Disastrous for Labour, good for the Tories

Allister Heath
IT was a disastrous night for Labour, and an even worse one for Gordon Brown, now a lame duck prime minister who cannot even appoint the cabinet of his choice. But Labour&rsquo;s crushing defeat &ndash; it got just 21.3 per cent of the vote in London, was beaten in Wales by the Tories for the first time since 1914, and came fifth in the South-East of England &ndash; hardly came as a surprise. Much more intriguing was another poor showing for the Liberal Democrats, which failed to beat Labour and who are once again beginning to look irrelevant. Tragically, the fascist British National Party is now represented in the European Parliament; and as expected, it was a great night for Ukip and the Greens.<br /><br />The Tories won the election but didn&rsquo;t triumph because so much of the anti-Brown vote slipped away to the smaller, fringe parties. The country is well and truly sick of Labour but has yet to embrace the Tories wholeheartedly, a mood of which Cameron is well aware. He knows that angry voters will be much more likely to switch to him at the Westminster elections, where the first past the post voting system means that supporting minor parties is a waste of time.<br /><br />Brown, who is now desperately seeking to buy time before having to call a general election, is now Cameron&rsquo;s greatest asset. If the prime minister had any sense or pride, and if he really wanted to prevent Labour from being completely wiped-out, he would resign this morning. Britain desperately needs a firm, competent and focused government; even he should realise that he is now incapable of providing this. Yet self-awareness is one quality the prime minister has always lacked; expect another year of political circus before Britain can finally move on.<br /><br /><strong>IN OTHER NEWS&hellip;</strong><br />While the biggest story in town, even for the City and business, is the accelerating disintegration of the Labour party, there are plenty of fascinating corporate stories too. The best two are the imminent appointment of ex-HBOS chief Andy Hornby as boss of private equity-owned Alliance Boots; and the negotiation between Barclays and suitors for the sale of the whole of Barclays Global Investors, its asset management division.<br /><br />It is important to set the record straight when it comes to Hornby. He cannot be exonerated for HBOS&rsquo;s appaling collapse. He joined in 1999 as CEO of Halifax and eventually went on to become HBOS&rsquo;s chief operating officer in 2005 and CEO a year later. His predecessor at the helm, James Crosby, was the real architect of the bank&rsquo;s downfall, yet Hornby went along with it. As an ex-Asda man, he is a much better retailer than he was a banker, which explains why Stefano Pessina, who is doing remarkably well at Boots&rsquo; helm, is trying to snap him up. Freed from the constraints of public markets, Hornby will probably thrive. Whether he deserves to be given a second chance so soon is another matter, however; at this rate Sir Fred Goodwin will be making a comeback too.<br /><br />As to Barclays, the possibility that it may take a large stake in BlackRock in return for BGI makes much more sense than a straight sale, which I have previously argued was self-defeating. Barclays needs an asset manager, or at least one with which it has very close links; this could be a sensible way forward.<br /><br />allister.heath@cityam.com