Watching Gordon Brown in action today at PM’s questions, I couldn’t help thinking he was actually enjoying himself for the first time. The body language was more relaxed, the smile a little less robotic.

He seems to think this clever Goldman’s wheeze on saving the Northern Rock with a government-backed bond issue offers the government an escape route from the whole fiasco and could even end up with the taxpayer making a profit.

Better still, he is able to highlight the extraordinarily uncertain Tory response to Northern Rock. Of all the options available, Mr Brown is probably right to say that administration – the current option favoured by the Tories – is probably the worst.

But I think what really got those whitened teeth flashing was a good old fashioned row over the economy. When Ken Clarke, the former chancellor, laid into him, it was just like the good old days. Mr Brown was able to reel off the stats about the Tories presiding over 15 per cent interest rates, 3m unemployed etc etc.

This is home turf for Mr Brown. It is his comfort zone. David Laws, the Lib Dem MP and former Treasury watcher, summed it up when I bumped into him outside the chamber.

"It’s almost as if the economic downturn and stock market turmoil is what he wants," he said. "It’s where he seems to want the debate to be."

Whether the public will "cling to nurse" (alias the former Iron Chancellor) or blame him for their economic plight is perhaps the big unknowables of British politics in 2008.

Nick Clegg got through probably the most nerve-wracking two minutes of his political career intact after a low-key but thoroughly telegenic debut at prime minister’s questions.

He avoided jokes – you end up looking desparate if nobody laughs. He didn’t try to be too clever. Instead he got away two questions on the government’s response to rising energy prices and fuel poverty. On the telly he looked serious and concerned. And he left the chamber unscathed.

That is about as good as he could have expected. The main thing was he did not stumble and bumble his way through his debut, as did Ming Campbell, his predecessor. Having survived he can try to be more ambitious, aggressive and funny next time.

But I was more interested at the apparently genuine attempts at flattery of Mr Clegg by David Cameron and Gordon Brown. Mr Brown spoke about their "private meetings" and how he wanted to work with him on common projects where they agreed.

Both know they may have to turn to Mr Clegg’s Liberal Democrats if – as seems possible – the next election produces a hung parliament. While Ming Campbell was a close friend of Mr Brown, the prime minister cannot rely on the support of the more right-leaning Clegg to keep him in power.

Would the Lib Dem leader do a deal with the Tories? I doubt if his activists would let him. But that does not mean he would necessarily prop up a defeated Labour government. He could do deals on an issue-by-issue basis with the biggest party.

In any case when he utters the magic Liberal Democrat word "equidistance", I reckon he intends to put more distance between his party and Labour than would ever have been imagined by either Sir Ming or – going further back – Paddy Ashdown.

Steve Morgan, who ran Peter Hain’s deputy leadership campaign, spoke today on BBC Radio Wales of arriving half way through and discovering scenes of "absolute chaos".

This tallies. After all, Mr Hain is still trying to work out who gave money to his campaign – and how much – almost six months after he was legally obliged to do so.

His office is being coy about the scale of his under-declaration of donations to the campaign, which are required under electoral law.

Few in Westminster believe Mr Hain is guilty of anything more than chaotic organisation. But the episode is worrying, not least because he is in charge of by far the biggest budget of any Whitehall department.

Some Labour MPs are asking whether a minister who is so cavalier about accounting for his own campaign finances be expected to be taking a keen interest in rooting out wrongdoing in the massive benefits budget?

Gordon Brown and Alistair Darling have made an impressive start to 2008 – at least judged by the shambolic standards of the weeks running up to Christmas.

Mr Darling flew back to the Treasury from Edinburgh for a day to give an interview to the FT which set the tone for how he will deal with the fallout of the Northern Rock crisis. Rather than waiting for the Treasury select committee to tell him what to do, this gave the impression he was in control.

Then Gordon Brown gave a series of quietly impressive television and radio interviews. Even my schoolyard friend – who normally drops off his daughter and then bends my ear about Mr Brown’s utter uselessness – said he was impressed by the PM’s appearance on the Today programme this morning.

Fair enough. But before we get too carried away, I think the real reason why Mr Brown’s administration seems a bit more stable as we enter 2008 has nothing to do with these two heavyweights "hitting the ground running".

It is more the fact that over Christmas, the government has been closed down for several weeks. No government initiatives, no disasters either. Suddenly the Conservative lead over Labour has shrunk from ten points to five.

When will politicians learn that what the voters want most is not endless action but a bit of peace and quiet. Look at Belgium: they haven’t had a government there since June, and – as far as I could judge on my last visit – the country seems to be getting on perfectly OK without the politicians.

If I were Mr Brown I’d keep my head down for a few weeks. Let memories fade of his grim 2008 and wait for the press to get bored. We might even start focusing on inconsistencies and tensions on the Tory side as David Cameron starts to roll out his programme for government.

Gordon Brown said something today which I have never heard him say before. Sorry.

Referring to the government’s loss of 25m pieces of personal data in the post – described by one security expert as a "starter kid for identity fraud" – the prime minister did not mess around.

"I profoundly regret and apologise for the inconvenience and worries that have been caused to millions of families who receive child benefit," he told the Commons.

This seems to be the first time Mr Brown has apologised for anything as prime minister. I don’t recollect him ever apologising for anything, and his aides looked flummoxed when I asked them whether this was a first.

Mr Brown has expressed regret for his decision to raise the state pension by just 75p one year, according to Downing St officials. But that isn’t exactly the same as issuing an apology.

So – if this is indeed a first for Mr Brown – it shows the political magnitude of this data blunder and the possible damage it could do to the government.

What I’d like to know is whether the government is now going to underwrite every case of fraud committed on every parents’ bank account in the land – if these discs got into the hands of big-time crooks.

Mr Brown again repeated that any fraud would be compensated through the banking industry’s own code. But Treasury officials have also told me that the banks could then get that money back off HM Revenue and Customs, if they could show the fraud was linked to the lost data.

What we know about fraudsters is that – if they got their hands on the missing CDs – they would probably wait a few months before starting to rip off the banks.

In which case, how would the banks know whether HMRC was to blame? Or, put it another way, how could the government say it was not its fault, if the discs are still out there somewhere?

Is the government nationalising the Banking Code and its fraud compensation scheme? After guaranteeing deposits in the Northern Rock, is this starting to become a habit?

Gordon Brown’s promise to outline his "vision" for Britain after scrapping plans for a 2007 election has raised expectations whenever he makes a new speech and provokes the inevitable question: "Is this it?"

Anyone hoping for a new foreign policy vision in Mr Brown’s speech to the Lord Mayor’s banquet in the City on Monday night is likely to have been disappointed.

"My approach is hard-headed internationalism," Mr Brown said. As opposed to what? "Internationalist because global challenges need global solutions." Hardly original. Reading the substance, Mr Brown’s foreign policy approach sounds rather like that pursued by Tony Blair.

There is a tough (US-friendly) line on Iran. There are warm words about the US ("our most important bilateral relationship"). Mr Brown criticises President Musharraf of Pakistan – a key Washington ally – for imposing martial law, but holds back from calling for Pakistan to be suspended from the Commonwealth.

The speech is a lacklustre affair, which will only add to speculation in the Foreign Office that Mr Brown is not focused on – or especially interested in – foreign policy. For a landmark speech, it has none of the passion or verve of Mr Brown’s recent speeches on liberty or education.

What it does contain is further evidence of Mr Brown’s belief that reformed global institutions such as the International Monetary Fund, World Bank and UN Security Council hold the key to solving the international problems he identifies. He dwells on these reforms at length.

But characteristically only a short part of the speech is devoted to Europe, perhaps the most effective multi-lateral organisation in the world – through which Britain can leverage its influence on issues like climate change, trade and security.

Mr Brown has a golden opportunity to lead in Europe along with likeminded allies like Nicolas Sarkozy and Angela Merkel but so far shows little inclination to get stuck in.

With the unratified EU treaty hanging over him until at least the middle of 2008, Mr Brown seems to have Europe locked up in a box marked: "Toxic: open at your peril."

If he is serious about developing a global policy, he should look beyond reforming unwieldy bodies like the UN and IMF – worthy though that cause might be – and start using the tools he already has at his disposal.

The EU is the world’s biggest and richest trading bloc. It is being copied in Africa, South America and South East Asia as a model for small countries hoping to shape globalisation. And it is a multi-lateral organisation which, in spite of its flaws, already works. He should grab the steering wheel.

Gordon Brown has a problem: he has talked about having "a vision for the future" and now he has to deliver. His ludicrous claim that he shelved the planned 2007 election to give him more time to explain his vision – nothing to do with the polls, of course – has put him under more pressure.

His aides are getting exasperated. "He’s setting out his vision all the time," said one. They point to his recent speeches on liberty and education – packed with philosophical musings – as evidence that his vision is there for people who want to see it.

The problem is that is not enough for his critics, who have their own motives for urging Mr Brown to use Tuesday’s Queen’s Speech debate on the government’s new legislative programme to chart a new course for his administration.

The dilemma for the prime minister is that the Queen’s Speech is perhaps the worst occasion to map out this new direction, even if he has one in mind.

Firstly the 25 or so bills are largely relics of the dying days of Tony Blair’s administration and Mr Brown does not seem to have thought up many new ideas in the four months since he arrived in Number 10.

Secondly, since Mr Brown trailed most of the bills in July he has completely lost any sense of surprise.

The prime minister will have to be on top of his game – not always the case in recent parliamentary performances – to avoid being portrayed by David Cameron as the visionary unable to move his government on to a fresh agenda.

Mr Brown probably deserves all he gets, having talked up the "vision thing" when he aborted the election. But lack of vision is not his real problem: after all the public seemed enthralled by him when he did nothing more complicated this summer than appearing to be a competent, unspun, hard-working prime minister.

Restoring that image – rather than making dense speeches citing Locke, Tawney and Himmelfarb – should be his first priority. The vision can wait.

The FT’s story today about foreign migrants in the British labour market tells us an intriguing thing about Gordon Brown’s Britain: the UK’s new economy seems to be better suited to foreigners than to the local workforce.

As we report, the British economy is generating plenty of  jobs – 270,000 net new posts over the last two years – yet at the same time the number of British nationals in work has fallen by exactly the same amount.

The 540,000 difference between the jobs vacated by Brits and the new jobs created has been filled entirely by workers from the European Union and – to a lesser extent – migrants from outside the bloc.

It is not entirely clear why this should be. The government says the indigenous population of working age fell during the last two years. But that does not get round the fact that Gordon Brown frets about the level of economic inactivity among local workers, hence his promise to find "a British job for every British worker".

The truth is that there are jobs there if you want them, as the migrant workers have shown. It is just that it seems many Brits would rather not do them, or that they are being forced out of the market by the recent arrivals from abroad. Simon Briscoe, our statistics editor, reckons the latter factor may be important.

That was "a bit more like it", sighed one relieved Brownite, after the prime minister returned to Commons form with a confident question time performance.

After the disaster of last week’s PMQs – when he floundered like an ageing heavyweight pinned against the ropes – Gordon Brown had the material and the jokes to breeze through what could have been another awkward session.

His advisers insist it was the same team who prepared the PM last week, although why they have suddenly discovered the value of humour and research a week late is beyond me.

Mr Brown was helped by the fact the whips had also got their act together, encouraging Labour backbenchers to cheer their man to the rafters, even when he was talking about elderly hospital patients dying of C.difficile. Ian Austin, the PM’s parliamentary aide, was rebuked by the Speaker for orchestrating the wall of sound.

What about David Cameron? His taunt that Mr Brown should call an election sounded strangely like last week’s story – something which will come as a great relief to the PM.

His claim that Mr Brown’s obsession with hospital targets contributed to the filthy state of Britain’s hospital wards was effectively rebutted by the PM, and as for his attack on the EU treaty, the issue simply failed to ignite in the Commons.

It wasn’t a poor performance by Mr Cameron, but political normality of a sort seems to be returning after the last few tumultuous weeks.

For a poor performance look no further than Vince Cable, acting leader of the Lib Dems, whose rambling question and comment about his happy marriage were mocked by Mr Brown, who poured lavish praise on his Fife neighbour, ex-leader Sir Menzies Campbell.

If Mr Cable had still entertained hopes of replacing Sir Ming in the long-term, I suspect his MPs will have seen enough today to have realised he made the right decision not to contest the post.

Why doesn’t Gordon Brown just say it? There won’t be a referendum on the EU reform treaty. He might as well make it crystal clear, because there are some – like the Daily Telegraph – that cling to the idea the prime minister might still put the text to the people, if he doesn’t secure all his negotiating "red lines".

On Monday the PM said that if all his red lines were not met when the treaty is finalised next week at an EU summit in Lisbon "we will veto it or say there has to be a referendum".

This is spin its its most juvenile form – and it left the PM’s official spokesman wriggling as he tried to explain it this morning. Think about it for a moment.

If Mr Brown was to hold a referendum on the EU treaty, that means he will have signed a document which he believes is against Britain’s national interest. Huh? And then what? Presumably he would have to campaign for a No vote – a rejection of a treaty which he had just signed in Britain’s name.

At least the PM was a bit more open later at a press conference when he said he would not agree to a treaty which did not contain all his opt-outs, opt-ins, protocols and exclusions. To make that clear to anyone who still doesn’t understand: there will be no referendum.

Of course, having "bottled" a general election, Mr Brown now stands accused by the Tories of bottling another date with the British people. And they have a point. I recently returned from a five-year stint as the FT’s Brussels bureau chief, and I can confirm that the new treaty is – essentially – the same as the constitution upon which the government did promise a referendum.

All the main ingredients – the EU president, foreign minister, foreign service, new voting system, extensions of qualified majority voting – are still there, albeit with some belts and braces for the Brits. The Commons EU scrutiny committee said as much in a report this week.

In spite of the political hit he will take, I reckon Mr Brown is right. The treaty will modernise the EU and make it more effective (admittedly a result europhobes will not favour in principle). It also strengthens the grip of member states on the Union – after all, the new EU president will be a creature of national capitals, not part of the bloc’s federalist structure.

Even if this treaty did represent a big transfer of power to Brussels, why on earth should this complex issue be a matter for the people rather than parliament? This is a representative democracy after all. The government got themselves into this mess, so I suppose Mr Brown deserves the opprobrium he will get for ultimately doing the right thing.

Gordon Brown has set a lot of store on giving Britain more time to see his vision for the future before he holds a general election.

This has obviously left him open to mockery from David Cameron, who ridiculed Mr Brown’s suggestion that this vision was so important that even the prospect of a 100-seat Commons majority would not have persuaded him to hold an election next month.

“He is the only prime minister in history to flunk an election because he thought he was going to win it,” scoffed Mr Cameron, as Mr Brown squirmed his way through a terrible half an hour at prime ministers’ questions.

Mr Cameron’s attack would strike home even if Mr Brown had a clear vision (everyone knows he aborted the election because his pollsters said he would have a majority as low as 20). But what if Mr Brown doesn’t actually have – or can’t articulate – a vision?

Mr Brown’s first 90 days in office (before the election fiasco) were brilliant in the sense he presented himself as “the change” from Tony Blair: no spin, straightforward, big tent, competent etc. A lot of that good work has now been undone, of course, by the events of the last fortnight.

But what exactly is his strategy for changing Britain? His Labour conference speech, which received positive coverage at the time, has now been reassessed in the media as being rather hollow and lacking a big strategic idea.

The pre-budget report – a chance for the government to map out its economic strategy – saw Alistair Darling, chancellor, rummaging around under the mattress to try to keep health spending going, but most of the best lines were stolen from the Tories.

As Jonathan Freedland in today’s Guardian asks: “You’ve had had long enough to work it out. What is your vision, Gordon?”

The prime minister, having surrendered the political momentum to David Cameron in a dramatic way in the last few days, needs to find the answer soon. The restless body language of Labour MPs behind him in the Commons today suggests their patience is not limitless.

FIrst off, I was wrong. I couldn’t see how Gordon Brown could back out of a November election without inflicting serious self-harm. It would have been a gamble, but in my view the bigger gamble was to wait, especially since a delay would hand the Tories a propaganda victory and deal his own reputation a heavy blow.

But having cranked up the election hype for weeks (make no mistake, this was not a media creation), Mr Brown’s decision to delay a poll – probably until 2009 – has fundamentally changed the terms of political trade.

The prime minister will be labelled "Bottler Brown", the man who failed to run against Tony Blair for the Labour leadership in 1994, was prepared to wound but not strike Mr Blair when he was PM, who backed out of a promise to hold a referendum on a new EU treaty. Now he is walking away from an election which his own aides had spent the last few weeks talking up.

By contrast David Cameron has been transformed from a political dead man walking – the latest in a line of Tory leaders heading for electoral disaster – into somebody who looks like he could be a winner. The Tories are back in the game.

This whole affair gives the Tories that most valuable of political commodities – momentum. But will there be longer term ramifications for Mr Brown, beyond the humiliation he will face next week when the Commons returns after its summer break?

Long term predictions are pretty pointless. The last few weeks have shown how febrile British public opinion is at the moment, with the polls veering widely from Labour domination to a Tory lead in a matter of days. Small political events can trigger extreme responses from the electorate.

But I think the damage to Mr Brown could outlast the firestorm of the next few days. The Tories have an open goal when it comes to tackling the prime minister’s claim to have risen above squalid party politics – to be some kind of father of the nation: they will say he ran away from an election because of poor opinion polls.

They will also use the episode to attack Mr Brown’s claim to have binned spin. What else has been going on for the last few weeks of election hype? And what about the ill-judged trip to Basra during the Tory conference?

Suddenly the master tactician looks vulnerable. He can bounce back – of course – but this has been a searing episode for the prime minister and his closest advisers. Hubris is the word that springs to mind.

 

Westminster blog

on the UK political scene

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Jim Pickard and Kiran Stacey, FT Westminster correspondents, share the latest news and analysis on the UK's political scene.

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Jim Pickard joined the lobby team in January 2008. He has been at the Financial Times since 1999 as a regional correspondent, assistant UK news editor and property correspondent.

Kiran Stacey is an FT political correspondent, having joined the lobby in 2011. He started at the FT as a graduate trainee in 2008, working on desks including UK companies and US equity markets before taking over the FT's Energy Source blog.

Contributors

Elizabeth Rigby, the FT's chief political correspondent, joined the lobby team in September 2010. Elizabeth has worked at the FT for more than a decade and was most recently its consumer industries editor.

Helen Warrell is the FT's UK reporter, covering home affairs, crime and policing. She joined the FT in 2008 and has spent time as a reporter in the Brussels bureau and more recently, editing the paper's Asia coverage on the world news desk.

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