Hezbollah has seized West Beirut and forced the closure of pro-government media - the reasons for the choice of target will become more evident in a moment. There are reports of eleven dead and 'dozens' wounded.

After months of Western media boredom with the umpteenth failure to elect a new President, what is going on in the Lebanon is now becoming of a matter of global interest once again.

What Happened

Hezbollah claimed that the pro-Western Government of Siniora had effectively declared war on it with a couple of measures designed to show the militia who was boss. 

The Government had declared Hezbollah’s telecommunications network to be illegal and unconstitutional and had removed an alleged Hezbollah-linked general from his job as head of security at Beirut airport.

Sunni-led Government and Hezbollah have thus been making strike and counter-strike at their respective technical communications infrastructures. Control of information, access and propaganda is vital to both.

The parallels with Al-Maliki's move on Basra are scarcely coincidental. Perhaps the Government had been watching Al-Maliki’s tactics in Iraq and believed that pressure might be exerted in the same way against its problem militia.

Perhaps months of tension over the Presidency has driven the Sunni Government of Siniora into ever more provocative acts in order to try and bind both internal security and the West into active support for its 'right' to govern.

Al-Maliki used the attacks on Basra and on Sadr City as means to bind the military to the state (by shaking out dissent), recapture control of key economic assets (the ports in the case of Iraq are echoed in the importance of controlling the airport in Beirut) and provoke the militia into wasteful resistance and internal splits.

Hezbollah - The Tougher Nut To Crack

Hezbollah are, however, just that bit hardier and more sophisticated than the Mahdi Army. It is alleged, plausibly, that the Mahdi Army has been learning directly from the organisational sophistication of its older brother.

It is probable that Al-Maliki was acting pre-emptively to halt the inevitable development otherwise of a similar state-within-the-Iraqi-state.

The Mahdi Army and Hezbollah have something else in common. Americans and Sunnis like to present both as creatures of foreign powers - Iran and Syria respectively - but this is nonsense. Allies are not controllers - although I might reconsider that statement in a British context.

Both operations are Shia first but still nationalist second. Neither is keen to see Iran or Syria be more than counterweights to what they see as an imperialist and colonialist Western offensive or occupation. 

So, any attempt to position the Hezbollah as anti-Lebanese in order to bring the military into play and to tip the balance of forces against it is not a certain strategy by any means - and less so than in Iraq in relation to the Mahdi Army.

The Presidency And A Weak State

A strong Lebanese Presidency could work (in Western theory) to integrate Hezbollah into the State as an internally-directed political movement rather than as an externally-directed revolutionary front that threatens Israel.

More to the point, Lebanon with a President is de facto part of the Western camp. Lebanon is effectively neutralized internationally without a President.

General Suleiman is the West’s candidate not because he is pro-Western (in fact, he is more of a Lebanese nationalist) but because it is in the West’s interest to take Lebanon out of its status as political no-man’s land.

Since Suleiman is also ‘candidate for the army’ (the least sectarian institution within the state), the army must also be presumed to be for order and for proper state formation, at least in principle. But it is also vulnerable to its own internal sectarian pressures.

The military had not moved in support of the Government at the time of writing, other than to act like a UN peacekeeping force to guard buildings seized by Hezbollah.

The situation is thus not directly comparable with Al-Maliki’s where the purpose was the capture of an unstable military for the Government interest. 

The Lebanese Army is not only retaining its factional neutrality – so far – it is becoming positioned as the arbiter between both Government and militia and defender of the nation against both Israel and Syria. 

It has even warned in effect that the Government’s brinkmanship (though not cast in these terms) contains dangers to military unity.

Lebanese national feeling may be resistant to Syrian interference or to ‘Greater Syrian’ sentiment but its most recent concern has been the fact of Israeli incursion. In the real world, Syria is a political but not such a military threat as Israel and the Army does not deal in 'politics'.

Hezbollah's Calculations

Hezbollah was thus an effective barrier to Israeli occupation, so the idea that the weakening of Hezbollah is in the Lebanese national interest may be self-evident to the Sunni elite and its Western allies but it is far from self-evident to some nationalists, including some in the Army.

The Lebanization and de-Iranisation of Hezbollah is a common goal of all nationalists but the means adopted to do this may well differ. It could be an own goal if the country is handed over to a Maronite-Israeli-French colonial administration in all but name.

In the event, Hezbollah acted with the grim determination that makes it such a heroic organisation in the eyes of the so-called Arab street, especially in this sixtieth anniversary year of the Naqba [the Palestinian catastrophe].

Initially, it resisted provocation (following tactics similar to those of Al-Sadr in Iraq) but when it acted, it acted decisively.

The same calculations must apply amongst Hezbollah politicians as they do within the Mahdi Army – how far to extend a mode of defence to one of attack and what a response to a provocation might mean for Iran and Syria. The Hezbollah response was thus very finely tuned.

The widespread fear is that the US and Israel will look for a chance to do something military to boost McCain in the forthcoming US Election, especially as Obama now looks increasingly likely to push an almost obsessively power hungry Hilary Clinton into second place.

The sheer energy of the resistance of the 'machine' to Obama suggests that powerful forces really do not want Obama as President any more than they once did Bobby Kennedy.

Though assassination is probably passé, it is reasonable to see the US' power ‘to do things’ overseas as being linked to the management of the democratic process at home. This is not conspiracy theory, just how things work.

Government Motivations

But back to Lebanon. Whatever calculations were going on in Washington and Tel Aviv (or Paris and London), Lebanese politics possesses its own momentum.

Even the most pro-Western Lebanese are deeply unwilling to see the country become a wasteland just to assist regional Great Power chess moves against one another.

Did Siniora’s Government place pressure on Hezbollah not to declare war but only to imply the possibility of a Western-backed war and extract Hezbollah's compliance with the real concern of the Western camp – the election of General Michel Suleiman as President?

This interpretation makes sense. Despite the rhetoric and the 'invasion' of Western Beirut, all parties seem to be prepared to use violence but only tactically. 

They are, in fact, operating in a restrained way, employing the rules of a finely tuned political game that can look scary in print and could get out of hand - but which is also carefully calibrated to get tactical rather than strategic advantage.

Nevertheless, this crisis does have qualities that suggest that a degree of brinkmanship on both sides is taking things further than the system may bear and one new factor is the emergence of economic problems into the 'mix'.

The Labour Unions Emerge As Players

Lebanon saw a general strike this week. High inflation, general in the region, has resulted in workers demanding very high wage increases. Government action to increase the national minimum wage was regarded as insufficient by the General Labour Confederation.

The strike, which Hezbollah decided to back with its formidable manpower by sealing off the airport, added to political tensions. The Government's moves might even be regarded as a sectarian provocation expressly designed to pre-empt a non-sectarian class alliance.

We are seeing the potential for a new alliance, albeit in its very early stages, between Islamist welfarist ‘street’ networks and organized labour.

Following patterns elsewhere in the world, such an alliance (similar to that between socialists and labour unions in Europe during its own industrial-developmental phase) would be of enormous potential import.

However, labour unions remain suspicious of Islamist influence. Worker and Islamist (essentially petit-bourgeois and economically conservative) concerns are far from identical. Secular trades unionists may justifiably fear Sharia culture as much as trades unions rightly feared Bolshevism. 

But class interest will tend to appear in times of economic crisis and the entire Muslim world is finding that inflation is destabilising the social structure.

Neo-Socialism - Western Liberalism's Worst Nightmare

We may also be underestimating the ideological effect of such bilateral dialogue as that between Venezuela and Iran (affecting in turn militia like Hezbollah and the Mahdi Army and even Hamas).

Redistributionist quasi-militarised strategies operating against corporate and bourgeois interests can, by removing the historic deadweight of Marxism, link up with conservative populist appeals in support of both the identity as well as the economic needs of the poorest in society.

This neo-socialism is every Atlanticist liberal's worst nightmare - a genuinely popular merger of identity politics and redistributionism. Too easily positioned as 'fascism', it is nevertheless not liberal.

The food crisis and inflation thus represents an interesting political opportunity for the labour movement to get both ‘bourgeois’ elites (like the Siniora Government) and radical networks (like Hezbollah) to bid for its support.

We have to use the Marxist term 'bourgeois' because it expresses precisely what we are talking about - local business and higher level professional networks integrated with the international marketplace.

These networks have to find ways to reassert sectarianism lest their own supporters find class a more interesting binding force than identity. This alone might trigger a move against Hezbollah just to remind the Sunni working class that it should not sup with the devil.

Lebanon and Egypt Compared

Of course, bourgeois elites are bourgeois because they believe in fiscal rectitude and Islamists, like Bolsheviks, have no long term interest in truly free trades unions. So the politics of all this are extremely volatile.

The three main players (Sunni middle classes, organised working class and Shia community) collaborate and compete with a fourth player, the military commitment to state security, and with a fifth, persistent foreign influence (notably Western soft power but also Syria) added to this frothy mix.

That this is not a problem just for Lebanon becomes clear when we look at Egypt. Just as Egypt has partially responded to union demands so the Lebanese tried unsuccessfully to do the same.

The Lebanese unions wanted a tripling in the minimum wage to over $600pm but the Government only offered $333 (still an increase from $200) – so militancy seems to have some determined political aspect underpinning it. It is about economics but not just about economics.

A general strike against a weakened state that is no position to ‘fire into the crowd’ and disperse demonstrators provides an opportunity for political recalibration as it might do in any number of other regional states where Islamists are struggling against more powerful state mechanisms.

Egypt should be the West’s greater concern because the situation had become so serious that the Government bought off the State apparat with inflationary salary increases that are likely to increase rather than diminish the anger of those outside the system.

The Egyptians increased fuel and tobacco prices and vehicle licence fees to pay for public sector pay rises. They are claiming (not very plausibly) that recent increases in public pay will only result in a 0.5% inflation increase.

This indicates the necessary commitment to ‘fiscal rectitude’ but it will also fuel inflation and partially redistribute the pain from public sector workers (presumably the apparat on which the regime depends for survival) to the struggling and smaller end of the private sector.

The difference between Lebanon and Egypt is the difference between a weak state and a strong state - strong 'bourgeois' states offer few opportunities for working class and 'petit bourgeois' (aka Islamist) revolt.

The threatened day of action in Egypt prior to these Government fixes over pay fizzled out quite quickly.

It was one of those Facebook non-events that we have now come to expect – like protests against Burma or Tibet, media-friendly but ultimately meaningless because they are not backed up by adequate physical organization on the ground.

But the principle stands that the Muslim Brotherhood and labour unions who have been getting angry for different reasons inside Egypt might be bound together by a specific anger over inflation in staple products as things get worse. 

Hence, the current geo-political panic over inflation. 'It's the politics, stupid'.

Back to Lebanon

As we write, having captured West Beirut, Hezbollah is challenging the State to remove its roadblocks to the airport. It promises a campaign of civil disobedience if this week’s decisions are not reversed.

The airport represents the economic lifeblood of the wealthy business elite of the country while the independent telecommunications network of Hezbollah is a key strategic asset in any resistance to another incursion by Israel.

Hezbollah rightly suspect Western pressure on Siniora to ‘deal with’ strategic infrastructures that advantage Hezbollah in its resistance strategies. Capturing telecomms and re-capturing the airport is analogous to Al-Maliki's investment in capturing the ports.

However, the actual rather than the potential extent of the crisis could be exaggerated.

It is not in the union interest to destabilize the country but merely to demand a greater share of the increasing prosperity amongst the middle classes (despite political instability) at a time of rapid inflation. Hezbollah remains fundamentally defensive at this stage.

Like the Mahdi Army, Hezbollah is under attack rather than being the aggressor. We would do well to remember this. Lebanon may be lurching in small escalations to some sort of definitive crisis in which the West is, sadly, playing a provocative role.

To Washington, Paris, London and Tel Aviv, Lebanon is merely a front in the war against Iranian influence. Civil war is not yet (just) on the cards but the situation is not a comfortable one for those few who care about civilian lives in a small country on the West's Eastern frontier.

www.tppr.co.uk

NEWS: City of London & GCC Conference brings together key players in international financial markets

The Middle East Association (MEA) in partnership with the City of London Corporation will be staging the third annual City and Gulf Co-operation Council Countries (GCC) Conference at the Merchant Taylor’s Hall in London on Thursday 19 June 2008.

For the third year running, this premier event will bring together key players from within the financial communities of the City of London and the GCC countries.

Lead sponsors this year include Bahrain Economic Development Board, Qatar Financial Centre Authority and National Bank of Dubai.

This year the keynote address will be delivered by The Rt Hon The Lord Mayor of The City of London Alderman David Lewis, with other high profile government and financial sector representatives from the UK and GCC addressing the Conference.

The main areas of focus at this year’s Conference include:

• Regulation and risk-based supervision in the context of the global credit crunch: GCC and London perspectives
• Building strong foundations for GCC growth: the financing and skills challenge
• Growing global impact of Islamic finance and insurance: UK and GCC synergies
• GCC investment flows to third markets and role of sovereign wealth funds

Jason Peers, Chairman of the MEA GCC region, commented:

“The City and GCC Countries Conference has established itself as a key element in the flourishing relationship between the City of London and the markets of the GCC. Discussions at the Conference will be even more relevant this year, given the rapidly changing relationship between the major global economies and financial institutions, and the increasingly powerful and self confident economies and institutions in the Gulf.”

He added: “With Western economies experiencing a financial correction and an increasing volume of capital coming from emerging markets, global interdependence is becoming even more important. This Conference allows senior finance professionals to look to the Gulf economic markets for long-term stability and growth.”

“The Conference will bring together the dynamism of the Gulf within the maturity of the City of London,” said Michael Thomas, Director General of the Middle East Association. “It will be an excellent and high-level networking opportunity.”

ENDS

Notes to Editors :

1. The Middle East Association (MEA) is the UK’s premier organisation for promoting trade and relations with the Middle East, North Africa, Turkey and Iran. Its members cover all sectors of industry and commerce including: Banking, Financial, Law, Consultancy, Manufacturing, Retail, Education and Training, and are responsible for the vast majority of all UK investment and trade with the region.

2. Conference Lead Sponsor - Bahrain Economic Development Board:

The Bahrain Economic Development Board is a dynamic public agency with overall responsibility for formulating and overseeing the economic development strategy of Bahrain, and for creating the right climate to attract direct investment into the Kingdom. Bahrain Financial Services is a department of the Economic Development Board that is uniquely dedicated to the needs of the financial services industry. Its role is to increase the international profile of Bahrain as a leading financial and business destination and to provide a single point of contact for international financial services firms looking to build a base in the Kingdom.

3. Conference Lead Sponsor - Qatar Financial Centre (QFC) Authority:

The QFC Authority is the commercial, administrative and legislative body of the QFC which is responsible for driving its commercial strategy, developing its commercial laws and forging relationships with the global corporate community and other key institutions both within and outside of Qatar. The QFC is a financial and business centre established by the Government of Qatar and located in Doha. It has been designed to attract international financial services institutions and major multi-national corporations and to encourage participation in the growing market for financial services in Qatar and elsewhere in the region.. The QFC was created by Qatar Law No.(7) and has been open for business since 1 May 2005.

4. Confirmed speakers include:

• The Right Honourable The Lord Mayor of The City of London Alderman David Lewis
• Sir David Walker, Senior Adviser, Morgan Stanley
• Baroness Symons of Vernham Dean, Special Representative on Saudi Arabia to the Prime Minister and Vice President, Middle East Association
• Richard Thomas, Managing Director, Global Securities House & Chair, UK Advisory Sub-Committee on Islamic Finance
• Michael Ainley, Foreign Banks Regulator, UK Financial Services Authority
• Stuart Pearce, CEO & Director General, Qatar Financial Centre Authority
• Robert Ainey, Chief Executive, Bankers Society of Bahrain

[Pendry White, subsidiary of TPPR, is acting as media relations adviser to the Conference through the Middle East Association]

www.pendrywhite.com

Gordon Brown’s response to the dreadful electoral results of last week provides a good opportunity to look back and see where all this has left British politics.

While the 10p tax rate may have left many natural Labour voters at home sullen and resentful, the next General Election will be won or lost on the anxieties and fears of a much larger swathe of the British public.

If things carry on as they are doing, they will go out and vote in a General Election alright – but for the ‘wrong side’.

Headline Issues

The final results of the London and local government elections showed us what Labour grassroots insiders have been privately predicting since late last year, a collapse in the Labour vote, although even they did not expect that it would fall to its lowest level in forty years.

A Tory victory in the next General Election is now regarded as probable rather than possible. Here are some of the headline issues that the results suggest that we should consider:

• One of the first announcements, as Boris Johnson (Tory) was confirmed as the new Mayor, was that Mayor Bloomberg of New York would be meeting him on May 9th. Both are Atlanticist conservatives. The implication of this is that London may shift back from ‘world city’ orientated towards the East (which has been Livingstone’s position, supported by the Government) towards the old Wall Street-City axis, at least insofar as politicians are able to effect this. Livingstone may, of course, have been more in tune with the trend of history than Johnson.
• While Boris Johnson's win should not affect the City’s ambition to become a centre of Islamic Finance, there is an anti-Islamist and strong pro-Zionist tinge to Johnson’s circle. This will proportionately strengthen this tendency within the Tory Party and will create some factional tension between the Tory Right (to which Johnson belongs) and the Tory Left. The coincidental election of a pro-Zionist anti-Islamist Neo-Fascist Mayor of Rome may not seem immediately relevant but it attests to the potential for conservative populism to emerge amongst the European middle classes, as fear and anxiety about the economy start to grow.
• Boris Johnson's win was not a landslide by any means. It might be judged as merely representing the ability of Tories to get suburban votes out on the day while disillusioned Labour voters abstained in the inner city. It was probably decisive that Liberal Democrat voters wanted to punish Livingstone on a second preference vote. In short, the Tories do not own London by any means.
• Gordon Brown is now looking like a ‘loser’. Already, respected grassroots Left figures are openly stating that New Labour is ‘dead’ (meaning not the Labour Party or Movement but the coup plotters in the mid-1990s): Labour may now go through an internal power struggle to recalibrate the Party away from the authoritarian neo-liberal Right.
• There will be no leadership challenge to Brown (see below) in the next few months, but he is likely to be seen as a caretaker rather than as long term Leader even if he is too deluded to see this himself. New Labour strategists (the ones with brains, that is) will now be planning for the probability (though not certainty) of defeat in 2009/2010.
• Contemporaneously, David Pitt-Watson resigned as Secretary-General-designate of the Party (an intention that was probably delayed because of the need not to have the story affect voting intentions): informed rumour suggests that he was dismayed at the financial state of the Party (£20m of debts serviced by a declining membership with no major donations in the pipeline except from a more militant trades union movement), at his personal liabilities if he led its administration and at the prospect of vicious infighting that would have stopped him doing his job. He has made no formal statement on any of these issues.

Labour’s Crisis Period

Add all this together (and see our previous analysis) and you see that the tensions within the Labour coalition are probably reaching a point of no return.

It is on the very edge of one of three outcomes: internal civil war, financial and administrative collapse or an eventual electoral challenge from the libertarian and democratic socialist left.

The process may result in a renewal under new leadership (certainly Labour stalwarts hope so) but it could remove New Labour from power for a generation.

Equally, it could cause a split that creates a serious competitor for a Party that has too long lodged on ground shared with the Tories.

There are historical precedents for renewal, for marginalisation and for splits - and, in the rise of the Labour Party itself, for displacement.

But could the situation be turned around?

It is possible but it would require a) qualities of leadership in the higher political reaches of the New Labour Party that have not been evidenced to date and b) a political strategy from the trades unions that was about much more than capturing the state by the back door.

Neither transformation is likely on the timescale of the next General Election. Part of Labour’s problem is that Cameronism is merely an extension of Blairism. Brown has failed to hold on to Blair’s territory credibly and he has lacked the imagination to seize higher ground elsewhere.

Middle England liked Blairite policies despite their being at the root of the current economic crisis.The suburban middle classes, in particular, find it very difficult to see the connection between current problems and past actions.

For many voters, Blair became very unpopular as a perceived monomaniac but the broadly authoritarian neo-liberal right position that he represented still had its base in the country - at that very point at which New Labour had become trapped through its triangulation strategy.

Brown’s attempts to fill Blair's space have not only not looked credible but his attempts to do so have left him in the valley between two sets of high ground - traditional values and Blairism. Cameron has cleverly and quickly leapt up the hill and captured part of Blair's old fortress.

Brown has proved himself a poor tactician and a worse strategist, ending up in a weak and indefensible position and fighting, in effect, on two fronts.

Meanwhile, the attempt to hold the old Blairite ground rather than cross the valley and build a new fortress on the centre left have finally alienated those who are on the more libertarian and left sides of the political equation.

Years of sullen compliance with a strategy that had brought power but was fundamentally politically a-moral had dammed up massive resentments. There is no incentive to suppress this anger if the leadership cannot even deliver the surety of power.

Problems Mount

Problems continue to mount for Gordon Brown. There is continued Parliamentary pressure on clarification of his proposals to mitigate the effects of the 10p tax rate.

The illiberal 42 days proposals are rapidly becoming a symbol of resistance to the Party’s ‘triangulation’ towards the authoritarian neo-liberal Right - and an issue on which the Tories have managed to out-flank the clumsy Mr. Brown to his Left! 

Boris Johnson in London has come in slugging with a traditional Tory position on crime and expenditure that has created what can only be described as inarticulate and impotent rage amongst Leftists in the City … whatever Ken says, they blame Brown for their loss.

But Brown’s response this past weekend still misses much of the point of the defeat.

It is still cast in terms of an egoism of the centre – he will be resilient (a pale shadow of Thatcher’s style) and his sympathy for the public is still a psychological centering of politics on him and not an empathy with the fear and anxiety (and anger) ‘out there’.

The public doesn’t really give a damn now for his determination and sympathy – they want results.

Our sources in the financial community are adamant that, despite the media’s recent trend towards moderating its earlier gloom on the economy, the credit problems in the ‘real’ economy will be hitting us hard in the Autumn - that is, if Government, banks and regulators cannot avert what looks like the inevitable.

A more optimistic Press is merely encouraging a lot of small businesses and investors to go 'into denial' (as one commercial banker put it to us).

Some even continue to try to borrow to expand when market conditions say determinedly that now is the time to re-order one’s affairs for a small storm at best and a hurricane at worst.

Meanwhile, the next test is a by-election on 22 May in Crewe and Nantwich which had been held by the late Gwyneth Dunwoody, an MP of the old Labour Right whose integrity and independence of mind was much respected.

If Dunwoody’s daughter is defeated (though a personal brand can mean some significant votes in some traditional Northern seats), it will mean that a Labour heartland will not stop at one ‘punishment vote’ for the Government but really is prepared to push ‘its own’ Party from power.

The Leadership Challengers

You can ignore the prospect of a leadership challenge for a while yet. This is not how Labour does things. 

A challenger would need 71 members openly to challenge Brown in September. Certainly John McDonnell could never deliver this number of the PLP despite his Leftist support in the country.

The prospects for a successful challenge that does not continue Blair's policy of triangulation to the Right look fairly bleak. Yet many Leftists are living in cloud-cuckoo land in believing that they can overturn the system from within.

John McDonnell operates in the Livingstone territory of mass action urban Leftism and Livingstone himself has been strengthened rather than weakened within the Party by his creditable performance in London, despite his defeat.

But McDonnell not only has insufficient support amongst the PLP and the unions, electorally he is unlikely to appeal to many outside the inner cities – he is a gadfly rather than a credible future Leader.

Ken Livingstone himself is unable to contend and can only endorse or withdraw his endorsement of other candidates.

He might get significant grassroots and even union support but the PLP would be highly resistant to him and he would face serious image problems in Middle England.

There is the Left-insider Jon Cruddas but, while he may win over many (though not all) trades unions, he has insufficient base in the PLP.

It would also require a massive effort to introduce him to the public as someone distinct from the current New Labour elite. Most importantly, his place in Parliament would probably disappear if we saw the levels of anti-Labour vote that we saw on Thursday at a General Election.

Compass (the leftish group) places its trust in Cruddas (with some reason in view of his undoubted talent), but he needs a far more secure base in the Party and as a politician. Their strategy (the ‘long game’) may soon be overtaken by events.

Cruddas is intellectually and even politically credible under certain conditions but those conditions might be those of such meltdown, even he was still in Parliament to take advantage of the crisis, that he would be in no better position than the leadership of the shattered Party that emerged out of the fiasco of Ramsey Macdonald's National Government.

The Left, whether radical or ‘sensible’, has no credible candidate who is not deeply ‘tainted’ by engagement with Blairism and with the policies of the last decade, let alone the last year, or who, to win, requires a devastating meltdown of the Party in the polls - and a whole lot of luck.

The Right Wing Candidates

All the remaining candidates, with Alan Johnson and David Miliband at the head of the queue are, by any analysis, continuations of the previous regime.

They are only able to sell more confidence and more competence in pursuing the same general strategy at a time when decisive radical reverses may be required in the face of a determined Tory challenge with a cogent 'social capital' theory underpinning it.

Some Leftists (ironically those further to the Left) believe that a full centre-left programme could capture a candidate from the New Labour centre-right. They are deluded.

The rhetoric might change but the programme of centralised executive authority, international liberalism, market economics and market solutions to social problems would remain core to New Labour.

The only addition might be the odd populist crumb thrown to the seething masses to keep them placid until the good times returned.

Such a strategy might well, of course, be sufficient to restore the Labour's fortunes but the fact is that New Labour and the Tories are now fighting over the same terrain on level terms for the first time in over a decade.

Of course, Johnson would bring the trades union bloc as moderate partner in a truly ‘Labour Party’, while Miliband would bring the progressive model that is attractive to the internationalist Left. But neither is innovative or radical.

The Weakness of Gordon Brown

The bottom line is that New Labour is going through a major crisis that is not only electoral but ideological.

It is a crisis that will probably develop to become a major internal struggle immediately after rather than before the next Election, unless the Prime Minister has the wisdom to allow it to be fought out quickly and decisively in advance.

But Brown failed to have the courage to put himself up to a challenge from McDonnell in the summer of 2007 (which he would easily have won).

He then failed to endorse his position in a snap election which he might well have won, especially in the early stages of the credit crisis when electors would have sought security in the devil they knew.

The accusations of dithering since those failures of nerve seem to confirm a picture of a politician without the risk-taking and decisive characteristics necessary in party politics.

He waited a decade to get the top job and now it looks as if he is hanging on to it regardless of the interests of either Party or nation.

The Brown Government will probably muddle through to defeat, to a minority Government or to a Government in which a small left-wing rump has disproportionate and electorally disruptive influence.

What New Labour (under Brown) cannot realistically expect is the same level of authority that it has had in the recent past unless international conditions and skilled political management remove current fears and uncertainties.

Conclusion

The neo-liberal authoritarian right remains the political core of Britain much as it does in most of those Western countries with irrational aspirations to international status and a middle class hungry for property and profit - but there are two caveats.

The first is that concentration of power on the centre-right is accentuated by the electoral system so that electoral reform must return to centre-stage in Left analyses.

In fact, even now, New Labour and Liberal Democrat votes still exceed Tory votes nationally. It is only the vagaries of the First Past The Post System [FPTP] that stop the creation of a permanent and dominant real centre-left coalition emerging.

FPTP has played a central role in driving New Labour towards the Right and then trapping it there as, in all but name, a European conservative party rather than democratic socialist party, one often operating against the majority libertarian instincts of the public.

The second is a corollary of this - the British are more socially liberal than other European nation and certainly more so than the US (which is a factor picked up on by Cameron and may yet propel him to power).

The paradox of a basically liberal country with its politics permanently lodged in a battle for ground more appropriate to the authoritarian right suggests a serious tension that is in-built into British constitutional arrangements.

As we have noted before, New Labour as it was and the Tory Party as it claims to be are operating broadly within the same policy parameters, adopting a libertarian social and economic policy but avoiding democratic reform and using authoritarian rhetoric when required.

If the Tories get to power, all that will change will be a bias towards the South rather than the North and towards middle class prejudices rather than working class needs.

Otherwise, it will be a further moderation of a settlement made during the Thatcher Revolution. The social democracy that emerged between 1940 and its collapse in the 1970s will look more and more like a historical 'blip'.

This past will be inspiring to some perhaps but only in the sense that the political revolution of 1640 to 1660 is inspiring - so that a legacy of a welfare state built on market solutions will be our social equivalent to the democracy of propertied interests that emerged after 1688.

Better but not really good enough. In short, the Labour Left may be in the position of Puritan Republicans in the Age of Queen Anne - on the verge of extinction, living in the past but not yet realising that their time had passed.

The massive correction under way in the global market will now face the current and next Government with some very serious problems that may disproportionately affect the middle classes of the South.

This alone suggests a lurch to market populism and against ‘prudence’ if a Government is to survive – Northern Rock may only be the beginning.

That same correction may also demonstrate a national inability to sustain Great Power status overseas. This will shame an incumbent more than a incomer who can claim that failures overseas are due to previous policies and not to the intrinsic weaknesses of the State.

None of the political class has yet fully come to terms with these changes or, perhaps more accurately, found a way to give the bad news to electors.

Sectoral demands, populist policies and failures overseas will create their own crises (albeit not terminal) for the current political system in the first half of the next decade.

The longer that New Labour remains in power, then the higher the chance that it may become unelectable in future because, like Herbert Hoover's administration in 1929, it lacks the ability to move outside its recent history. It is, in summary, played out.

On the other hand, the longer that the British Left loses itself in the New Labour project without developing a transformative alternative, then the more likely that it will not exist in the century ahead as anything that would have been recognisable to a twentieth century Leftist, perhaps as anything at all.

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