"Things will never be the same again" says Nick Robinson. "Don't believe a word of it" says John Rentoul. Who is right, and what are the implications of this week's banking rescue for Gordon Brown? Here's today's Journal column.
Politics is full of historical ironies – but ironies don’t come much bigger than what the Labour government has been forced to do to the British banking system over the past seven days.
Fourteen years ago, Tony Blair stood up at the Labour conference and pledged to scrap the infamous Clause Four of the party’s constitution and its commitment to “common ownership of the means of production, distribution and exchange.”
“Common ownership of the means of exchange” was in fact just a fancy way of saying “nationalisation of the banks” even though this had long ceased to be a realistic policy goal.
Nevertheless, to Mr Blair and Gordon Brown, it was a meaningless shibboleth which only served to alienate floating voters, and as such it had to go.
Those with even longer memories may recall another little gem from Labour’s historical archive which first saw the light of day in the year Messrs Blair and Brown were both first elected to Parliament.
It consisted of a wish-list of improbable promises which included tighter government control over bank lending, creation of a publicly-owned investment bank, and a securities commission to regulate the City.
“We expect the major clearing banks to co operate with us fully on these reforms, in the national interest. However, should they fail to do so, we shall stand ready to take one or more of them into public ownership,” the document concluded.
It was of course Labour’s 1983 election manifesto – long-derided by those of a New Labour persuasion as “the longest suicide note in history.”
The main author of that document Michael Foot – still going strong at 95 – might have permitted himself a wry old smile this week.
The party he once led has spent a total of £500bn propping up the UK banking system, and that’s not including the £119bn already spent on rescuing Northern Rock and £14bn on Bradford and Bingley.
As a result of the deal the government now owns preference shares in eight leading financial institutions - Abbey, Barclays, HBOS, HSBC, Lloyds TSB, Nationwide Building Society, Royal Bank of Scotland and Standard Chartered.
Add to that Northern Rock and Bradford and Bingley and that’s ten major banks that are either wholly or part-owned by the taxpayer.
I will leave the economic analysis of whether this mother of all gambles is likely to pay off to the likes of BBC business editor Robert Peston, who has been transformed into an unlikely TV celebrity by the crisis.
I remember “Pesto” from my Lobby days when as FT political editor he was regularly the butt of No 10 press secretary Alastair Campbell’s mockery. I wonder who is laughing now.
But I digress. The truth is I am not qualified to give a judgement on whether I think the rescue plan will work, whether the stock market will recover, or whether we are now in a “feedback loop” – apparently the new name for a vicious circle.
And I know not who was to blame for persuading Derwentside District Council and scores of other local authorities to place their deposits in Icelandic banks – this year’s equivalent of Bulgarian umbrellas it seems.
But what of the political implications? Peston’s BBC colleague Nick Robinson intoned gravely this week that “things will never be the same again,” but he really should know better than to make such sweeping claims.
The truth is, it is far from clear at this stage whether we are in a period in which “normal” politics has simply gone into abeyance, or whether the landscape really has undergone a permanent change.
The events of the past few weeks may very well mark the end of the free market political consensus that was ushered in by Mrs Thatcher in 1979 and assimilated by New Labour after 1994. Or then it again, it may not.
Until we’ve come through this and out the other side, we won’t really know.
Similarly with Prime Minister Gordon Brown. History may show that the past few weeks have transformed him from a political dead man walking into a popular and respected leader who is set to go on and win the next election.
He certainly has a bit more a spring in his step these days, and it is becoming clearer and clearer that, like Churchill, like Thatcher, he is more at home in a crisis.
But the pro-Labour but anti-Brown commentator John Rentoul was scathing about the very idea that Mr Brown’s fortunes had undergone a turnaround.
“Don't believe a word of it. People think the Government has made a terrible mess of the economy and are furious that it is asking taxpayers to pick up the tab….this is game over,” he wrote this week.
Once again, we won’t really know who is right about this at least until the government has faced another serious electoral test.
My own hunch is that while this crisis has undoubtedly given Mr Brown the opportunity to redefine himself and his premiership, the public’s underlying attitude to him may not, in fact, have changed.
Has the prevailing sentiment “We think you’re a lousy Prime Minister and we want you to go” been replaced by “We actually think you’re quite good on the whole and we’d really rather like you stay?”
Or has it simply changed from “We want you to go,” to “We want you to stay and sort out this mess which you helped create – and then we want you to go.”
To put it another way, will this week’s part-nationalisation of the banks prove to be Gordon Brown’s Falklands Moment – the point at which he stood up to the enemy in the form of rampant, unregulated capitalism and slew the monster?
Or will it prove to be his ERM moment, the moment his party’s old reputation for economic incompetence resurfaced and all New Labour’s work was undone?
On the answers to these questions will, almost certainly, hang the ultimate fate of Mr Brown’s premiership – and the result of the next general election.
Only then, I suspect, will we see whether the political world really has changed for good.