Bruce Anderson: Time to expose Brown's negligence

Most voters only think fitfully and irritably about politics. It follows that when they get what they think they want, they often do not like it. Take the current crisis. Much of the public would insist that things are too serious for yah-boo partisanship: that this is the time for all good men to forget party and come to the aid of the country. For some weeks, David Cameron went along with this. The early drafts of his Party Conference speech included some good knockabout at Gordon Brown's expense. In the final text, it was all discarded.

Instead, Mr Cameron offered to cooperate with the PM, just as the voters think that he ought to. The result: a reduced Tory lead in the latest poll. That said, most of Labour's gain has come from the Liberals, which seems odd. Vince Cable, the Liberals' Treasury spokesman, has had a good crisis. Much good it has done his party. The trouble is that Vince Cable and Chris Huhne cannot conceal the rest of their party's chronic lack of seriousness.

But Mr Cameron had a problem. If he had struck too early, he would have been accused of exploiting the country's woes; talking down Britain, in the words of that great patriot Harriet Harman. So the Tory leader was absent from the airwaves. The result: grumbling from some Tory faithful – or at least from some Tory bloggers. Where was David Cameron? Why had he not solved the problem and scorned Gordon Brown out of office? Opposition can be a maddening business.

Fortunately for Mr Cameron's peace of mind, none of the recent developments has surprised him. As soon as the banks started collapsing, he knew that the terms of political trade had radically altered, and that this would be good for Gordon. In the short term, the Tories have no easy solution.

It would help if they could package an account of the crisis in a few sparkling sentences which fixed the blame on Mr Brown. But that is impossible. It would lack intellectual credibility, and the voters would not believe it. Inasmuch as most voters think that they know what has happened, they believe that it is the fault of greedy bankers, abetted by the Bush Administration. Most of the British public is irredeemably convinced that George Bush is personally responsible for all the world's ills, from the credit crunch to climate change to child molestation.

This is convenient for Mr Brown, especially as bank bonuses are in the dock next to the President. Inevitably, greedy bankers help the Left and discredit the Right. Even so, the Tories are not as much at the mercy of events as recent developments might suggest. They can and should do more to influence the debate.

In so doing, they ought to concentrate on three areas: regulation, debt and waste. There is no point in accusing Mr Brown of causing the entire problem. No-one would believe that, rightly so. But Gordon Brown has no answer to some very serious charges: that by his sustained negligence, he left Britain worse prepared for the banking shock than any other country in the world, except Iceland.

There are three prongs to this attack. The first is regulation. Until 1997, the UK system of bank regulation was the best in the world. It underpinned the transformation of the financial sector that occurred after Big Bang, which has been crucial to our prosperity. Without the City, there would have been no way of financing either living standards or social programmes.

An efficient City requires sophisticated regulators who not only understand banking but also possess that uncommon attribute: common sense. They should be aware that you can have too much of a good thing. They must be ready to remind the young, easily caught up in the enthusiasms and profitabilities of the fashionable moment, that there is nothing so terrifying as the sound of crashing paper. The regulators must always have a good nose for a wrong 'un and be able to pick out a corked banker from the other end of Threadneedle Street.

These are not easy tasks. Yet for most of the 20th century, the Bank of England performed them. The Bank was one of those ethos-based institutions which are hard to explain to foreigners, but which are the glory of British public life. They have enabled this country to survive everything that modern history could throw at it: wars, economic depressions, Labour governments.

Then came Gordon Brown. Like the rest of the new Labour tribe, he had no understanding of ethos, and filled that intellectual vacuum with contempt. He is also a compulsive complicator. He cannot come across anything that works well without heaping it with new regulations and procedures.

Thus it was with bank regulation. Instead of one body which had done the job well, Mr Brown divided the responsibilities between three rivalrous organisations: the Bank – now diminished and disgruntled – the Treasury and the Financial Services Authority, which is better at demanding more resources than at explaining how it has deployed the very large sums that it has already spent, with unimpressive consequences.

Inadequate regulation exacerbated the recent problems.That is Gordon Brown's fault. So is the high level of public debt. There is nothing wrong with a bit of Keynesianism: a highish public sector borrowing requirement when the rest of the economy is sluggish, sharply reducing when the private sector is growing fast. Everything should roughly balance out in the course of an economic cycle. As George Osborne puts it, borrowing from President Kennedy, Chancellors shoud fix the roof when the sun is shining.

Not with Gordon in charge. He does not believe in balance, economic cycles, or mending – only in spending, spending, spending. The consequences are now apparent. It is time for the Tories to be relentless in exposing this. Nor are the malign outcomes merely macro-economic. A profligate government is also a wasteful one. As a result of new money poured down without touching the sides, much of the public sector has become more inefficient and demoralised.

So the Tories have no shortage of targets, only of phrases and narrative. David Cameron must rectify that, as politics returns to normal – which it will.