Alan Watkins: A 'spot the difference' puzzle at No 10

It was not Denis Healey who promised to squeeze the rich until the pips squeaked; it was Sir Eric Geddes, speaking at Cambridge in 1918, and he was not referring to the rich but to the Germans.

Why Lord Healey should have been saddled with the quotation remains a mystery. But then, Mr Mike Yarwood added to the Chancellor's fame by incorporating the phrase "silly billy" into his impersonations.

Lord Healey promptly adopted it for the purposes of his own act, even though he had not used it before. The trademark phrase had been much employed by Randolph Churchill, son of Winston, in his newspaper contributions of the 1950s and early 1960s.

What Lord Healey really said, at the Blackpool conference of 1973, was that there would be "howls of anguish" from the rich if he became Chancellor, as he duly proceeded to do in 1974.

Two years later, with James Callaghan recently installed as Prime Minister, the Chancellor had to go for a loan from the International Monetary Fund. Harold Wilson had got out in time; much as Mr Tony Blair had removed himself in 2007. There was, however, a difference. Wilson had planned his departure for years, four of them, if the fullest accounts are to be believed, as I do.

Mr Blair, by contrast, wanted to go on for longer. It is a piece of mythology, partly created by Mr Rupert Murdoch's newspapers, that he left office at a date and in a manner "of his own choosing". Mr Blair had his mind made up for him by the peasants' revolt of September 2006, largely brought about by his continuing support for US policy in Lebanon.

I think that Mr Blair, if he had stayed on, would have behaved in much the same way as Mr Gordon Brown is behaving. So far as Mr Brown is marking the end of Blairism, or, if you prefer it, of New Labour, the Prime Minister is using most of the rhetorical tricks which Mr Blair perfected in his spell at No 10.

There is, to begin with, the patriotic card. It is interesting to see how Mr Brown drags in admiring references to our armed forces, even though he had previously shown no great interest in military matters. But then, lo and behold, a whole book suddenly appears of profiles in wartime courage. Either he has a highly dedicated team of ghost writers or he is neglecting his duties in Downing Street for, as some of us know, it is hard work to write a whole book from start to finish.

Patriotic fervour can easily be transferred from the armed services to the currency. Mr Alistair Darling, to his credit, has refrained from joining in the general denunciation of the Tories for allegedly "talking down" sterling. Wilson used to specialise in complaining of this kind in the 1960s. In recent weeks, Labour speakers (not including Mr Darling, or I think not) have mentioned Margaret Thatcher in the same way. She, too, used to denounce the talkers-down. But she also said that you could not buck the market, so fair play to the old girl.

When Mr Brown succeeded Mr Blair in June 2007, there was a disposition to believe, not perhaps that true Labour had been restored, but that there was a new beginning. Lord Hattersley was as full of zeal for the new dispensation as were the foolish virgins of The Guardian newspaper.

This period of enthusiasm lasted for roughly three months. Now, all of

a sudden, socialism is supposed to be back in fashion again.

In fact Mr Brown hesitated for months before taking action of any kind. Not only did the action that was at last taken fall short of full public ownership, but Mr Brown went out of his way to deny that what had been done amounted to nationalisation at all. The very word was like a curse or an obscenity, not fit to be used before, say, the trustees of the BBC.

Dr Vince Cable was not so shy. He continues to make the most sensible contributions to the debate that is going on. Quite why the Liberal Democrats are not doing better in the polls than they are remains a puzzle. I suppose that in times of trouble, public opinion tends to polarise. Dr Cable certainly cannot be blamed, but there it is.

In his speech in Wednesday's debate, Dr Cable asked why no government or Treasury appointments had been made to the boards of the banks that had been supported by the taxpayer. Mr Darling replied soothingly that all was in hand and that the appointments would be made in a matter of days. Mr Darling added, with equal emollience – though perhaps less soothingly to the taxpayer – that he would not expect to be issuing directions to the banks.

But that, of course, is precisely what the taxpayer would expect Mr Darling, or one or more of his duly appointed representatives, to do.

Dr Cable, who had properly given way to allow Mr Darling to provide his assurances, then completely accepted his explanation and resumed his seat within seconds. The speakers were operating under a 10-minute limit. Dr Cable understandably had to rush.

In the circumstances, I can add a few observations of my own. As for the banks, I am reminded of Felix Schwarzenberg, the Chancellor of the Austrian empire in 1849: "We shall shock the world by the depth of our ingratitude." Like the Austrian, I have a certain admiration for the banks. They are not prepared to be pushed around by the Government.

No doubt examples of pressure from No 10 or from individual ministries can be produced from all governments of recent times. But there was a whole succession of particularly flagrant episodes from the Callaghan government in relation to the prices and incomes policy.

The banks have landed themselves in the trouble they are now in largely owing to their lending policy, which was encouraged over a whole decade by the current Prime Minister who was then the Chancellor.

If he and his present Chancellor want the banks to revert to their more adventurous ways (whether in the interests of the wider economy, or of the Labour Government) they should say so clearly, in directions made in proper legal form.

All the statutes setting up the nationalised industries – as remote from us as the tombs of ancient Egypt – contained provisions to enable the responsible minister to issue directions to the board in the public interest, as the minister conceived it to be. Only two or three such formal directions were ever given. Successive governments regarded these instructions as unfriendly and unhelpful, as bad for government as they were thought to be for the public corporations themselves.

The result was the politics of a-word-in-your-ear, which remains the preferred way of doing business in this country.

Politicians and the press can unite against the banks in a bout of bullying which has the merit of leaving its victims unharmed, indeed, in a state of restored health. Mr Brown can bully Mr David Cameron. The politicians themselves have received a new lease of life, of which Mr George Osborne was as much a beneficiary last week as Mr Darling days later.