Prescott admits that Labour is "on the verge of bankruptcy" and dependent upon "the goodwill of the Co-op bank"

By Tim Montgomerie

Today may not have been a great day for the Conservative fundraising operation but the resignation of David Rowland before he even became Tory Treasurer is a small problem compared to Labour's financial problems.

John Prescott - who is running for the position of Labour Treasurer - has written in tomorrow's Guardian that his party is "on the verge of bankruptcy" and facing a "crisis in funding". He says that the party has debts of £20m, its membership is declining and is only remaining a going concern because of "the goodwill of the Co-op bank".

He also puts a price tag on the decision by Brown to abort the honeymoon election of autumn 2007. Estimates at the time suggested a £1m hit. Prescott puts it at £1.5m.

The new Labour leader will be hampered in two ways by the fact that Brown left his party as well as the country in bad financial shape:

• He will have to spend a disproportionate amount of his time fundraising. Hague from 1997 to 1999 in particular was not able to campaign on the scale he would have liked because of the dire state of Tory finances. He and Lord Ashcroft had to fight a battle to stop the Tories from going under. That he succeeded is one of the under-reported achievements of the Hague leadership.
• The new Labour leader will also need to lean heavily on the unions if he is to keep Labour afloat and this will restrict his policy options. The public sector unions, in particular, might decide to fund their own political campaigning if they do not see the Labour leadership defending their members' job security and perks.

> From ConHome's General Election Review: The Conservative Party enjoys a massive financial advantage over Labour and the Liberal Democrats

Will Gordon Brown pledge a slice of his speaking fees to the victims of the Pakistan floods?

By Paul Goodman

Over at the Spectator's Coffee House, Fraser Nelson has the story that Gordon Brown's asked a London speaking agency to tout for speaking engagements for him in the Middle East and Asia.

He writes -

"And the price? [Brown's] been offered at $100,000 a pop and is promising to speak on areas covered by his new book, The Financial Crisis, which is due out soon. That should have 'em roaring in the aisles.

A hundred grand – and in dollars, not pounds – is a lot less, of course, than the figures commanded by Blair, Clinton or, in her day, Thatcher. But our ex-Dear Leader doesn't have quite their international cache. So $100,000 for an hour's work would be not a bad fee for a son of the manse with his self-styled moral compass and parsimonious bent.

There are more demands. Whoever wants him – and I'm told there actually is some interest in the Gulf – would also have to stump up for five-star hotel accommodation, a first-class seat and three business-class ones."

Nelson points out that "Tony Blair has been pledging a slice of his massive post-PM earnings to The Royal Legion".  Brown's bound to be asked, given his broadcast recently about the catastrophe in Pakistan, whether he'll promise a slice of his to the flood victims.

Academics say Gordon Brown was third worst PM since WWII

By Tim Montgomerie

According to a survey of more than one hundred leading academics, reported in the Financial Times (£), only Sir Anthony Eden and Sir Alec Douglas-Home were less impressive.

The academics, all experts in politics and history, put Atlee at the top of their list. The creator of the centralised British state which nationalised large parts of British society and economic production scored a rating of 8.1 out of 10. Margaret Thatcher was second placed scoring 6.9. I think that's right. Margaret Thatcher was a great reforming Prime Minister but the Atlee legacy has cast a longer shadow.

Blair thought Brown was "mad, bad and dangerous", says Mandelson

By Jonathan Isaby

Today is the final day of the serialisation of Peter Mandelson's memoirs behind the Times's paywall.

Much of what has appeared in the serialisation merely confirms what was widely known already about the tensions at the top of New Labour for over a decade - but it's great to hear it all in the words of Mandelson himself for the first time.

Take this juicy quote from this morning's extracts explaining then Prime Minister Blair's feelings about his Chancellor before the 2005 election:

“There is no one to match Gordon,” Tony said, “for someone who articulates high principles while practising the lowest skulduggery.” He variously believed, and told me, that Gordon was mad, bad, dangerous and beyond hope of redemption

Will Blair be as candid when his own memoirs are published later in the year?

Mandelson's autobiography to be called 'The Third Man: Life at the Heart of New Labour'

Writing for today's Times Lord Mandelson previews his forthcoming autobiography, humbly called The Third Man.

In the article he regrets that Brown and Blair did not fight each other for the Labour leadership in 1994:

"After John Smith died I was mistaken in arguing so hard that the two modernising candidates should not oppose each other. I did so from the best motives. I did not want two friends to hurt each other. I did not want the modernisers’ cause damaged with the risk that a split vote might let in someone else. But if we had resolved the matter there and then, we would have avoided so much of the soap opera that followed."

Although he accepts that the term 'New Labour' may not be used again, he argues that the principles behind it must live on:

"It is, and was, a logical flow from the revisionist, social democratic tradition in our party — the tradition that applies the timeless values of our party afresh to new times; that believes the Left should concentrate on the ends — a strong economy, social justice and high-quality public services — but should always be willing to consider new means of achieving those ends. It is about Labour not being a party of class or sectional interest, but about being a broad-based party of conscience and reform. An outlook that remains in tune with the priorities and ambitions of families across the country. Open, not tribal. Pluralist, not statist. But it is also a mindset that is, above all, governmental. Which recognises that democratic power is the only route to implementing our values, and that very difficult policy choices — such as those raised by the deficit — cannot be ducked."

Read the full piece.

Tim Montgomerie

Gordon Brown to resign as Labour leader

Brown has just made a statement on the steps of Downing Street indicating his intention to resign.

He said he would instruct his party to begin proceedings for a leadership contest for the Labour Party, aiming to have the position filled by their conference in October. He said: "I will play no part in that contest, I will back no individual candidate."

However, with respect to the current negotiations, he announced that whilst he understands that Nick Clegg wishes to continue his dialogue with the Conservatives, he now wants also to take forward discussions with the Labour Party. Brown said that he wants to respond positively to this and that the negotiating process was being formalised.

> WATCH Brown's statement in full

6.30pm Here is the full text of Brown's statement:

"We have a parliamentary and not presidential system in this country and as I said on Friday, with no party able to command a parliamentary majority arising from the general election, my constitutional duty as prime minister is to ensure that government continues while parties explore options for forming a new administration with majority support in the House of Commons.

"The business of government has continued including concerted action in Europe today to avert the financial crisis in the Euro area. Alistair Darling the chancellor spent much of his time yesterday in the European finance ministers meeting in Brussels. This morning I have had conversations with the president of the European council, the managing director of the International Monetary Fund, and the president of the European Central Bank. I have said I would do all I could to ensure that a stable, strong, and principled government is formed able to tackle Britain’s economic and political challenges effectively.

"As we know, the Liberal Democrats felt that they should first talk to the Conservative Party. Mr Clegg has just informed me that while he intends to continue his dialogue that he has begun with the Conservatives, he now wishes also to take forward formal discussions with the Labour Party. I believe it is sensible and it’s in the national interest to respond positively

."The Cabinet will meet soon, a formal policy negotiating process is being established under the arrangements made by the Cabinet Secretary, similar to the negotiations between other parties. The first priority should be an agreed deficit reduction plan, to support economic growth and a return to full employment. I know that both parties recognise the importance of ensuring economic stability in the markets and protecting Britain’s standing and both are agreed on the need for a strong and full deficit reduction plan over the coming years.

"There is also a progressive majority in Britain and I believe it could be in the interests of the whole country to form a progressive coalition government. In addition to the economic priorities, in my view only such a progressive government can meet the demand for political and electoral change which the British people made last Thursday. Our commitments on a new voting system for the House of Commons and for the election of the House of Lords are clearly part of this.

"I would however like to say something also about my own position. If it becomes clear that the national interest, which is stable and principled government, can be best served by forming a coalition between the Labour Party and the Liberal Democrats then I believe I should discharge that duty, to form that government, which would in my view command a majority in the House of Commons in the Queen’s speech and any other confidence votes.

"But I have no desire to stay in my position longer than is needed to ensure the path to economic growth is assured and the process of political reform we have agreed moves forward quickly. The reason that we have a hung parliament is that no single party and no single leader was able to win the full support of the country. As leader of my party I must accept that that is a judgement on me. I therefore intend to ask the Labour Party to set in train the processes needed for its own leadership election. I would hope that it would be completed in time for the new leader to be in post by the time of the Labour Party conference. I will play no part in that contest, I will back no individual candidate.

"I believe that the British people now want us to focus on the economy, the continuing fight against terrorism, the terrorist threat to our country, they want us to continue to pursue the economic recovery and I will do so with my usual vigour and determination and I will do all in my power to support the British troops whose service and sacrifice cerate a debt of gratitude we can never fully repay. And I believe on Thursday the country was also telling us that they want a new politics and that the political reforms we seek will help deliver that change. I now intend to facilitate the discussions that the Liberal Democratic party has asked for. Thank you very much. As you will understand I will take no questions this evening, other discussions can be had later. Thank you very much."

Jonathan Isaby

If this election is about character, Gordon Brown's actions yesterday showed that he is doomed

Today's front pages are every bit the disaster for Gordon Brown and Labour that you would expect the day after he was found to have described a 65-year-old Labour-voting widow as "bigoted".

And this morning it seems appropriate to reflect briefly on a speech Gordon Brown made just seven weeks ago - about the choice facing the country at the general election. As the Scotsman reported on 11th March:

"In a major speech in the City, the Prime Minister set out a clear message that the election would centre on his personal character, integrity and ability to steer the UK through the "stormy waters of the economic crisis".

"In an election set to be dominated by the first television debates of the major party leaders, Mr Brown hopes that his experience and actions will win the day against the untested David Cameron."

Brown's record on the economy will come under scrutiny from David Cameron at tonight's leader's debate, and we'll be covering that on ConHome later in the day. But for now, if Brown wants to be judged on his personal character, integrity and actions as unwittingly put on public display yesterday, I can do little but conclude that he is doomed.

The Prime Minister said himself in that speech in March:

"It is for other people to judge but I believe that character is not about telling people what they want to hear but about telling them what they need to know... For better or for worse, with me what you see is what you get."

And therein lies the problem for Brown. His unguarded outburst about Mrs Duffy demonstrated that what you see is most certainly not what you get.

I blogged yesterday afternoon that the significance of the incident was that it put on public display his duplicity, his tendency to blame others when things go wrong and the contempt which he evidently has for millions of voters.

Trevor Kavanagh in The Sun this morning agrees that the veneer came down and the Prime Minister has inadvertently shown his true colours to the wider public:

"This was the authentic Gordon Brown - thin-skinned, paranoid and perpetually on the hunt for someone else to blame. This is the Chancellor who made life hell for Tony Blair and every political friend or foe who stepped in his path. It is the phone-throwing, pen-stabbing raging bull disturbingly portrayed in Andrew Rawnsley's prophetic book The End of the Party."

As Rawnsley himself writes in today's Guardian:

"It will be rightly taken as evidence of the less attractive dimensions of his personality. Note that it happens because he stresses over the trivial and becomes infuriated by anything or anybody that disturbs his idea of himself as a man in iron control. Mrs Duffy was far from the most tricky customer ever to confront a politician. In fact, he dealt with the initial encounter reasonably well. She even said she was going to vote Labour. Calling it "a disaster" was an over-reaction to a fairly humdrum moment on the campaign trail. We see also a glimpse of Brown's tendency to instantly assign fault for a setback to someone else."

And I can sum up the incident no better than Rawnsley, who concludes:

"Brown's problem is that this episode shows him acting not out of character, but entirely in it."

Jonathan Isaby

Brown is duplicitous, contemptuous of the public and always seeking to blame others for his mistakes - what the Gillian Duffy incident tells us

The rolling news media are not going to drop the story about Gordon Brown calling a Rochdale voter, Gillian Duffy, "bigoted", and the front pages tomorrow are liable to be devastating for Labour.

Here are my thoughts on the incident and what it tells us about the man seeking to be elected Prime Minister by the British people for the first time.

Brown's contempt for voters
Mrs Duffy had concerns about a number of issues which echo those of millions of ordinary people in the country. That Brown showed such contempt for her suggests that he holds millions of the rest of the electorate in contempt as well.

Brown's duplicity
It showed Brown up as a duplicitous person, saying one thing in public and another in private. This is a point that Tory Rascal's poster picks up: Brown said she came from a good family and how lovely it was to meet her a few seconds before condemning her as bigoted in private. If he meets any other ordinary voters in the remaining week of the campaign, will they be able to believe his small talk?

Brown's tendency to blame others
What was striking was that in his remarks caught on the microphone he sought to blame one of his assistants for allowing him to meet Mrs Duffy in the first place; then in his Jeremy Vine interview afterwards, he tried to shift the blame onto the media for having him wear the microphone in the first place, for not letting him answer a question and then for broadcasting the private conversation. The media have since said been quoted as saying that Brown's aides asked for him to wear the microphone as the big boom microphones are a distraction. Meanwhile, watching the video again, I cannot see how he was stopped from answering any of the questions.

Brown's lack of media savvy
I thought that the John Major infamous "bastards" interview with Michael Brunson had been instructive to any politician about the need to be wary when wearing a microphone. I noted the other evening when watching the coverage of the post-debate spin room that David Miliband was holding his hand over the microphone on his jacket to ensure that his private conversation with a fellow Labour insider was not picked up.

Gordon Brown just being out of touch
As much as anything, I found it incredibly revealing that Brown first remark on getting into the car was that the encounter with Mrs Duffy was "a disaster". To be frank, it wasn't. She aired a few concerns, but it ended on a positive and consensual note. This was no Sharon Storer moment (the woman confronted by Blair in 2001 outside a Birmingham hospital) - until, ironically, Brown turned it into one by his unguarded reaction to it. That Brown thought it a disaster suggests he is even more on edge and living in a parallel universe than I thought.

Jonathan Isaby

Gordon Brown describes lifelong Labour voter he meets as "bigoted"

Gordon Brown has met precious few real voters during the course of the campaign - as David Cameron has been saying, the PM has been going from "safe house to safe house", only meeting Labour Party activists.

And today we got a glimpse of what happens when he does meet a real person who deigns to disagree with him.

A woman in Rochdale - who had always voted Labour before - engaged with him on a number of issues this morning and according to Channel Four News, this is what his microphone picked him up saying on getting back into his car:  

"You should never have put me with that woman. Whose idea was that? Sue's I think. Everything she said - she's just a bigoted woman."

I suspect we can safely conclude she is now a former Labour voter.

I am still trying to track down the video/audio footage but will post it as and when it appears.

12.30pm update:

The woman, Gillian Duffy, has been tracked down by the BBC and Sky News, both of which have been running a live interview with her in their rolling new channels. She has confirmed she will not be voting Labour now and has said she is upset by what he said. She has said that she wants an apology from Brown and an explanation of why he thought she was a bigot.

12.40pm update:

CLICK HERE TO WATCH THE FULL ENCOUNTER 

1pm update:

Brown had the tape played back to him while appearing live on the Jeremy Vine Show on Radio 2 and said he the media hadn't given him a chance to answer her question about immigration, adding that by having the microphone on he thought he was being helpful to the broadcasters, clearly angry that his "private conversation" had been broadcast. He did apologise for his remark.

Tory Rascal has produced this take on the incident:

 

1.30pm update:

Downing Street has confirmed that Brown has telephoned Mrs Duffy to apologise for his remarks, with a spokesman saying:

"He does not think that she is bigoted. He was letting off steam in the car after a difficult conversation. But this is exactly the sort of conversation that is important in an election campaign and which he will continue to have with voters."

3.15pm update:

Brown has returned to Rochdale to apologise to Mrs Duffy in person. Before we get reaction after the meeting, here are other relevant links:

> Brown is duplicitous, contemptuous of the public and always seeking to blame others for his mistakes - what the Gillian Duffy incident tells us

> WATCH: Gillian Duffy's reaction on being told Gordon Brown called her "bigoted"

> WATCH/LISTEN: Gordon Brown's radio apology to Gillian Duffy (including video footage of him listening to the tape of his remarks)

3.45pm update:

After nearly 45 minutes insider her house, Brown emerges and says that she has accepted her apology and that he is a "penitent sinner" who has apologised for what he said. He said he had misunderstood what she said to him this morning and that sometimes you say things you don't mean.

4.30pm update:

Channel Four News have provided a full transcript of the original encounter and here is the text of his apology outside Mrs Duffy's house (courtesy of Andrew Sparrow's Guardian blog):

"I've just been talking to Gillian. I'm mortified by what's happened. I've given her my sincere apologies. I misunderstood what she said, and she has accepted there was a misunderstanding and has accepted my apology. If you like, I'm a repentant sinner. Sometimes you say things you don't mean to say, sometimes you say things by mistake and sometimes you say things you want to correct very quickly.

"So I wanted to come here and say that I made a mistake but to also to say I understood the concerns she was bringing to me and I simply misunderstood some of the words she used. I made my apology.

"I've come here – it's been a chance to talk to Gillian about her family, her relatives and her own history and what she has done, but most of all it's been a chance to apologise and say sorry, and to say sometimes you do make mistakes and you use the wrong words and once you've used the wrong word and made a mistake you should withdraw it and say profound apologies and that's what I've done."

5pm update:

> WATCH Gordon Brown making the above statement outside Mrs Duffy's house

6.15pm update:

Brown has just emailed the following apology to Labour Party members (hat tip: James Forsyth):

As you may know, I have apologised to Mrs Duffy for remarks I made in the back of the car after meeting her on the campaign trail in Rochdale today. I would also like to apologise to you.

I know how hard you all work to fight for me and the Labour Party, and to ensure we get our case over to the public. So when the mistake I made today has so dominated the news, doubtless with some impact on your own campaigning activities, I want you to know I doubly appreciate the efforts you make.

Many of you know me personally. You know I have strengths as well as weaknesses. We all do. You also know that sometimes we say and do things we regret. I profoundly regret what I said this morning.

I am under no illusions as to how much scorn some in the media will want to heap upon me in the days ahead.

But you, like I, know what is at stake in the days ahead and so we must redouble our campaigning efforts to stop Britain returning to a Tory Party that would do so much damage to our economy, our society and our schools and NHS, not least in places like Rochdale.

The worst thing about today is the hurt I caused to Mrs Duffy, the kind of person I came into politics to serve. It is those people I will have in my mind as I look ahead to the rest of the campaign.

You will have seen me in one context on the TV today. I hope tomorrow you see once more someone not just proud to be your leader, but also someone who understands the economic challenges we face, how to meet them, and how that improves the lives of ordinary families all around Britain.

Regards,

Gordon

Jonathan Isaby

Gordon Brown relaunches Labour's campaign... with an Elvis impersonator

Desperate times call for desperate measures, they say.

And the Labour campaign took a surreal turn this morning.

The great relaunch of Labour's campaign took place this morning at an event in Corby - where Louise Bagshawe is poised to oust Labour MP Phil Hope - and involved Brown making a series of outrageous claims about how a Conservative government would reduce the NHS to a 'sub-standard' service.

His scare-mongering claims were all the more spurious given that the Conservatives have of course promised to increase spending on the NHS in real terms - a commitment which not even Labour will match.

And then came the weird bit. Onto the stage then came Labour's latest secret weapon: an Elvis impersonator. It really was quite bizarre.

I have not been able to verify reports that Labour is now considering using the 1958 Elvis B-side I Got Stung as its new campaign song, or indeed that Brown will adopt the King's little-known 1971 single I'm Leavin' as his personal theme at remaining campaign events... 

> Click here to watch the video of the bizarre spectacle

Jonathan Isaby