Fraser Nelson

The debt Gordon Brown has saddled his country with deserves to be a top political as well as financial issue, as The Times powerfully argues in a leader today. Gordon Brown has over the last week been on a mission to airbrush Northern Rock out of the national accounts. He has claimed repeatedly—and mendaciously—that he’s taken debt as a share of GDP from 44% to 37%. The Times in its leader today gets it precisely right. Not only does it use the correct net debt figure – 43.3% in August – but it goes on to lambaste Brown. “This parlous financial position is a direct political legacy. A government of genuine prudence might have put money in the bank at the top of the cycle to pay for the bills at the bottom.

When I was at the Fabian Society debate last Sunday with Ed Balls, the subject of taxing the rich came up. I warned them they were chasing a false God, that it will result in less tax yield. The rich will have less incentive to earn more, and more incentive to dodge tax. I gave a figure which one of those in the audience later accused me of making up. It’s pivotal to understanding how this country is financed, so here it is… The richest 1% of this country pay 23% of all income tax collected (table here) in 2008-09. The richest 5% pay 42% of the tax. These ratios should warm the heart of the most ardent redistributionist. Brown’s wise refusal to raise the top rate of tax has seen the richest shoulder a greater share of the burden. In 1999-00 these ratios were 21.

Gordon Brown’s Baldrick-style Cunning Plan for global finance involves using the International Monetary Fund (IMF) as an “early-warning system”. Great idea.  When I was a business journalist, I remember the IMF early warnings – about how Brown’s switch to debt-fuelled profligacy post-2000 would end in tears. The key misjudgement made by both Brown and Greenspan was to try and get around the 2001 slowdown (which would have flushed out bad businesses and dodgy loans) by pumping the economy full of cheap debt. Pain delayed today means disaster tomorrow in financial markets. The IMF said in September 2001 that Brown’s spending spree was “regrettably pro-cyclical”. And since then?

A new Brownie was born today at 7am. Gordon Brown came on to BBC Breakfast this morning to tell presenter Sian Williams about how, as a family man himself, he sympathises with Ruth Kelly wanting to devote more time to her children. He didn’t expect to be grilled on his untrue claim that he has lowered the national debt. He repeated his Sky/Marr line: that debt had gone down from 44% to 37% of GDP. Williams told him this was untrue, and that the Office for National Statistics said so last week. She told him, rightly, that he arrived at his figure by subtracting Northern Rock - which he can’t wish away because he’s already sunk billions into it on the taxpayers’ behalf. Brown suggested it was daft to count in Northern Rock “No country does that,” he said.

In David Miliband’s “leaving do” speech for Gordon Brown, one line jumped out at me – when he said Gordon Brown has “transformed the debate about international development in Britain”. He has certainly transformed the accounting, by pioneering dodgy off-balance sheet financing of overseas aid. It’s worth revisiting, in the light of his new pious anger about banks who use off-balance sheet financing. His so-called International Finance Facility is a classic Brownite vehicle: it exploits a Eurostat loophole so if three or more EU countries share a pool of debt, it doesn’t show up on any of their books and they can fool their taxpayers into thinking they owe less than they do.

Coffee House is running a series of posts on the contenders to succeed Gordon Brown as Labour party leader.  The latest is below.  Click here for our profile of David Miliband, here for Jon Cruddas, and here for Alan Johnson. Jack Straw, 62, Lord Chancellor and Secretary of State for Justice Pros Experience: This is a man who has been an MP since 1979, and who - in his near thirty year career - has filled positions including Foreign Secretary and Home Secretary. On paper, at least, it's not a bad record, perhaps the best among any of the potential leadership candidates. Straw's got experience by the bucketful. And that's a useful commodity as the economic storm clouds darken.

The Brown demise is on a downward rollercoaster trajectory: it stabilises before it plunges again. I suspect that a period of stabilisation, and maybe even an upswing, is now on the cards. Yesterday went very well for him, and from the quotes I have seen he managed to get through even Jeff Randall on the Sky interview to be broadcast at 8pm tonight. Also, he may soon have another merger deal to point to.  EDF, which walked away from British Energy in July, will meet during the Labour Party conference to discuss a higher offer. Creating an entente nuclear is one of Brown's main ambitions - something which justifies his tough talk about "long-term decisions", and which, best of all, is a wedge issue with the Tories.