David Miliband rules out early shadow cabinet return

Former foreign secretary insists: "I made the right decision last year."

As the Guardian's Andrew Sparrow notes, David Miliband has given an interview to local paper The Journal in which he again rules out an early return to the shadow cabinet. Asked if he would take a job on the frontbench, he said:

I say the same thing always to everyone, which is that I think I made the right decision last year. I promised I would give Ed the space to lead the party as he sees fit, I wasn't going to be part of a soap opera. And so I am here to support the party and support the leadership.

But in case you missed it here is this week's New Statesman leader on why the elder Miliband should come in from the cold:

In a moving and poignant interview with Jonathan Derbyshire on page 54 of this week's issue, the New Labour pollster Philip Gould, who is dying, reflects on the fractious relationship between Tony Blair and Gordon Brown and the one between Ed Miliband and David Miliband. "Gordon lost to a metaphorical brother," he says, "[but] David lost to an actual brother."

Mr Gould has spoken of his desire for David Miliband to return to front-line politics and to work with his brother to fulfil his dying wish - the election of a new Labour government. He is right to do so.

It was right for Mr Miliband, who served with distinction as foreign secretary from 2007 to 2010, to step down from the shadow cabinet after he was narrowly defeated by his brother in last year's leadership election. In his own words, he feared "perpetual, distracting and destructive attempts to find division where none exists". But one year on, it is clear that the return of the elder Miliband would be a huge help rather than a hindrance to Labour.

His return would encourage a significant section of the party, not least the 104 MPs who voted for him, to lend their unequivocal support to Ed Miliband. So long as their "lost leader" remains out-side the shadow cabinet and on the back benches, some will be reluctant to do so. Moreover, the speeches and articles he has written in recent months have reaffirmed his status as one of the party's best and brightest thinkers. On matters from the NHS to multiculturalism to the crisis of the European centre left, David Miliband has demonstrated a rare clarity of purpose. The talent pool of British politics is far too shallow for him to linger on the back benches and in the directors' box at Sunderland Football Club.

The differences between the brothers are largely of emphasis, not principle. They are committed to the former chancellor Alistair Darling's plan to halve the deficit by 2014 (although Ed has adopted a 60:40 ratio of spending cuts to tax rises, rather than the original 70:30 split). David's correct assertion that Labour should have founded the Office for Budget Responsibility does nothing to alter this.

The characterisation of David Miliband as a "Blairite" is wrong. Many know that he served as head of the No 10 Policy Unit during the Blair years, far fewer that he left because he was considered insufficiently reformist. In a long interview with the NS editor, Jason Cowley, in early 2009, he memorably spoke of the "red thread" that should run through all Labour policies; and in the leadership election he advocated a series of progressive policies, including ending charitable status for private schools, extending the bankers' bonus tax rather than raising VAT and supporting Vince Cable's proposed mansion tax on homes worth over £2m.

It is incumbent on those who call for Mr Miliband's return to pose the question of what job he should do. Having served as foreign secretary for three years, he will have no desire to shadow William Hague. He would make a fine shadow chancellor (and was offered the post after his brother's election) but it would be foolish to move Ed Balls, who has proved an effective foil to George Osborne, at this stage of the political cycle. The solution, perhaps, is to create a new policy-focused role for Mr Miliband, analogous to the position held by Oliver Letwin in the coalition government.

There are encouraging signs that Labour is renewing itself. On page 45, Stewart Wood, one of Ed Miliband's chief strategists, sets out an intellectual route map for the post-neoliberal era and argues that the party must "rewrite the rules that govern how Britain works". Labour is fortunate to have Lord Wood, a recently created peer, in the shadow cabinet.

In ambition and scope, Ed Miliband's political project is potentially as significant and as bold as the reform pursued by Margaret Thatcher and her Hayekian allies in the 1970s. Just as Mrs Thatcher shifted the centre ground of British politics to the right, so Mr Miliband now hopes to pull it leftwards. He will be best served in this endeavour if he has his brother alongside him in a shadow cabinet of all the talents.

George Eaton is political editor of the New Statesman.

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Scotland's vast deficit remains an obstacle to independence

Though the country's financial position has improved, independence would still risk severe austerity. 

For the SNP, the annual Scottish public spending figures bring good and bad news. The good news, such as it is, is that Scotland's deficit fell by £1.3bn in 2016/17. The bad news is that it remains £13.3bn or 8.3 per cent of GDP – three times the UK figure of 2.4 per cent (£46.2bn) and vastly higher than the white paper's worst case scenario of £5.5bn. 

These figures, it's important to note, include Scotland's geographic share of North Sea oil and gas revenue. The "oil bonus" that the SNP once boasted of has withered since the collapse in commodity prices. Though revenue rose from £56m the previous year to £208m, this remains a fraction of the £8bn recorded in 2011/12. Total public sector revenue was £312 per person below the UK average, while expenditure was £1,437 higher. Though the SNP is playing down the figures as "a snapshot", the white paper unambiguously stated: "GERS [Government Expenditure and Revenue Scotland] is the authoritative publication on Scotland’s public finances". 

As before, Nicola Sturgeon has warned of the threat posed by Brexit to the Scottish economy. But the country's black hole means the risks of independence remain immense. As a new state, Scotland would be forced to pay a premium on its debt, resulting in an even greater fiscal gap. Were it to use the pound without permission, with no independent central bank and no lender of last resort, borrowing costs would rise still further. To offset a Greek-style crisis, Scotland would be forced to impose dramatic austerity. 

Sturgeon is undoubtedly right to warn of the risks of Brexit (particularly of the "hard" variety). But for a large number of Scots, this is merely cause to avoid the added turmoil of independence. Though eventual EU membership would benefit Scotland, its UK trade is worth four times as much as that with Europe. 

Of course, for a true nationalist, economics is irrelevant. Independence is a good in itself and sovereignty always trumps prosperity (a point on which Scottish nationalists align with English Brexiteers). But if Scotland is to ever depart the UK, the SNP will need to win over pragmatists, too. In that quest, Scotland's deficit remains a vast obstacle. 

George Eaton is political editor of the New Statesman.