even the Faragiste Daily Express had wised up a bit. Hence a chastened Thirsty’s embrace of a “unilateral alliance” with Johnson – the political equivalent of a forced
marriage.

Smarter Tory analysts warned that, without a further retreat from those Labour seats Johnson needs to win to offset losses to Remain in the soft south, the election is far from in the bag for the portly plotter. That’s true. Acts of both God and man, too much can go wrong for both sides – postal strikes or the untimely ousting of Bolivian comrades for Corbyn, floods which make Etonian Tories look indifferent to Yorkshire’s suffering for Johnson. Jo Swinson’s “Revoke A50” strategy may have overreached itself or it may prove a master stroke. Javid’s disreputable £1.2 trillion ‘Labour debt’ calculation can easily be unpicked, that’s not the point. It’s designed to stick in susceptible voters’ minds like that “£350 million a week for the NHS” slogan or false online smears (true smears too) or a rehash of Corbyn’s crypto-pacifist past. The Tory techniques should be familiar, they carry the Cummings copyright. But it’s not all one-way.

Polls confirm that many Labour policies – paid for by borrowing or other people’s tax rises – are popular, even costly renationalisation of the railways. And why not? Some Generation Z voters were born in 2001, long after the death of the British Rail sarnie. When torrential rain, cracked dams and flood waters are back with a vengeance (partly caused by flood prevention measures elsewhere, as usual) doesn’t a new Green Deal sound the answer? Politicians from Germany to fire-ravished California and Australia think so too.

But credibility and tone – head and heart – may prove decisive in an election where both potential prime ministers arouse such strong feelings, positive ones, fear and loathing.

Like Theresa May before him, Johnson engineered this premature election and anything less than a clear, working majority of Brexit-compliant MPs will be a defeat from which he is unlikely to recover. As he appoints an EU commissioner – another promise broken – the shine is off his brass neck. Only a decisive win can redeem him, at least for now.

Without Scotland, largely lost to the SNP, Corbyn can scarcely hope for a majority Labour government, even if the polls move his way. But he has potential coalition allies, so he can lose but still win. The price would be high and the process disorderly, like Gladstone dealing with the Irish contingent at an even older
age.

But why look back to the Victorians when we can peer across the Bay of Biscay? Spain has just held its fourth election in four years, but not produced a result. Spending sprees or no, hard times are coming.