Gordon Brown: ‘The planning for Brexit wasn’t done’

The former chancellor and prime minister contrasted the Labour government’s decision not to join the euro with the lack of preparation for the even more momentous decision to leave the EU

Gordon Brown answers questions from postgraduate students at King’s College

The Blair-Brown duo were in town yesterday. Tony Blair spoke at the parliamentary press gallery lunch in Westminster. He opened with a joke about Gordon Brown. After the chair said there was one person above all she had wanted to invite as a speaker, he said: “I thought you were going to say, ‘Gordon Brown’.” He went on to make a fluent and self-deprecatory argument for a second referendum. “This time there is no acceptable third way.”

I headed two stops down the line to King’s College, where Brown was taking the class run by Jon Davis on the Treasury and economic history, at an event organised by the Strand Group. Brown did not start with a joke about Blair. He did Einstein’s chauffeur instead which, to be fair, is a fine joke.* But he also said he had been a university lecturer before he became an MP. “So I understand the values of academia, of intellectual rigour and the search for the truth – all the things you have to leave behind when you go into politics.”

What struck me was how similar Blair and Brown were. Brown was also impressively fluent and self-deprecatory; between them, he and Blair (Blair came to King’s three weeks ago) made a powerful defence of their joint record in government.

Brown said that when he was chancellor he was the longest serving finance minister in the EU, apart from Jean-Claude Juncker, “and that was because as prime minister of Luxembourg he appointed himself”.

He was also the longest serving UK chancellor since Nicholas Vansittart – “and in a few years’ time I shall be as forgotten as he is” – who served from 1812 to 1823, “and the only reason he survived was that he abolished income tax halfway through his time in office”.

Then he was off into a guided tour of his greatest hits. Independence for the Bank of England in setting interest rates was the first. The NHS was second. “The biggest political operation we had to do was persuading people they had to pay higher taxes for the National Health Service,” he said.

He admitted the Private Finance Initiative, which allowed higher capital spending early in the Labour government, was controversial, but “I still defend it as a necessary means of improving our hospitals”.

The third achievement was the negative one of reaching “the right decision on the euro” – that is, not to join – in 2003. He said the Treasury’s assessment had shown conclusively that adopting the euro would not have worked for the UK – “and I’m not absolutely sure it has been working for the rest of Europe either”.

In answer to questions from students he said the euro assessment was one of only two exhaustive studies of the UK’s relationship with the rest of Europe. The other, in the 1950s under Harold Macmillan, concluded there was no alternative but to join the EEC.

This brought him to the subject of Brexit, which was a decision that “wasn’t worked through and for which the planning wasn’t done”. He said: “I personally think you can solve the problems that Leave voters have within free movement.” Britain could have a registration scheme for migrant workers, as in Belgium and Germany, and rules against “social dumping”, as in France. “I don’t understand how the Department of Work and Pensions was able to exclude those options.”

He said that when he was trying to help the Remain campaign in the referendum, “I was told by David Cameron that we cannot discuss immigration at all.” He added: “I don’t want to criticise individuals, but...” and tailed off.

He defended his policy of tax credits, using the tax system to boost the incomes of low-paid workers, but admitted they were “never properly understood and so were always vulnerable”. Indeed, tax credits were never understood by Blair, who said the policy turned out to be more expensive than Brown had ever suggested. And tax credits have proved to be vulnerable in that they are now being swallowed up in universal credit – a policy that was not going to work, Brown said, because benefits are being cut at the same time.

He was proud of his response as prime minister to the world financial crisis in 2007-08, and critical of the suggestion, put to him by one student, that the Bank of England should have had a bigger role. “The idea that you could have decisions over public money, rescuing banks, made by an unelected body is unsustainable,” he said.

He answered questions about the falling-out between Alistair Darling, his successor as chancellor, and Mervyn King, the governor of the Bank of England. “When things are going well, the governor of the Bank of England gets all the credit; when they are going badly, the chancellor gets all the blame,” he said. He suggested Lord King had crossed the line between politicians responsible for tax and spending and the Bank for monetary policy. In 2008, when interest rates were 1.5 per cent in the US they were still 4 per cent in the UK. “I said nothing because I wanted to respect the autonomy of the Bank of England to set interest rates, but it works two ways, and if the Bank starts to comment on fiscal policy...” He tailed off again.

Questions were restricted to students but Nick Macpherson, permanent secretary to the Treasury while Brown was chancellor and now a visiting professor at King’s who is jointly teaching the course, was allowed one. He asked: “What is the optimal relationship between chancellor and prime minister?”

Brown laughed and didn’t answer, although towards the end he touched on his relationship with Blair. “The difference of opinion was on acting on inequality. We did raise the top rate of income tax in the end [just before the 2010 election], but we didn’t do enough.”

Finally, he was asked about his disagreement with Blair over student finance. He wanted a graduate tax; Blair wanted student loans. He said: “We got as close to a graduate tax as possible.” Again, he didn’t mention Blair by name. “The prime minister usually gets his way, unless he can be persuaded by the chancellor. And that’s how British politics works.”

*There is a version of it here, though Brown told it better.