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David Gauke, MP for SW Hertfordshire, says Gordon Brown and his "Chancellor" Alistair Darling make for a dithering, directionless double-act that is damaging the country.

The point of Alistair Darling was always supposed to be that he was a ‘save pair of hands’.  He was seen as unobtrusive and inscrutable and had held a number of Cabinet positions without attracting much adverse attention.  It was not a Ministerial career with many notable achievements but there were even some who considered him quietly competent.

It was a reputation he lost in the final months of 2007.  As Chancellor of the Exchequer, he has faced three major challenges – Northern Rock, HMRC’s data loss and the capital gains tax fiasco – and the response in each case has been one of indecision and delay.

The changes to CGT are the clearest example, in part because this was a crisis entirely of his own making.  When Mr Darling announced the abolition of taper relief in the Pre-Budget Report on 7 October 2007, he united business in opposition to the plans.  Within weeks, Gordon Brown was briefing journalists that there would be a partial U-turn and on 27 November, the Chancellor told the CBI that he was ‘listening to business’ and that he would report back to Parliament before Christmas with new proposals.

As it turned out, however, Mr Darling was forced to make a statement to Parliament before Christmas at which point he declared that he was not in a position to announce any changes to CGT until the New Year.

The full story of how the Government handled the Northern Rock collapse
has yet to emerge.  However, it is clear that the Chancellor made a
huge mistake in rejecting the Lloyds TSB bid before the run on Northern
Rock and that he should have guaranteed the Northern Rock deposits
earlier.  Mr Darling has consistently failed to get a grip (and be seen
to get a grip) of the situation.  Throughout, he has been reactive,
uncertain and nervous.   

We have also learned from the Sunday Times that the Bank of England
want to introduce fundamental reforms of the banking system in order to
prevent another Northern Rock but are frustrated by a Prime Minister
and Chancellor ‘unable to focus because morale throughout the
government is so low’. This criticism may have stung the Chancellor
into action and he set out some broad proposals in an interview with
the Financial Times on 4 January. 

As far as the loss of the HMRC discs is concerned, the major scandal is
that HMRC’s systems allowed a junior official, with the apparent
knowledge of his superiors, to access and download the personal data of
25 million people.  Alistair Darling has kicked all the issues relating
to this into the long grass by commissioning the Poynter Review which
will report later in the year.   

However, what is clear is that Mr Darling’s response to learning of the
loss was hesitant.  When informed of the loss on Saturday, 10 November,
he did nothing but tell HMRC to search its own offices and that of the
National Audit Office (in fact, HMRC did not get round to searching the
NAO premises for another week).  The Chancellor did not instruct HMRC
to contact the police until the following Wednesday and only told the
banks of the data loss late on the Friday.  Remember, the details of
7.5 million bank accounts had been lost and the banks would have been
the first to detect if these details were being misused.  But for six
days the Chancellor waited and hoped that the discs would turn up
before letting the banks know.  Parliament was finally told on 20
November.

Alistair Darling could be described as an unlucky Chancellor.  As a
rule, Chancellors are usually in the spotlight at pre-determined times
when presenting Budgets and Pre-Budget Reports.  In periods of global
economic growth and stability, the Chancellor is less subject to
‘events’ than, say, the Home Secretary.  The fact that failures in our
banking regulatory structure and the systems of HMRC came to light
under his watch (rather than his longstanding predecessor) might be
seen as being unfortunate for him.

He might also be seen as being unfortunate in that he serves a Prime
Minister who is reluctant to delegate, at the best of times, and who
takes his role as First Lord of the Treasury very seriously.  Gordon
Brown undermined his Chancellor by briefing the press about the CGT
retreat and, it is widely rumoured, blocked any announcement of changes
before Christmas.  Mr Darling is less Chancellor of the Exchequer and
more Second Lord of the Treasury.

Whether it is the First or Second Lord of the Treasury in charge,
neither man appears capable of making decisions.  As readers of Tom
Bower’s biography of Gordon Brown could have predicted, the Prime
Minister has revealed himself to be someone who finds making decisions
difficult and will delay doing so for as long as possible.  The General
Election fiasco perfectly illustrates this flaw and the consequences
that can follow.

In a sense, we have a Prime Minister and Chancellor well-matched.  A
dithering double-act, uncertain, insecure and directionless.  At a time
of global economic fragility, a faltering Revenue & Customs and a
substantial budget deficit, the UK needs something better.

6 comments for: David Gauke MP: The men who came to dither

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