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 chief executive of the Resolution Foundation 

Chuka Umunna speaks at the launch of Labour's education manifesto during the general election. Photograph: Getty Images.
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After so badly misjudging the leadership contest, how will the Blairites handle Corbyn?

The left-winger's opponents are divided between conciliation and aggression. 

When Labour lost the general election in May, the party’s modernisers sensed an opportunity. Ed Miliband, one of the most left-wing members of the shadow cabinet, had been unambiguously rejected and the Tories had achieved their first majority in 23 years. More than any other section of the party, the Blairites could claim to have foreseen such an outcome. Surely the pendulum would swing their way?

Yet now, as Labour’s leadership contest reaches its denouement, those on the right are asking themselves how they misjudged the landscape so badly. Their chosen candidate, Liz Kendall, is expected to finish a poor fourth and the party is poised to elect Jeremy Corbyn, the most left-wing leader in its 115-year history. For a faction that never ceases to underline the importance of winning elections, it will be a humbling result.

Though the crash has been sudden, the Blairites have long been in decline. Gordon Brown won the leadership unchallenged and senior figures such as John Reid, James Purnell and Alan Milburn chose to depart from the stage rather than fight on. In 2010, David Miliband, the front-runner in the leadership election, lost to his brother after stubbornly refusing to distance himself from the Iraq war and alienating undecided MPs with his imperiousness.

When the younger Miliband lost, the modernisers moved fast – too fast. “They’re behaving like family members taking jewellery off a corpse,” a rival campaign source told me on 9 May. Many Labour supporters agreed. The rush of op-eds and media interviews antagonised a membership that wanted to grieve in peace. The modernising contenders – Chuka Umunna, Liz Kendall, Mary Creagh, Tristram Hunt – gave the impression that the Blairites wanted to drown out all other voices. “It was a huge mistake for so many players from that wing of the party to be put into the field,” a shadow cabinet minister told me. “In 1994, forces from the soft left to the modernising right united around Tony Blair. The lesson is never again can we have multiple candidates.”

While conducting their post-mortem, the Blairites are grappling with the question of how to handle Corbyn. For some, the answer is simple. “There shouldn’t be an accommodation with Corbyn,” John McTernan, Blair’s former director of political operations, told me. “Corbyn is a disaster and he should be allowed to be his own disaster.” But most now adopt a more conciliatory tone. John Woodcock, the chair of Progress, told me: “If he wins, he will be the democratically elected leader and I don’t think there will be any serious attempt to actually depose him or to make it impossible for him to lead.”

Umunna, who earlier rebuked his party for “behaving like a petulant child”, has emphasised that MPs “must accept the result of our contest when it comes and support our new leader in developing an agenda that can return Labour to office”. The shadow business secretary even suggests that he would be prepared to discuss serving in Corbyn’s shadow cabinet if he changed his stances on issues such as nuclear disarmament, Nato, the EU and taxation. Were Umunna, a former leadership contender, to adopt a policy of aggression, he would risk being blamed should Corbyn fail.

Suggestions that the new parliamentary group Labour for the Common Good represents “the resistance” are therefore derided by those close to it. The organisation, which was launched by Umunna and Hunt before Corbyn’s surge, is aimed instead at ensuring the intellectual renewal that modernisers acknowledge has been absent since 2007. It will also try to unite the party’s disparate mainstream factions: the Blairites, the Brownites, the soft left, the old right and Blue Labour. The ascent of Corbyn, who has the declared support of just 15 MPs (6.5 per cent of the party), has persuaded many that they cannot afford the narcissism of small differences. “We need to start working together and not knocking lumps out of each other,” Woodcock says. There will be no defections, no SDP Mk II. “Jeremy’s supporters really underestimate how Labour to the core the modernisers are,” Pat McFadden, the shadow Europe minister, told me.

Although they will not change their party, the Blairites are also not prepared to change their views. “Those of us on this side of Labour are always accused of being willing to sell out for power,” a senior moderniser told me. “Well, we do have political principles and they’re not up for bartering.” He continued: “Jeremy Corbyn is not a moderate . . .
He’s an unreconstructed Bennite who regards the British army as morally equivalent to the IRA. I’m not working with that.”

Most MPs believe that Corbyn will fail but they are divided on when. McFadden has predicted that the left-winger “may even get a poll bounce in the short term, because he’s new and thinking differently”. A member of the shadow cabinet suggested that Labour could eventually fall to as low as 15 per cent in the polls and lose hundreds of councillors.

The challenge for the Blairites is to reboot themselves in time to appear to be an attractive alternative if and when Corbyn falters. Some draw hope from the performance of Tessa Jowell, who they still believe will win the London mayoral selection. “I’ve spoken to people who are voting enthusiastically both for Jeremy and for Tessa,” Wes Streeting, the newly elected MP for Ilford North, said. “They have both run very optimistic, hopeful, positive campaigns.”

But if Corbyn falls, it does not follow that the modernisers will rise. “The question is: how do we stop it happening again if he does go?” a senior frontbencher said. “He’s got no interest or incentive to change the voting method. We could lose nurse and end up with something worse.” If the road back to power is long for Labour, it is longest of all for the Blairites. 

George Eaton is political editor of the New Statesman.

This article first appeared in the 03 September 2015 issue of the New Statesman, Pope of the masses