Fraser Nelson Fraser Nelson

The fall of the masters of the political universe

Every financial collapse in the City you can normally be traced back to a testosterone-sodden trading floor where young men believed a little too much in their own hype. Britain is in the unusual position that both our economic and political collapse can be traced to the same gang – the ones that Gordon Brown assembled in the Treasury. In my cover piece for today’s magazine, I detail the damage they did: to our economy and to the Labour Party.

At the heart of McBride’s fall was the hubris, the risk-taking. Imagine being so stupid as to put all those vile smears in an email sent from 10 Downing Street computer. But the risks the Brown-Balls-Whelan-McBride team took with the British economy were no less great. And far more significant. Imagine the sheer audacity required to tear up the system of banking regulation, and to invent a tripartite system based on nothing more than faith in your own brilliance. To have the central bank chase an inflation targeting, New Zealand style – and to do this on the sly, preferring not to share this secret with the British public or the City in a manifesto.

And, as CoffeeHousers hate me saying, Balls was brilliant. I was a business journalist at the time, and heard the reports. There he sat, this whiz kid barely 30 years old his own mammoth office, giving crystal clear directions to the civil service about the revolution he pretty much personally oversaw. They may not have agreed with him but, while Brown ummed and ahhed, Balls went at it with Napoleonic vigour. They liked him for his direction: there was never any doubt what to do. Balls wrote the five tests for UK Euro entry on the back of an envelope in a taxi in Washington (and for keeping us out of Brussels he has my sincere thanks).

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