Bruce Anderson: Brown finally makes a good decision. But it won't make up for the qualities he has lost

The PM has two modes: action leading to retreat, and thought that never leads to action

Last week, although nobody noticed, Gordon Brown got a couple of things right. For eight years, Paul Murphy was that exceptionally rare commodity in the Blair government: a minister with a safe pair of hands. As Minister of State in the Northern Ireland Office under Mo Mowlam, he did the work while she showed off. Later, he was a thoroughly competent Northern Ireland Secretary. He was the sort of chap you want in a department where a lot can go wrong: which only hits the headlines when the news is bad. That suited Paul Murphy. He had no interest in headlines.

This must explain why Tony Blair sacked him. Otherwise, it was an incomprehensible decision. Randolph Churchill once had a tumour removed and it was found to be benign. Evelyn Waugh's comment was characteristic: "How odd that the doctors should discover the only non-malignant bit of Randolph and throw it away.'' For those doctors, read Tony Blair. His government was full of incompetents, yet he disposed of a good man who had done well in a hard job. No member of the 2005 Blair government, including the Prime Minister and the Chancellor, had done less to deserve the sack.

Anyway, Gordon Brown has recalled Mr Murphy, if only to Wales. But as this government runs into ever-deeper trouble and the haplessness of several senior ministers becomes even more manifest, Paul Murphy could well be promoted.

Mr Brown also brought in another interesting figure with a past: Jeremy Heywood, the new Permanent Secretary at No 10. Those who have worked with him are unanimous in their praise. He is one of the ablest civil servants of recent years and an extremely likeable fellow.

His admirers include Norman Lamont and David Cameron. Although Mr Brown may not yet realise it, he will now have to drop one of his favourite dishonesties from the repertoire for Prime Minister's Questions. When he has been goaded to a more than usual pitch of desperation, the Prime Minister likes to claim that Mr Cameron was more or less responsible for Black Wednesday: Britain's forced withdrawal from the Europea * Exchange Rate Mechanism. As Mr Brown is well aware, this is nonsense. In September 1992, Mr Cameron was 25 and had been the Chancellor's political adviser for five months. It is absurd to claim that he was in charge of the Government's monetary policy.

Nor was Jeremy Heywood. But he had been Mr Lamont's principal private secretary for more than a year and, as such, a lot closer than Mr Cameron to the epicentre of economic policy. As Mr Brown has now tacitly acknowledged, Black Wednesday should not disqualify either man from occupying a senior post in No 10. In a couple of years, they may be there together, though this time the order of seniority would be reversed.

When he was Mr Lamont's private secretary, Mr Heywood seemed to live on cigarettes and black coffee. As a result, he too was a rarity: someone at the heart of politics who was visibly underweight. The secretaries would point out that shirts large enough to fit the rest of him were several collar sizes too big. This caused problems when he went through Customs. The officers thought that they had spotted a scrawny-necked druggie. They were right. Mr Heywood was an addict, but only of nicotine and caffeine, so he was always quickly released.

Many might prefer even the most sceptical interrogation by HM Customs to a posting in the land of Gordon. But Mr Heywood will do whatever he can to ensure No 10 works as efficiently as possible. Fortunately for the Tories, he has a difficulty which even his great intellect cannot solve: his boss.

As recently as four months ago, Mr Brown appeared to possess four formidable qualities: competence, integrity, strength and decisiveness. The decisiveness was first to go. It has long been noted that the PM chews his fingernails. Suddenly, everyone realised this was not just a cosmetic defect. The clunking fist had been replaced by a dithering nail-chewer. Labour's election prospects were the first visible product of his loss of nerve.

Northern Rock needed to be gripped and clunked, not flapped out by a trembling, nail-chewed hand. Earlier on, I wrote that the degringolade would not be resolved until Christmas and that the taxpayer would lose at least £10bn. I would now like to apologise for grossly overestimating this government's decisiveness and grossly underestimating its profligacy.

Gordon Brown's Treasury is capable of moving quickly (even if Alistair Darling draws the Chancellor's salary, he has as much control over economic policy now as Mr Cameron did in 1992). But it only moves when Mr Brown panics, as he did over inheritance tax and capital gains tax. Then, decisions are taken so fast as to be well beyond the speed of thought. Later on, however, thought catches up and the decisions have to be reversed.

There are two Brown modes. The first is action, followed by thought, followed by a retreat. The second is thought, endlessly protracted, which never leads to action – so at least there is no need to retreat. It is not clear which is worse.

The decisiveness went the way of the £1m which the Labour Party wasted on poster sites for an October election. The illusions of strength and competence were, alas, more expensive to dispel. But the bills for Northern Rock will finish them off. The reputation for integrity should have gone when Mr Brown spun Afghan troop numbers during his party conference speech, giving a lot of military families the false hope that their soldier relative would be home for Christmas. That was a disgraceful breach of trust, duty and faith. We should remember it if we are ever tempted to think that the PM is receiving too much blame for the Hain and Abrahams affairs.

In the case of Mr Hain, Mr Brown's crime was dithering, not corruption. It was clear from the outset that Mr Hain had to go. The sums of money were too large, the dubiousness self-evident, the questions unanswerable, the excuses pathetic. The best defence Mr Brown could come up with was that Mr Hain had been incompetent, a wonderfully reassuring description of a minister in charge of £130bn budget.

We are now told that Mr Brown's reluctance to sack Mr Hain had nothing to do with dithering. It was merely that the PM did not want to look like a bully. If only he had displayed a similar reticence a few weeks ago instead of shouting at the Garden Girls: the girls in No 10 who are probably the finest secretaries in the world. This is a man who does not know how to exercise his authority in a rational way. Two good appointments will not cure that problem.

Tony Blair also got something right, not last week, but over several years. He concluded that Mr Brown was not up to the job of being Prime Minister.