25 SEPTEMBER 1993, Page 25

Labour of lunch

THE LABOUR Party comes to Brighton leading in the polls but trailing in the City. No prejudice, of course, but markets live by anticipation, and their leading indicator does not flatter Labour's chances. This is (as you would expect from the City) a lunch index. It reflects the number of chairmen who are saying: 'We may have to deal with these chaps — hadn't we better ask them in?' At the height of John Smith's prawn- cocktail offensive he had a five-month wait- ing list. I am not privy to Gordon Brown's diary, but I can read a lunch-book, and I see no sign that chairmen are hurrying to meet the Shadow Chancellor. That is their loss but it is how they see the market. Mr Smith was the perfect lunch-guest but he has left Labour with a handicap, first point- ed out to me by Nigel Lawson. There was one good political reason (so he said to me three years ago) for Britain to join the European Exchange Rate Mechanism, and that was to spike Mr Smith's guns: 'Every time he's asked what he would do about the economy, he says he'd join the ERM. So if we've joined it already, he'll have to think of something else.' That was prescient. Labour backed a loser in the ERM policy until it was destroyed in the market, and now says instead that it would sign the Social Chapter. There is ample scope for Mr Brown to think of something else, but if he does I wish he would tell me — prefer- ably over lunch.