Is Alan Johnson the right man for the job of shadow chancellor?

The coalition, and the cuts consensus, have to be challenged, not indulged.

I was on Radio 4's World Tonight and BBC2's Newsnight yesterday discussing the appointment of the former home secretary Alan Johnson as the new shadow chancellor. I don't think any of us saw that coming -- in fact, I don't think Alan Johnson saw it coming! When I spoke to him at the Labour party conference in Manchester, he seemed keen to shadow the Deputy Prime Minister, Nick Clegg, and hold the coalition government's constitutional and electoral reform agenda to account. He has never served in the Treasury before and is not an expert on the economy.

Nick Robinson tells the following anecdote on his blog:

I once told Alan Johnson that some in the cabinet were arguing that he should replace Alastair Darling as chancellor. His communication skills, wry good humour and common sense were regarded by many as making him the perfect foil to Gordon Brown and more likely to cheer up the nation up than Darling himself.

I well recall his reaction – he looked like he'd swallowed a wasp. Unlike the other obvious candidate back then – Ed Balls – he had no economic training and was not desperate to do the job.

Regular readers of this blog will know that I was hoping Ed Balls would be made shadow chancellor. I believe he was the best-qualified person for the job – and he deserved it, too, having delivered a scathing critique of Osbornomics at Bloomberg in August, and having harried and humiliated Michael Gove at the despatch box again and again over the summer. I also think it is odd that the two most formidable economists on the Labour front bench should be confined to home affairs (Balls) and foreign affairs (Yvette Cooper), where their impressive grasp of macroconomics will not be needed and where Cooper, in particular, might be wasted.

But what do I know? I'm just a hack. Ed Miliband is the leader and I'm guessing he has a plan. Plus, Johnson is an experienced and able politician, a great communicator with a fantastic sense of humour, as well as a fascinating backstory that contrasts with George Osborne's privileged upbringing.

Now, there has been much debate over the past 24 hours as to whether the Johnson appointment and the decision to deny Balls the post he so craved is a sign of strength or weakness on the part of Miliband. I was on BBC Radio Wales with the former Blair adviser John McTernan this morning: McTernan thinks the new Labour leader showed "strength" in giving Balls the home affairs, rather than the Treasury, brief. Indeed, the narrative emerging from the Blairites is "Ed Mili faced down Ed Balls".

But there is another view that says that Miliband the Younger capitulated to the Blairites and the right-wing press, who like to refer to him as "Red Ed" and to Ed Balls as a "deficit denier", by going with the safe option of Alan Johnson, a supporter of the candidate (Mili-D) who was backed by more Labour MPs than Mili-E was. Kevin Maguire, for example, says:

Ed Miliband's fluffed his first big call. Appointing Alan Johnson as Labour shadow chancellor is to stick with the Alistair Darling line on halving the deficit when Labour lost the election. The bold move was to put Ed Balls or Yvette Cooper in the job and shift the Labour position to slower cuts to keep the economy recovering.

I'm not sure where I stand on this. Perhaps, as I noted in a CIF piece yesterday, the personnel issue is irrelevant and we should all wait to see what Labour's policy response is to George Osborne's Spending Review on 20 October.

Ed Miliband has repeatedly referred to the Alistair Darling plan for deficit reduction (that is to say, halving the deficit over four years) as a "starting point" and told Channel 4 News the day after his conference speech that he'd like to do more with taxation, and less with spending cuts, than Darling had allowed for. Johnson's appointment might be part of a deliberate strategy by Miliband to take charge of the party's economic and, specifically, fiscal policy rather than outsource it to the shadow chancellor/chancellor (as Tony Blair did in the Nineties and Noughties).

It is worth remembering that Miliband taught economics at Harvard during his sabbatical in 2003-2004 and chaired the Treasury's Council of Economic Advisers between 2004 and 2005. Unlike Blair, and perhaps Johnson, he understands economics.

Meanwhile, the coalition's fiscal and welfare policies are in disarray – at the Conservative conference, a cut in child benefit for higher-rate taxpayers to save £1bn was followed by a transferable tax allowance for married couples which will cost £500m! In today's Daily Telegraph, Chris Huhne, the Lib Dem Energy Secretary, says that the proposed spending cuts are not "lashed to the mast" and that it "may be appropriate" to alter the plans in the event of a serious economic downturn. Like Ken Clarke, the Tory Justice Secretary, Huhne also admits that a double-dip recession is a possibility.

So now is not the time for Ed Miliband to go wobbly on deficit reduction. The opposition has to make clear that deep and immediate cuts will make the deficit get bigger, not smaller. And Alan Johnson needs to understand the Keynesian argument, and the "moral" argument – as his preferred leadership candidate, David Miliband, put it during the Compass hustings in June – for running deficits in downturns.

Here are some people Johnson should perhaps try to speak to for advice this week, ahead of the SR on 20 October:

* Paul Krugman

* David Blanchflower

* Anne Pettifor

* Martin Wolf

* Ed Balls :-)

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.

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Who will win in Stoke-on-Trent?

Labour are the favourites, but they could fall victim to a shock in the Midlands constituency.  

The resignation of Tristram Hunt as MP for Stoke-on-Central has triggered a by-election in the safe Labour seat of Stoke on Trent Central. That had Westminster speculating about the possibility of a victory for Ukip, which only intensified once Paul Nuttall, the party’s leader, was installed as the candidate.

If Nuttall’s message that the Labour Party has lost touch with its small-town and post-industrial heartlands is going to pay dividends at the ballot box, there can hardly be a better set of circumstances than this: the sitting MP has quit to take up a well-paid job in London, and although  the overwhelming majority of Labour MPs voted to block Brexit, the well-advertised divisions in that party over the vote should help Ukip.

But Labour started with a solid lead – it is always more useful to talk about percentages, not raw vote totals – of 16 points in 2015, with the two parties of the right effectively tied in second and third place. Just 33 votes separated Ukip in second from the third-placed Conservatives.

There was a possible – but narrow – path to victory for Ukip that involved swallowing up the Conservative vote, while Labour shed votes in three directions: to the Liberal Democrats, to Ukip, and to abstention.

But as I wrote at the start of the contest, Ukip were, in my view, overwritten in their chances of winning the seat. We talk a lot about Labour’s problem appealing to “aspirational” voters in Westminster, but less covered, and equally important, is Ukip’s aspiration problem.

For some people, a vote for Ukip is effectively a declaration that you live in a dump. You can have an interesting debate about whether it was particularly sympathetic of Ken Clarke to brand that party’s voters as “elderly male people who have had disappointing lives”, but that view is not just confined to pro-European Conservatives. A great number of people, in Stoke and elsewhere, who are sympathetic to Ukip’s positions on immigration, international development and the European Union also think that voting Ukip is for losers.

That always made making inroads into the Conservative vote harder than it looks. At the risk of looking very, very foolish in six days time, I found it difficult to imagine why Tory voters in Hanley would take the risk of voting Ukip. As I wrote when Nuttall announced his candidacy, the Conservatives were, in my view, a bigger threat to Labour than Ukip.

Under Theresa May, almost every move the party has made has been designed around making inroads into the Ukip vote and that part of the Labour vote that is sympathetic to Ukip. If the polls are to be believed, she’s succeeding nationally, though even on current polling, the Conservatives wouldn’t have enough to take Stoke on Trent Central.

Now Theresa May has made a visit to the constituency. Well, seeing as the government has a comfortable majority in the House of Commons, it’s not as if the Prime Minister needs to find time to visit the seat, particularly when there is another, easier battle down the road in the shape of the West Midlands mayoral election.

But one thing is certain: the Conservatives wouldn’t be sending May down if they thought that they were going to do worse than they did in 2015.

Parties can be wrong of course. The Conservatives knew that they had found a vulnerable spot in the last election as far as a Labour deal with the SNP was concerned. They thought that vulnerable spot was worth 15 to 20 seats. They gained 27 from the Liberal Democrats and a further eight from Labour.  Labour knew they would underperform public expectations and thought they’d end up with around 260 to 280 seats. They ended up with 232.

Nevertheless, Theresa May wouldn’t be coming down to Stoke if CCHQ thought that four days later, her party was going to finish fourth. And if the Conservatives don’t collapse, anyone betting on Ukip is liable to lose their shirt. 

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