Nick Wood: An early election is Gordon’s only hope

Nick Wood is a former press secretary to Conservative leaders William Hague and Iain Duncan Smith. He now runs Media Intelligence Partners.

A Labour MP was quoted this week as likening the financial meltdown to the 1982 Falklands War, which brought Margaret Thatcher’s beleaguered Government back from the brink and helped secure her landslide election win of 1983.

So how secure is that parallel? We all know that when floods and plague sweep the land, gloomy Gordon cheers up a mite. About his only good spell was last summer when he was able to pretend he was in charge of events. And the further and faster the markets fall today, the jollier he looks.

His message – and Labour’s – is that Gordon is good in a crisis - unlike the effete sixth-formers warming the Conservative frontbench. Brown’s “novice” crack at the Labour conference – rightly confronted by David Cameron in Birmingham – underlined Labour’s latest mantra – “things can only get worse”.

It is true enough that people are scared by the market gyrations, the collapse of banks that once towered over Wall Street and the City and the dire warnings of a Main Street shake-out to come – with spending cuts and tax rises. The instinct to keep hold of nurse for fear of something worse is no doubt behind the spring in the Prime Minister’s step as he lectures the world on bank bailouts and jets from one crisis summit to the next.

Yet this is not the Falklands. That war lasted only a few weeks and ended in a clear and heroic victory for the British forces who sailed 8,000 miles across the Atlantic to rout the invaders. But it was much more than a spectacular feat of arms. The Falklands came to symbolise Margaret Thatcher’s assault on the defeatism that had crippled the country for 20 years. For the first time since the 1950s, government was no longer about the orderly management of decline. And – almost magically – once General Galtieri was put to flight, the economy started to respond to her nasty but necessary medicine.

The Falklands was a terrific gamble – and a terrific act of political courage by Mrs Thatcher. But there was at least the prospect of a successful and relatively swift outcome . The global crash of 2008 will not have a happy or a clear-cut ending. The markets may stop spinning out of control, banks may stop going bust by the day, governments may stop inadvertently fulfilling the Bennite dream of scaling the commanding heights of the economy, but that will be just the end of the beginning.

Gordon will look best in this phase. Climbing aboard jets, decamping onto red carpets, gravely greeting foreign potentates, issuing declarations and denouncing papier-mache scoundrels like the hapless Icelanders.

But the bust will give way to a less dramatic but politically more debilitating phase. The nagging pain of the recession will take over. Jobs will be lost by the bucketful, firms large and small will collapse, home repossessions will rise inexorably, welfare budgets will swell, demands for intervention and state handouts will grow, public borrowing will balloon and spending cuts and tax rises will loom. Falklands War? More like Napoleon’s retreat from Moscow – and lasting all the way to an election in 2010 and defeat at the hands of the Tories.

Is there a way out for Gordon? Funnily enough, it might be that old favourite of an early election. If Brown went to the country in the teeth of the crisis, he might just have a prayer – at least of averting a Tory landslide. After all, since the sky went black, he has halved Cameron’s poll lead.

Of course, the Great Ditherer won’t do it. He funked an election a year ago that he was certain to win. It is hard to imagine him calling an election in the next few months that he would almost certainly lose, if not by much? Only one thing should worry us – Peter Mandelson, a man who can recognise a political opportunity when he sees one, is back on the Labour payroll. Will he tell Gordon to go to the country next spring?