Does Labour now fear Boris more than Cameron?

The Mayor of London is increasingly viewed as a threat by Labour.

"I think the biggest threat to our chances now is …" I eagerly awaited the conclusion to this sentence uttered in a conversation earlier this week with a senior figure in the Labour Party. This is someone who, not surprisingly given the coalition’s travails, is very upbeat about Ed Miliband’s chances of becoming Prime Minister. (He referred to "when" rather than "if" it happens, which is a new development in the tone around the shadow cabinet.)

So what would that threat be? Ongoing doubts about the party’s fiscal credibility? Lack of a clear narrative on what to do with public services? A divisive row with the Unions over how reconciled the party should be with the cuts it will inherit?

"… Boris," he said. This surprised me. I’m a bit of a Boris-sceptic, thinking much of the cheerleading on his behlaf is an expression of Tory frustration with Cameron, rather than a serious movement to get the London Mayor promoted to the job of Prime Minister any time soon. But the case was persuasively made. Everything that is now being said about his unsuitability for the top job and the unlikelihood of it actually happening was once said about his chances of being London mayor. He is, I was told, a real star who has managed his career well and, crucially, who animates people who don't usually care about politics. That is the Holy Grail in Westminster these days. The fact that he isn’t in parliament now and has another job? A minor hurdle, apparently. Once Tory MPs are convinced enough that Cameron is leading them to defeat their famously regicidal tempers will be fired and a way will be found.

I’m still not entirely persuaded but it is certainly revealing that Labour people are taking the prospect very seriously indeed. (My colleague George points out that Jacqui Smith, former Labour Home Secretary, has intervened in a fairly vigorous attempt to debunk the myth of Boris bonhomie.) It wasn’t that long ago that Labour people were actually rather enjoying Johnson’s not so secret campaign to undermine Cameron and Osborne. They may have hated the way he kept Labour out of City Hall but the prevailing feeling was that his function on the national stage was as a convenient thorn in the PM’s side - an enemy’s enemy and therefore kind of a friend. No longer.

I was reminded also of a conversation I had a while ago with one of Ed Miliband’s advisers about the issue of charisma and personal ratings, where Cameron still beats the Labour leader in opinion polls. Wouldn’t a presidential-style contest between the two men be a problem for Ed? The answer: that is the received wisdom, yes. But consider how much of a hit Cameron’s personal brand has already taken, how limited his power is in coalition, how much some his own MPs dislike him, how jaded his act will seem by 2015. Is it so hard to think that, by the next election, a presidential face-off would be something Miliband might even relish? I was deeply sceptical of that proposition at the time and most people I have shared it with (including pollsters) have looked puzzled or snorted in disbelief.

But to hear Tories talk about their own leader is a masterclass in disillusionment and pessimism. Sometimes they seem to do a better job of talking up Miliband’s chances than their Labour counterparts. Partly that is because Labour MPs are desperate not to sound complacent and because they have more of an insight into how brittle and unready the party machine is when it comes to the prospect of fighting an election. The Tories know their own weaknesses on that front too, of course.

The Labour high command certainly isn’t writing Cameron off. Far from it. The feeling I get from talking to Miliband’s closest aides is that they know Cameron still outpolls his party and remains a formidable politician  - "clearly he is still their strongest asset" – says one. The Tories, goes this view, would be crazy to change leader before the election. That remains a very remote possibility in any case. But something has definitely changed in the way Labour views their main opponent.  There is now someone in the wings they would want to take on even less.

The Mayor of London is increasingly viewed as a threat by Labour. Photograph: Getty Images.

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

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The Autumn Statement proved it – we need a real alternative to austerity, now

Theresa May’s Tories have missed their chance to rescue the British economy.

After six wasted years of failed Conservative austerity measures, Philip Hammond had the opportunity last month in the Autumn Statement to change course and put in place the economic policies that would deliver greater prosperity, and make sure it was fairly shared.

Instead, he chose to continue with cuts to public services and in-work benefits while failing to deliver the scale of investment needed to secure future prosperity. The sense of betrayal is palpable.

The headline figures are grim. An analysis by the Institute for Fiscal Studies shows that real wages will not recover their 2008 levels even after 2020. The Tories are overseeing a lost decade in earnings that is, in the words Paul Johnson, the director of the IFS, “dreadful” and unprecedented in modern British history.

Meanwhile, the Treasury’s own analysis shows the cuts falling hardest on the poorest 30 per cent of the population. The Office for Budget Responsibility has reported that it expects a £122bn worsening in the public finances over the next five years. Of this, less than half – £59bn – is due to the Tories’ shambolic handling of Brexit. Most of the rest is thanks to their mishandling of the domestic economy.

 

Time to invest

The Tories may think that those people who are “just about managing” are an electoral demographic, but for Labour they are our friends, neighbours and the people we represent. People in all walks of life needed something better from this government, but the Autumn Statement was a betrayal of the hopes that they tried to raise beforehand.

Because the Tories cut when they should have invested, we now have a fundamentally weak economy that is unprepared for the challenges of Brexit. Low investment has meant that instead of installing new machinery, or building the new infrastructure that would support productive high-wage jobs, we have an economy that is more and more dependent on low-productivity, low-paid work. Every hour worked in the US, Germany or France produces on average a third more than an hour of work here.

Labour has different priorities. We will deliver the necessary investment in infrastructure and research funding, and back it up with an industrial strategy that can sustain well-paid, secure jobs in the industries of the future such as renewables. We will fight for Britain’s continued tariff-free access to the single market. We will reverse the tax giveaways to the mega-rich and the giant companies, instead using the money to make sure the NHS and our education system are properly funded. In 2020 we will introduce a real living wage, expected to be £10 an hour, to make sure every job pays a wage you can actually live on. And we will rebuild and transform our economy so no one and no community is left behind.

 

May’s missing alternative

This week, the Bank of England governor, Mark Carney, gave an important speech in which he hit the proverbial nail on the head. He was completely right to point out that societies need to redistribute the gains from trade and technology, and to educate and empower their citizens. We are going through a lost decade of earnings growth, as Carney highlights, and the crisis of productivity will not be solved without major government investment, backed up by an industrial strategy that can deliver growth.

Labour in government is committed to tackling the challenges of rising inequality, low wage growth, and driving up Britain’s productivity growth. But it is becoming clearer each day since Theresa May became Prime Minister that she, like her predecessor, has no credible solutions to the challenges our economy faces.

 

Crisis in Italy

The Italian people have decisively rejected the changes to their constitution proposed by Prime Minister Matteo Renzi, with nearly 60 per cent voting No. The Italian economy has not grown for close to two decades. A succession of governments has attempted to introduce free-market policies, including slashing pensions and undermining rights at work, but these have had little impact.

Renzi wanted extra powers to push through more free-market reforms, but he has now resigned after encountering opposition from across the Italian political spectrum. The absence of growth has left Italian banks with €360bn of loans that are not being repaid. Usually, these debts would be written off, but Italian banks lack the reserves to be able to absorb the losses. They need outside assistance to survive.

 

Bail in or bail out

The oldest bank in the world, Monte dei Paschi di Siena, needs €5bn before the end of the year if it is to avoid collapse. Renzi had arranged a financing deal but this is now under threat. Under new EU rules, governments are not allowed to bail out banks, like in the 2008 crisis. This is intended to protect taxpayers. Instead, bank investors are supposed to take a loss through a “bail-in”.

Unusually, however, Italian bank investors are not only big financial institutions such as insurance companies, but ordinary households. One-third of all Italian bank bonds are held by households, so a bail-in would hit them hard. And should Italy’s banks fail, the danger is that investors will pull money out of banks across Europe, causing further failures. British banks have been reducing their investments in Italy, but concerned UK regulators have asked recently for details of their exposure.

John McDonnell is the shadow chancellor


John McDonnell is Labour MP for Hayes and Harlington and has been shadow chancellor since September 2015. 

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