Stealth tax cuts

History may not judge the Northern Rock fiasco to be Labour’s Black Wednesday. Instead, the banking saga might yet become to Gordon Brown what ‘sleaze’ was to John Major. The potential symmetry is one of form, not content (there is no hint of personal corruption in the saga of the collapsed bank). Just as ‘sleaze’ became the ubiquitous shorthand for the aura of jadedness, selfishness and obsolescence that clung to the Major regime, so the words ‘Northern Rock’ could easily become a catch-all means of expressing the sense that this government has lost the plot, squandered its reputation for competence and planted itself firmly on the back foot.

This week, David Cameron and George Osborne made a tactical decision to portray the nationalisation of the bank as an outright calamity rather than merely a severe embarrassment for Gordon Brown and Alistair Darling. On Monday the Tory leader declared that the decision was ‘a disaster for the British taxpayer, a disaster for this government and a disaster for our country’. Strong words, seen by some as positively hysterical. But Mr Cameron was not succumbing to hysteria. He was making a political calculation about the months ahead.

In manifold ways, this government no longer seems to be in control of its own destiny, let alone the destiny of the country. On Northern Rock, capital gains tax and non-doms, it has vacillated and reacted when it should have been decisive and proactive. The Prime Minister’s response is to contrast his own flinty approach at a time of global financial turmoil with the callow ‘opportunism’ of the public schoolboys across the dispatch box. He protests that he is taking the necessary ‘long-term decisions’ to preserve the fundamental stability of the UK economy.