The comparison some seem (prematurely) keen to make between the effect of the Northern Rock affair on Gordon Brown’s premiership and ‘Black Wednesday’ is revealing.
Aside from the fact that this estimation is surely the triumph of hope over expectation, it suggests a misinterpretation of the last Conservative Government history. The significance of the drama on that single ‘black’ day was a concentrated emblem of the tragi-comic, grey Major years. In the public’s eye the pathos was much deeper than a single economic episode or even a single aspect of government. It’s true that the electorate became unsure of the Government’s economic competence after the 16th September 1992 but they had lost faith in our fitness to govern long before.
Two years earlier on Thursday 22nd November 1990 the most significant event in the modern history of the Conservative Party took place. On that desperate day a sitting Prime Minister who had delivered her Party three successive election victories was dumped by her parliamentary ‘friends’. The unconsulted British electorate smelt dishonour and concluded that if Margaret Thatcher could not trust the Conservative Party neither should they. It was on this curious basis that they voted for us in 1992; not because they liked us, but out of fear of Neal Kinnock’s Labour alternative. Just as serious has been the enduring corrosive effect of ‘Black Thursday’ on MPs. Because of the taste for treachery acquired by many of their febrile colleagues no Conservative leader since the blessed Lady has enjoyed the respect their office warrants as what was once described as the Tories’ ‘secret weapon’ – loyalty – has rusted from disuse.
In the end I am not convinced that the reputation of leaders are made or lost in a day or by a single event. That’s why George Osborne is right that the really important lesson from the Northern Rock fiasco is not what Gordon Brown says or does today or tomorrow, but what this episode says about his stewardship of the economy over 10 years.
Much of the feel-good factor behind Labour’s electoral success has been funded by borrowing on an unprecedented scale, secured typically by inflated housing equity. The decline of the savings ratio and an explosion in personal debt is a shaky foundation for secure economic stability. The Shadow Chancellor also makes a good case on the prospects for national economic growth. A good deal of the last decade’s growth has been stimulated by public sector expenditure – both through job creation and capital investment. As the Government tightens its, thus feeble, grip on spending, growth will falter with unhappy consequences for employment, tax receipts etc.
It’s unlikely that Mr Brown’s regime will founder on the immediate fortunes of a single bank, but this sorry business may remind the public that for years the man from the north has been steering us towards the rocks.
John Hayes MP