Backbenchers decide Brown is having a 'good' economic war

ANALYSIS:PRESUMABLY THERE will be no further lectures now from the soon-to-be-ennobled Lord Mandelson on the dangers of "economic nationalism" blocking the way to international agreement and co-operation, writes Frank Millar,London Editor

Nor hints either of angry telephone calls from chancellor Alistair Darling to Minister for Finance Brian Lenihan protesting the unhelpful effect of "unilateral" actions by the Irish Government.

For while still preaching the doctrine of "global solutions for global problems", British prime minister Gordon Brown yesterday put his and his Labour government's authority on the line with a £400 billion (€505 billion) package of measures designed to liberate the British banking system and counter the threat of imminent recession.

No matter that this was a high-stakes gamble, making British taxpayers significant shareholders in leading high street banks whether they like it or not.

Labour MPs were understandably delighted.

Having set aside (for the time being at least) their preoccupations with Mr Brown's unsuitability to lead them into a general election, many of them have evidently decided the prime minister is having a "good" economic war.

The cheering backbenchers also sensed David Cameron's difficulty in finding himself forced to play the role of leader of the constructive opposition.

For all the display of bipartisanship at Westminster yesterday, however, Cameron opened up some space in anticipation of a future reckoning.

In adopting a distinctly non-conservative position and demanding assurance that there be "no bonuses" for executives of any participating banks, moreover, thoughtful Labour MPs will have been discomfited by the observation that the Tory leader was casting himself as more Barack Obama than John McCain.

In assuring Brown of his party's "wholehearted" support for the British bailout, Liberal Democrat leader Nick Clegg also gave an intimation of normal party hostilities to be resumed further down the line.

"When the ship is sinking," he offered with more than a hint of savagery, "you send out the lifeboats."

Any argument about who steered the ship into the iceberg in the first place was for another day. It is hardly fanciful to think that touch might have been provided by Liberal Democrat treasury spokesman Vince Cable, considered by many the best chancellor Britain could have in a government of national unity. For yet again Cable had been seen to be ahead of the game, while the "d" word had begun to exercise much of the commentariat.

Brown hates the suggestion that he is a "ditherer". Yet that was again the perception even before Darling rose to make a statement in the Commons on Monday that spectacularly failed to reassure the City and saw shares in London suffer their biggest one-day points fall on record.

Just 24 hours before, on the BBC's Andrew Marr Show, Darling had indicated his readiness to take "some pretty big steps" to deal with the crisis. This was taken to be a reference to the part-nationalisation plan for the recapitalisation of banks floated by both Cable and Cameron. Indeed, the London Timeson Monday splashed on the emerging plan to pump billions of taxpayers' cash into the British banks.

Bank shares plunged when the plan failed to materialise, while Downing Street seemed preoccupied with blaming the Conservatives for leaking the details of a confidential briefing last Friday given by Mervyn King, the governor of the Bank of England.

The plan had seemingly been in the making for several weeks.

Yet ministers were still engaged in the blame game on Tuesday after news broke that the chief executives of three big banks had been discussing the details of the plan with the chancellor on Monday night.

Again, Tuesday's Daily Telegraphreported the banks giving broad support for the government taking equity stakes in return for capital injections.

"Everybody knows they're going to do it - get on with it," was the sage advice from former conservative chancellor Kenneth Clarke.

Yet Brown and Darling only finally did it after Tuesday's "day of reckoning" had seen bank share prices collapse once again.

Even while denying Tuesday night's Downing Street summit in preparation for yesterday's announcement represented any form of "emergency" session, Number 10 maintained that any decisions required would be taken in "a calm, orderly and responsible" manner.

Nobody believed that - while yesterday everyone had to hope that this US-style package would not just enable the banks but crucially, as Cameron succinctly put it, "feed into the real economy" as well.

Having rushed to congratulate the prime minister and chancellor yesterday, Labour MPs will know who the British public will hold to account if it does not.

Having spent and borrowed on such a staggering scale, meanwhile, they might also reflect that Brown and Darling have still declined to heed the Daily Telegraph'sadvice to follow the Irish example and guarantee all bank deposits without limit for a fixed term.

The newspaper argued yesterday that "no other single measure" would do more to restore public confidence.

But then again, maybe that's another tough choice that lies ahead, still to be taken in orderly fashion.