Gordon Brown is said to have once quipped that the difference between a good and a bad chancellor is all down to the timing of their departure from number 11. Time it right, and history will recall you as a good chancellor. Get it wrong like Nigel Lawson did (the Tory who held that office for the most time under Mrs Thatcher and who for a while was described as the UK’s best chancellor ever) and you end with up with the ignominy of having your name prefixed to the term “boom” in economic text books describing “a specific period of unsustainable economic growth.”
But, of the men who have laboured at number 11, Gordon is thought of by many as a Titan. But then, to others he is just plain “Lucky Gordon.”
One of Gordon’s great ideas was his golden rule. This allows you to spend and spend on current account items at certain times stages in the economic cycle, providing you pay it back before the cycle is up.
But the commentators, economic think tanks and some newspapers have been sharpening their knives waiting for the Gordon to break his own precious rule. And there has been a queue, from London to Dunfermline and West Fife, of experts warning that the rule is about to be broken.
But every time Gordon’s rule looks like being broken, the future PM says “told you so”. Yesterday, was just another example.
According to the Office of National Statistics, the UK’s current account posted a surplus of £15.3 billion in January, the best January figure since 1998. As for net borrowing, (that includes capital investment) fell to £-12.6 billion, compared with £8.8 billion in January 2005.
The surprise improvement was down to a fortuitous combination. The timing for corporation tax receipts from the oil companions had been changed, and, thanks to the high price of oil, these were at a record level.
But while Gordon might have got away with it this time, the doubts still linger.
The Item club, for example, which uses the same model as the Treasury, has predicted problems next year. Some have pointed out that while tax from oil companies was up, other corporation tax payers are likely to post a fall in profits because of the high price of oil. And yet others remind us that Gordon has only kept to his golden rule by changing, or so they say, the goal posts, the latest of a long stream of examples being changing the timing of the current economic cycle.
Okay, Gordon has been lucky and he is good at playing with economic terms to prove he is right. Even so, he has presided over the longest run of economic growth in the UK, ever. His tenth budget is coming up next month, and if he can follow that by surviving another 12 months of keeping his golden rule intact, then he might well move next door with the record of being the only chancellor to have been lucky for ten years in a row.
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