Gordon Brown faces a nightmarish choice over when to hold a by-election in Glasgow North East, the seat that will be vacated next month by Michael Martin, the outgoing Speaker.

Will Labour go quickly and try to bury what is likely to be an adverse result in the dog days of summer? The party tried that trick last July, holding a by-election in the adjoining seat of Glasgow East during the city’s holiday season. Their rushed and shambolic campaign resulted in the Scottish National party overturning a majority of 13,500 to win what had previously been seen as an impregnable Labour stronghold.

Banx cartoon

Yet it would be premature to view the contest as a shoo-in for the SNP.

Mr Martin won 53 per cent of the vote at the 2005 general election, giving him a majority of 10,134 over the nationalists. But even though the Conservatives and Liberal Democrats had followed Westminster convention and not contested the Speaker’s seat, the SNP took only 18 per cent of the votes, with most of the rest going to far-left candidates.

When another Scottish Labour MP died last August, the party decided to play it long and did not hold the consequent by-election in Glenrothes until November. Even then, Labour fatalism was so entrenched that it chose a date just after the US presidential election to limit coverage of what was expected to be another SNP victory.

But by then the financial crisis had intervened and the prime minister was leading the government rescue of Royal Bank of Scotland and HBOS, the two-Edinburgh-based banks at the centre of the meltdown in the UK. Mr Brown was able to act decisively while the SNP was sidelined – and Labour easily held off the nationalist challenge in Glenrothes, a seat that adjoins his own Fife constituency of Kirkcaldy and Cowdenbeath.

Both Labour and the SNP are also fretting over the prospect that, in the present febrile political atmosphere, an independent anti-sleaze candidate could come into Glasgow North East and upset all their calculations.

Mr Brown could go for an early poll but it seems more likely that – like Mr Micawber – he will wait for something to turn up.

Dividing spoils

The reshaping of Lloyds Banking Group is being avidly followed in Scotland, where thousands of jobs could hang on the outcome. Archie Kane, who is the representative for Scotland on the main board, has emerged as the group’s executive director of insurance and will be running one of the UK’s biggest life assurance and general insurance businesses out of Edinburgh.

The insurance arm of the giant new bank – the product of last autumn’s shotgun marriage between Lloyds TSB and the stricken HBOS – will combine the 194-year-old Scottish Widows life assurance business, which employs 3,000 in Edinburgh, with 185-year-old Clerical Medical, which is supported by 2,000 HBOS employees in Bristol. Lloyds has promised to retain the Bristol headquarters, but the Clerical Medical brand will be phased out.

Mr Kane will be directing his new empire from the splendid historic headquarters of Bank of Scotland, which merged with the Halifax mortgage bank in 2001. HBOS spent millions refurbishing the building, which sits high above central Edinburgh on the Mound, but its designation as the group’s corporate headquarters always had a symbolic feel to it.

There is no doubt that Lloyds Banking Group will be principally run from London, but because of a quirk of corporate history the registered office of the new entity will be in Scotland. When Lloyds Bank acquired TSB Bank in 1995, it was agreed that the registered office of the new bank would be in Edinburgh. The current registered office of Lloyds Banking Group is therefore at Henry Duncan House in George Street, one of the main thoroughfares of Edinburgh’s New Town. But Mr Kane confirms it will be switched to the Mound in due course.

In-flight turbulence

Sir Fred Goodwin, the ousted chief executive of Royal Bank of Scotland, was spotted recently on a flight to Nice, sitting some distance from his family.

The reason for this became apparent as a steady stream of passengers walked up to point their fingers in his face and berate him over the plight of the now-nationalised bank, the size of his notoriously large pension and the slump in the value of RBS shares.

Where’s that corporate jet when one needs it?

andrew.bolger@ft.com

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