When Tony met Kerry (in his dreams)

New Labour's spin doctors are fond of saying that the media concentrates too much on people and personalities and not enough on policies. They know what they are talking about because, when Alastair Campbell interviewed Peter Mandelson on television a while back, there was very little discussion of policy and an awful lot about personality, not least the personality of Peter Mandelson.

But the fact of the matter is that people, personalities and policy are closely linked. Despite what is being said by the Blair camp, I doubt whether Gordon Brown, for all his admiration of certain aspects of the US, would have hugged George Bush or his policies so closely.

Brown is a cautious, introspective character, who is much more interested in the details of policy than Blair. Because Brown nurses strong criticisms of certain aspects of eurozone economic policies, this sometimes makes him come across as more anti-European than Blair. But the latter shocked a Cabinet colleague during the early days of the 1997-2001 government by saying something about Europe that did not seem to fit in with the agreed policy, to which Blair replied 'It's only words'.

Blair is the Don Juan of British, and for that matter, international politics. He seduces followers, is seduced by powerful world leaders, but, like Don Juan, eventually moves on, with modern-day Leporellos attempting to sweep up the mess he leaves behind.

If ever personalities mattered in the Blair government, they matter now, as the Blair-Brown duumvirate moves into its final phase, on the eve of a US presidential election on which the rest of the world appears to take a different view from the US electorate, as measured by recent opinion polls.

Among the many of us who are desperate for Bush to lose the coming presidential election, there is an unlikely member. He is one Anthony Charles Lynton Blair. Even our self-deluding prime minister now realises that his association with Bush is doing him increasing political harm. His hope that Iraq will prove to be a 'phase, not a continuum' rests partly on the belief that a Kerry victory would enable him to make a fresh start, and put Iraq, and the associated unpopularity, firmly behind him.

I do not believe that even a Kerry victory would do that for him. Tacitus summed up the situation in Iraq nearly 2,000 years ago, when writing about a country closer to home: 'Ubi solitudinem faciunt, pacem appellant' ('When they create a wilderness, they call it peace'). The crisis in Iraq is not going to go away, whatever the result of the US elections. Things are too far gone for that.

Blair has not, to my knowledge, met Kerry, whereas I believe Brown has. The sight of Blair taking the first flight across the Atlantic to congratulate Kerry would be good material for Rory Bremner, and could actually happen. Although the omens do not look good at present, I recall the way most serious columnists wrote off the chances of the Democrat Jimmy Carter during the 1976 campaign.

If Hurricane Bush-Cheney triumphs, there are all manner of implications for Britain and Europe. Vague French aspirations of a Europe that, even if it cannot 'stand up to America', can at least try to get its economic and diplomatic acts together would surely take on a much greater urgency.

The monstrosity of what the Bush Republicans have done knows few bounds. Quite apart from their well-known position on global warming, and their daylight grab for Middle Eastern oil, they have squandered the budgetary inheritance of Bill Clinton and devoted it largely to tax cuts for the rich and military mis-spending that has made the world an unsafer place. It's quite an achievement.

I know that Kerry has many friendly critics who are concerned about his early lacklustre campaign and economic policy statements that have veered on the protectionist, but he is committed to reversing those obscene tax cuts for the American Joneses with whom Conrad Black and Barbara Amiel tried to keep up.

Kerry would be faced by the serious economic problem of the vast budget and balance of payments deficits. The adjustment of the imbalances created by these deficits, and by chronically weak domestic demand in the eurozone, is going to require careful handling, as a high-powered group of 'wise men' has explained in an important new pamphlet ('International Economic and Financial Cooperation: New Issues, New Actors, New Responses' CEPR, London).

The group, which includes former Treasury international finance expert Sir Nigel Wicks, advocates the setting up of a new Group of Four. This would embrace the US, the eurozone, Japan and China. In the omission of the UK from the proposed group there is an obvious hint for Britain to get its European act together.

This is a reminder of modern realities. Tony Blair's misadventures in Bushland could mark the last hurrah for the so-called special relationship, and finally wake this country up to where its true interests lie.

There may be another wake-up call in the offing. Britain has been boasting quite a lot recently about its economic achievements, which have drawn widespread praise from around the globe. But in a world where commentators seem to be concerned 90 per cent of the time with the latest quarter-point change in interest rates or rise in house prices, the long-forgotten British balance of payments problem has been creeping up on the outside.

In recent months our deficit on overseas trade has been running at a record rate of £60 billion a year. We are even back in deficit on oil. True, much of this deficit is offset by earnings from services and income of overseas investment, but the trend is disturbing.

The good old British boom has produced a situation where the volume of exports in the three months from May to July was actually lower than three years ago, whereas imports were almost 12 per cent higher.

We have been suffering from an overvalued pound and depressed demand in Europe, our main market. No wonder Gordon Brown was so concerned about the outlook for the European economy in his last public pronouncement.