AR: I wouldn't say quite from the start. In his first four or five years he wins the plaudits of the markets because he really clamps down on public spending, and in the period of 1999 spending as a proportion of GDP almost falls to a post-war low because they stick to Ken Clarke's corset. Although he does that and wins some plaudits from the City it's actually a very scratchy relationship with the City. One thing you have to say about Brown is that, unlike Tony Blair and Peter Mandelson who like money and the company of the monied, he's not very interested in money. He recoiled in horror once, when someone asked him whether he'd try buying a national lottery ticket. I think Brown gets seduced by two things: He becomes seduced and to a certain extent buys into the City's own propaganda about itself, so after that first five years of being rather scratchy he starts to want to be associated with the financial sector because he thinks it's really successful. So he opens the new headquarters of Lehman's and he opens the new headquarters of HBOS in Edinburgh, both banks which later went bust. He also, looking for economic legitimacy, associates himself very much with Alan Greenspan. In the book I quote Andrew Gowers, the then editor of the Financial Times, saying you couldn't have a conversation with Gordon Brown without, within five minutes — and I've had the same experience myself — him going on about what a great man Alan Greenspan was. And Greenspan, of course, was the father of the bubble. 

Brown's intellectual mistake, and he wasn't the only one, to be fair, was to buy into this new paradigm that somehow we had the nirvana of low inflation, low unemployment and permanent growth, which was actually built on this huge leverage of debt. There were a select minority of people, like Warren Buffett and Vince Cable, who were warning of the risk, but nobody, once the party was going, wanted to take away the punch bowl. Gordon Brown didn't, because it was producing revenues which you could spend on nice Labour things like health and education, so nobody wanted to ask the question either.

DJ: How is it that this man who was the ultimate control freak ended up being so beholden to everyone around him? He's actually become quite a weak Prime Minister who relies heavily on Mandelson and various other allies. I wondered whether it was the economic crisis that did that to him.

AR: I think it's a really good point. Why was he such a strong Chancellor, so strong that he could defy at will the Prime Minister of the day, Tony Blair? Constantly sabotaging him and getting to the point where he would point-blank refuse to tell the Prime Minister what was in the Budgets, which when you look back seems extraordinary. I spoke to a chief executive of a company the other day and he said that if his finance director refused to share the quarterly results with him and the rest of the board they simply wouldn't put up with it. But Blair did put up with it. He put up with it to the point where he was so desperate he got John Prescott to come into a room with him and Brown, and Prescott sat there and said: "For Christ's sake Gordon, he's the f***ing Prime Minister, you've got to tell him what's in the f***ing budget." — and Gordon still wouldn't. His own civil servants were saying "it's ridiculous, you can't treat the Prime Minister like that". 

One reason for this is that our political system gives an enormous amount of power to the Chancellor, especially if he is a strong personality like Brown. You have the power over a lot of information, you have a lot of power over money, and Brown used the Chancellorship not only to control the budgets of other departments, but also to second-guess them on policy development. I can remember sitting in the Treasury, towards the end of his time, waiting to see a minister for a chat, and one of the nice reception ladies beetled over and said, "Are you here, Mr Rawnsley, for the youth crime summit?" We're in the Treasury and you'd think, hold on, youth crime? Shouldn't that be at the Justice Department or the Home Office? But sure enough, shortly afterwards a great gaggle of people — about 25 of them — arrive for a youth crime summit at the Treasury. It was a government within a government. 

At the time, the Prime Minister — contrary to one of the myths of the Blair years — and Number 10 were quite weak. Blair got frustrated by this, but never really cracked it. He would have one adviser on, say, Trade and Industry. Well, Gordon Brown, if he wanted to, could put 20 civil servants into a unit on Trade and Industry. Oddly enough, I think when he then moved from all that power in the Treasury to the Prime Minister's Office, partly also because he was overwhelmed by the very different demands on the Prime Minister, he suddenly found that he wasn't in control of all the money, that Darling now had control of the money. That was much more difficult for him.