Business View: Who could replace Gordon Brown? We'll soon find out

Click to follow
The Independent Online

What is going to provide the big economic event of 2005 in the UK? Interest rates? Housing? Retail sales? Stock market boom/bust? Further weakening of the dollar?

No. It will be the ending of Gordon Brown's eight-year tenure as Chancellor. Almost everything that comes out of Westminster at the moment indicates that Tony Blair is steeling himself to cut the Gordian knot. But will this drop the Prime Minister in the Brown stuff?

The scenario painted by those in the know is that Labour gets back in after a spring election with a reduced majority. Mr Blair - having tried to end the feud with his Chancellor before the election - does what many of his closest supporters - Messrs Mandelson, Milburn and Byers - have been pushing him to do for a long time, and turfs Gordon out of the Treasury. The word is that Mr Brown will be offered the Foreign Office. For the purposes of this column, we don't care. All we care about is who succeeds him.

The first criterion is that the new Chancellor be trusted by the City. This immediately rules out a return to the centre of power for Stephen Byers (perish the thought) and makes it unlikely that Alan Milburn will be rewarded for his sterling work on the re-election campaign. It also looks like ruling out Jack Straw.

The Foreign Secretary has been talked about because he is pro-euro (our second criterion), loyal to Mr Blair (our third) and is a substantial politician (no more Norman Lamonts, thank you). But a safe pair of hands he isn't. David Blunkett's snipe that he left the Home Office in a "mess" has undermined confidence, as has his poor performance during the Iraq war. Older readers might remember that he nearly bankrupted the National Union of Students when he was its president. This is not a good CV for a Chancellor.

This brings us to the main Cabinet candidates: Alistair Darling and Patricia Hewitt (some might mention Charles Clarke and John Reid, but the former needs time at the Home Office and the latter surely fails the Lamont criteria).

Mr Darling is iffy on the euro test and is seen as a bit too close to Mr Brown. That said, the City thinks he's done a great job at Transport, wasn't too unhappy with his work at the briar patch that is Work and Pensions, and likes Scots running our finances.

The Trade Secretary is right on the money on the euro, right on the money on loyalty and, after a sticky start, has been doing a pretty good job at Trade and Industry. But does she carry the political weight of Mr Brown? Not likely. But then, is there anyone in the Labour top ranks who could?

What could stop the appointment of the first-ever female Chancellor? A bad election result. I was out with a leading Labour supporter in the City last week, and I offered to bet him there would be a hung parliament, with loads of disaffected Labourites voting Liberal Democrat as a protest over the Iraq War. He wouldn't touch my money.

With Labour needing Lib Dem support to rule, anything could be possible.

Green on his Marks?

I am getting concerned about Philip Green. I called him on Friday to see if he would crow about the Marks & Spencer profits warning, and he refused to take the bait.

Sure, he might have been jetlagged after his flight back from Barbados, but that should not stop him pointing to a 5.6 per cent fall in like-for-like sales over Christmas as evidence that the City was wrong to snub his 400p-a- share bid. M&S shares went up on Friday purely on the speculation that he'll be bidding again this year.

But hold on. Philip Green never actually bid 400p a share. He said he would if he could see the books etc. There's many a slip between indicative bid and real offer.

Plus, we don't know how well Mr Green's own little empire - Bhs and Arcadia - is doing. Nor will we. Reserving his rights as a private company, he will not be issuing a trading statement (as he didn't last year). We will have to rely on his accounts, which are quite historic and do not have to be as forthcoming as public company reports.

The spring season will be key for Stuart Rose and his new team at Marks & Spencer. But if that is a flop, I wouldn't rely on Philip Green to bail investors out of their underperforming M&S shares.

j.nisse@independent.co.uk

Comments