Bruce Anderson: My predictions for 2006 - Blair still in office, Bush recovering and Condi Vice-President

Bush and Rice are as close as any man and woman who have not shared the same sheets

This is an especially foolish moment to try and predict the future. At the beginning of 2006, it is hard enough to predict the past. All the most important world events of recent years are still open to widely divergent interpretations, and the same is true of the current changes in British politics. In such circumstances, political forecasting is one of the less accurate branches of astrology.

That said, here goes, at least on Britain and the US. 2006 will see a modest recovery in President Bush's fortunes, for two reasons: the economy and Iraq. At some stage, strong growth in America will move share prices upwards. A thousand-point rise in the Dow-Jones index would be a further boost to economic confidence. It would also help the President' s ratings to recover.

In the US, however, it is no longer the economy, stupid. It is Iraq. I believe that after the latest elections, there will be enough progress to allow the Americans to reduce troop numbers without appearing to scuttle. If this is true, and the casualty figures continue to fall, it ought to be possible for the President to make a case which would win the respect of the majority of American voters.

That will help with the mid-term elections. It would never have been easy for the Republicans to lose control of either the Houses of Congress. The Democrats are unlucky. One-third of all senate seats come up for re-election every two years. This time, there are only two obvious Republican marginals. In the House of Representatives, it has become harder and harder to displace incumbent Congressmen, unless there is a dramatic shift in public opinion.

Earthquakes do happen, asin 1994, when it was widely believed that a lot of Congressmen had become corrupt. If Iraq goes pear-shaped, there could be another one this year. But if my Iraqi prediction is right, George Bush will maintain his reputation as a party builder.

He does have one remaining party problem: the succession. The most obvious Republican candidate is greatly to the President' s liking, with similar views - and a further asset. Given a text, the President can be a great orator. But his brother Jeb does not need to be at a lectern in order to speak as if English was his first language. If Jeb Bush was not the President' s brother, he would be a very strong candidate. As it is, he is virtually disqualified. However much George Bush' s reputation recovers, it is inconceivable that the American voters would accept a dynastic succession.

In the absence of Governor Jeb, there is another strong Republican candidate: John McCain. He has a lot of cross-party appeal. According to the polling evidence, it would be very hard for any Democrat to beat him.

Yet there is a difficulty: temperament. Senator McCain is prone to ungovernable rages and is notoriously difficult to work for. There may be a reason for this. Mr McCain spent several years as a prisoner of the North Vietnamese. Because his father was an Admiral, he was selected for especially brutal treatment. As he refused to yield, it became viler still. Although much should be forgiven to a man who went through all that and came out unbroken, he may not be stable enough to be President of the United States. President Bush does not regard him as the right man to safeguard the inheritance.

George Bush cannot run his brother. He does not trust John McCain. The Republican Party has not produced a persuasive alternative. So there is only one option. The President will have to persuade his sister to stand. I suspect that George Bush and Condoleezza Rice are as close as any man and woman who have not shared the same sheets. Mr Bush has total confidence in Secretary Rice. He would also be delighted if his worthy successor were the first American female President and the first American black President.

All of my Washington friends regard this as an intriguing notion. None of them thinks it is realistic. It sometimes takes an outsider to see the obvious.

A Condi candidacy would require two sacrifices. Dick Cheney would have to stand aside as Vice-President so that she could succeed him and enhance her political standing. Condi Rice herself, who is by no means certain that she would like to go through a presidential campaign, would have to renounce her doubts. But if George Bush asked them to make the sacrifices, Mr Cheney would find it hard to refuse; Miss Rice, impossible.

In Britain meanwhile, a lot of traditional Tories fear that David Cameron is trying to force them to make sacrifices. They are wrong. Changes, yes: there, we have seen nothing yet. But there will be nothing which any sensible Tory should regard as a sacrifice. Mr Cameron merely wants his fellow Tories to help him to present the party to the voters as it is, instead of trying to validate their opponents' caricatures.

If David Cameron saw any point in fighting lost historical battles, he would insist that the Tory party had no reason to be ashamed of its record on public services. Since the war, Conservative governments have always provided extra cash, out of the resources created by successful economic management. But they have rarely received any electoral credit.

Mr Cameron does not believe that the difficulty arises because of a rigid adherence to Thatcherite purity. He thinks that it is caused by chronic incompetence in public relations. He is determined to put that right. Over the past month, he has made a good start, and there is much more planned. On this, I can make a confident prediction. The next year will see one of the most exciting periods in Conservative electoral history. The Tories will make tremendous efforts to reposition their public image.

The other two parties are already worried, with good reason. Surely the Liberals will find themselves a new leader in 2006, and put poor Charlie Kennedy out of his misery. He has always been the man who took the weight out of lightweight. As long as no one took any interest in Liberal policy, this did not matter, but at the last election they did, so it did. It rapidly became clear that Charlie' s economic policy went no further than the price of a triple Glenmorangie in Mrs McTumshie's bar in Tain.

As for Mr Blair, I predict that he will leave office in May 2007, following the 10th anniversary of his becoming Prime Minister. But for all serious purposes, his premiership is already at an end. He has lost his authority. Mr Blair is now concentrating all his energies on his legacy, but that is too late. You have to build up a legacy over long years of achievement; you cannot busk one by singing and dancing tricks in the last few months.

Mr Blair would also like a dignified exit. But he ought to know that in British democratic politics, that cannot be guaranteed. Look at Mrs Thatcher: no dignified exit for her. But she did have the legacy. He never will.