Leading article: Farewell to the prudence that once made New Labour electable

The Government is planning to ditch the rules that have governed Labour's stewardship of the economy for the past 11 years. New rules, to be announced in the autumn, will allow the Government to borrow and spend its way out of its present difficulties. Now you can argue that too much store is set by strict compliance with rules and that New Labour, as it then was, offered a hostage to fortune when it committed itself to rigid principles for running a sound economy. You can also argue that, as chancellor, Gordon Brown was less scrupulous in observing the rules than he was cracked up to be. What is missed here, however, is the political imperative.

In the 1990s, Labour needed to inspire public confidence. It had to demonstrate to the voters, and especially to business, that it could be trusted on the economy. This is why it pledged itself to rules on spending and borrowing before the 1997 election and why Mr Brown's first act as chancellor was to make the Bank of England independent. This is also why any plan to rewrite the rules is so devastating. It drives a coach and horses through Labour's very own undertakings on sound economic management.

For Labour to wrest from the Conservatives the laurels of being most trusted on the economy was not only a precondition for Tony Blair's first election victory, it was also a considerable feat. And it was a feat Labour kept up for more than a decade. Indeed, the perception of economic success was one reason why Mr Blair managed to win a third election victory, despite being weighed down by the problems of Iraq.

If the rules are now to be changed, that is another way of saying that the old rules, the rules introduced to show how responsible a Labour government could be, would otherwise be flouted. If, as it appears, the changes will loosen restrictions on borrowing, then the reputation for sound money that Mr Brown built as chancellor is compromised. Such a move would also amount to an admission that the state of the economy is as bad, if not worse, than feared.

Mr Brown and Alistair Darling between them have made much of the ill winds from abroad that are creating the current uncertain climate. And there is some truth in what they say. In the timing of his transfer from the Treasury to No 10 – as in so much else – Mr Brown has been unlucky. The US mortgage crisis, escalating world fuel and food prices all descended on Britain just as Tony Blair elevated himself into elder statesmanship.

At the same time, however, Gordon Brown's reputation for sound, even brilliant, economic stewardship looks increasingly overblown. In many ways, he was as blessed as Mr Darling is cursed now by the global conditions beyond one government's control. He also benefited consistently from higher government receipts than anticipated. Even so, he was not above a little rule-bending, rewriting his golden rule about keeping spending and borrowing in equilibrium by simple dint of "correcting" the timing of the economic cycle.

And the Government was always selective in the indicators it used to define its success. It cited growth, borrowing and (official) unemployment, rather than productivity, manufacturing, exports or training – areas in which Britain's performance consistently lagged behind that of other EU countries. The extent to which Britain's boom relied on cheap credit and high house prices was also underplayed, yet these are both major factors in our present discomfort.

Now, it seems, the Government wants to change the yardstick by which it measured – and asked the voters to measure – its competence. What an epitaph for Mr Brown's brand of prudence.