In the background for now at least, the long and important Labour leadership battle rages on

David Miliband launches campaign against VAT rise +++ Ed Balls benefits from Question Time bounce ++

Amid the controversy surrounding the government's benefit cuts that are serving as small print for discussion following the Budget, the long-drawn-out Labour leadership contest continues to run, the other, less-noticed story in British politics today. So, time for a quick update on the three main players:

** David Miliband has launched a campaign against the increase in VAT from 17.5 per cent to 20 per cent, which the Lib Dems themselves had opposed and which even the independent Institute for Fiscal Studies has labelled "regressive". He is writing to each Lib Dem MP setting out why they should vote against the move in the Budget. Miliband has also criticised the record on schooling of successive governments -- including Labour administrations -- and called for the removal of the "obstacle course" of constant exams for students from the age of 14 onward.

** In Westminster, Ed Balls is considered to have done his campaign no harm with his feisty performance on BBC1's Question Time last week, during which he tore into the "stooge" Vince Cable over the Budget and over the reversal of critical Lib Dem policy lines -- including the position on VAT -- that had provided cover for the party. Yesterday, Balls made the running on Iain Duncan Smith's plans for reallocating the jobless, likening it to Norman Tebbit's call for the unemployed to get "on your bike".

** And Ed Miliband sets out his case for "values" over "management" in politics in a ten-minute interview for the BBC's Daily Politics. In it, he says that he is a politician of the "centre ground" but that he is in politics to "shape that centre ground from the left". Miliband notes that it wasn't just people "on the left" who were outraged at the banking crisis, for example, and claims that he could reach out beyond Labour's core vote. Incidentally, he admits to having a "geekish" background, but defends his career, which has been largely in politics. He also confirms that he and his brother, David, told each other that it would be "quite wrong" to stand in one another's way when both men decided to stand for the leadership.

James Macintyre is political correspondent for the New Statesman.
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Martin Sorrell: I support a second EU referendum

If the economy is not in great shape after two years, public opinion on Brexit could yet shift, says the WPP head.

On Labour’s weakness, if you take the market economy analogy, if you don’t have vigorous competitors you have a monopoly. That’s not good for prices and certainly not for competition. It breeds inefficiency, apathy, complacency, even arrogance. That applies to politics too.

A new party? Maybe, but Tom Friedman has a view that parties have outlived their purpose and with the changes that have taken place through globalisation, and will do through automation, what’s necessary is for parties not to realign but for new organisations and new structures to be developed.

Britain leaving the EU with no deal is a strong possibility. A lot of observers believe that will be the case, that it’s too complex a thing to work out within two years. To extend it beyond two years you need 27 states to approve.

The other thing one has to bear in mind is what’s going to happen to the EU over the next two years. There’s the French event to come, the German event and the possibility of an Italian event: an election or a referendum. If Le Pen was to win or if Merkel couldn’t form a government or if the Renzi and Berlusconi coalition lost out to Cinque Stelle, it might be a very different story. I think the EU could absorb a Portuguese exit or a Greek exit, or maybe even both of them exiting, I don’t think either the euro or the EU could withstand an Italian exit, which if Cinque Stelle was in control you might well see.

Whatever you think the long-term result would be, and I think the UK would grow faster inside than outside, even if Britain were to be faster outside, to get to that point is going to take a long time. The odds are there will be a period of disruption over the next two years and beyond. If we have a hard exit, which I think is the most likely outcome, it could be quite unpleasant in the short to medium term.

Personally, I do support a second referendum. Richard Branson says so, Tony Blair says so. I think the odds are diminishing all the time and with the triggering of Article 50 it will take another lurch down. But if things don’t get well over the two years, if the economy is not in great shape, maybe there will be a Brexit check at the end.

Martin Sorrell is the chairman and chief executive of WPP.

As told to George Eaton.

This article first appeared in the 30 March 2017 issue of the New Statesman, Wanted: an opposition