As the G8 summit begins, none of the leaders in Europe are under more pressure than Gordon Brown, the British Prime Minister. While Brown has never had the flair of Tony Blair, at least he was seen as a steady hand on the political and financial tiller. He was after all Chancellor of the Exchequer (finance minister) for a decade, under Blair’s premiership. But in recent weeks, he has entirely lost the plot.

British public spending is at 50% of Gross Domestic Production and rising. And while the recession takes some of the blame, Brown’s public borrowing to finance his ‘investment’ policies, takes the lion’s share. Borrowing this year will be about $300bn, and it is increasingly obvious to everyone but Mr Brown that it is entirely unsustainable. It is not just Government debt that has spiralled out of control. According to Ryan Streeter of London’s Legatum Institute, “between 1997 and 2007 average household debt grew from 105 to 177 percent of disposable income. The US, of course, also experienced an explosion of household debt during the same period but not nearly to the same extent. At the end of 2007 America’s average household debt reached 106 percent of disposable income – essentially where the UK started 10 years earlier.”

While Brown’s bureaucracy can do the math and is planning to make astonishingly large cuts in spending of 20% by 2011, Brown and his party continue to mislead voters that it will make no cuts. It is remarkable that ahead of a general election, which must take place by May 2010, the Conservative opposition run by David Cameron acknowledges that cuts must be made, while the incumbent Government continues its spending mantra.

During the Bush years the Democratic party looked to Britain’s Labour Party with some envy, it had ostensibly forged a compromise between wealth generation and the welfare state, which appealed to voters. But with the scandals over politicians’ compensation, economic mismanagement, endless waits at hospitals for treatment and collapsing schools, voters are looking to jump ship, probably to Cameron’s Conservatives. It is interesting and ironic that the crisis of capitalism has not caused a lurch to the left in Britain (or the rest of Europe) but has encouraged voters to pick center right parties across Europe in response.

I view the coming Cameron administration with as much appetite as I did the Bush administration. Neither leader really likes small government, and neither is ideologically economically conservative – they are both simply better than the alternative on offer. Cameron is even more fixated by focus groups than Tony Blair was, not for him the ideologically driven and correct vision of downsizing of government and control of the public sector brought by Margaret Thatcher and Ronald Reagan.

In a piece last weekend in the London Sunday Times, my old boss, John Blundell the General Director of the Institute of Economic Affairs, laments the demise of argument by politicians both in and out of Government. I’m still an adjunct fellow at IEA and I used to love the discussions in the early 1990s when I ran environment policy at IEA. Politicians would debate with business men and think tankers the key issues of the day and policy was often implemented, indirectly and years later, from those discussions. As Blundell says:

I’ve noticed how much more guarded politicians have become. When in Government, the Tories used to leave their minders at the door and come in for good, open off-the-record discussion. I also recall Tony Blair taking off his jacket and charming everyone in sight and Gordon Brown cracking a half-joke about vicars. When Labour came to power in 1997, the nightmare of ministers arriving late and leaving early, reading prepared scripts with five minders present and not engaging one little bit, led us to withdrawing our invitations.

It is arguable that other think tanks may have usurped IEA as the generator of ideas over the past decade, but it is simply more likely that politicians no longer want to take ideological and policy risks – although they seem all too willing to take financial ones with their expenses claims.

The revitalisation of the political and think tank culture in Britain is vital or there is a risk of more of the same when Cameron inevitably wins office next year. Although conservatives will be pleased that Labour will be out of power, how much will really change?

Roger Bate is the Legatum Fellow at the American Enterprise Institute in Washington DC.