Less than a month ago, British prime minister Gordon Brown was a broken man. There were reports of terrible rows, including broken furniture, inside Downing Street. Brown’s cabinet ministers—spurred on by Tony Blair—were plotting to destroy him.
Most of his own staff were privately convinced that he would be driven from office before Christmas. He lagged twenty points in the polls behind his Tory rival David Cameron.
Today everything has changed. There’s a new crispness and confidence about Brown. The familiar savage scowl has been replaced by a cheery grin.
Gordon Brown is no longer a doomed and useless leader. Instead he suddenly looks like the savior of the world financial system.
Brown has been saved by the financial crisis. As stocks on Wall Street have crashed, shares in Gordon Brown have soared. Millions of men and women across the United States and Britain fear losing their jobs in the coming downturn. Recession has saved Brown’s job.
It’s given him a purpose. Gordon Brown loved being Chancellor of the Exchequer, because finance is the one thing he really knows about. He’s hated being prime minister. Now he is focussing on the nation’s finances once again.
Brown’s plan to bail British banks, announced last Wednesday, was a masterpiece. It was immediately hailed by bankers as the best prophylactic yet invented against financial Armageddon.
Yesterday Brown flew to France to brief European leaders. As a result his plan looks certain to be put into affect all across Europe. Now it looks certain to be adopted in the United States.
As Paul Krugman wrote in the New York Times last week: “What should be done? The United States and Europe should just say “Yes, prime minister.””
So Gordon Brown is no longer a doomed and useless leader. Instead he suddenly looks like the savior of the world financial system. This is a narrative that could even win him the next general election, which looked completely lost only a few weeks ago. “This crisis is Brown’s Falklands,” says one Downing Street aide, a reference to the way Margaret Thatcher’s flagging premiership was redeemed by victory in the South Atlantic twenty five years ago.
The truth, however, is very different from the story accepted by Krugman and others—and puts Brown in less favorable light. The prime minister was originally very slow indeed to pick up the scale and threat posed by the downturn—Paul Krugman’s claim in today’s New York Times that Gordon Brown moved with "stunning speed" is rather too generous. Officials at the British Treasury say privately that they wanted to use the budget statement as long ago as last March to warn of impending economic problems.
Brown refused, however, to let them. He ignored the warning signals then coming thick and fast from across the Atlantic. Unforgivably, he never learnt the lessons from the collapse of the Northern Rock bank in the summer of 2007.
There were fierce clashes between Gordon Brown and his Chancellor Alistair Darling. Darling wanted the truth to come out. Brown—whose mantra has always been that his economic management has ended ‘boom and bust’ for good—either would not or could not understand the truth about the economy.
Right up to early autumn this year Gordon Brown was in denial that Britain was entering a recession. I understand that he may even have failed at first to understand the meaning of the Lehmann Brothers collapse. Only the failure of the Paulson plan, and the subsequent collapse of markets around the world, brought home the enormous scale of the problem.
At first Gordon Brown – and the British government—were completely at a loss how to respond. His best answer was the announcement of a farcical 18 strong ‘economic council’ to confront the situation.
Senior Treasury sources tell me, however, that this sense of hopelessness changed the moment that the US investment genius Warren Buffet took a $5 billion stake in Goldman Sachs. Officials at the British Treasury immediately understood that the Buffet strategy- purchasing preference shares that ranked higher than ordinary equity—would work well for the taxpayer in Britain.
But when the idea was put to Gordon Brown I am told that he was hard to convince. Last Monday night Britain’s bankers were obliged to demand the presence of the prime minister at an emergency meeting where the bail-out scheme was discussed. He only attended very reluctantly. However, in the early hours of last Wednesday the scheme was finally agreed.
Gordon Brown looked a new man at prime minister’s questions later that day. A weight was off his shoulders. He was no longer the victim of events. He was a hero. Polling at the weekend showed that the Labour Party has sharply improved in popularity. Meanwhile Tony Blair—who was privately telling friends over the summer Gordon Brown should stand down—has called off the dogs. In a gesture of amity last week, the former prime minister encouraged his close ally Peter Mandelson to give up his job as European Union trade commissioner and join the Brown government.
So Gordon Brown stands stronger today than at any time in his premiership. The question is whether this sense of security will last. Will British voters reward Brown for the burst of energy he has shown over the past few weeks? Or will they remember that he was at the helm as we hit the rocks?
Peter Oborne is Political Columnist for the Daily Mail. His book, The Triumph of the Political Class, is published in paperback by Simon & Schuster on November 4th.
