Alan Watkins: Darling will survive, but not with any credit

The Northern Rock settlement has already begun to unravel; Mr Brown's only consolation is that the Tories appear equally clueless
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In one of the Sherlock Holmes stories, the great detective (who was not given to boasting) observes to his friend and colleague Dr Watson: "I have the British Treasury behind me." Oddly enough, there was no boasting from the occupants of the government benches when it came to nationalising Northern Rock last week. Mind you, there was nothing shamefaced about them either. Nationalisation of a bank, we were given to understand, was all in the day's work for busy ministers.

We were also told – though this had to be extracted with greater difficulty – that powers were being taken over all banks, not only over the outfit in Newcastle. The reason why this was being done was that otherwise the measure would probably turn into a "hybrid Bill", whereupon all kindsof awkward consequences would ensue.

A hybrid Bill, I should explain, is partly general and partly about individual rights. So, to be on the safe side, the Government decided it could nationalise every single bank in the high street. Not even Mr Tony Benn at his most staring-eyed went as far as that. Indeed, he goes down in political history as something of a denationaliser. He it was who, as Secretary for Energy, got rid of the Government's stake in British Petroleum.

As a matter of interest, by the way, has anyone else noticed how the proportion of swivelling eyes in the Cabinet is increasing? Mr John Hutton can be quite alarming. Mr David Miliband might bring about a diplomatic incident all on his own. As for his brother Ed, he might just as well be called "Mad Eyes" Miliband.

The ministers who were put on display before our admiring eyes last week were not like this. Mr Gordon Brown confined himself principally to Prime Minister's Questions. His task has been easier than it would otherwise have been because Mr David Cameron has decided to specialise in a high level of general indignation while not having the faintest idea of what he would do himself.

Exactly the same was true of Mr George Osborne, who was put up against Mr Alistair Darling in the censure debate on Tuesday. Colleagues of mine who award points for these encounters, like boxing referees, broadly agree that Mr Darling won the contest, even if it was far from being a knockout. Mr Brown survived likewise, for the reason that I have already indicated: Mr Cameron prances around doing no real damage.

At the same time, there must be worries about Mr Brown's stamina. It is reported (I do not know how truthfully) that he is having only three hours sleep a night. He tries to be calm, to sound reasonable. He has examined all the available choices – in modern politico-speak, "options" – with the greatest care, resting neither by day nor, as his friends are now telling us, by night. At last, after great exertions, he has come up with the prudent and the correct solution: the bank is to be taken into temporary public ownership. But at the back of his voice there is a note of hysteria.

The trouble is that Mr Brown and his colleagues do not really know what they are trying to do. This became evident with the procedural debate later in the week in the Commons and the more general debate in the House of Lords. In the Commons, the junior Treasury minister Ms Yvette Cooper assumed control of the proceedings. She belongs to the Patricia Hewitt school of political oratory and accordingly believes in treating her audience as less well-endowed mentally than she happens to be herself.

Unfortunately, she had picked the wrong opponent in the person of Mr Kenneth Clarke, who had looked in on the committee stage after dinner. Or perhaps he had eaten no dinner at all. He was highly acute but affability itself: the presence or absence of sustenance was arguable either way. Mr Clarke wanted to know: was the Government trying to make a success of Northern Rock? Or was it intent on running the bank down?

If it was the first course that was to be followed, the protection of the Treasury referred to by Sherlock Holmes (though unquoted by Mr Clarke) would inevitably form part of the bank's committees. If so, however, the other banks would complain with equal inevitability. It now appears that there will be a regulatory regime in place to put Brown's Bank on the same basis as the other, allegedly commercial banks. But on the evening in question, Ms Cooper had no answer.

Likewise, there was a flurry of excitement over whether the bank would be excluded from the Freedom of Information Act. The Government said it ought to be so excluded because of commercial confidentiality. The Liberal Democrats first of all dissented but the opposition in the Lords then rather collapsed.

When we did learn later in the week – the matter had gone unmentioned, as far as I can see, in Tuesday's censure debate – was that Northern Rock had sold on a huge chunk of mortgage debt to a firm called Granite and based in the Channel Islands. Mr Darling might meet with the response: "Kindly sign this piece of paper – a mere formality, I assure you – while I put on my running shoes."

The hero of the hour is, deservedly, Dr Vince Cable, though what has emerged over the past couple of days may make nationalisation a less straightforward course than it might have seemed at first sight. There are all kinds of doubtful characters prowling around the harbours of the Riviera, only too ready to get their running shoes on. Dr Cable, oddly enough, knows these people. I write that it is odd because he transmits an air of seriousness and endeavour. He has had several jobs in finance, the oil industry and the like. Alas, he is not Chancellor, but Mr Darling is.

The Northern Rock settlement has already started to unravel. There are certainly numerous strings to tuck in or to cut off. But Mr Darling is unlikely to pay any very heavy price. Norman Lamont survived for eight months after the events of September 1992. The policies of his successor, Mr Clarke, proved markedly successful, partly on account of our exclusion from the exchange-rate mechanism of the European Monetary System.

Mr Brown has maintained our exclusion from the euro to this day and shown no sign of changing. His difficulty is that he has come at the end of his own era. It is an aspect of the difficulty which I mentioned earlier: that he does not know what he wants to do about Northern Rock. Does he want to make it a successful public institution, subject to any provisions about unfair competition? Or does he want to return it to the private sector as soon as he decently can, possibly at cut prices?

It is fairly clear, on the evidence so far available, that Mr Brown still wants to get rid of his bank on almost any terms. That is why I think Mr Brown is at the end of his post-capitalist era.