The UK Prime Ministers Ranked: 10th/9th place - Gordon Brown/Neville Chamberlain

 

10. Gordon Brown

The latest in a long line of Prime Ministers who were better Chancellors.

I tell you what, Brown’s National Care System would have been bloody useful these days…

ADVERT - If you like this article, you can follow Michael on Twitter, YouTube, Soundcloud or Instagram, or send some Irn Bru or bill paying funds via the donation button. Every little helps. Thanks!

Gordon Brown’s reputation is built on the financial crisis of 2008, when the US housing market collapsed and threatened to send the rest of the world into the resulting economic black hole. The end result was the worst recession in decades, which we still feel the (ideological) pinch of, but without the actions of one man, it would have made the Great Depression look like the teddy bear's picnic.

The recession started in 2008, with Lehman Brothers (fourth largest investment bank in the US) going bankrupt. Their executives had been massaging the accounts to look more impressive than they were for some time, so when the housing bubble collapsed in 2007 in America, they had no safety net. 

But this began in the 1990s, under the stewardship of Alan Greenspan, chair of the Federal Reserve. Greenspan was a great believer in tax cuts and of increasing the money supply by lowering the interest rates. When you lower the interest rates, you increase monetary speculation, and lower mortgage rates. The former lead to a sudden rush, and bubble burst, in internet stock.

The second led to a vast increase in subprime mortgages, which are those given to folk who might struggle to pay them due to their own financial situation. This was done by setting interest rates higher than those protected by the government. So many banks traded on these mortgages that the world economic system soon became based on the artificial rising of house prices, and these mortgages, on paper. Like the Calvin Coolidge era, it was an economic boom entirely based around the Emperor's New Clothes.  The entire system was badly regulated.

Subprime loans are only a safe investment as long as the real estate market continues to rise in value. People who should have known far better traded these loans on the stock market to build mortgage portfolios.

Which brings us back to Alan Greenspan, who had reduced the interest rates even lower after the September 11 attacks. Faced with the fears of inflation brought on by his tinkering, the Federal Reserve rose the interest rates back up in 2004. It jumped 4% in less than 2 years. But by then, the housing market had responded to the rush for housing his polices had created by building more houses, and then in 2006, suddenly, the demand for houses was less than the number of houses. Which should be good news in humanitarian terms, but in an economy resembling Russian Roulette, it’s akin to sitting down to watch Doctor Who, only to learn it’s been cancelled in favour of a Prime Ministerial broadcast by Boris Johnson  Liz Truss.

Anyhow, when interest rates go up, and house prices go down, the ensuing inflation hikes makes the cost of day-to-day living go up, and that means that millions of people, with subprime mortgage deals, can no longer afford to pay for the houses they got mortgaged under this system. This credit crisis consumed the real estate market, and then spread its fire to those who had been gambling on its continued success. Intra-bank interest rates shot up, and for Lehman Brothers, again, one of the biggest banks in the USA, their funds became worthless. They went bust. Other banks saw this and panicked the fuck out. A bank panic leads to a stock market crash, which fuels all the other economic issues.

Wall Street suffered a week of losses worse than 1929, General Motors was on the brink. The crisis spread fast and quick, those who had been the biggest gamblers during the years of rising mortgages suffering fastest and quickest.

The American Federal Reserve slashed interest rates to 0%.

Meanwhile in Britain, our banks had cashed in on the subprime mortgages like they were horny teens buying copies of the Ringu cursed video en masse, only to find no one wanted to buy them off them and the clock was ticking and she was coming out of the well. Northern Rock was riddled with the things. HBOS had over speculated. They were not alone. In the UK, and across Europe and the major economies, the banks threatened to go bust one by one, following Lehman Brothers lead.

On a Friday in October 2008, the Prime Minster was told that HBOS and the Royal Bank of Scotland had run out of reserves, and would be unable to open on the Monday. The European banking system was hours from total collapse. No cash, no credit, no money. And this was all during a weekend where Gordon Brown was at a meeting with the G7 leaders, about the financial crisis.

Gordon Brown decided that there were only two decisions possible: to let the banks collapse, which was not a viable position, or nationalisation. For the Treasury to buy out the banks, to bail them out of their trouble, and take the economic hit itself. He chose the latter, and so he and his Chancellor, a quiet cautious man named Alastair Darling, worked to coerce the bank bosses into agreeing. A £500 billion bailout was agreed before the stock markets reopened.

He then convinced Nikola Sarkozy, and a sceptical Angela Merkel to follow his lead. Even the US Treasury, which had balked at the idea, followed it.

“Meanwhile, the British government went straight to the heart of the problem - and moved to address it with stunning speed. On Wednesday, Mr Brown's officials announced a plan for major equity injections-into British banks, backed up by guarantees on bank debt that should get lending among banks, a crucial part of the financial mechanism, running again. At a special European summit meeting on Sunday, the major economies of Continental Europe in effect declared themselves ready to follow Britain's lead, injecting hundreds of billions of dollars into banks while guaranteeing their debts.”
Paul Krugman, Gordon Does Good, New York Times 12 October 2008

Now, having prevented total financial collapse of the UK economic system, do you praise Gordon Brown for his quick actions to stop doomsday, or do you blame him for the subsequent British recession? Some of the media, and certain politicians, even tried to claim Brown was responsible for the whole crash, because lord knows a one-eyed grumpy Scot was seen handing out millions of bad mortgage deals in America in the 1990s. Earlier this year, during that BBC Blair and Brown documentary series, George Osborne (a man with no real achievements to his name) outright blamed Gordon Brown for the entire financial crisis.

Yes, it is important to note, the boom years under Gordon Brown (and Ken Clarke) were underlined by debt, but this was, as we see, the way of the world at the time. It seems foolish to blame one man or government for a worldwide speculation. Especially if you are then the Shadow Chancellor and say the route to success is to further deregulate the banks and let the free market pick up the tab. 

THAT WAS THE PROBLEM IN THE FIRST FUCKING PLACE, MR OSBORNE.

If you read his attacks on Brown, you see they are directly related to the effects of bailing out the banks (namely, the British deficit rose spectacularly) and because he was opposed to nationalisation. Well, the risks of leaving alone were considerably worse.

Basically, with Gordon Brown, you have to ask yourself. If everyone makes the same error, and then an apocalypse is threatened, but one of those people acts to prevent it. Do you praise that person for saving everyone, or do you damn them for being one of the many before? Gordon Brown’s media reputation is based on the latter. I myself look at the words of economists and world leaders of the time with far better experience of what went down, all of whom praise Gordon Brown’s leadership, and declare that, unlike some, I am not tired of listening to experts.

I am also not an economist. This is like trying to get Robert Peston to explain politics.

Now, away from the financial crisis. (“But other than that, how was the play, Mrs Lincoln?”)

Brown’s government beefed up the powers of parliament. It transferred the power to declare war to the parliament itself rather than solely at the Prime Minister’s discretion. He beefed up the role of the Attorney General, and the Ministerial Code. That a blonde narcissist ignored it all with a large majority cannot be placed at the feet of his predecessors. (Though the fact all the rules of the land can be ignored if you feel like it shows a gaping loophole in the unwritten constitution which needs fixed.) He signed the prohibition on use of cluster munitions and banned forced marriages. Yes, that took until the 21^st Century.

Elsewhere, Net Zero became a government target on carbon emissions for the first time, and Crossrail started construction. There was the introduction of corporate manslaughter charges to the law book, and a crackdown on the rules surrounding the sale of tobacco. The National Flood risk management scheme was implemented, there was extensive promotion of green energy (despite the NIMBY market), and the Equality Act was updated.

He also introduced the apprenticeships and guaranteed jobs for the young. Amusingly, I was sent to an interview for one of those, and turned down, due to a lack of experience!

Brown’s government was faced with the worst crisis in 80 years and dealt with it admirably. YouGov currently have him on a better approval rating than Blair, May and that David Cameron person. Indeed, if you consider also that under Brown's leadership, Britain left Iraq, and harrassed others into signing up to Kyoto, his impact on the rest of the world may be better than most other Prime Ministers. That myths born from personal animosity continue to muddy this doesn’t detract from the overall situation.

And if you want to know how long myths can derail a Prime Minister’s standing, I present to you…

9. Neville Chamberlain

The second Prime Minister in succession who would rise even higher if we were to judge their reign as Chancellor.

In the 1940s, Michael Foot and others drafted the book Guilty Men, the first of many attacks on appeasement. 

To be succinct by my standards, I will now sum up the Labour party policy for most of the 1930s:

Appeasement is bad.
Rearming the country is also bad.
Fascists are bad.
War is bad.
We support none of the above.

Ah, appeasement. Never has a policy directed so much bad press at a man who used it as a means to an end. While the likes of Lord Halifax did seem to genuinely believe it would avoid war, Neville Chamberlain’s actions throughout the 1937-39 period were designed to shape the country’s mood and resources to a point where, when war was called, the public would back it, and the country would be able to go to war, after a decade long lull on defence spending.

But before we talk Nazis, can I just point out that, as Prime Minister, Neville Chamberlain ring-fenced unemployment benefits during the Great Depression, and as Chancellor, had managed to create a budget surplus by 1934. This doesn’t affect his spot. But his achievements as Prime Minister do. Holiday pay, followed by holiday camps, rent controls, and the nationalisation of coal, all achievements under his watch.

He also made peace with Ireland, despite the drawback of having to negotiate with Eamon de Valera. As part of the deal, the Irish were given control of the “treaty ports”, the three deep water ports controlled by the British, but de Valera promised they could use them in the case of war. This ended the damaging Anglo-Irish Trade War and set Ireland on the way to becoming a republic.  (While I disagree with the notion that Hitler hoodwinked Chamberlain, he certainly trusted de Valera more than was wise.)

Now…

The policy of appeasement (ie diplomacy and détente) towards Nazi Germany started under Ramsay MacDonald and Stanley Baldwin in 1933. It continued when Hitler remilitarised the Rhineland, when everyone looked to the French for action, only for none to happen. (To be fair to the French, they had political instability of their own, and their own World War One PTSD, and no one knew that even the slightest reproach would likely end the German action instantly, and thus hurt Hitler’s at-the-time fragile PR. We know this with the benefit of historical hindsight. They did not!)

Chamberlain implored the French to act on the matter of the Rhineland and would later complain that the French “couldn’t keep a secret for half an hour, or a government for six months”! But going back to the Locarno Pact, Anglo-French diplomatic relations weren’t as strong as they should have been, and dictators love a vacuum.

The thing about appeasement was it was as much a PR thing as it was a political move. War was very unpopular in Britain, even by the time of the Munich crisis. Stanley Baldwin had been horrified by the Spanish Civil War, and memories of World War One, and so warned everyone that, in a series of doom-laden end of the world type speeches, that, in war, “the bomber will always get through”. The media and politicians still feared Communist Russia more than the Charlie Chaplin lookalike in Germany, and Hitler even felt like a possible “bulwark” against Communism spreading to the Western democracies. A useful ally, even. (Not to mention the press who were cheerleaders for the blackshirts.) 

By the mid-1930s, the economy was in surplus, thanks to the actions of Chancellor Neville Chamberlain. The chattering classes felt affluent again and feared losing this as they had in the 1910s. The public, on the whole, still looked back on the First World War with horror and despair, and all of this combined into one gigantic anti-war feeling.

We can’t ignore Versailles guilt either. (Oh hello again, Mr Lloyd George.) Inflexibility on the terms, despite the actions of Gustav Stresemann and co in the 1920s, meant the depression hit Germany worse than most countries. Hitler leaned on this guilt, by quoting the Treaty endlessly, as the reason why he couldn’t alleviate German suffering. His excuse for remilitarisation was to claim it was economically necessary thanks to the Depression and the effects of the Versailles Treaty. Given the treaty was, by the 1930s seen as distinctly unfair... (Who knew that war guilt clause would cause issues?)  Hitler built on this to create the image that the Germans were only acting out of self-determination. Righting the wrongs of an unjust peace treaty. No threat to anyone, honest.

We should also mention that the British painting the French as the true villains of the Versailles treaty, whitewashing the British attempts to get war pensions paid instead, didn’t help dent the Nazi PR, or improve British/French relations!

In 1934, the fascist Austrian Chancellor, Engelbert Dollfuss, was assassinated. An opportunity for the Anschluss to reform was nixed in the bid, as Italian fascist leader Mussolini, unhappy at the idea, sent troops to the Austrian border as a message. Hitler and Mussolini had mutual disdain, and so those who champion the enemy of my enemy talk could have seen benefits in an alliance with Italy. In fact, the British government position on Italy since the dictator took over was a friendly one. But, like Hitler, Mussolini wanted empire, and he tried to take over Abyssinia. In the 1930s, the Brits could have saved the floundering League of Nations, or their diplomatic relations with Italy. They managed to lose both instead.

Another appeasement enforcing decision came from abroad, with William Lyon MacKenzie King, the longest serving Prime Minister in Canadian history, enforcing Canadian neutrality. The Australians were the same. The Americans uninterested in a European war. The Brits were running short on allies with manpower, diplomatic skills or useful geography.

That Hitler phrased his desire to conquer the Sudetenland part of Czechoslovakia under the concept of Germanic self-determination, and of the Versailles settlement, is no surprise. The requirement for lebensraum was going to short on alibis before long, but at this point in 1938, the Hitler PR game was in full swing. He’d even been forgiven for mass murdering his opponents in 1934.

Plus, Baldwin had stopped armaments, as noted much earlier.

So Prime Minister Neville Chamberlain was faced with three issues. The first was public opposition to any involvement. The second was the insanely low levels of army resources. 

The third was geography.

Namely, how does Britain go about defending the Czechs? 

To the north, there is Germany, who aren’t going to let British troops in to take on German troops. To the south, Mussolini had already been pissed off. To the East, communist Russia, not our best friends. To the West, oh its Germany again. This was rotten European geography in 1938 for an ally. The route from Britain to Denmark to Poland to Czechslovakia traversed the Baltic Sea, full of German and Russian boats to stop it. Even if we made peace with Italy and got up the Adriatic instead, there’s Hitler friendly fascist countries blocking the way. The only way to make a stand against what was going to happen to the Czechs was to declare war on Germany, who had been militarising longer than us. We were able to do the same when Poland were in a similar problem a year later, but not in 1938. The Chiefs of Staff were correct to warn against this. To be blunt, it would lead to a world where Nazi Germany won a short war, and that is too horrific to think about.

And so, Neville Chamberlain went to meet Adolf Hitler in Munich to discuss the Czech issue. The fate of the Sudetenland. This diplomatic meeting was as much a battle of PR as anything else. Chamberlain knew that the Czech defences were IN the Sudetenland, but he also knew Britain had limited defences of their own. He disliked Hitler – “I don’t trust this man” he wrote plainly in his diaries – and Hitler viewed the aging Tory as a stuffy diplomat interested more in rhetoric and navel gazing than in action. Hitler decided the chances of a war with Britain with this old duffer in charge were slim, and so when Chamberlain got him to sign a deal, he did it to get rid of him. He either didn't read the clause about German self-determination in the Sudetenland being the last demand of Germany, or didn't believe it.

What the Munich Agreement did was create the basis for war with Germany. By stating that he would go this far and no further, like Clive Revill in that Columbo episode, Chamberlain had lain the trap for future threats against British allies in the region. He also, contrary to the belief in the man who believed in peace in our time (though that was a stupid line, even looking at its PR uses), sped up British rearmament from Munich onwards. Chamberlain didn’t want war, he hoped he could prevent war, but he was practical enough to know that war was likely and in a real sense of realpolitik, his decisions at Munich bought the UK twelve months of preparation it desperately needed.

“The hard fact is that nothing could have arrested what actually happened unless this country AND other countries were prepared to use force!”
Neville Chamberlain, to Archibald Sinclair, Hansard 14 March 1938

Chamberlain’s overblown way of showing off his treaty basically told the anti-war public and press: “LOOK! I arranged peace. I’ve done everything possible to prevent a European war. If there is war, it’s not our fault.”  At the time he wrote despairingly that Hitler had misunderstood the entire venture, that he thought understanding was instead a sign of weakness. Chamberlain knew the war was coming, even as he stated the opposite to the public.

The Neville Chamberlain doll was a popular Christmas gift in 1938. He remained a popular public figure up to his death from cancer in 1940, and while he was overthrown after the invasion of Norway, his reputation was seen more as not being a man suited to being a wartime Prime Minister, not the evil appeaser. It was only after the war that his reputation as the worst of the worst, of becoming a noun in political writing for cowardice and naivety, became written.

(Cowardice? The man was notoriously afraid of planes. Hitler knew this. This is why talks were in Munich and not somewhere closer.  Chamberlain was also advised against the trip by his doctors on health grounds. He ignored phobia, health woes and attempted intimidation to do what he felt was right for Britain and Europe. You may disagree with his realpolitik outlook, or considering him naive, but he was never a coward.)

And his support for Churchill, when he could easily have done a Boris, was crucial to the British war effort in the early years, as much as his support for Attlee and the Labour government ministers, who noted (the dying) Chamberlain’s gentlemanly nature towards them. He shaped the country post-war posthumously, but without his actions pre-war, there wouldn’t be the country to shape. Add to this, that Chamberlain achieved all of this while suffering terminal cancer – unaware, he had assumed it was gout.

His reputation is shaped in binary terms, by those who followed and wanted to make bigger deals of their own anti-Hitler stances. Especially those who helped Hitler by muddying the British response! If anything, the fact that the myths surrounding this Prime Minister still take precedence over his real achievements points to the uphill battle the pro-Brown side have over the course of this century, in the face of relentless propaganda against sensible (if grim) decision making.

Oh, and Lord Halifax wrote the speech which had the “peace in our time” line in it. 

He was a twit.