Brown’s gloomy day: jobless at 2m, Turner threatens more discomfort

Even ministers believe any positive spin on the ICM poll in today's Guardian is clutching at straws. But it did give Gordon Brown a ray of hope at the start of a gloomy day on which unemployment broke the two-million mark for the first time in 12 years and the Turner report on the banking industry threatens to raise the ghost of Gordon past - the one who called for light-touch regulation over the City.

The ICM poll shows the Tories still have a commanding 12-point lead over Labour (42-30) and 65 per cent say clear signs of recovery by polling day would "make no difference" to the way they intend to vote. But Downing Street is focusing on the nine per cent of Tories who say they might change their vote if Gordon can pull it off.

With so little sign of green shoots around, Brown can be forgiven for grasping at any signs of hope.

Now enter his trusted City technocrat, Lord (Adair) Turner, chairman of the Financial Services Agency, with two reports - the first on curbs on the risk culture in the banking system, the second on curbs on the bonus culture of the bankers.

Brown is certain to use Lord Turner's blueprint for tougher financial regulations - closely resembling Brown's own plans for global recovery - to defend himself from blame for the financial crash when he comes under attack from David Cameron at Prime Minister's Questions at noon today.

It will mark the formal return of political hostilities across the despatch box since Cameron's fortnight of absence after the death of his son, Ivan, and Tory backbenchers will be willing their leader on.

Cameron has got plenty of ammunition, some of it supplied by Lord Myners, the banker turned City minister, who yesterday compounded his failure to stop Sir Fred Goodwin's scandalous £703,000 pension by disclosing to the Treasury Select Committee that the Royal Bank of Scotland had already paid Sir Fred a lump sum of £3m and would pay the tax on it too, all subsidised by the taxpayer.

The Cameron camp are now going through the Turner report for any line in it that will allow them to lay the blame for the banking crisis at Brown's door.

We know that on February 25 Turner appeared to blame Brown for the political "pressure" and "light touch regulation" that allowed the crash to happen. Accepting that the FSA had to share some of the blame, Turner said the FSA was operating within "a political philosophy" where all the pressure on the FSA was not to say "Are you looking more closely at these business models?" but "Why are you being so heavy and intrusive? Can't you make your regulation a bit more light touch?"

And we know that in 2005 Brown told the CBI there should be "no inspection without justification… not just a light touch, but a limited touch". Yet in his interview with the Guardian on Tuesday, Brown declared: "Laissez-faire has had its day."

As the Mole reported yesterday, Brown used the Guardian interview to finally admit responsibility for his failings in heading off the recession, though he declined to apologise. It will be interesting to see if he makes any further shift from his position of total denial of blame.

The Mole is prepared to bet that he will still be more inclined to re-write history. Who knows, by the time the general election is called, perhaps those Tories - the nine per cent - who told ICM they might vote for Brown will have come to believe that the PM was calling for tougher regulation all along, and it was the "bankers wot did it".

THE MOLE: UNEMPLOYMENT

FIRST POSTED MARCH 18, 2009