It was easy to forget during Gordon Brown’s trip to India and China that he has actually been Prime Minister since June. His speeches were filled with export targets and trade deals, barely distinguishable from the rhetoric he deployed as Chancellor. This is deliberate. Mr Brown makes no claim to be a suave statesman (a reality he inadvertently reinforced by stumbling over a red carpet in Delhi). Abroad, as at home, he bills himself as the hardworking guardian of prosperity. His entire premiership is based upon the supposedly sturdy pillar of economic stability.
This is why the turmoil to which Mr Brown returned on Tuesday morning could be as damaging to him as the problems which greeted the tanned Jim Callaghan on his return from the Guadeloupe arms summit in 1979. Mr Brown did not ask ‘Crisis? What crisis?’ (That was the headline: Callaghan’s words were actually ‘I don’t think other people in the world would share the view [that] there is mounting chaos’). But that awful precedent will not have been far from Gordon’s mind as he stepped on the tarmac. The news was plastered over every front page in every city in the world: a stock market meltdown in which serious financiers were talking about a collapse in the world banking system. And this was the ghastly backdrop against which the PM was trying to sell Northern Rock.
The old Brown jinx, which accompanied his calamitous sale of British gold reserves five years ago (at $275 an ounce, against today’s $850 an ounce) was back. Stocks were plunging, house prices falling, investors fleeing and — in about the worst context conceivable — Alistair Darling was in the House of Commons announcing his plan to offload a zombified mortgage bank. The terms are extraordinary: the taxpayer will be liable for the risks while would-be bidders could take almost all the profits.
Once, such a ruse would have worked for Mr Brown. It was fiendishly complex, and it would take several years (and at least one election) until anyone knew how much the taxpayer had lost. Yet from the Morning Star to the Financial Times this was denounced as an appalling deal designed to save Mr Brown’s reputation rather than protect the public interest. Northern Rock has become a kryptonite pendant against this self-styled financial Superman — and he would pay anyone anything to take it from him.
Certainly, the Prime Minister’s luck has turned. But there is something more fundamental than that. The mood, too, has changed — perhaps irrevocably. Even when the London stock market rallied, shares in Brown remained lifeless. In a landmark article, Anatole Kaletsky declared in the Times that ‘Mr Brown’s career as a serious politician ended yesterday’. No one can agree which of the disasters of the last few months struck the terminal blow. But a consensus is slowly emerging that, for Mr Brown, it is over.
The Conservatives should treat all this with cunning and forethought. Just as City investors switch tactics when a bull market turns to a bear market, so too must politicians adapt to the era of an economic downturn. The Tories have yet to do so. They must develop a critique of Mr Brown as powerful and simple as that which he used against John Major to such devastating effect. They must use this turmoil to take the clear lead in economic credibility, on which the keys to political power depend.
The Tories cannot do much about the economic turmoil itself, but their mission is to sound more plausible than Mr Brown. This should not be hard. The Prime Minister’s strategy has so far been one of denial. He boasts about low inflation at a time when the Bank of England’s Governor warns of the opposite and food prices are rising at the highest rate on record. He talks of low interest rates, at a time when 1.6 million are bracing themselves to remortgage, and repossessions are at their highest since 1992.
One could write a book listing the magic tricks and sleights of hand Mr Brown has used in the last ten years to embellish his record. Triple counting is just the start. There is the currency trick, where he uses misleading conversion rates to claim (hilariously) that Britain spends more on defence than Russia or China. There is the ‘false proxy’ (Bank of England base rates do not equal mortgage rates) the ‘dud backdrops’ (comparing Britain against basket-case economies such as France, Italy and Germany) and ‘metric switch’ (comparing RPI inflation of 10 per cent under Major to CPI inflation of 2 per cent now). The list is as long as it is imaginative.
But Mr Brown’s fatal error has been to stretch the truth so far that the elastic has finally snapped. His claims of high employment and low inflation may still wrongfoot his political opponents often enough. But — at the visceral level of real politics — such assertions simply do not ring true with the type of people who decide British elections — those on modest incomes who, unlike most MPs, actually know how much a pint of milk costs. Their concerns are mounting debt, heating bills, petrol at 104p a litre. One can guess what their reaction is to Mr Brown’s preening over all the tough ‘long-term decisions’ he has taken.
David Cameron should focus purely on such people and forge a convincing narrative about how the Prime Minister failed to prepare Britain for this global downturn, and left us at its mercies. Into this story, he can weave the question of immigration, the public’s top concern. Mr Brown used his years of prosperity to keep five million Brits on benefits and imported a workforce — which is why two in three jobs created in the Labour years have been filled by migrants. It is also why economic growth has not translated into true ‘social justice’. It has passed millions by.
For years, the Conservatives have felt unable to challenge Mr Brown on the economy. This aphasia was the cruellest symptom of their unreadiness for office. I have lost count of the number of shadow Cabinet members who have told me at one time or another than Gordon’s record is unassailable and that they’d do better focusing on crime or sleaze. Yet the opportunity is now with them. Mr Brown is regarded not as an Iron Chancellor turned Iron PM but as a magician whose sleeves and hats are empty, whose audience can see through the tricks and feels conned rather than entertained.
Jack Straw likes to say that, in popular perception, New Labour has been ‘in power’ since 1994, rather than 1997, in that they talked and behaved like a government three years before the election. He is right. This is now to Mr Cameron’s advantage: he faces an exhausted administration that feels as if it has been in office for 13 years, not a decade. Through a combination of appallingly bad luck and even worse misjudgment, Mr Brown has dropped the torch of economic competence. It is up to the Conservatives to pick it up again.