Los efectos que las comunidades escolares perciben producto del Consejo

The global financial crisis emerged dramatically in September 2008. Before narrating the scale of the crisis, we make reference to two conditions which conditioned Brown’s financial policy performance. The first condition of Brown’s performance in the global financial crisis was his political trajectory. As chancellor, Brown’s ten year leadership of the Treasury was characterised by stability, growth and prudence. He had a positive reputation for managing the economy (see Bower, 2007). Brown had accrued international political capital with fellow leaders and chancellors and finance ministers; his personal capital was arguably greater internationally than nationally and conditioned the overwhelmingly positive international response to his policy proposals as in section 7.3.2. The second condition was that during the 2007 summer recess, the first major expression of a banking crisis within the polity emerged. Northern Rock, Britain’s biggest mortgage lender, was in extreme financial difficulty. Brown’s pragmatic response in guaranteeing customer deposits and then the nationalisation of Northern Rock in February 2008 demonstrated political action fitting to unexpected circumstances. Brown’s response to Northern Rock was a prelude to financial policy making in response to the international crisis. Bearing in mind the two positive conditions referred to, the global financial crisis is narrated (7.3.1), Brown’s response to the crisis and policy performance is detailed (7.3.2) as is the international endorsement and replication of Brown’s bailout policy package and effect upon political persona.

7.3.1 Emergence of the global financial crisis

The first major expression of the global crisis within the British economy was in the early hours of 15 September 2008. At approximately 05:30am, news that U.S. Bank, Lehman Brothers had collapsed was reported; staff at the Canary Wharf Headquarters were told that morning that the company had gone into administration.

On the day of the collapse, the reverberations domestically and internationally were significant: a loss of confidence in markets, plummeting share prices, at “4.30pm BST: FTSE 100 closes almost 4% lower at 5,202.4, a 210 point drop, wiping out £50bn of value” (The Guardian, 2008), which contributed to a raft of job losses and growing insecurities. All of these developments iterated the functioning of markets within (and not separate from) a system of global finance, the suddenly fragile triumphalism of western capitalism, deregulation and the embracing of the free market economy, policy positions that New Labour had embraced post-Thatcher (see sub-chapter 3.1). The impact of the crisis within the polity was job insecurity, companies announcing redundancies and reduction in working hours, and liquidations.

7.3.2 Policy response to the crisis

Brown’s policy position as a response to the crisis was set out on 13 October 2008 in two separate but related performances. The first policy performance was a joint press conference at Downing Street with the chancellor, Alistair Darling. The second performance was a speech on the Global Economy on the same day at The Reuters Building, Canary Wharf, the location serving as a reminder of the financial crisis, as the collapse of Lehman Brothers on 15 September 2008 in the U.K. had emerged from within Canary Wharf. We should stress that Alastair Darling was rarely seen as in charge of economic policy, Brown operated a dual role – as prime minister and as chancellor. The following points illustrate Brown’s policy response to the crisis:

13 October 2008: Joint press conference with Alastair Darling at Downing St: • “The action we are taking is unprecedented but essential for all of

us”.

• “British banks are being strengthened today through the injection of nearly £50 billion of new capital from the government and from the markets. There is not a bank in the world that has not been affected

by the global storm, some more than others, but at this time of uncertainty we want British banks to be able to lead the world and to be as strong and as well capitalised as any across the globe”.

• “I believe that only by global action can we fully restore the confidence that is needed and build the international financial order, and I will put forward proposals for major reform of the international institutions in a speech in the City later this morning”.

• “To let the chips fall where they may would be the height of irresponsibility, it would be a failure of leadership at precisely the moment vigorous action is needed to protect people who need that help most. And if we pull together as a country we can come through these times stronger and not weaker” (Brown, 2008a).

Before we analyse the above as policy responses to the crisis, we highlight one significant quotation from Brown’s second policy performance on the global crisis which he set out in a speech on Global Economy at the Reuters Building, Canary Wharf:

“We will not shirk from our responsibilities and are prepared to go beyond the conventional thinking by taking the decisive action that is necessary to support British families and business through difficult times. But let me repeat, we have no interest in running British banks, we do have an interest in strengthening their position. And this has always been the way for Britain. The British people have always risen to the challenge of a crisis and we must do so again, and to pull together as a community and to show that spirit, resilience and determination which has defined Britain to the world as a nation for generations. And by maintaining that British spirit, working in partnership with our friends across the globe, I believe we can come through these tough times together as a global community as well as a Britain that is stronger, not weaker. And we have to recognise that the action we need is not just national, but global” (Brown, 2008b).

Having set out key quotations from Brown’s policy responses to the financial crisis, we make the following points. The Bailout package proposed by Brown, injecting British banks with nearly £50bn worth of “new capital from the government and the markets” (Brown, 2008a), prevented the collapse not only of the banking sector but the economy. The scale of monies involved was far bolder and braver than the nationalisation of Northern Rock in February 2008 and reflected the depth of the crisis which Britain faced. Brown’s pragmatic response to the crisis illustrated decisive leadership at a time when the U.K. economy faced the prospect of collapse