Britain's Labour Party last week suffered its worst performance in 40 years in local elections in England and Wales when it received 24 per cent of the vote compared to 44 per cent for the Conservatives and 25 per cent for the Liberal Democrats. Labour lost over 230 seats, while the Conservatives gained 167 and the Liberal Democrats made some small gains.

Prime Minister Gordon Brown said the result was a bad and disappointing one for the Labour Party and that he will learn lessons, reflect and move forward. Conservative leader David Cameron, on the other hand, called the result a "big moment".

This was Mr Brown's first electoral test since becoming Prime Minister in June last year when he said he would lead a new government with new priorities. He had stated then that he would be "strong in purpose, steadfast in will, resolute in action in the service of what matters to the British people, meeting the concerns and aspirations of our whole country."

Soon after Mr Brown replaced Tony Blair in June last year, his approval ratings among voters was very high indeed. The public seemed to have appreciated the new Prime Minister's radical Cabinet shakeup, his plans to strengthen the role of Parliament and his move away from spin. Furthermore, contrary to what many analysts had predicted, Mr Brown remained firmly entrenched in the centre of the political spectrum. Who can forget Mr Brown's famous invitation to Margaret Thatcher for tea at Downing Street, something which horrified left-wing Labour supporters?

Unfortunately for Mr Brown, however, his honeymoon with voters was short-lived. His biggest mistake was when he decided last October not to call an early general election after his government had been sending out signals for weeks that an election was highly likely. The fact that Mr Brown changed his mind after opinion polls showed that key marginal seats could fall to the Conservatives made him look like a weak leader, especially so after it was his administration which had been hinting for quite some time that an election announcement was imminent.

Mr Brown's government also lost some credibility last year when presenting its annual budget after it was alleged that it copied three Conservative Party tax policies which seemed to have struck a chord with the electorate, including raising the inheritance tax threshold and taxing airlines for their pollution.

The government's handling of the Northern Rock issue however, raised questions over its economic credentials, a dangerous development considering that Mr Brown had a reputation as a sound economic manager - he was Mr Blair's Chancellor for 10 years and presided over an exceptionally sound economy.

Furthermore the perception that Labour was better than the Conservatives at handling economic issues - which has been the assumption among voters since Black Wednesday (September 16, 1992, when the John Major Conservative government withdrew sterling from the European Exchange Rate Mechanism) - was finally being challenged.

There have been other problems for Brown. His refusal to hold a referendum over the Lisbon Treaty angered some Labour MPs and allegations of irregular financing of the Labour Party eroded some of his support. Only recently he was forced to commit another U-turn when he faced a backbench rebellion over income tax reform.

The Prime Minister admitted last Wednesday - a day before local elections - that he had made a mistake on this issue and promised that the government would compensate those hit by the removal a 10 per cent threshold on income tax, which came into effect last month. Such a pledge, however, did not seem to influence voters, who gave Labour a bloody nose.

In fact the local council results show that Labour's vote dwindled a lot in its traditional heartlands, proving that the 10 pence measure cost the party a lot of its core support. Labour's deputy leader Harriet Harman said: "We didn't respond early enough to those groups of people who were going to lose out as a result of the change in the 10p rate which overall benefits lower income people but there were some people who lost out and we didn't react early enough."

Labour's poor result is similar to the thrashing received by the Conservatives in the 1995 local elections, two years before Labour won by a landslide in the general election of 1997, so things are not looking good for Mr Brown. If last week's result was repeated in a general election, the Conservatives would have a parliamentary majority of 138 seats.

Of course, a poor local election result does not necessarily mean that Labour will lose the next general election, but the trend away from Labour and towards the Conservatives is definitely a reality. So Mr Brown, who lacks the charisma of his predecessor Tony Blair - something which has definitely worked against him - will have to work very hard at convincing the British public that he has a bold vision for the country, that he is not a ditherer and that his party is better than the Conservatives at managing the economy.

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