Political review 2008: Labour

By Iain Watson
Political correspondent, BBC News

The 10 pence tax row caused serious discontent in Labour ranks

2008 could well be remembered as the year GB's recovery began.

Not Britain's economic recovery, of course, but Gordon Brown's political recovery.

But, weighing up the PM's fortunes, it is worth remembering that he is improving from a very low base.

The year began under the cloud of the election-that-never-was but there was a bigger political storm on the horizon.

In April I was invited to Snodland, a small town in Kent which was the most Labour-leaning part of the marginal Chatham And Aylseford constituency.

Disillusioned Labour Party members wanted me to see the sheer scale of anger locally about the abolition of the 10 pence tax rate.

Tax anger

Labour's position had been weakening with a wipeout of all their long-standing town councillors - and the impression that Labour was now hitting their own core supporters, party members felt, would hand marginal seats to the Conservatives.

What particularly miffed the party activists was the insistence by Gordon Brown that no-one would lose out as a result of his tax changes.

The local treasurer, Jeremy Hayes said his working son was worse off and his wife was thinking of chucking in her party membership in disgust.

I carried out a very unscientific snapshot of opinion around town and was impressed that people knew all about the tax changes; they were sceptical that tax credits would help and denounced the whole system as too complex.

The prime minister has to be able to move on from saying I know how to sort out a crisis, to being able to say I know where I want to take the country Professor John Curtice, Strathclyde University See-saw 2008 for Cameron's Tories

Nationally Labour started the year four points behind the Conservatives in the opinion polls according to polling company Populus.

By May they were eleven points behind and facing a mass revolt of backbenchers over 10p tax.

Frank Field, never much of a fan of Gordon Brown after his sacking as welfare reform minister in 1998 - which he blamed on the then chancellor - was seen as the leader of the 10p tax revolt.

But the reality was even more worrying for the prime minister.

Mr Field made it clear that the rebellion was more spontaneous than organised as MPs heard from their constituents much the same message I had picked up in Snodland.

The government defused - or at least temporarily quelled - the rebellion by hastily introducing a £2.7bn package of tax cuts, though even this did not compensate everyone who had lost out from the 10p tax abolition.

After a drubbing in the English local elections, with the Lib Dems gaining a higher share of the vote than the governing party, an even higher profile defeat awaited Labour.

Derailed in Crewe

The death of the veteran and independent-minded MP Gwyneth Dunwoody led to a by-election in Crewe and Nantwich - a seat which had remained Labour even during the high tide of Margaret Thatcher.

Mrs Dunwoody's daughter Tamsin stepped into the breach and by all accounts performed well as a candidate.

But a campaign that was more class-based than classy - portraying the Conservative candidate as privileged and out of touch - did not marshal the support of the Labour-inclined masses in the town.

The crushing by-election defeat in Crewe left Mr Brown wounded

The sight of Labour activists dressed in top hats and tails was seen more as risible than as a rallying cry.

In the end the electorate cared more about 10p tax than Tory toffs and the Conservatives scored their first by-election gain in a quarter of a century.

A kind of gallows humour enveloped backbench Labour MPs at this stage, with many humming along to their 1997 campaign anthem: Things Can Only Get Better.

But they did not.

Just days after Gordon Brown's celebrated his first anniversary as prime minister in June, the MP David Marshall resigned his Glasgow East seat.

Depression became more widespread on the Labour benches as they watched a 13,500 majority disappear on 24 July - just after the Commons rose for its summer holidays.

Summer of plots

In politics, as in comedy, timing is everything.

So those MPs who were increasingly worried about Gordon Brown's leadership found it difficult to plot while they spread themselves across the world's sunspots.

But what seemed like a parting shot, as the recess began, came from the leader of the giant GMB union, one of Labour's main funders.

At a meeting of the party's National Policy Forum in the West Midlands, Paul Kenny called for a leadership contest to "clear the air".

Over the summer I spoke privately to a good few Brown sceptics.

They were united in intent - he had to go or Labour would lose the next election badly - but not on tactics.

Some hoped the cabinet would give him the political equivalent of a pearl-handed revolver. But despite a controversial article by the foreign secretary, David Miliband, in the Guardian - in which he talked of Labour's future but never mentioned Gordon Brown - no-one made a move.

Then, almost out of the blue, as MPs reassembled after their summer break, the formerly uber-loyal assistant whip Siobhain McDonagh went public and called for an open leadership contest, saying her hand had been forced.

She and some of her colleagues had written to the party's ruling national executive committee asking for nomination papers for leader to be sent to party members.

Gordon Brown saw off his doubters with an effective conference speech

The existence of the correspondence was leaked and in the poisonous atmosphere of the time, there was much debate as to whether supporters of the prime minister had been responsible, in order to spike her guns - or whether the Brown sceptics had leaked it to prove opposition to Gordon Brown was more widespread than reported.

Soon after, Scotland Office minister David Cairns resigned.

A friend of Siobhain McDonagh, he had also been the front man for the Glasgow East by election and made it clear he could not remain a minister while Gordon Brown remained prime minister.

But the nascent revolt was crushed by the elephant in the room; the deteriorating state of the economy.

Labour had, at last, to admit things looked gloomy and that Northern Rock's nationalisation would not be a one-off. As confidence in the banks declined, confidence in the prime minister began to return.

Even so, on the eve of Labour's annual conference in September, knives were still being sharpened - there was excited talk of up to five cabinet ministers resigning to force Brown from office.

In the end, only Transport Secretary Ruth Kelly actually departed, citing family reasons, although she did not get to choose the timing of her announcement.

The fact that she had previously spoken to Gordon Brown about standing down was leaked and confirmed in a hotel bar in the early hours of the morning by the prime minister's spokesperson.

Again, there was claim and counterclaim as to who was responsible.

Mandelson returns

But many of those sharpened knives were sheathed after a memorable speech by Gordon Brown.

He said that the global financial crisis meant it was 'no time for a novice' - a jibe at David Cameron certainly but also seen as a sideswipe at David Miliband, seen as a potential future leader.

Any further murmurings were silenced by the unveiling of Gordon Brown's secret weapon.

Gordon Brown cast aside differences by bringing Peter Mandelson back

Just as the Conservative conference ended in October, a man once seen by the prime minister as toxic was deployed as the antidote to any anti-Brown poison amongst Labour's ranks.

EU trade commissioner Peter, now Lord, Mandelson returned from Brussels to bolster No 10 as much as the economy.

He admitted that he "hadn't always seen eye to eye" with Gordon Brown, a remark that could have been a contender for understatement of the year.

A bailout of the banks led to speculation that there would be a 'Brown bounce' in the polls and just as the Glasgow East by-election threatened the prime minister's position in the summer, the autumn saw another Scottish contest boost his standing.

Labour saw off an SNP challenge in Glenrothes, a seat which borders Gordon Brown's own in Fife.

Labour's success was followed by perhaps the most political pre-Budget report of recent years, with Chancellor Alastair Darling offering that rare thing in politics - at least in the short term - tax cuts and spending increases.

Brown stimulus

Talk of a fiscal stimulus seemed to give Gordon Brown a physical stimulus as he began globetrotting and suggesting that many other countries would follow Britain's example.

The Conservatives suggested that perhaps all this was going to Gordon Brown's head when he made what was presumably a gaffe at prime minister's questions in December.

It seemed that he intended to say he had saved the banks but somehow said he had saved the world.

UK troops will return from Iraq in 2009 but will Gordon Brown benefit?

But one electoral expert warned that Gordon Brown may yet get his fingers burnt.

"Gordon Brown has been an effective fireman but if the fires of the economy are still burning in spring, it's going to become much more difficult to convince people that government action has been effective," says Professor John Curtice of Strathclyde University

"The prime minister has to be able to move on from saying I know how to sort out a crisis, to being able to say I know where I want to take the country."

As 2009 looms - the year Britain will, largely, withdraw from Iraq - we can at least say the Gordon Brown story is To Be Continued.

Those political obituaries that were being drafted are now, if not spiked, then shelved.