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Terry McGrenera argues that those dismayed by the appointment of the new Business Secretary should not have expected anything less from Gordon Brown

THE symbolism is startling. Peter Mandelson, the Blairite ultra, has been made Secretary of State for Business by Gordon Brown, who was supposedly among his most bitter enemies. The cartoonists have had a field day. First prize goes to Peter Brookes in The Times for his cartoon of Mandelson receiving a blood transfusion in hospital for the removal of a kidney stone. Political commentators were gifted an easy column to write following the Prime Minister’s decision to restore Mandelson to the heart of power in Britain in following his stint – as ever, controversial – as the European Union’s trade commissioner. This is not so much bringing in new blood as bringing back an old bloodsucker. All this has taken place against the background of the credit crunch, the financial system in crisis and the haemorrhaging of confidence in the global economy.

Mandelson’s return means that those Labour members and supporters who had been hoping Brown would save their party by ushering in a new set of policies that they might actually be happy to commend to the electorate must now reconcile themselves with their disappointment. It is not the Labour Party that has been saved by the Cabinet recent reshuffle but Gordon Brown. He will now probably remain in Number 10 Downing Street for the next 18 months until the general election. It has been suggested that, in appointing Mandelson, the Prime Minister was giving a job to one of the few people even more unpopular than himself. So this may be a canny Brown plan to deflect the flak onto someone else.

But the return of the prince of darkness is not what those who had such high hopes of Brown when he finally replaced Tony Blair ever wanted to see. And none would bet against Mandelson having to resign from the Cabinet for a third time, bearing in mind his past, dubious record. It’s hardly the record of the political genius Mandelson’s advocates would have us believe he is.

In fact, outside of Blair and Mandelson himself, those advocates are pretty thin on the ground. Brown once told a joke about being been asked by Mandelson to borrow 10p in order to ring a friend. Brown said he gave him 20p and told him to ring all his friends. So the recall of the person Brown felt most betrayed him by switching his allegiance to Blair for the leadership of the Labour Party is truly astonishing.

But by showing he is not a man to bear a grudge – or at least, only for a decade and a half – Brown has scuppered the plotting of the disgruntled Blairites –for now. There had been rumours that Ruth Kelly was not to going to be alone in leaving the Cabinet, following David Miliband’s abject failure to anoint himself as the true heir to Blair  and the obvious alternative to Brown.

Meanwhile, Brown’s failure to reinvigorate his party and take his Government in a different and more progressive direction, has angered and frustrated even friendly members of the commentariat. For instance, according to Polly Toynbee in The Guardian: “The promised ring-binder of new ideas he had brooded over these years in the Treasury dulled the senses and taught only excessive caution. Instead of change, here he is heading back to the tropes of 1997, which were, in truth, a bit dog-eared even back in 1994.”

Seumas Milne, also in The Guardian and writing the week before the reshuffle acknowledged that Labour and Brown were fighting for their political survival and hoped that he would see “a couple of significant Blairite scalps” on the gates of Downing Street to show that Brown’s “new settlement” and the seriousness of his intent were more than a conference platform flourish.

According to BBC political correspondent David Thompson, Brown reached out to the left of the Labour Party by appointing Jon Trickett as his parliamentary private secretary and “his eyes and ears in the tearooms and on the backbenches”. That’s hardly on a par with elevating Mandelson to the House of Lords and restoring him to the Government in a role that some commentators perceive as de facto Deputy Prime Minister. Meanwhile, Jon Cruddas, seen by some as a rising star of the left, remains excluded from Brown’s inner circle and is concentrating his efforts on combating the threat of the British National Party in his constituency.

It’s not just former Brown cheerleaders such as Toynbee who have been disappointed. Neal Lawson of the leftish think-tank Compass could have been expecting to receive a call from Downing Street inviting his organisation to contribute to policy ideas which might distinguish the Brown years from those of his predecessor. Now it will be interesting to see whether Brown gives the keynote speech at the Compass or Progress annual conference next year. Mandelson was involved in setting up of Progress and the call by Compass for a windfall tax on the energy companies probably means that Lawson need not reserve a chair for the Prime Minister.

That Brown has rejected a windfall tax should surprise no one. In opposition, he promised to close the loophole that allowed wealthy non-domiciles to live and work in this country – many of them in the financial services industry – while keeping their earnings overseas and away from the clutches of British tax authorities. During the debate on the 1993 Finance Bill, Margaret Beckett – who is now another “comeback kid” in the Cabinet – said the tax treatment of people having non-domicile status “makes this country one of the most generous for the seriously rich”. To have non-domicile tax status in Britain was to enjoy the same benefits as a tax haven. Labour has had 11 years to do something about this and failed.

It became part of Brown’s economic strategy that the financial services industry would take the place of the million manufacturing jobs that were lost during Labour’s first 10 years in power.

To show their appreciation, one of the investment banks attracted to London invited the then Chancellor to open its new European headquarters on April 5 2004 in Canary Wharf. Brown told his audience: “Lehman Brothers is a great company today that can look backwards with pride and forward with hope. And in wishing Lehman Brothers the success it deserves for the future, let me thank you for the privilege of being here and formally declare this new building open.” Just over four years later, Lehman Brothers went bust in spectacular fashion.

Brown once wrote a biography of his Scottish compatriot, the great Labour MP James Maxton who, in Brown’s words, “had sought to make socialism the common sense of his age”. That must seem as long ago to the Prime Minister now as it does to everyone else.

By coincidence, on the same weekend that most pundits were writing about Mandelson’s shock return, The Independent on Sunday carried an interview with Bernadette Devlin on the 40th anniversary of the first civil rights march held in Northern Ireland. She was asked if she would ever go back into politics. She replied: “What is the point of going into politics? Look at Gordon Brown. He doesn’t believe anything he used to believe in.”

Terry McGrenera is editor of The Green Paper – politics for the planet and its people