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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Is defeat in Stoke the beginning of the end for Paul Nuttall?

The Ukip leader was his party's unity candidate. But after his defeat in Stoke, the old divisions are beginning to show again

In a speech to Ukip’s spring conference in Bolton on February 17, the party’s once and probably future leader Nigel Farage laid down the gauntlet for his successor, Paul Nuttall. Stoke’s by-election was “fundamental” to the future of the party – and Nuttall had to win.
 
One week on, Nuttall has failed that test miserably and thrown the fundamental questions hanging over Ukip’s future into harsh relief. 

For all his bullish talk of supplanting Labour in its industrial heartlands, the Ukip leader only managed to increase the party’s vote share by 2.2 percentage points on 2015. This paltry increase came despite Stoke’s 70 per cent Brexit majority, and a media narrative that was, until the revelations around Nuttall and Hillsborough, talking the party’s chances up.
 
So what now for Nuttall? There is, for the time being, little chance of him resigning – and, in truth, few inside Ukip expected him to win. Nuttall was relying on two well-rehearsed lines as get-out-of-jail free cards very early on in the campaign. 

The first was that the seat was a lowly 72 on Ukip’s target list. The second was that he had been leader of party whose image had been tarnished by infighting both figurative and literal for all of 12 weeks – the real work of his project had yet to begin. 

The chances of that project ever succeeding were modest at the very best. After yesterday’s defeat, it looks even more unlikely. Nuttall had originally stated his intention to run in the likely by-election in Leigh, Greater Manchester, when Andy Burnham wins the Greater Manchester metro mayoralty as is expected in May (Wigan, the borough of which Leigh is part, voted 64 per cent for Brexit).

If he goes ahead and stands – which he may well do – he will have to overturn a Labour majority of over 14,000. That, even before the unedifying row over the veracity of his Hillsborough recollections, was always going to be a big challenge. If he goes for it and loses, his leadership – predicated as it is on his supposed ability to win votes in the north - will be dead in the water. 

Nuttall is not entirely to blame, but he is a big part of Ukip’s problem. I visited Stoke the day before The Guardian published its initial report on Nuttall’s Hillsborough claims, and even then Nuttall’s campaign manager admitted that he was unlikely to convince the “hard core” of Conservative voters to back him. 

There are manifold reasons for this, but chief among them is that Nuttall, despite his newfound love of tweed, is no Nigel Farage. Not only does he lack his name recognition and box office appeal, but the sad truth is that the Tory voters Ukip need to attract are much less likely to vote for a party led by a Scouser whose platform consists of reassuring working-class voters their NHS and benefits are safe.
 
It is Farage and his allies – most notably the party’s main donor Arron Banks – who hold the most power over Nuttall’s future. Banks, who Nuttall publicly disowned as a non-member after he said he was “sick to death” of people “milking” the Hillsborough disaster, said on the eve of the Stoke poll that Ukip had to “remain radical” if it wanted to keep receiving his money. Farage himself has said the party’s campaign ought to have been “clearer” on immigration. 

Senior party figures are already briefing against Nuttall and his team in the Telegraph, whose proprietors are chummy with the beer-swilling Farage-Banks axis. They deride him for his efforts to turn Ukip into “NiceKip” or “Nukip” in order to appeal to more women voters, and for the heavy-handedness of his pitch to Labour voters (“There were times when I wondered whether I’ve got a purple rosette or a red one on”, one told the paper). 

It is Nuttall’s policy advisers - the anti-Farage awkward squad of Suzanne Evans, MEP Patrick O’Flynn (who famously branded Farage "snarling, thin-skinned and aggressive") and former leadership candidate Lisa Duffy – come in for the harshest criticism. Herein lies the leader's almost impossible task. Despite having pitched to members as a unity candidate, the two sides’ visions for Ukip are irreconcilable – one urges him to emulate Trump (who Nuttall says he would not have voted for), and the other urges a more moderate tack. 

Endorsing his leader on Question Time last night, Ukip’s sole MP Douglas Carswell blamed the legacy of the party’s Tea Party-inspired 2015 general election campaign, which saw Farage complain about foreigners with HIV using the NHS in ITV’s leaders debate, for the party’s poor performance in Stoke. Others, such as MEP Bill Etheridge, say precisely the opposite – that Nuttall must be more like Farage. 

Neither side has yet called for Nuttall’s head. He insists he is “not going anywhere”. With his febrile party no stranger to abortive coup and counter-coup, he is unlikely to be the one who has the final say.