Volatile markets give Brown a reprieve

LONDON // The turmoil on the world's financial markets has thrown an unlikely political lifeline to Gordon Brown, Britain's embattled prime minister. Just as it seemed that calls for him to go would reach a deafening crescendo at this week's Labour Party Conference, which starts in Manchester today, the global banking crisis appears to have taken off some of the pressure - at least temporarily.

Although there will be calls in Manchester for him to face a leadership challenge, they will not be nearly as shrill as they would have been a week ago. "The fact is that we would look silly demanding a change at the top in the current situation. It would send out the message that we've got our priorities all wrong," a Labour activist in the south of England said last night. "Nevertheless, the fact of the matter is that the party is in a dreadful state and much of that must be laid at Gordon Brown's door. He has been in the job for more than a year now and he has constantly appeared ineffective and a ditherer. He's been a great disappointment to many of us."

Indeed, a survey last week of Labour activists across the United Kingdom showed that 54 per cent of them believed that Mr Brown should make way for someone else. And this came on top of the resignation of a junior government minister in Scotland because he believed Mr Brown should quit, and the sacking of two senior parliamentary aides for demanding a leadership contest. The problem for Mr Brown is that dissatisfaction with his performance is not only growing among his own party but among the electorate, too. Labour has lost two of their safest parliamentary seats in by-elections recently and had a disastrous showing in local elections in the spring.

The latest opinion polls gave the opposition Conservative Party, led by David Cameron, 45 per cent and Labour a meagre 26 per cent. For many Labour MPs, such a result would mean oblivion at a general election, which must be held within the next 18 months or so. However, the growing roars of discontent became suddenly muted over the past week as banks began to fail and stock markets across the world went into free fall.

Mr Brown, whose political reputation is based on his performance as Tony Blair's chancellor of the exchequer, took action, clearing the way for Lloyds to take over the troubled HBOS bank, the UK's largest mortgage lender, and working with the US Securities and Exchange Commission to temporarily ban the short selling of stocks. In an interview with The Guardian newspaper yesterday, Mr Brown played to these strengths in a fairly unsubtle attempt to quell the disquiet surrounding his own leadership.

Reiterating his credentials as the "steady hand" on the economic tiller, he said he had taken "necessary and decisive action this week to keep the financial system moving". He said the events of the past week represented "the starkest demonstration yet that we are living in an era of dramatic global change" - with the inference being that this was no time to start thinking about a change at No 10 Downing St.

"Just as when we stopped Northern Rock going to the wall," he said, "we have acted to secure people's savings, support the housing market and underpin liquidity in the banking sector." Unfortunately, Mr Brown's promotion of the government's record was quickly undermined by Stuart Rose, the chairman of Marks and Spencer, one of the UK's largest retailers, who told the BBC yesterday that the government should have acted more rapidly when it became clear last year Britain was entering a period of sustained economic weakness.

"The recognition that this was a more deep-seated issue was a bit long in coming," he said. "The people in the UK want to feel confident somebody, somewhere knows what the problem is and is dealing with it." Adding to Mr Brown's woes was an article in yesterday's Daily Mirror by David Milliband, the UK's foreign secretary and the man most likely to challenge Mr Brown in any leadership election. Although Mr Milliband said in the article, which occupied four pages of the tabloid newspaper, that there was "no vacancy" at No 10, it was being seen by political commentators as a virtual manifesto of his plans if he became prime minister.

Some help was at hand, however. Alan Johnson, the health secretary and another potential leadership contender, ruled himself out of a bid for the job and called on critics of Mr Brown to "shut up". He told The Times that the prime minister was the right man to lead the party "at the moment". Mr Brown's real test, though, will come on Tuesday when he addresses the conference delegates. Party activists are saying that unless his speech is "an absolute humdinger", it could be the beginning of the end for the prime minister.

dsapsted@thenational.ae