Andrew Grice: The Week in Politics

Worrying echoes of John Major and Black Wednesday

"The irony is that if Gordon had called the election, he would have fought it on competence," the cabinet minister told me with a rueful smile. It might have worked on 1 November. But Gordon Brown would be laughed out of court if he tried to fight a "competence election" now.

How quickly things have changed. Confusion over the number of migrant workers. An admission that thousands of illegal immigrants were working in the security industry. The taxi drivers' vote lost, but not disastrous in the wider world.

Then growing fears that taxpayers might not get back all the Government's £24bn loan to Northern Rock. Getting serious.

And, to cap it all, the bombshell that sensitive personal data about half of the people in the country has been lost in the post by HM Revenue & Customs. Very serious indeed. The talk of the Dog and Duck, where people are angry.

It really has been "Get Gordon" week. Even heading off to the Commonwealth conference in Uganda did not bring him respite. Former defence chiefs queued up in the Lords to accuse him of putting the lives of our armed forces at risk. The Government looks as though it is stumbling from one crisis to another.

How did it happen? His disastrous non-election turned politics on its head. He miscalculated the price he would pay for allowing election speculation to grow and then bursting such a big bubble. Overnight, it transformed his positives into negatives – strength into apparent weakness, decisiveness into indecision and experience into a silly game of leading his troops up the hill and down again. Now the competence he showed in handling the terrorism threat, foot-and-mouth and flooding early in his premiership has turned into incompetence. Not surprisingly, even his strongest asset, economic competence, is waning, according to one opinion poll. Other bad polls will surely follow.

Even his good record at the Treasury is being turned against him. This is due in part to the media's desire to kick a man when he's down. But only in part. If the current problems can be traced back directly to his time as Chancellor, it spells big trouble. On Northern Rock, a major issue is a regulatory system split between the Treasury, the Bank of England and the Financial Services Authority. (Author – G Brown, 1997).

One central question in the Datagate inquest will be whether a shotgun marriage between the Inland Revenue and Customs & Excise led to cost-cutting which left data protection a low priority. The 2004 merger was ordered by Mr Brown after his top civil servant at the Treasury, Sir Gus O'Donnell, carried out an investigation. It was one of those Treasury inquiries when Mr Brown knew the answer he wanted when he posed the question.

The theme of the week was how all roads lead back to Mr Brown. As Chancellor, he was always less sympathetic than Tony Blair to pleadings from the MoD. "You're giving away too much and being outrun by those military bastards," he told Mr Blair when the service chiefs were in open revolt over their budget in 2004, according to Anthony Seldon's new biography, Blair Unbound. They won more money that year, but feel neglected by the new tenant at No 10 and those who have retired are settling old scores.

How serious is his predicament? "It is a critical moment," said one minister and Brown loyalist. "We are in a very rocky period. He needs to show competence and confidence, and do it quickly." Inevitably, comparisons are being made with the John Major years: an accident-prone government that can do nothing right and loses the confidence of the public so spectacularly that it cannot win it back.

I decided to test the theory. When Prime Minister Major was in trouble, I once rang round the Tory backbench shop stewards, the leaders of the 1922 Committee, to test their mood. What I hoped they would say was that Sir John was "on probation" after a series of mishaps. Eventually, one did. The result was a Sunday Times headline saying "Senior Tories put Major on probation". It stuck. That was 1993. He was permanently on probation after that, until an inevitable election defeat four gruelling years later.

So this week I asked Labour figures what they make of Mr Brown's predicament. They are worried, yes. They think there is a dangerous crisis of confidence, that the Prime Minister must show strong leadership and, above all, needs a period of competent government. But they are not panicking in the way the Tories were in 1993. There is no point in putting Mr Brown on probation, since there is no alternative leader in sight. And he has a much more comfortable Commons majority than Sir John, whose Eurosceptic rebels made his life hell.

The pivotal event then was Black Wednesday, when Britain was forced out of the exchange rate mechanism (ERM) in 1992. The Tories hope that Datagate or Northern Rock, or perhaps a combination, will be Mr Brown's Black Wednesday. It hasn't happened yet, but it might do, especially if ministers make mistakes as they try to sweep up the mess.

People lost their homes as a result of the ERM fiasco. As yet, taxpayers have not lost money over Northern Rock, though they might. There would be an outcry, but it would be less damaging than individual savers losing their deposits.

If there is fraud as a result of Datagate, people will be anxious and inconvenienced. That could be damaging, even though they would still get their money back. For now, ministers are cautiously optimistic that criminals have not got hold of the missing discs with 25 million names on. We will find out, though I would be sweating more in their shoes.

There are other reasons why Mr Brown has not yet had his Major moment. In 1992, the Opposition was led by John Smith, a credible alternative. After his death two years later, Mr Blair took over, and instantly looked the part.

David Cameron is in a good place to profit from Mr Brown's misfortunes. He is starting to look the part but is not there yet, not least because his party is some way behind him. The Tories haven't yet got a coherent programme for government.

What they have now is a powerful stick with which to beat Labour. "Competence and experience" were Mr Brown's trademarks. One is no use without the other. If the "incompetence" label sticks, the Tories will be in business. "Time for a change" is a powerful slogan when it catches the tide of opinion. Defeat for Labour might look inevitable.

Mr Brown will change his tactics. He intends to widen an inner circle that didn't serve him well over the non-election. He needs some older heads. The need for a forward agenda is more acute. "We can't win by saying 'better the devil you know'," a Brown ally said.

The PM suspects the Tories will try to get as close as they can to Labour on policy, hoping charges of incompetence and "time for a change" will do the trick. He doesn't believe Mr Cameron has changed his party as much as he claims, and will try to highlight new "dividing lines" between the two parties, which he insists are real and not manufactured.

There is still time to turn it round. Mr Brown has not turned into John Major. Yet.

Read Andrew Grice's online column at: independent.co.uk/todayinpolitics