Tory majority, or Labour lead in a hung parliament? What a way to kick off . . .

The election campaign begins.

The choppers are out in force, with aerial pics of the Brown motorcade making the one-mile drive back from Buckingham Palace. My former colleagues at Sky News are in "split-screen" mode, with David Cameron on one half, gesticulating and pontificating, and a locked-off shot of a solitary policeman standing outside 10 Downing Street.

So what's the mood inside the bunker? A Brown aide tells me that the PM has a spring in his step. "He's at his best when faced with a tough challenge but he knows he has a plan, so he's fine," says the aide.

And I can believe it. I doubt that the Prime Minister will be punching the back of the front seat of his Jaguar this morning. Not if he's got a copy of the Guardian inside the car with him. The paper's latest ICM poll shows the Tory lead over Labour cut to 4 points for the first time in almost two years -- a lead that, if replicated on 6 May, would leave Labour as the largest single party in the House of Commons.

The Guardian's Julian Glover writes:

On a uniform national swing, these figures could leave Labour 30 seats short of an overall majority. Even if the Tories perform better than average in marginal seats -- as most people expect -- David Cameron would struggle to establish a secure parliamentary basis for power.

Amazing, eh? Who'd have predicted it? Not the great and the good of the anti-Brown lobby or commentariat. And certainly not the arch-critic of all things Brown, John Rentoul of the Independent on Sunday. Only a few weeks ago, John was telling me he had no doubt in his mind that Cameron's Conservatives would win a comfortable, double-digit parliamentary majority. This morning, according to a Paul Waugh tweet, John said:

Nobody, certainly not me, expected Gordon Brown to be in the position he is today.

Not quite. For the last time (I promise!), let me refer you all to the rather prescient column that James Macintyre and I wrote for the NS in June, in the wake of Labour's disastrous performance in the Euro elections, in which we referred to the "Tories' precarious electoral position" and concluded:

If . . . the Brown government can concentrate the country's attention on public services and public spending, Labour may well still stand a fighting chance of a hung parliament at next year's general election.

It's a suggestion, a prediction, that James and I have long stood by. Bring on 6 May!

UPDATE: Before I'm denounced by Tory trolls "below the line" as a "Labour spin doctor", let me apologise for failing to acknowledge above that there is, in fact, another reputable poll out today -- by YouGov for the Sun -- which tells a somewhat different story. The YouGov survey shows the Tories have reopened a 10-point lead over Labour -- which is, of course, the margin they need to maintain in order to win an overall majority next month.

So is the ICM poll just a "rogue", as some Tory sympathisers have suggested? Who knows? Don't forget: as a wise man once said, rogue polls tend to be polls you don't like. And even the YouGov survey shows an increase in the Labour share (from 29 to 31 per cent). So I still think there's reason for Brown, and Labour supporters, to be cheerful this morning.

 

Mehdi Hasan is a contributing writer for the New Statesman and the co-author of Ed: The Milibands and the Making of a Labour Leader. He was the New Statesman's senior editor (politics) from 2009-12.

Getty
Show Hide image

Leader: The unresolved Eurozone crisis

The continent that once aspired to be a rival superpower to the US is now a byword for decline, and ethnic nationalism and right-wing populism are thriving.

The eurozone crisis was never resolved. It was merely conveniently forgotten. The vote for Brexit, the terrible war in Syria and Donald Trump’s election as US president all distracted from the single currency’s woes. Yet its contradictions endure, a permanent threat to continental European stability and the future cohesion of the European Union.

The resignation of the Italian prime minister Matteo Renzi, following defeat in a constitutional referendum on 4 December, was the moment at which some believed that Europe would be overwhelmed. Among the champions of the No campaign were the anti-euro Five Star Movement (which has led in some recent opinion polls) and the separatist Lega Nord. Opponents of the EU, such as Nigel Farage, hailed the result as a rejection of the single currency.

An Italian exit, if not unthinkable, is far from inevitable, however. The No campaign comprised not only Eurosceptics but pro-Europeans such as the former prime minister Mario Monti and members of Mr Renzi’s liberal-centrist Democratic Party. Few voters treated the referendum as a judgement on the monetary union.

To achieve withdrawal from the euro, the populist Five Star Movement would need first to form a government (no easy task under Italy’s complex multiparty system), then amend the constitution to allow a public vote on Italy’s membership of the currency. Opinion polls continue to show a majority opposed to the return of the lira.

But Europe faces far more immediate dangers. Italy’s fragile banking system has been imperilled by the referendum result and the accompanying fall in investor confidence. In the absence of state aid, the Banca Monte dei Paschi di Siena, the world’s oldest bank, could soon face ruin. Italy’s national debt stands at 132 per cent of GDP, severely limiting its firepower, and its financial sector has amassed $360bn of bad loans. The risk is of a new financial crisis that spreads across the eurozone.

EU leaders’ record to date does not encourage optimism. Seven years after the Greek crisis began, the German government is continuing to advocate the failed path of austerity. On 4 December, Germany’s finance minister, Wolfgang Schäuble, declared that Greece must choose between unpopular “structural reforms” (a euphemism for austerity) or withdrawal from the euro. He insisted that debt relief “would not help” the immiserated country.

Yet the argument that austerity is unsustainable is now heard far beyond the Syriza government. The International Monetary Fund is among those that have demanded “unconditional” debt relief. Under the current bailout terms, Greece’s interest payments on its debt (roughly €330bn) will continually rise, consuming 60 per cent of its budget by 2060. The IMF has rightly proposed an extended repayment period and a fixed interest rate of 1.5 per cent. Faced with German intransigence, it is refusing to provide further funding.

Ever since the European Central Bank president, Mario Draghi, declared in 2012 that he was prepared to do “whatever it takes” to preserve the single currency, EU member states have relied on monetary policy to contain the crisis. This complacent approach could unravel. From the euro’s inception, economists have warned of the dangers of a monetary union that is unmatched by fiscal and political union. The UK, partly for these reasons, wisely rejected membership, but other states have been condemned to stagnation. As Felix Martin writes on page 15, “Italy today is worse off than it was not just in 2007, but in 1997. National output per head has stagnated for 20 years – an astonishing . . . statistic.”

Germany’s refusal to support demand (having benefited from a fixed exchange rate) undermined the principles of European solidarity and shared prosperity. German unemployment has fallen to 4.1 per cent, the lowest level since 1981, but joblessness is at 23.4 per cent in Greece, 19 per cent in Spain and 11.6 per cent in Italy. The youngest have suffered most. Youth unemployment is 46.5 per cent in Greece, 42.6 per cent in Spain and 36.4 per cent in Italy. No social model should tolerate such waste.

“If the euro fails, then Europe fails,” the German chancellor, Angela Merkel, has often asserted. Yet it does not follow that Europe will succeed if the euro survives. The continent that once aspired to be a rival superpower to the US is now a byword for decline, and ethnic nationalism and right-wing populism are thriving. In these circumstances, the surprise has been not voters’ intemperance, but their patience.

This article first appeared in the 08 December 2016 issue of the New Statesman, Brexit to Trump