Ed Miliband leads “new generation” of Labour

David concedes with great dignity.

Despite predicting in the New Statesman in December 2008 that Ed Miliband would succeed Gordon Brown, I am still stunned by what we have just seen in the conference hall in Manchester today.

There is no point in pretending Ed's defeat of David isn't one of the most dramatic stories in modern British political history. This is a tale of ruthless and focused determination, based on what Ed regarded as an importantly different set of policies. The result is that the Labour Party has today moved clearly on from Tony Blair.

Yet it was so close: David was ahead in the first three rounds and it was only at the last that Ed pipped his elder brother. David was the first on his feet. He embraced his brother warmly. He listened intently. And he kept his smile on throughout. But there is no hiding the fact that what has happened here today is a tragedy for him, one of the brightest and best in the Labour movement.

Ed will desperately be hoping he can unite his party and his family. Time will tell. In the meantime, this party prepares to walk out of the shadow of Tony Blair and Gordon Brown. The Tories will claim they are happy with the result. Yet Ed is one of the most charismatic and alluring politicians of the age. The fight for power at the next election has begun.

One word of warning, though: there will be endless -- there already are -- attacks from Tories saying Labour is controlled by the unions. Much of it will be nonsense. However, Labour would do well now to consider splitting with the unions which -- as with the C of E and the state -- would be in both parties' interests.

James Macintyre is political correspondent for the New Statesman.
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George Osborne's surplus target is under threat without greater austerity

The IFS exposes the Chancellor's lack of breathing space.

At the end of the last year, I noted how George Osborne's stock, which rose dramatically after the general election, had begun to plummet. His ratings among Tory members and the electorate fell after the tax credits imbroglio and he was booed at the Star Wars premiere (a moment which recalled his past humbling at the Paralympics opening ceremony). 

Matters have improved little since. The Chancellor was isolated by No.10 and cabinet colleagues after describing the Google tax deal, under which the company paid £130m, as a "major success". Today, he is returning from the Super Bowl to a grim prognosis from the IFS. In its Green Budget, the economic oracle warns that Osborne's defining ambition of a budget surplus by 2019-20 may be unachievable without further spending cuts and tax rises. 

Though the OBR's most recent forecast gave him a £10.1bn cushion, reduced earnings growth and lower equity prices could eat up most of that. In addition, the government has pledged to make £8bn of currently unfunded tax cuts by raising the personal allowance and the 40p rate threshold. The problem for Osborne, as his tax credits defeat demonstrated, is that there are few easy cuts left to make. 

Having committed to achieving a surplus by the fixed date of 2019-20, the Chancellor's new fiscal mandate gives him less flexibility than in the past. Indeed, it has been enshrined in law. Osborne's hope is that the UK will achieve its first surplus since 2000-01 just at the moment that he is set to succeed (or has succeeded) David Cameron as prime minister: his political fortunes are aligned with those of the economy. 

There is just one get-out clause. Should GDP growth fall below 1 per cent, the target is suspended. An anaemic economy would hardly be welcome for the Chancellor but it would at least provide him with an alibi for continued borrowing. Osborne may be forced to once more recite his own version of Keynes's maxim: "When the facts change, I change my mind. What do you do, sir?" 

George Eaton is political editor of the New Statesman.