Steve Richards: Leaders who are having to learn as they go along

The misjudgement over Northern Rock was the first of many in response to the economic crisis

Although avid and admiring students of the New Labour project, David Cameron and George Osborne are not having the same success in projecting an equivalent for their party. Increasingly they seem overwhelmed by events, the scale of which would test much more experienced politicians than the youthful duo who are still finding their way at the very top.

Their relative inexperience is the one act of precise duplication with New Labour. Tony Blair and Gordon Brown came to power having never served as ministers. Cameron and Osborne are similarly new to power. Blair and Brown were more developed politically by 1997 but both suffered from having no ministerial past on which to lean at moments of crisis.

At times the fragility had profound consequences. Blair might have read and deployed intelligence documents more knowingly if he had ever been a Home or Foreign Secretary. Instead he made his judgements on the road to war as a Prime Minister with no ministerial past.

In the case of Cameron and Osborne they had only been MPs for a few years before seizing the leadership of their party. Experience in politics helps to flesh out distinctively informed and yet original outlooks. Lacking such experience, the duo read the New Labour rulebooks and sought out the lessons of the 1980s when the Tories were election-winners. But they lack a clear, developed worldview of their own, tested by events in opposition and in government. Yet their rise to the very top coincides with seismic events, partly of their own making.

I felt uneasy about the announcement from Osborne that he was selling off Northern Rock, and was not entirely sure why. After all, the sale might be the best deal available and could well add much-needed innovative competition to the sclerotic banking sector. I soon realised why I had doubts. The Northern Rock crisis that erupted in September 2007 highlighted for the first time the inexperience of Cameron and Osborne at the top of politics.

Until Northern Rock teetered on the edge, Cameron/Osborne had adapted well to the demands of leadership, not least in recognising that the best way to undermine Tony Blair was to support him. But in their opposition to the nationalisation of Northern Rock they displayed naivety and an alarming tendency to apply 1980s ideas to an entirely new situation. Even The Economist called for the nationalisation.

That misjudgement was the beginning of many in response to the economic crisis, including their opposition to a fiscal stimulus when even the right-wing republican administration in the US was applying one. In my view it was these judgements and not Cameron's advocacy of the Big Society that meant the Conservatives failed to win an overall majority at the last election.

It all began with Northern Rock, and as I write a Conservative MP warns on the BBC's World at One that the bank has been sold to Virgin at too big a loss for the taxpayer. We will never know for sure whether, if Osborne had waited longer, the taxpayer would have made a profit. What is evident is that the Chancellor needs to find money wherever he can as tax receipts fall and the bills for high unemployment grow.

Plan A is the peak of the misjudged ascent that began with their opposition to the nationalisation of Northern Rock. More experienced politicians would not have become trapped by a Plan that now so rigidly defines their cause.

Public proclamations are deceptive. Because Ed Miliband has declared the death of New Labour and Cameron/Osborne revere parts of the New Labour project we misread what is actually happening. In reality the three key figures in the Shadow Cabinet – Miliband, Ed Balls and Douglas Alexander – are applying many of the lessons they learnt from Blair/Brown at the height of their powers in opposition.

In his speech yesterday, a big improvement on the shapeless academic lecture delivered at the party conference, Miliband sought to establish a very New Labour dividing line between the "old ways" of running an economy and the new ones. The speech was well structured with clear staging posts and specific examples of how he would apply a "hard-headed" approach to moral capitalism.

"Hard-headed morality" has a New Labour ring in its dual message, rather like prudence for a purpose. Balls was a similarly challenging caricature yesterday when he insisted that the cash from Northern Rock should be used to pay back the deficit. Here was prudence for a purpose again, and an argument that makes Balls less easy to categorise as a deficit denier.

Alexander also had Blair/Brown in mind when he delivered his speech on Europe earlier this week, one that sought to avoid traps several positions ahead on the chessboard. For them New Labour is not quite as dead as Miliband suggested it was, or at least the version that functioned in opposition.

Cameron and Osborne are confident and polished in public, disguising their relative inexperience. The two Eds and Alexander are still learning the art of performance, and may never fully do so, but have experienced a huge amount of opposition and ministerial power. In the end the state of the economy will determine the fate of them all, but the political battle is not quite what it seems to be.

s.richards@independent.co.uk