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If a week is a long time in politics, then a month is an eternity. The party conferences have come and gone. Famous names in banking have been merged or nationalised. And the Government has been reshuffled. So where does this leave the political scene? All three party conferences were overshadowed by the economic turmoil. But, as normal business is resumed at Westminster, it is the Liberal Democrats who have been left languishing. That's despite deputy leader, Vince Cable, continuing to sound authoritative on the economy, and leader, Nick Clegg, seeing off an internal revolt on his tax and spending plans – although it still is unclear where £20bn worth of savings are coming from. And, like the Tories, talk of cutting public spending, so fashionable in July, may, in October, be seen to be accelerating rather than easing the impact of the credit crunch. Tory leader, David Cameron, and shadow chancellor, George Osborne, had to show some nifty footwork at the Conservative Party conference as the scale of the economic hurricane become apparent. Out went the small government and free market rhetoric, and in came recognition of the need for greater regulation and government action. Out went the partisan political attacks, and in came more sober speeches and the offer to work in a cross-party fashion. Even so, the Conservatives had time to announce some policies. Two particular initiatives will worry local government. The promise to freeze council tax for two years does not look as though it has been thought through. If it is implemented, adult social care will bear the brunt of the inevitable spending restrictions that will follow. It is also becoming clear that the Tories' would be even more aggressive than Labour in circumventing local authorities on education. Whereas the Government sees authorities as a strategic commissioner, brokering solutions to struggling schools, the shadow secretary of state for children, schools and families, Michael Gove, seems more focused on getting schools out of local authority control as an end in itself. Given that many of the top-tier authorities are now Conservative-run, this could make for some interesting tensions if the Conservatives were to win the next election. As for Labour, the state of the banking sector pushed talk of leadership challenges to the sidelines. Prime minister Gordon Brown's conference speech was well received but, much more significant for his future, is the way that the Government has handled recent events. There was decisive action to support the takeover of HBOS by Lloyds. And the nationalisation of the Bradford and Bingley was handled adroitly and swiftly – clearly lessons had been learned from the experience of Northern Rock. The new, more decisive Mr Brown was also evident in the reshuffle. It was a bold move to bring back Peter Mandelson. At a stroke, the prime minister has neutralised many of his opponents and strengthened links with the business sector – where the Tories are vulnerable. He also has a big-hitter in the Cabinet who can take to the air waves to explain the Government's policies. Margaret Beckett and Ed Miliband will be other useful recruits to this army. So where does this leave the Brown Government? The opinion poll gap has narrowed, but is still in double digits, so the prime minister is certainly not out of the woods. But – to mix metaphors – he is back in the game. Mr Brown and, to a degree the wider Labour Party, have signalled that they are not going to relinquish power without a fight. Politics has just got interesting again! However, if the Government is to consolidate its position, it has to continue to act boldly. The decision in early October to allow banks to use a broader range of securities as the basis for raising money was welcome – but should have been taken months earlier. The Government is still tending to react to rather steer events. It needs imaginative policies on banking, housing and mortgage liquidity, if we are to reverse the spiral which is in danger of engulfing homes, jobs and balance sheets. Rescuing the economy from the current market mayhem may not be enough to win the next election, but the way Mr Brown and his colleagues perform over the next few weeks will be crucial to his and Labour's prospects. Robert Hill is an independent consultant on public policy

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WHITEHALL

What a difference a month makes

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