A Political Firestorm For Prime Minister Gordon Brown

In June of 2007 Gordon Brown became Prime Minister of the United Kingdom. After a decade working as the Chancellor of the Exchequer, Brown had developed a reputation of competence. Low national unemployment, reform, and a decade of growth of nearly 3% per year can work wonders for a political resume, especially for a politician in charge of the Treasury.

In politics, a individual of integrity who can technically get the job done, can overcome a lack of personal charisma. Gordon Brown is not known in the United Kingdom for charisma. He was known for having a record of competence. However, his reputation, and that of the Labour party, has been badly shaken since September 2007. The problems at a bank called Northern Rock and the disclosure that the Labour government has lost the personal financial data for about half of the country's citizens have created a political firestorm and a crisis of confidence in the United Kingdom's Prime Minister, Gordon Brown.

Indeed, over the last several months, government incompetence has been front page news in the United Kingdom. Even worse for the Prime Minister, the incompetence is focused on the procedures of the Treasury and the competence of the new Chancellor of the Exchequer, Alistair Darling.

Consider the political nightmare of a panic by depositors and a run on a bank. The daily news of the Northern Rock banking crisis for the last several weeks has even made world headlines. The scenes of thousands of people lining up to withdraw savings were reminiscent of the worst financial crises of the last century. However, Brown is being criticized in the United Kingdom for making the Northern Rock banking situation even worse. As Prime Minister, Brown changed the process for dealing with financial turmoil by involving the Bank Of England, the Financial Services authority, and the Treasury.

In effect, the Northern Rock crisis has become a potential United Kingdom government bailout. Since Brown's first action as Prime Minister just five months ago was to grant the Bank Of England independence, the recent bailout arrangement for Northern Rock demonstrates that the Bank Of England is not really independent at all.

Next consider the Labour government's disclosure that it somehow managed to lose financial data on 25 million people. Two disks that were not encrypted were put in the regular mail and have disappeared. The data relates to details about families with children, including names, dates of birth, addresses, bank account information, and insurance records.

The Chancellor's office admitted that procedures were not followed and that low level officials had access to, and improperly mailed, aggregate financial data of millions of people. Also, it was disclosed that the same mistake had been made several times in the past six months. The banking industry issued a security alert recommending that people immediately change any passwords associated with family member names. Meanwhile, the disks have been lost in the mail since October. Police are continuing their search in the tax offices in Newcastle, where the disks were apparently mailed.

Here is the apology to the United Kingdom from Gordon Brown: "I profoundly regret and apologize for the inconvenience and worries that have been caused to millions of families that receive child benefits. We have a duty to do everything that we can to protect the public".

The latest public opinion poll numbers (Populus poll for The Times) from the United Kingdom show that the problems at Northern Rock and the government's incompetence in the loss of half of the country's private financial data have taken its toll on public opinion. The number of voters who trust Gordon Brown and Chancellor Alistair Darling to handle the economy has fallen from 61 percent to just 28 percent since September 2007. A further 64 per cent questioned "the basic competence of the government".

People pay attention when they feel that their life savings are at risk. People pay attention when their personal identity and security are compromised. They pay attention when their tax dollars are used as bailout money for bad decisions in the private sector. This is not the type of attention that a politician or his party needs. It is also something that the voting public does not soon forget.

The Labour Party has been in control of the United Kingdom since 1997. A decade in politics is historically a long time for any one party to govern. The voting public may feel the need for a change of direction. The next election in the United Kingdom is currently an event scheduled for 2009. If these types of problems persist into next year, Labour could be vulnerable at the ballot box.

Indeed, a change in government in the United Kingdom in the next election may well be traced to this current political firestorm of governing incompetence surrounding the Labour Party and Prime Minister Gordon Brown.

James William Smith has worked in senior management positions for some of the largest financial services firms in the United States for the last twenty five years. He has also provided business consulting support for insurance organizations and start up businesses. Mr. Smith has a Bachelor of Science Degree from Boston College. He enjoys writing articles on political, national, and world events. Visit his website at http://www.eworldvu.com