Brown's Stock

So how does the collapsing markets impact on the stock of Gordon Brown? Watching him recently, joking about collapsed banks, he seems to have almost a spring in his step. It is as though he's found his purpose as prime minister.



I think his mood has improved for a number of key reasons. First, he's seen off the Blairite challenge, and I believe that he's now safe until the General Election, whenever that is. His conference speech, in which he declared that "It's no time for a novice", was relatively successful. While it did little to outline his vision for the future, it did effectively slap-down both Miliband and Cameron simultaneously.

But this was only the first element of his strategy to see off the Blairites. The third-coming of ultra Blairite, Peter Mandelson - back in the cabinet for a third time - effectively neutralised the possibility of a Blairite plot. Brown clearly believes in keeping your friends close and your enemies even closer.

Second, the media control the agenda far more than politicians like to think. With the growing crisis in the financial sector, the media have a new story to focus on. August is well-known as the 'Silly Season' for the media, and with a lack of other stories to focus upon, "Brown bashing" became the daily sport.

Third - and probably the most important of all - Brown actually is now doing something. The 24 hour news channels are full to bursting of Brown dealing with the banking crisis. He's making regular press conferences where he actually appears to be dealing with the crisis.

It is a marked contrast from the previous six months as the Credit Crunch gloom descended over the country. All of those repeated chants we heard about him "getting on with the job" and "focussing on taking the right decisions for the long term", which seemed to infuriate voters who were struggling with high fuel prices and soaring inflation in everyday essentials - like food, have been replaced by him actually having something new to say.

And with something new to say, people are once more prepared to listen.


So does this leave us in a Bear market or Bull market for Brown plc?


Some commentators will have us believe that this is Brown's "Falkland's Factor" and others believe it is his ERM moment. I don't believe that either of these are applicable. Assuming his bail-out plan for the banks restores some stability and the UK avoids a deep recession, he can in General Election 2010 present himself as the man who got us through the bad times. In this case, I still think that David Cameron will win, as the "Time for a Change" argument can be very overwhelming and difficult to counter. By 2010 - the Labour party - and Brown himself - will have been in power for 13 years. Labour will lose - but it won't be a landslide loss.

It the bail-out doesn't work, and if the public conclude after a long period of recession, that it is all Brown's fault, as Chancellor / PM for the last 13 years, then I think we could be looking at a Conservative victory on the scale of Labour's in 1997.

The next upcoming hurdle for Brown - other than the markets opening tomorrow morning - will be the Glenrothes by-election in Scotland. Convention has it that the PM does not campaign in by-elections (although this convention was broken by TB), but as the MP in the neighbouring constituency (Kirkcaldy), I forecast that Brown will campaign. The bookies are still pointing to an SNP gain in Glenrothers, but I think that Brown may surprise us all. With effective campaigning, including Brown engaging in a copy of Blair's masochism strategy, I think Labour may just hang on.

At that point, I think Labour will be able to say that they have turned the corner.