Embattled Prime Minister scents unlikely victory on his home turf

A few weeks ago Labour faced defeat in the Glenrothes by-election. But the credit crisis has improved the party's standing so much that even Gordon Brown may campaign for the first time since moving to No 10. By Andy McSmith in Fife

Whoever designed the little Scottish town of Glenrothes believed in roundabouts. Glenrothes has no traffic lights, other than at a few pedestrian crossings. Wherever two busy roads meet, cars go round in circles.

Gordon Brown's political career has also been going around in ever-decreasing circles until very recently, when the global banking crisis started to make him look a man with a mission, battling a problem not of his making, instead of a man who did not know what to do next.

Now a few optimists in the Labour Party are hoping that Mr Brown's dismal year is over. The most recent opinion polls have suggested there may have been a "Brown bounce" inspired by his handling of the credit crunch. Glenrothes is where we will find out whether that bounce is real, or whether he is still on the road to nowhere.

The Glenrothes constituency, between Edinburgh and Kirkcaldy, has a by-election pending on 6 November because of the death of the Labour MP John MacDougall. If it is anything like the last two by-elections – in Crewe and Nantwich in May, and Glasgow East in July – the Labour Party will be humiliatingly slaughtered in what used to be a safe seat, and the SNP will have been given another political shot in the arm.

Three weeks ago, some delegates to Labour's annual conference in Manchester were so certain that Glenrothes was lost that they marvelled at the folly of the Prime Minister in delaying the inevitable, and had Glenrothes marked down as the trigger that would start a cabinet revolt to prise Mr Brown out of Downing Street.

But that was before the full horror of the credit crunch had hit home. Now the Labour Party at least is readier to give Mr Brown the benefit of the doubt as he grapples with a global crisis. It is a mood also to be found on the streets of Glenrothes.

Last month, the SNP's campaign had a lively look about it, while Labour had got off to a spluttering start. The party had made the unusual decision to choose a 59-year-old candidate who had never run for elected office before. He was Lindsay Roy, a local headmaster, whose job meant he could only campaign outside school hours. He is nowhere near as well known as the SNP candidate, Peter Grant, the leader of Fife Council.

What was painfully noticeable, visiting the constituency in mid-September, was the silence of Labour voters. No one seemed to want to admit to voting Labour. "The Labour Party should be panicking when a small town like Glenrothes could be putting the Prime Minister's job on the line," said Alec McIntosh, a driver. "But in the evening, I get telephone calls saying, 'Will you vote for us, will you vote us', from every party except Labour. I have been Labour all my life. I was brought up to believe that Labour is the party for the working man. But I don't see that it makes a difference to the working man which of them is in. I don't know if I'll vote Labour at the general election, but in this by-election I'll definitely vote SNP."

Alec Redpath, a leading member of the Church of Scotland in the village of Leslie, said: "Labour has been in power for so long, and did a lot of good things in Fife, but people see the national picture and how if affects them personally. The credit crunch worries people. People are saying they want someone who can help them out."

Fife is a big recruiting area for the Army. Near Glenrothes bus station, there is a monument to two men killed in Iraq – and the blame for that is not all heaped on Tony Blair. "I'm absolutely disgusted with Gordon Brown, because this is the man who wrote the cheques for the war," said Rudi Vogels, a former social worker and "lifelong socialist".

But three weeks and one global financial crisis later, Ladbrokes have cut the odds on a Labour victory, and Labour's private polling is telling them that the mood among their supporters in Glenrothes is good enough to risk having Mr Brown pay a visit as polling day approaches. It will be the first time he has campaigned in a by-election since becoming Prime Minister.

These straws in the wind should not be taken too seriously. Even in these changed circumstances, an SNP victory must still be the most likely outcome, but at least it is no longer difficult to find people around Glenrothes who are not bashful about saying they will vote Labour.

Mr Roy and his team went out canvassing this week in the village of Leven. Here, Labour voters were happy to open their doors, talk and shake the candidate's hand – which they were notably shy of doing in another village three weeks earlier. As Mr Roy was treading the pavement, a car drew up so that its driver could say how glad he was to see the Labour Party showing its face once more – a rebuke for previous inactivity perhaps, but also a small sign of Labour's recovery.

The other surprise was hearing people come to Mr Brown's defence. "I think it's wrong how he's getting all that slagging off," said Daniel Ferguson, a retired lorry driver. "They blame him for this, they blame him for that, when it's not his fault. He's always trying to do his best. He thinks about working class people."

"This crisis is not Gordon Brown's fault," said Elizabeth Cooper. "It's global, and we can't expect Gordon Brown to sort it out alone, or anybody else for that matter."

In normal times, these comments are what you would expect from working-class people on a council estate in Labour's Scottish heartland. In this part of the world, the Prime Minister is practically a local boy made good. Mr Brown went to Kirkcaldy High School, where Mr Roy is now headmaster. The Prime Minister's seat of Kirkcaldy and Cowdenbeath is next door. Some of the villages now in Glenrothes constituency had Mr Brown as their MP until the borders were adjusted.

But times are not normal, and in Scotland particularly, Labour has taken one knock after another from the SNP. Fife Council, which covers Glenrothes, was Labour-controlled from its formation, until last year. Now it is run by the SNP, in coalition with the Liberal Democrats. Since the inception of the Scottish Parliament, Glenrothes has had a Labour MSP – again until last year, when the SNP took the seat. In July, in the seemingly rock-solid Labour seat of Glasgow East, the swing from Labour to the SNP was 22 per cent. In Glenrothes, the SNP need a swing of just over 14 per cent.

Sooner or later, the SNP will run into the problems that come with incumbency. Mr Grant can expect his campaign to be dogged throughout by a group of disabled protesters who object to recently introduced means-tested charges for people aged under 65 on home help.

But the honeymoon the SNP has enjoyed since winning control of the Scottish Parliament in 2007 is not over yet. Popular measures, such as a cut in prescription charges and free school meals for primary school children, have kept it going. The SNP's research has shown up fuel and food prices as the main sources of discontent. They plan to campaign hard on both – and they do not believe Mr Brown can hide behind the credit crunch to escape the consequence of the Government's unpopularity.

"Gordon Brown was portrayed as a wonder worker when everything was going well," said Mr Grant. "Having taken the credit in good times, he is going to find it difficult not to be held responsible when things go wrong."