Gordon Clown .Com

The Confederation of British Industry has said today that the number of manufacturers intending to raise their factory gate prices soon has hit the highest level for 12 years.  This is the latest in a sequence of events demonstrating that inflation is back with a vengence, and that suppliers and retailers have rediscovered their pricing power.  With commodity prices and food ingredients prices soaring, price rises at supermarkets look set to continue for the forseeable future.  The collective coma surrounding oil depletion has led to soaring biofuel demand causing food prices to shoot up, a situation that is not likely to be reversed easily or soon.  Pricing power has returned to supermarkets who are seeking to rebuild profits following the energy price shocks of 12-18 months ago, and in view of the likely future ramp up in food costs.  Gordon and the MPC should be very worried indeed about this.  King has already linked climate change to an increase in biofuel demand and hence food price inflation - this is not an issue that is going to go away soon.

The CBI’s Industrial Trends survey showed that 32pc of manufacturers expect product prices to rise, compared with 8pc thinking that they will fall. The resulting rounded balance of +25pc was the highest since March 1995.

It came as oil prices hit a nine-month high of $72 a barrel, fuelling fears that higher petrol prices and transport costs could generate further jumps in inflation.

Brent crude was up $1.10 at $71.70 a barrel in late trading, lifted by concerns about the potential for military action against Iran, and strikes by state oil workers in Nigeria.

With mounting evidence that worldwide oil supply is near to peaking, or may indeed have already peaked, the long term trend in oil prices from here forwards is likely to be up, and up fairly quickly.  Oil is vital for everything the world economy does, so the price of all goods and services is likely to be affected.  There is no easy way out of this one.

Howard Archer, chief UK and European economist at Global Insight, said: “The CBI survey adds to the pressure on the Bank of England to lift interest rates by a further 25 basis points to 5.75pc sooner rather than later, and a back-to-back [increase] in June is currently looking like a real possibility. Furthermore, there is an ever-growing danger that interest rates will reach 6pc before the end of the year.”

George Osborne, the shadow chancellor, said: “It’s official: Gordon Brown is leaving the Treasury with the public finances in the worst state in Western Europe. You have to be truly incompetent to combine the highest taxes in our history with a budget deficit higher even than Italy’s.”

While problems on the world stage can take some of the blame, the MPC and Gordon Brown must shoulder the greater share.  Inflation is a problem for the US and Europe too, but it seems to be affecting the UK worse than most - our food price infltaion is far higher than the eurozone.  Perhaps it’s because the British economy is built on debt, with enormous monetary growth needed to keep everything ticking along.  Until it all goes wrong, of course.

Gordon Brown is set to face a major headache just as he takes over as leader of the Labour party, an event that now looks to be mere weeks away.  It has recently transpired that Labour, who have long been running close to the wire in financial terms as witnessed by the various loans for peerages scandals that have come to light in recent years, are £5m in the hole for party funding.  When installed in office around the beginning of July, Gordon will have to go cap-in-hand to any and all who may cough up to keep Labour from going bankrupt.

Tony Blair has screwed Gordon again, somewhat, as it appears that a few rather sizeable loans taken out during his time are due for repayment very soon after Gordon takes over, and with the good favour of Tony amongst the wealthy a thing of the past, it now appears that those loans are likely to be called in.  The scale of the Labour party’s debts are staggering, and perhaps only outdone by the massive debt that Gordon has put the country in during his 10 years as chancellor.

On 13 September, Lord Sainsbury, the former science minister, is expecting £2 million to be returned.

On 30 September, £1 million is due to Nigel Morris, co-founder of Capital One Financial Corporation, and £400,000 should go to businessman Derek Tullett.

Sir Gulam Noon, the Indian food tycoon, is due to have £250,000 repaid on 30 October.

Another £1 million is owed to developer Barry Townsley in April, and two loans of £500,000 each from former Capita boss Rod Aldridge are due in autumn 2008.

The loans were taken out on Mr Blair’s orders during a panic over funding for the 2005 election. A police inquiry is thought to have recommended charges be brought over allegations that some of Mr Blair’s officials dangled honours, including peerages in front of wealthy backers.

Labour also owes £2 million to fashion magnate Richard Caring for a loan taken out last year and repayable next February.

Channel 4’s Dispatches programme tonight examined some of the personality traits that Gordon is said to exhibit behind closed doors that may betray his unfit state to govern the country.  Chief among these was his propensity to only listen to a very small group of so-called “trusted advisors”, those from the past such as Geoffrey Robinson and Charlie Whelan, both now fairly disgraced, and present advisors such as Ed Balls.  Brown was portrayed in the programme as a control freak whose treatment of other ministers and colleagues ranges from ignoring them to bullying them and worse.

“I’ve been a political journalist for fifteen years and have closely followed the career of Gordon Brown. I have written pieces that both criticize and praise the Chancellor but one thing is unarguable - he is a massive politician of exceptional gifts, the kind of figure that comes along once in a generation - and in a few weeks time he’ll be Prime Minister. And yet some very senior figures on his own side are certain he is unfit for office - one has called him a ‘control freak’, another ‘psychologically flawed’ and one serving cabinet minister has said he’d be a ‘f***ing disaster’,” says Peter Oborne.

Again and again examples are given of how Brown snubbed, cut, bullied, ignored and ploughed his own furrow. Even friends acknowledge the problem. The film examines a double allegation of a refusal to collaborate with his colleagues allied to vindictiveness against those who threaten to stand in his way. These character traits have mainly been concealed from the public but they have shown themselves in a series of feuds, particularly with potential challengers; for example his clashes with Robin Cook, Mo Mowlam, Peter Mandelson and Alan Milburn.

Brown’s relationship with Blair is also put under scrutiny. Brown arrived at 11 Downing Street still believing he should be the man in No.10. He’d been given by Blair unprecedented authority over economic and domestic policy. Brown has interpreted this as a licence to defy No. 10.

Numerous and authoritative accounts of Brown’s behaviour in government, the sulks and surliness, refusal to co-operate - according to one extremely well-placed insider he even stormed into No 10 and hurled obscenities at Tony Blair - paint a very different picture from the warm man loved by his friends.

In conclusion Peter says, “Gordon Brown is going to be the next Prime Minister. It’s important for all of us - except perhaps the Conservative opposition - that he should be a success. But we’re taking a giant leap in the dark. Gordon Brown is a brilliant man, capable of great warmth and human decency - but he’s also very closed, clannish, suspicious, tormented and very difficult to deal with. The success of his premiership depends on whether, when he attains his lifetime ambition and enters No.10 Downing Street, he can become a changed character.”

Only time will tell whether Gordon genuinely can change his character and reverse the clear flaws which have been demonstrated by his time in Number 11.  The odds don’t look good.

The newspapers today are reporting that Gordon has admitted his mistakes in an aim to make a clean break with the Blair years.  These mistakes he has specifically admitted to are as follows:

• Some mistakes made in Iraq
• Some mistakes over ID Cards
• The culture of celebrity

Cunningly, none of these mistakes could be directly pinned on Gordon and for most of them, Blair is more to blame.  Although quite who can take the blame for the “culture of celebrity” is anyones guess.  Gordon, of course, failed to admit his more numerous and gross errors as Chancellor, preffering to brush the following under the carpet:

• Inflating enormous debt bubble
• Destroying pension schemes
• Massive PFI off-balance-sheet debts
• Massively increasing tax burden through fiscal drag
• Selling Gold reserves just before Gold tripled in value
• Creating the biggest trade defecit in 10 years
• Pricing hundreds of thousands of people out of owning their own home
• Nose picking
• etc

Conveniently the above mistakes were not mentioned.  Over the coming months and years, as the long term effects of these blunders become progressively clearer.

After taking a pasting at the polls on Thursday, obtaining a meagre 26% of the popular vote and losing control of the Scottish Parliament, Gordon must be wondering what message the general public are trying to send him. Blair, having promised to serve a full third term, looks set to take the money and run next week, looking forward to having more free time to spend “up George Bush’s arse” in the future, as the BBC suggested on Have I Got News For You. Gordon, meanwhile, is facing virtually no opposition in the leadership contest - most likely because in the next 2 years the job of Prime Minister will undoubtedly become a poison chalice as the chaos caused by his economic mismanagement while in No. 11 begins to unfold.

There can be only one message to take from Thursdays humiliation for Gordon - the public doesn’t want you as Prime Minister, and therefore you must call a general election once you take over as leader of the Labour party. The Tory’s election campaign slogan from 2005 of “vote Blair, get Brown” appears to have come true, and the country at large is lodging its protest vote here and now.

With the polls looking awful, allegations of electoral fraud in Leeds and severe mismanagement of the chaos that has occured concerning the Scottish ballot papers, things aren’t looking too promising for a Brown premiership. The Scotsman highlights Gordon’s difficulties north of the border:

GORDON Brown yesterday suffered a massive personal blow to his status as prime-minister-in-waiting after the party he aspires to lead lost an election in his own backyard.

The Chancellor had played a major role in the Scottish Labour Party campaign, both with repeated public visits, and as a key strategist behind the scenes.

Yesterday’s disastrous result for Labour could set up years of constitutional wrangles for Mr Brown, who is likely to have to fend off attacks from the SNP in Edinburgh.

The message is clear to Gordon - the nation demands an election.

Apparently, Gordon has said that he refuses to work together with the SNP in the Scottish parliament, not withstanding the massive defeat that Labour will almost certainly suffer in the elections on Thursday:

Gordon Brown last night warned Scottish voters that he will find it “impossible” to work as prime minister with a Scottish National party-led government in Edinburgh if its leader, Alex Salmond, refuses to abandon his “dangerous and disastrous” plans for independence.

With Labour facing the prospect of losing an election in Scotland for the first time since 1955 to a hostile coalition in his home base, Mr Brown made an impassioned plea to wavering supporters to “come home to Labour” and head off the separatist threat of a “day one conflict strategy” if the SNP wins on Thursday.

Ladbrokes makes the SNP 1/5 favourites to be the largest party with 46 seats to Labours expected 40, but 65 seats in total are required for a majority, which would leave the SNP free to attempt to construct a deal with either Labour or a collection of other parties including the Lib Dems and Greens.

Mr Brown argued yesterday that a new generation of young Scots voters are much more internationally minded than their elders and not “obsessed with constitutional wrangling”.

A “Labour-led Scottish parliament and a UK Labour government can focus on the No 1 priority, not creating constitutional chaos but building a world-class education system,” he said, refusing to concede the possibility of having to work with Mr Salmond.

Now, what is the likelihood of Gordon having a change of heart after the full reality of Labour’s crushing Scottish defeat becomes clear on Friday morning?