Gordon Brown had a welcome fifty-seventh birthday present this week, when the government published better-than-expected public finance figures for January.
These were not just good; they were exceptional. Higher corporation tax receipts enabled a net cash repayment of £22.1bn – the largest since records began in 1984.
Unfortunately for the PM, this was the one bright spot in a woeful week. The nationalisation of Northern Rock, the breaching of the sustainable investment rule and the latest disc disaster all somewhat dampened the party spirit.
Brown can justifiably argue that nationalisation was the least worst option, and that this was not an Old Labour fantasy to take over the commanding heights of the economy. He can also point out that without Northern Rock the rule would have remained intact.
But it still threatens Brown’s main claim to fame – that the economy is safe in his hands.
The prudent custodian of the finances, as chancellor and now as PM, is looking less and less sure-footed.
January’s record performance is unlikely to be repeated, as tougher market conditions affect tax receipts. Meanwhile, debt levels remain worryingly high, the housing market is looking shaky and there is growing talk of a recession.
Public sector bodies – already facing cuts in funding – are seeing the value of their pension schemes fall and questions being asked about the viability of capital projects (see Don’t bank on it).
Brown and Chancellor Alistair Darling have some difficult decisions to take before next month’s Budget. Even without Northern Rock, the Institute for Fiscal Studies estimates that the government needs tax rises of £8bn to stay within its self-imposed limits.
Something has to give: we can’t increase borrowing, there’s little slack in public sector funding and voters are unlikely to react well to stealth taxes.
At least for the first time in 11 years, Brown does not have to deliver the Budget speech himself on March 12. But it will be scant consolation: he, above all, knows where the buck stops.
