Osborne under assault from all sides

Alastair Campbell slams Boy George

It must count as some achievement to simultaneously attract the ire of Alastair Campbell and Simon Heffer. That's the unusual position in which George Osborne finds himself this morning, with Campbell writing a deliciously catty letter to the Financial Times and Heffer calling on David Cameron to sack his shadow chancellor.

The departure point for Campbell's letter is the growing awareness that Osborne is more concerned with grabbing headlines than he is with credible economic policy. His pledge to ban retail banks from paying out large cash bonuses may have translated well in our soundbite culture, but it was soon exposed by economists who pointed out that it would weaken planned curbs on the investment banks responsible for the most extravagent bonuses.

Osborne's claim that capping bonuses would lead banks to lend more similarly fell apart under scrutiny. Banks would almost certainly use any spare cash to build up their balance sheets.

Campbell astutely notes that Osborne's dual role as shadow chancellor and election co-ordinator may be responsible for his economic shortcomings:

In appointing Mr Osborne to both positions, David Cameron perhaps reveals his own weakness in failing to differentiate between strategy and tactics. It might be sensible for the Conservative leader to relieve Mr Osborne of one of his two posts. I sense that the City would like it to be the shadow chancellorship. The Labour Party will be hoping that's the one he keeps.

Some may be surprised to see a Labour tribalist like Campbell pop up in the FT, but as I've noted before the paper is not the free-market bible some imagine it to be. Thanks to a strong Keynesian faction, the title has backed Labour at every election since 1992.

I notice that Iain Martin, formerly of the Daily Telegraph and now of the Wall Street Journal, has launched an "FT Watch" on his blog. That the most economically literate paper on Fleet Street has turned its guns on the Tories says much about the state of Conservative policy.

George Eaton is political editor of the New Statesman.

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Why isn't Labour putting forward Corbynite candidates?

Despite his successes as a candidate, the organisational victories have gone the way of Corbyn's opponents. 

The contest changes, but the result remains the same: Jeremy Corbyn’s preferred candidate defeated in a parliamentary selection. Afzhal Khan is Labour’s candidate in the Manchester Gorton by-election and the overwhelming favourite to be the seat’s next MP.

Although Khan, an MEP, was one of  the minority of Labour’s European MPs to dissent from a letter from the European parliamentary Labour party calling for Jeremy Corbyn to go in the summer of 2016, he backed Andy Burnham and Tom Watson in 2015, and it is widely believed, fairly or unfairly, that Khan had, as one local activist put it, “the brains to know which way the wind was blowing” rather than being a pukka Corbynite.

For the leader’s office, it was a double defeat;  their preferred candidate, Sam Wheeler, was kept off the longlist, when the party’s Corbynsceptics allied with the party’s BAME leadership to draw up an all ethnic minority shortlist, and Yasmine Dar, their back-up option, was narrowly defeated by Khan among members in Manchester Gorton.

But even when the leadership has got its preferred candidate to the contest, they have been defeated. That even happened in Copeland, where the shortlist was drawn up by Corbynites and designed to advantage Rachel Holliday, the leader’s office preferred candidate.

Why does the Labour left keep losing? Supporters combination of bad luck and bad decisions for the defeat.

In Oldham West, where Michael Meacher, a committed supporter of Jeremy Corbyn’s, was succeeded by Jim McMahon, who voted for Liz Kendall, McMahon was seen to be so far ahead that they had no credible chance of stopping him. Rosena Allin-Khan was a near-perfect candidate to hold the seat of Tooting: a doctor at the local hospital, the seat’s largest employer, with links to both the Polish and Pakistani communities that make up the seat’s biggest minority blocs.  Gillian Troughton, who won the Copeland selection, is a respected local councillor.

But the leadership has also made bad decisions, some claim.  The failure to get a candidate in Manchester Gorton was particularly egregious, as one trade unionist puts it: “We all knew that Gerald was not going to make it [until 2020], they had a local boy with good connections to the trade unions, that contest should have been theirs for the taking”. Instead, they lost control of the selection panel because Jeremy Corbyn missed an NEC meeting – the NEC is hung at present as the Corbynsceptics sacrificed their majority of one to retain the chair – and with it their best chance of taking the seat.

Others close to the leadership point out that for the first year of Corbyn’s leadership, the leader’s office was more preoccupied with the struggle for survival than it was with getting more of its people in. Decisions in by-elections were taken on the hop and often in a way that led to problems later down the line. It made sense to keep Mo Azam, from the party’s left, off the shortlist in Oldham West when Labour MPs were worried for their own seats and about the Ukip effect if Labour selected a minority candidate. But that enraged the party’s minority politicians and led directly to the all-ethnic-minority shortlist in Manchester Gorton.

They also point out that the party's councillor base, from where many candidates are drawn, is still largely Corbynsceptic, though they hope that this will change in the next round of local government selections. (Councillors must go through a reselection process at every election.)

But the biggest shift has very little to do with the Labour leadership. The big victories for the Labour left in internal battles under Ed Miliband were the result of Unite and the GMB working together. Now they are, for various reasons, at odds and the GMB has proven significantly better at working shortlists and campaigning for its members to become MPs.  That helps Corbynsceptics. “The reason why so many of the unions supported Jeremy the first time,” one senior Corbynite argues, “Is they wanted to move the Labour party a little bit to the left. They didn’t want a socialist transformation of the Labour party. And actually if you look at the people getting selected they are not Corbynites, but they are not Blairites either, and that’s what the unions wanted.”

Regardless of why, it means that, two years into Corbyn’s leadership, the Labour left finds itself smaller in parliament than it was at the beginning.  

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.