By Robert Hutton and Kitty Donaldson
April 24 (Bloomberg) -- A week before reaching the peak of British political power,Gordon Brown thanked a group of bankers for helping him usher in a “new golden age.”
It didn’t last long -- for them or for him.
The decade-long boom for which Brown took credit as chancellor of the exchequer has turned into a bust, haunting him since he replaced Tony Blair as prime minister in 2007 and shattering the prize he worked 24 years to earn.
Like Anthony Eden, Winston Churchill’s World War II foreign minister who was undone as prime minister by the 1956 Suez Crisis, Brown has been derailed by events in the very field where he made his name.
“You’ve got the Eden problem,” says Anthony Seldon, author of the 2005 biography “Blair.” “There was a man who was brilliant as foreign secretary, but couldn’t cope with the job upgrade.”
For Brown, banking failures and a deepening recession have dominated his time in office, diverting him from plans to reduce poverty and improve schools.
The 1.9 percent first-quarter economic contraction, which was reported today, underlines the problems facing Brown: the biggest annual decline in output since the war; the widest budget deficit on record and the highest unemployment in more than a decade -- this after his government took over four banks, includingRoyal Bank of Scotland Plc, to prevent their collapse.
Brown’s 22-month-long premiership has been a catalogue of political setbacks: a last-moment retreat after signaling he would call an early election; the reversal of a tax increase on low-wage earners; and this month the sacking of his media adviser over a smear campaign aimed at opposition lawmakers.
Trailing the Tories
Brown, who must call an election by June 2010, has trailed David Cameron’s Conservative opposition in every poll since January 2008. A February survey by Ipsos-Mori Ltd. put the gap at 20 percent.
“I don’t think he really realized how easy he had it as chancellor, and that when you’re prime minister you’re in the front line,” says Steven Fielding, head of the Centre for British Politics at Nottingham University.
The strain shows, say current and former Brown aides: Among other things, it has inflamed a temper that has always been the subject of gallows humor among those who work with him, they say.
The prime minister, 58, has hurled pens and even a stapler at aides, according to one; he says he once saw the leader of Britain’s 61 million people shove a laser printer off a desk in a rage. Another aide was warned to watch out for “flyingNokias” when he joined Brown’s team.
The ‘News Sandwich’
One staffer says a colleague developed a technique called a “news sandwich” -- first telling the prime minister about a recent piece of good coverage before delivering bad news, and then moving quickly to tell him about something good coming soon.
“This is not an account I recognize,” Brown’s spokesman, Michael Ellam, told reporters today. “It is the sort of nonsense that you might expect to read in diary columns.”
With more than a year to the next election, there may still be time for Brown, whose experience dwarfs that of the 42-year- old Cameron and 37-year-old shadow chancellor George Osborne, to rebound. “There are no iron laws of politics; anything could happen,” says Vernon Bogdanor, professor of government at theUniversity of Oxford. “Obviously, the Conservatives are favorites at the moment, but it is perfectly possible people will say, ‘It’s a difficult time, are we willing to trust things to an unknown combination?”
A ‘Furious’ Brown
Still, the atmosphere in No. 10 Downing Street, where Brown lives and works, is grim. In his less-than two years in office, he has already gone through two chiefs of staff -- Tom Scholar and Stephen Carter -- and five advisers on strategy.
The latest episode to provoke Brown’s anger came over the Easter weekend, when he learned that newspapers had obtained e- mails written by his media adviser,Damian McBride, containing plans to spread slurs about the personal lives and families of leading Conservatives. McBride quit and Ellam told reporters April 14 the incident had made the prime minister “furious.”
Brown frequently says his background as the son of a Church of Scotland minister gave him a sense of morality, a duty to help the poor and a strong work ethic. Before entering Parliament in 1983, in the same election as Blair, Brown was a politics lecturer and a current-affairs editor for Scottish television.
Years Spent Waiting
Much of Brown’s political career has been spent waiting. Fourteen years passed between when he won his seat in a district near Edinburgh and when Labour finally took power. In that time, he was overtaken by Blair, the younger and less experienced politician with whom he shared an office in their early days. When Labour formed a government in 1997, Blair, now 55, and not Brown headed it.
It took another 10 years before Brown finally reached his goal. Once he did, he floundered.
Within three months, he called off plans for an early election at the last moment -- and denied that his decision had been influenced by the narrowing of his lead in opinion polls. It was a “catastrophic error” that set a tone for what was to come, Seldon says.
“Before that, he was seen as strong and competent,” says Anthony Wells, a pollster with YouGov Plc. “Afterwards, he was seen as weak and ineffectual, almost cowardly.”
Taking Over
In the months that followed, he came under increasing pressure to admit he made a mistake in his last budget as chancellor. In March 2007, with Blair in his final months as prime minister and Brown his likely but not certain successor, the end of the chancellor’s budget statement held a surprise: a cut in the income-tax rate to 20 percent from 22 percent.
What Brown didn’t mention was the removal of a 10 percent “starting rate,” with the result that lower earners ended up paying more. It was more than a year before he backed down, after Labour lawmakers threatened to vote against the 2008 budget.
“His long years in opposition, both before and during government, encouraged a preoccupation with tactics over strategy, as demonstrated by tax and the non-election,” says Martin Farr, a lecturer in politics at Newcastle University.
Just this month, two of Blair’s former Cabinet ministers, Stephen Byers and Alan Milburn, said they had been victims of McBride during the decade Brown was campaigning to secure his succession, when his chief concern was to prevent anyone from challenging his position.
Promise and Success
As Brown has struggled through Britain’s financial crisis, there have been moments of promise, and even success. With some of the U.K.’s biggest banks on the brink of collapse, Brown moved in October to take stakes in RBS, HBOS Plc and Lloyds TSB Bank Plc. Princeton University economist Paul Krugman, on the day he won the Nobel Prize, suggested Brown had “saved the world.”
“He first dealt with the banking crisis, and made sure there wasn’t a run on the banks; we take that for granted,” says Oxford’s Bogdanor. “His weakness is that he hasn’t yet been able to explain these matters clearly to the country, as for example Roosevelt did in the U.S. in 1933.”
The summit of the Group of 20 leading economies in London at the start of this month gave Brown another chance to show leadership. He traveled the world to make the case for coordinated stimulus, increased regulation of markets and free trade.
‘Very Lucky’
“The world is very lucky to have Gordon Brown as host of this G-20,” John Kirton, professor of political science at the University of Toronto and co-founder of its G-8 Research Group, said at the time. “There’s not a single G-20 leader who’s had that many years experience as a finance minister. He knows how to work this crowd, he knows these issues. Most of the leaders, if you start talking about this stuff, they don’t get it.”
That experience cuts both ways. The Conservatives point to his June 20, 2007, “Golden Age” speech to financiers at the Mansion House in London as evidence of complacency about the economy. Brown doesn’t these days repeat his opening salute in that speech to bankers’ “ingenuity and creativity.”
As chancellor, Brown delivered Britain’s longest expansion in two centuries; now, “history is pulling away the success he had,” says Lawrence Black, a history lecturer at Durham University and author of “The Political Culture of the Left in Affluent Britain.” “Brown had too much belief in the dynamism and vibrancy of international markets. His economic success has led to economic turmoil.”
The prime minister “can be regarded almost as a Shakespearean character, in the way his career and personality have brought him to this point,” says Newcastle’s Farr.
To contact the reporters on this story: Robert Hutton in London atrhutton1@bloomberg.net and Kitty Donaldson in London atkdonaldson1@bloomberg.net
Last Updated: April 24, 2009 07:29 EDT
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