Labour's right to join the economic debate is under attack

Osborne's attempt to create a sense of equivalence between Fred Goodwin and Ed Balls is a threat to

George Osborne's speech had two distinct purposes. The first and most obvious was to show that the government is not complacent about the stagnating economy and the effect it is having. This he aimed to do with a rash of announcements, the most significant of which is surely the interest in "credit easing", by which the Treasury lends directly to firms. As my colleague George points out, this looks like a tacit admission that Project Merlin - the deal between government and the banks to increase the supply of private sector credit - is failing. It is worth adding that other devices that were meant to stimulate the economy by disbursing government cash, notably the regional growth fund, are also implicitly belittled by this move. The growth fund has yet to actually hand out any money.

The second of Osborne's tasks was to reinforce the coalition's central political message about Labour's responsibility for creating the crisis. This Osborne did with a sleight of rhetorical hand, embarking on what sounded like an attack on the bankers but blended seamlessly into an attack on the shadow chancellor. The aim is to create some sense of equivalence in people's minds between the dereliction of responsibility shown by the likes of Fred Goodwin at RBS and the fiscal management of the last government. It is a crude device but one that poses a big threat to Labour. Osborne doesn't want to beat the two Eds in an argument on the economy, he wants to trash their moral credentials to even participate in an argument about the economy.

Given how effective the Chancellor has already been in promoting his account of Labour profligacy as the prime cause of austerity, Miliband should be worried by this renewed assault on his entitlement to have a view. The argument Miliband made in his conference speech - that the Tories' economic analysis represents the last gasp of a failed model of irresponsible free market capitalism - requires a degree of historical and ideological perspective that many voters don't bring to bear when apportioning blame. Labour badly needs a sharper rebuttal.

One other point on Osborne's political calculations: The heavy emphasis on the failings in the eurozone was inevitable, but the tone, essentially blaming continental governments for creating the conditions that are now holding back the UK economy, was new. The Chancellor clearly felt the need to lash out at "Europe" in some way to appease the large numbers in his party who see the single currency crisis as an opportunity to renegotiate Britain's whole settlement with Brussels. But I sense another element to this argument. Osborne lavished praise on William Hague for his 2001 election campaign dedicated almost entirely to demands to "save the pound". The Tories lost by a landslide. Now that the euro is in dire trouble, Tory strategists are sensing an opportunity to salvage some credibility from their wilderness years. This isn't so much a eurosceptic argument as part of the Tory "decontamination" agenda. Osborne seems to be re-branding old political failures as a kind of foresight.

The Chancellor doesn't just want to monopolise economic argument in the present and future, he wants to rewrite the past too.

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

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Don't bet on James Brokenshire saving devolution in Northern Ireland

The Northern Ireland secretary's decision to extend talks makes a settlement less, not more, likely. 

The deadline for the parties at Stormont to form a new executive has passed without an agreement. Northern Ireland secretary James Brokenshire has – as was inevitable – taken the least difficult option and opened a “short window of opportunity to resolve outstanding issues”.

Talks have been extended for a “short few weeks” – Brokenshire’s interpretation of the “reasonable period” allowed after the initial three weeks after the election elapsed. Despite his earlier warnings, there will be no snap election (for which he conceded there was “no appetite”).

Unhelpful though the tortured semantics of “a short few weeks” are, we can assume that new negotiations may well as last as long as the impending Commons recess, which begins on Thursday and ends on April 11th – after which, Brokenshire said, he will bring forward legislation to set regional rates in the absence of an executive. This, though not quite direct rule, would be the first step in that direction.  

So what changes now? Politically speaking and in the immediate term, not a great deal. For all the excited and frankly wishful chatter about the two parties approaching the final talks afresh after Martin McGuinness’ funeral last week, Sinn Fein and the DUP remain poles apart.  

The former declared talks to have failed a full day before the deadline, and Sinn Fein president Gerry Adams has since said there has been “no substantive progress” on the key issues at hand – particularly the DUP’s “minimalist” approach on the Irish language and marriage equality. Seemingly unassailable differences remain on a new Bill of Rights and measures to deal with the legacy of the Troubles. As such, both Adams and Sinn Fein's new leader Michelle O’Neill continue to stress their election lines: equality, respect, integrity, and, perhaps most tellingly, “no return to the status quo”.

Brokenshire clearly recognises that there will be no new executive without some movement on these issues: yesterday he referred to the talks to come as an “opportunity to resolve outstanding issues”. He is right to do so: Sinn Fein’s demands are, for the most part, as yet unimplemented provisions from the Stormont House and Fresh Start Agreements of 2014 and 2015. 

But will the DUP budge? It appears unlikely at first glance. Sinn Fein’s approach to negotiations has only heightened tensions between the would-be coalition partners, whose relationship has regressed to the openly adversarial (DUP leader Arlene Foster yesterday expressly blamed Sinn Fein for the collapse in talks).

There looks to be little appetite for compromise on Sinn Fein’s headline demands. The DUP’s opposition to historical prosecutions of Troubles veterans is well-publicised, and appears to be aligned with UK government thinking.

Nor does there appear to have been any real shift in the party’s position on legal recognition for the Irish language. Speaking on the BBC’s World at One yesterday afternoon, Ian Paisley Jr stressed in pretty woolly terms to the DUP’s commitment to “promoting minority languages”, which, however true, is not the commitment to an Irish language act that Sinn Fein are asking for. That the spirit of Paisley’s remarks was essentially the same as his leader’s contrarian take on the issue – she said, provocatively, that there was much a need for a Polish language act as an Irish language act – is not a promising sign.

The continuing fallout from the Renewable Heat Incentive scandal that triggered last month’s election also complicates matters. Though the London press have already relegated this public spending scandal to the footnotes, the full ramifications are yet to be seen. A full list of claimants was last week published by the Belfast News Letter, and the longer the process of negotiation and renegotiation drags on, the clearer the answer to the question of who exactly benefited from the scheme’s mismanagement becomes. Though, Foster's penance in the wake of the DUP’s calamitous election performance has gone some way to rehabilitating her public image, the taint of corruption could retoxify the brand. It isn’t difficult to see why veteran Stormont horse-traders like Reg Empey, the former leader of the UUP, believe an executive may well be unachievable until the inquiry into "cash for ash" delivers its ruling – a process which could take a year.

The political impasse, then, looks as insoluble as ever. Leaders of smaller parties such as the non-sectarian Alliance have blamed Brokenshire for the startling fact that there were no roundtable talks at any point during the past three weeks. The Northern Ireland secretary’s decision to extend talks for another fortnight could bury power-sharing as we know it for good. From Wednesday, the civil service will take control of the province’s budget, as per Section 59 of the Northern Ireland Act. The permanent secretary of the Department for Finance will immediately have access to just 75 per cent of available funds, and, if the situation persists, 95 per cent.

In the worst case scenario, this means cuts could well come hard and fast. All the better for Sinn Fein - as I wrote earlier this month, the imposition of austerity and Brexit from London offers an opportunity to parlay short-term pain into long-term political gain. Meanwhile, Brexit secretary David Davis has admitted that Northern Ireland would automatically rejoin the EU in the event of a border poll. The path to a united Ireland via direct rule looks clearer than ever before.

Unionists are not blind to this existential risk – and here Brokenshire’s bizarre insistence that he was ready to call Northern Ireland’s third election in twelve months exposes his political naivety. He maintains there is “little public appetite” for a new poll. He might be right here, but that doesn’t mean a revanchist DUP would refuse the opportunity, if it arose, to go back to a unionist electorate it believes have taken frit at Sinn Fein’s post-election manoeuvring. Some in the party are keen to do so, if only to put to bed what they deem to be premature and melodramatic talk of imminent Irish unity.

Another election would suit Sinn Fein’s long game. The more dysfunctional and unworkable devolved politics in the North, the stronger the logic for a quick transition to a united Ireland in the EU. Much of the Northern Irish political establishment deem Brokenshire a lightweight - as do many in his own party. That he seems not to have realised that threatening a new election wasn’t much of a threat at all – or foreseen this avoidable mess - does nothing to dispel that notion. 

Patrick Maguire writes about politics and is the 2016 winner of the Anthony Howard Award.