Economic Council. Regional ministers. Massive liquidity flood. Wow.
OK this is big. I am slightly depressed that in a press conference about the biggest change in UK economic policy in over a decade most of the questions were about Peter Mandelson, and I suppose so is he. Here's the announcement. As you can see the new Economic and Regional councils involve almost everybody powerful in the government. It is, as Nick Robinson suggested, a "war cabinet" (except as it now strikes me there is an even more evocative parallel: the Stavka!).
But equally important is Gordon Brown's response to a question: the "old economic policy" he suggested, of tweaking interest rates to control inflation (and by implication of staying with arbitrarily defined fiscal rules) is dead.
I will get to the critique and depth analysis in an updated. But my snap reaction to this is it a) prefigures a major change in economic policy which will be fleshed out in the PBR; b) a big change in the political apparatus for running the economy. Think "Board of Trade" under Heseltine or Tony Benn to come up with parallels.
Finally, c) it is one massive two fingered gesture to David Cameron and the most telling and incisive point in his Tuesday speech. Where Cameron suggested Labour's problem was "state-downwards" solutions to social and economic ills and what was needed was the intermediate transmission mechanism of society, friendship etc. Well this is statism - I don't say it is a turn to the left but it is certainly a turn to a dirigist solution to the crisis.
BERR will now, instead of being eviscerated as it steadily has been, fold into a governance mechanism that replicates huge chunks of what the old DTI used to do.
UPDATE: It also creates a massive political opportunity for the Conservatives, and in a way the Libdems. Here's how. a) If it doesn't work, virtually the entire government is tarred with the brush of failure - this I suppose is why Gordon Brown designed it this way: we all sink or swim together. b) It is not obvious what huge regular meetings of umpteen Permanent Secretaries and Secretaries of State will achieve even on a dirigist agenda. They will lay themselves open immediately, as all social services departments know, to a "meetings culture". c) As I say before it exposes a total difference in political philosophy between Brown and Cameron; statism verus the small state; regonalism versus localism. At the same time the move can be easily painted as left: the people I am speaking to in the Labour party already are fairly keen to paint it as such themselves.
UPDATE 2: I have now spoken to two senior government spokespeople about this and I have yet to find an answer to: "If the old policy does not work, what is the new policy?" They seem a little nonplussed: I am told the template for the new way of working is all the cross-departmental work that went into the housing and energy announcements. Since these were greeted as something of damp squibs, it just makes you realise how many ministers you have to get into a room to make something happen fast. I asked Downing Street how you would go about getting something onto the agenda of the NEC. They said "we don't want to talk process" but indicated that the Business Ambassadors will be playing a part here. I asked for a case study as to how the new body might be effective but nobody can give me one. I asked for an indication of what its early agenda might be, and was told that it would set its own agenda come Monday. There is an element of free-form governent emerging here. We will just have to see how it works. The original "Stavka" - I know people hate these Stalin analogies but I can't resist them - worked because it could circumvent bureaucracy and micromanage with extreme force.
UPDATE 3: If I were an oil speculator or an OPEC minister I would regard myself as firmly on the agenda of the NEC now. This has emerged in briefings as one of the things they are going to try to tackle: a holistic energy policy with global and local actions to shape the pricing mechanisms.
One bit of nuance on the Mandelson re-appointment. As a seasoned Labour watcher I read this as something different than "the return of Blairism". Notice who's been kept out: Charles Clarke, Milburn, Byers et al. And the post-Blairite ministers - Purnell and Burnham - have been kept in post and not promoted (although Purnell sits on the NEC). No - together with the appointment of Ray Collins, and the re-emergence of Alistair Campbell, this is the "labour movement" wing of Blairism that is in the ascendant. Why is that important? Because I get a sense that this subset of New Labour thinks it can play a part in reinventing the old formula on new terrain. They will be happier to junk a lot of the "choice" and "light touch regulation" mantras of old on the grounds that "these are new circumstances". The permission to do this was contained in that single Brown remark - the old economic policies of tweaking things dont work.
A further point: this marks a decisive move of the government off legislative terrain and into rule by fiat. Most of what these various councils, work groups etc will do will be done through orders in council - and I suspect they will be unable to resist at some point donning hi-vis vests and digging trenches themselves.
More later. Hit the comments.