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Sunday, 3 May, 1998, 18:14 GMT 19:14 UK
Labour's first big test approaches
The BBC's Political Editor, Robin Oakley, gives us the form guide to this week's local government elections, the first serious ballot box tests since the Government was elected a year ago.

In the week of Tony Blair's 45th birthday (yes, even governing with a majority of 180 does make you look older) we have the first serious ballot box tests since the Government was elected a year ago, with voting in local government elections and on whether London should have an elected mayor and strategic authority.

The Prime Minister's efforts to inject new momentum into the Middle East peace process will be tested on Monday with Yasser Arafat and the Israeli Prime Minister, Benjamin Netanyahu, meeting US Secretary of State, Madeleine Allbright, in London. And we are likely to see continued ructions over the fudged presidency of the European Central Bank after the messy weekend in Brussels.

Local Government elections

Not much hope of a Tory comeback, with William Hague's party still languishing in opinion polls on 31%, the same figure they had in the General Election a year ago. But since the last time the same seats were fought provided one of the Tories biggest disasters they will be hoping for a modicum of recovery. They have been picking up seats in local government by-elections over recent months.

Liberal Democrats will be nervous that their policy of "constructive opposition" to the Labour government nationally will dilute their party identity locally. They are defending a comparatively high water mark from 1994 but will still be hopeful of making a few gains at Labour's expense. Labour will merely be hoping for confirmation in the ballot box of the continued honeymoon with the voters indicated by their record opinion poll ratings.

Although there are upwards of 4,000 seats at stake in 166 local authorities, these are comparatively low key local elections, with a much bigger contest due next year. Only in 32 London boroughs and in the Isle of Wight unitary council are all the seats being contested.

There are no elections in Scotland and Wales and in the other 36 metropolitan districts, 88 shire districts and 9 unitary districts where elections are being conducted, only a third of the seats are up for election, offering few opportunities for changes of council control.

The form guide

The Conservatives are currently the third party in local government, well behind the Liberal Democrats in terms of seats held overall and councils controlled, they will be hoping that the Lib Dems closer association with Labour will enable them to make progress at their expense.

But locally where Labour and Lib Dems have practised co-operation it has not seemed to count against them so far. The Tories best hopes of advance are in London where they do still out-perform the Lib Dems. A one per cent swing from Labour compared with 1994 would enable the Tories to take control of Barnet and Brent. A two per cent swing against Labour would lose them control of Croydon. But for major gains the Tories need a swing of 5 per cent. That looks unlikely, given that Labour are running a few points ahead in the opinion polls of where they were in 1994 and that the anniversary pieces about Labour's first year have emphasised the Government's domination of the political scene.

The nightmare scenario for the Tories, whose strategy is to begin to restore their fortunes first in local government, would be if they were to make further local government losses now, including such traditional strongholds as Wandsworth.

The Liberal Democrats' poll rating is a few points down on where they stood four years ago. But that may not mean much. The Lib Dems nearly always do better in the local polling booths than their national opinion poll ratings suggest. That may be partly because there is less of a "wasted vote" mentality applying in local elections.

In the local seats contested on General Election day last year the Lib Dems did 9 per cent better than in the national poll. They will fear that media talk of their closeness to Labour will see some former Tories reverting to their traditional loyalty but they will be hoping to offset that factor with gains in areas like Liverpool and Sheffield where Labour's less attractive image in local government could work to their benefit.

Labour are well aware that local government, still something of a bastion of Old Labour, is their Achilles heel. There have been too many stories of council cronyism and corruption in Labour's municipal one-party states for comfort, with sleaze allegations in Glasgow, Doncaster and Hull.

Tony Blair is determined on widespread reform. But this is yet to take legislative shape and if any of the gloss has rubbed off Labour's image these elections could begin to provide the evidence.

Labour activists have been urged to do all they can to undermine their Lib Dem allies as the party of "cheap soundbites and fantasy economics" for fear of the inroads they could make in northern cities. The Prime Minister and Gordon Brown have shown their irritation at constant Lib Dem attacks on health and education spending levels.

Turnout could be something of a problem for Labour. Tony Blair is becoming more involved in the local election campaign than other Prime Ministers have chosen to do, in the hope that some of the "Blair effect" will rub off.

The local elections coincide with Londoners' opportunity to vote in a referendum on whether they want an elected mayor and London assembly, which could help to boost the traditionally low turnout as the media discusses the possibilities for higher profile would-be mayors like Ken Livingstone and Jeffrey Archer.

The Single European Currency

The Brussels European Council to launch the Single European Currency was supposed to be a day of 'Europhoria' celebrating an achievement few had believed possible until recent months, with 11 countries signed up to launch monetary union on January 1 1999. But it turned out to be a messy, chaotic affair, an old-fashioned Euro row between countries scrabbling for national advantage and to live up to pledges made to placate national voters, ending in an old-fashioned Euro fudge.

The row over the first president of the European Central Bank and the terms under which Wim Duisenberg would step down after four years to let the Frenchman Jean-Claude Trichet take on the rest of his eight year term, took nine hours to resolve. So the grand speeches stayed in the leaders pockets and they did not even get around to their "family photo" until after midnight.

As President of the European Council, Tony Blair insisted that Mr Duisenberg wrote down and read out to the council his intentions. He was adamant that there would be no political interference, with Mr Duisenberg making his own decision and not having his leaving date dictated to him by the council, as the French wanted. And the British Prime Minister insisted that the letter of the law as laid down in the Maastricht treaty had not been broken (They called in lawyers to reassure themselves on this).

But though Mr Blair was faced with French intransigence and with the difficulty of coping with coalition governments which were divided within themselves (especially Germany) on the terms of the compromise deal he came under strong criticism for not having worked hard enough in advance to broker a deal. British briefing proved to be over-optimistic as it had done over the earlier row on membership of the Euro X committee at the previous Luxembourg summit and there may have been over-confidence after the Prime Minister's successes in Northern Ireland and in the Middle East. Europe is a different game, a weekly slog in the league rather than a one-off Cup match.

The Euro launch was thus a major embarrassment. Since Duisenberg had said a year before that he wanted to serve an eight year term, as specified in the treaty, there was clear political dealing over a key economic appointment to the independent central bank. That will unnerve markets and it has clouded the launch of the Euro.

Jose Maria Gil-Robles, the president of the European Parliament, condemned the deal as clearly against the spirit of the Maastricht treaty and ructions will follow when the Parliament on Thursday has to approve the nominees for the Central Bank board. The parliament cannot stop the deal but it can help to make it stink. And the problem for Mr Blair is that the more uncertainty there is about the launch of the Euro the more speculators are going to pile into the pound, so penalising British manufacturing exports and hindering the Government's efforts to boost employment.

Mr Blair's distaste for Europe's way of doing business is developing fast, as did John Major's before him. He will now need to stage something of a recovery at the Cardiff Euro-summit if Britain's six month presidency is to be accounted a success.

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