Don't stop, Gordon: we need more reforms

IN HIS first year as Chancellor of the Exchequer, Gordon Brown has been a whirlwind. He granted the Bank of England independence, named and shamed thieving pension fund providers, created a super-SIB, and made a start at breaking the boom-bust cycle which undermines efforts to stem economic decline.

Mr Brown has cut corporate tax to the lowest level of any industrial nation. He gave film industry luvvies new tax breaks. Without saying so, he has programmed the nation to join European Monetary Union. He has kicked off his welfare-to-work plan, branded the New Deal.

The New Deal, in particular, is courageous economic policy - testimony to Mr Brown's conviction that the interests of justice and the market can work hand in hand. He believes a rising tide will lift all boats. He has attracted well-wishers around the world, searching for a third way between the ruthlessness of the markets and the marginalisation of those who defy its dictats.

The business event of the week offered a neat reminder of the colossi Mr Brown seeks to civilise. On Monday two US financial giants, Citicorp and Travelers, said they are to swap shares in a deal worth $83.9bn. The merger, the largest in history, all but seals the debate on whether globalisation is temporary or permanent. The man in the street increasingly has to look at the world as corporate chiefs do: as one market of 5 billion consumers built around a few hundred companies and brands. Citigroup in banking, Ford and Toyota in cars, Sony in consumer electronics, Microsoft and Intel in information technology, McDonald's in food retailing, Nike in fashion apparel.

What will Mr Brown do for an encore? He can go on hold and wait for the policies to work. He can protect his flank on the left, mitigating the effects of his work-centred policies. Or he can push on down the trail he is blazing, harder and faster.

The best bet politically may be to cool it. But the smart bet in the long term will be to crank it up. The Citicorp-Travelers merger may seem a distant event, but as the men running the newly-created Citigroup understand, distance is dead. There is no over here, over there anymore. The speed with which the global market is evolving is making Mr Brown look sluggish, his policies tentative. The danger is that he ends up a leader who came to power with a painfully worked out economic battle plan, only to watch it come to naught as events overtake it.

There are hints that Mr Brown fears this. Promoting welfare-to-work on Radio 4's Today programme on Monday, he barely let interviewer James Naughtie get a word in edgeways. This might have been impatience to get his message across. It might have been what the Tories call his "control freak tendency". Or it might have been insecurity, a sense that for all their sweep, his policies are too little too late.

Whatever it was, Mr Brown's steamroller rhetorical style will not work. He can talk over interviewers. He can silence his critics. But he cannot stop events. His only option is to prove himself as open to changing circumstance as his counterparts in the corporate sector.

This will not come easily. As a career politician and an old, if metamorphosing, leftie, Mr Brown still sees the world too much in terms of political power. There are workers and there are bosses - even if they are allies like BP's Lord Simon, Barclays' Martin Taylor and TransTec's Geoffrey Robinson.

But Mr Brown appears to have a blind spot. He does not seem to see the group that could be the motor for his economic reforms - the middle class, the thirty and fortysomethings with an entrepreneurial bent, the men and women who choose to operate outside the political sphere, who see their best hopes for self fulfilment and security in the pursuit of wealth.

Until Mr Brown finds a way to galvanise this class - the British equivalent of Italy and Taiwan's small company entrepreneurs and Germany's Mittelstand - his hopes for raising the base level of economic growth run the risk of being still-born.

In some quarters the entrepreneurial energies of the middle class are still associated with Margaret Thatcher and so have a bad name. Trade, after all, has always been beneath the upper class. And the Left has done a good job down the years of aping its social superiors. Nonetheless, Mr Brown must tap into the reservoir of commercial energy which is still half buried in the middle class if his second year as Chancellor is to be as successful as his first.

Rupert dumbs down

ONE PERSON Mr Brown should not listen to is Rupert Murdoch. During his 40-year relationship with Britain, Mr Murdoch has been many things. Hated. Admired. Envied. Copied. Speaking at the European Tele-Visual Conference in Birmingham last week, he was something new. Out of it.

As reported, Mr Murdoch's luncheon address sounded like a bilious retread of a theme he first trotted out when Margaret Thatcher was a spring chicken. The man who controls Sky, the Times, the Sunday Times, the Sun, Twentieth Century Fox, the New York Post, HarperCollins, America's TV Guide and the Los Angeles Dodgers railed against the power of the BBC. He attacked the BBC's "elitism".

In the 1980s, just possibly, this theme had a certain - to use a 1980s word - resonance. Today it seems absurd. Who is Mr Murdoch trying to kid? Who, if not the man himself, is the sine qua non of today's trans-national elite?

Compared with him, the men and women at the BBC attempting to defend values they see as under attack are minnows. That Mr Murdoch is still savaging them is a measure both of the man's insatiable will to dominate and his obsession with putting a certain type of Englishman back in his box.

Mr Murdoch got even dumber. In his speech he criticised state-owned broadcasters like the BBC for meddling in the political process. The man who a week ago boasted about getting Tony Blair to sound out the Italian prime minister about the potential purchase of Silvio Berlusconi's media empire thundered about the BBC having "over 100 lobbyists".

Mr Murdoch's charm is legendary. Still, the Blair Government must at some level feel the contempt he demonstrates over and over again for British culture. Though it is un-Christian to say it at Easter, Mr Murdoch and Britain seem past reconciliation. While it may be shrewd of Blair to keep Murdoch's dogs on the leash by mollycoddling their master, the ploy will only end in tears.

So, save Lord McNally's amendment to the Competition Bill. Stop the predatory pricing of Mr Murdoch's newspapers. Recognise that he represents a piratical extreme in the global market. For inspiration and energy to compete in that market, let us look elsewhere.