Too fast, too slow – how the passing of time is shaping politics for Cameron and Miliband

Labour needs to move at pace if it’s not going to get timed-out.

Two years into the life of the coalition and all the sudden the passing of time seems like Ed Miliband’s best friend and David Cameron’s worst foe. For a government that has lost its footing, facing an opposition learning how to benefit from the stumbling and fumbling, the long expanse of time left in this parliament will be starting to feel less like an opportunity to develop and deliver an agenda and more like an ordeal to be survived.

It’s not just the slow motion horror of the six weeks since the budget or the likelihood that the next few weeks, dominated as they will be by the Leveson inquiry, will feel like a very long stretch indeed for Jeremy Hunt and David Cameron. It’s the six budgets and autumn statements the coalition parties have to negotiate before the next election; the thirty seven months of enervating governing grind to get through; and the fact that come the next election it will have been a full 23 years since the Conservatives won outright, an observation that is weighing increasingly heavily on the Tory ranks who sense their prospects of doing so next time aren’t brightening. A lot of politics is still to happen even before the parliament reaches half-time – and the second half is littered with all manner of political, economic and legal icebergs.

 And yet, for an upbeat Labour, the clock is ticking loud and clear. Over recent months this point has often been made in relation to the risk that the electorate forms a settled and negative view of the leadership or the legacy of the previous Labour government. But just as pressing an issue is how Labour gets itself into a position to respond to the single biggest challenge it faces between now and the next election: the spending review that George Osborne has pencilled in for autumn 2013, which will span the years 2015-17.

Let’s start by recognising the obvious: it will be a political and policy horror story for all sides.  The numbers released at the budget imply continued cuts of over 2.3 per cent per year across public services – and that’s if we assume another £8bn is cut from welfare spending, on top of this parliament’s £18bn; alternatively, if welfare is not cut further, the hit to public services rises to 3.8 per cent per year (read this excellent blog by Nick Pearce for an overview). All this is driven by the fact that the OBR now estimates that the structural deficit won’t reach a balance until the middle of the next parliament (indeed the path of deficit reduction now looks very reminiscent of the Darling plan which Osborne used to lambast). Prior to the last Budget, Conservative strategists would have been rubbing their hands in anticipation at the political mayhem the spending review could create for Labour, as it is forced to pick between backing further cuts that hit the bone, tax hikes, or what be presented as another round of deficit-denial. Six weeks on the politics for the Conservatives look less straightforward.

Every new cut is likely to be more painful to make than those already agreed and the public mood at the time of the next spending review will be far darker than it was in 2010, or even now, given continued falls to living standards. Moreover, the budget demonstrated that even minor fiscal tinkering, never mind yet deeper reductions in spending, can now wreak political havoc for the coalition. Choosing where to cut will be painful. The lead target will be welfare spending, which is why it’s noteworthy that IDS has put down such a clear marker that he won’t tolerate further hits to his budget. The future NHS budget presents a monumental challenge: failing to protect it is unlikely to be an option, not least given the recent Lansley debacle and the fact that public concern over waiting lists is likely to be escalating by 2013; but ring-fence it, as Cameron will surely want to, and the cuts elsewhere are even more terrifying.

Yet all of this may be something of a picnic compared to the political challenge faced by the Lib Dems. Since the Budget senior advisors have admitted - in private at least - they are in a wilful state of denial about how they navigate the treacherous terrain between the spending review and their 2015 manifesto. Come the election they will, of course, tweak the coalition’s choices on tax and spending to give Lid Dem policies more of a yellow hue. But having spent 18 months drafting, presenting and defending Osborne’s choices the public may not be open to this belated change in direction.   

For Labour, though, the stakes are perhaps highest. Recall it hasn’t seriously engaged with a spending review and the trade-offs involved in them for six years – and back in 2007 the government thought it was getting tough by bringing down the annual growth rate of public spending from 4 per cent to 2 per cent. In early 2010 it chose not to undertake its own pre-election spending review, and no-one much cared what it had to say in response to the coalition’s defining statement that came that autumn.

Again, it will be very different next time. There will be searing scrutiny of Labour – understandably so given the period covered would span the first half of the next parliament - a period during which Labour has already conceded that it would be making cuts.

If Labour is to stick with the playbook of modern politics – and very few leaders depart from it - it will opt to match pretty much whatever the coalition comes up with in 2013.  Neutralise your political weaknesses is the rule. Brown did this in the mid 1990s when committing to stick to Tory spending plans, just as Osborne did pre-crash when pledging to match Labour spending totals, and then post-crash in protecting the NHS budget. And in the eyes of the public, Labour’s major weakness is, and is likely to remain, spending and the deficit. Given this, it will be argued forcefully that the very last thing it should do is distinguish itself by backing a bigger deficit that lasts for longer – or indeed hiking up taxes. Whatever the macroeconomic merits of adopting a looser fiscal stance during 2010-2012, so the argument will run, both the politics and economics point a different way for 2015-17.  

If this orthodox strategy prevails it will, of course, be contested. Some will highlight that predicating Labour’s political future – and forcing it into what many on the left will view as a kamikaze position on cuts in key areas - on the shifting sands of OBR estimates (and their inevitably sketchy views of the potential output of the economy) is a gamble too far. More generally, it will be argued that to stand shoulder to shoulder with the coalition on another bout of cuts at a time when austerity economics is at its most vulnerable would be a truly perverse act of political masochism. Just as the coalition succeeded in laying responsibility for the cuts announced in 2010 at Labour’s door, the next round of retrenchment can be pinned directly on Cameron and Osborne for stalling the economy - or so it will be claimed.  

If Labour is to be the answer to the central questions of our times it needs to demonstrate both an iron fiscal resolve over the medium term and show that, even in an era of sustained austerity, progressive choices can be made. To do this convincingly it will have to make its reckoning with some fundamental questions about the role of the state over the next decade – where it should advance, retreat and act differently - as well as on future sources and levels of taxation. And you don’t do this overnight.

Just as a currently beleaguered coalition is grasping quite how long it still has to govern for, a newly self-confident Labour needs to move at pace if it’s not going to get timed-out. Tick-tock.

The clock is ticking loud and clear for Labour. Photograph: Getty Images.

Gavin Kelly is a former adviser to Downing Street and the Treasury. He tweets @GavinJKelly1.

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Who is the EU's chief Brexit negotiator Michel Barnier?

The former French foreign minister has shown signs that he will play hardball in negotiations.

The European Commission’s chief Brexit negotiator today set an October 2018 deadline for the terms of Britain’s divorce from the European Union to be agreed. Michel Barnier gave his first press conference since being appointed to head up what will be tough talks between the EU and UK.

Speaking in Brussels, he warned that UK-EU relations had entered “uncharted waters”. He used the conference to effectively shorten the time period for negotiations under Article 50 of the Lisbon Treaty, the legal process to take Britain out of the EU. The article sets out a two year period for a country to leave the bloc.

But Barnier, 65, warned that the period of actual negotiations would be shorter than two years and there would be less than 18 months to agree Brexit.  If the terms were set in October 2018, there would be five months for the European Parliament, European Council and UK Parliament to approve the deal before a March 2019 Brexit.

But who is the urbane Frenchman who was handpicked by Commission President Jean-Claude Juncker to steer the talks?

A centre-right career politician, Barnier is a member of the pan-EU European People’s Party, like Juncker and German Chancellor Angela Merkel.

A committed European and architect of closer eurozone banking integration, Barnier rose to prominence after being elected aged just 27 to the French National Assembly.  He is notorious in Brussels for his repeated references to the 1992 Winter Olympics he organised in Albertville with triple Olympic ski champion Jean-Claude Killy.

He first joined the French cabinet in 1993 as minister of the environment. In 1995, Jacques Chirac made him Secretary of State for European Affairs, teeing up a long and close relationship with Brussels.

Barnier has twice served as France’s European Commissioner, under the administrations of Romano Prodi and José Manuel BarrosoMost recently he was serving as an unpaid special advisor on European Defence Policy to Juncker until the former prime minister of Luxembourg made him Brexit boss.“I wanted an experienced politician for this difficult job,” Juncker said at the time of Barnier, who has supported moves towards an EU army.

 

Barnier and the Brits

Barnier’s appointment was controversial. Under Barroso, he was Internal Market commissioner. Responsible for financial services legislation at the height of the crisis, he clashed with the City of London.

During this period he was memorably described as a man who, in a hall of mirrors, would stop and check his reflection in every one.

Although his battles with London’s bankers were often exaggerated, the choice of Barnier was described as an “act of war” by some British journalists and was greeted with undisguised glee by Brussels europhiles.

Barnier moved to calm those fears today. At the press conference, he said, “I was 20 years old, a very long time ago, when I voted for the first time and it was in the French referendum on the accession of the UK to the EU.

“That time I campaigned for a yes vote. And I still think today that I made right choice.”

But Barnier, seen by some as aloof and arrogant, also showed a mischievous side.  It was reported during Theresa May’s first visit to Brussels as prime minister that he was demanding that all the Brexit talks be conducted in French.

While Barnier does speak English, he is far more comfortable talking in his native French. But the story, since denied, was seen as a snub to the notoriously monolingual Brits.

The long lens photo of a British Brexit strategy note that warned the EU team was “very French” may also have been on his mind as he took the podium in Brussels today.

Barnier asked, “In French or in English?” to laughter from the press.

He switched between English and French in his opening remarks but only answered questions in French, using translation to ensure he understood the questions.

Since his appointment Barnier has posted a series of tweets which could be seen as poking fun at Brexit. On a tour of Croatia to discuss the negotiations, he posed outside Zagreb’s Museum of Broken Relationships asking, “Guess where we are today?”

 

 

He also tweeted a picture of himself drinking prosecco after Boris Johnson sparked ridicule by telling an Italian economics minister his country would have to offer the UK tariff-free trade to sell the drink in Britain.

But Barnier can also be tough. He forced through laws to regulate every financial sector, 40 pieces of legislation in four years, when he was internal market commissioner, in the face of sustained opposition from industry and some governments.

He warned today, "Being a member of the EU comes with rights and benefits. Third countries [the UK] can never have the same rights and benefits since they are not subject to same obligations.”

On the possibility of Britain curbing free movement of EU citizens and keeping access to the single market, he was unequivocal.

“The single market and four freedoms are indivisible. Cherry-picking is not an option,” he said.

He stressed that his priority in the Brexit negotiations would be the interests of the remaining 27 member states of the European Union, not Britain.

“Unity is the strength of the EU and President Juncker and I are determined to preserve the unity and interest of the EU-27 in the Brexit negotiations.”

In a thinly veiled swipe at the British, again greeted with laughter in the press room, he told reporters, “It is much better to show solidarity than stand alone. I repeat, it is much better to show solidarity than stand alone”.

Referring to the iconic British poster that urged Brits to "Keep Calm and Carry On” during World War Two, he today told reporters, “We are ready. Keep calm and negotiate.”

But Barnier’s calm in the face of the unprecedented challenge to the EU posed by Brexit masks a cold determination to defend the European project at any cost.

James Crisp is the news editor at EurActiv, an online EU news service.