Why this half-hearted plot will fail

Barring a major cabinet resignation, Brown is safe

The behaviour of Geoff Hoon and Patricia Hewitt is a fine example of how not to lead a plot. Both have been making the media rounds claiming, absurdly, that their decision to call for a secret ballot on Brown's leadership is not designed to undermine the Prime Minister. Do they really believe that Brown could emerge strengthened from a disruptive ballot? Their refusal to declare which way they would vote is taking the PLP for a bunch of fools.

There are several reasons why this plot is likely to fail. First, the decision to go public strongly suggests they have failed to persuade any cabinet minister to turn against Brown. While the Prime Minister retains the support of cabinet heavweights such as Mandelson, Miliband, Darling and Straw he is likely to survive.

Second, that this latest plot is led by two unambiguous Blairites means the centre left of the party, focused around the Compass group, is unlikely to join in. So long as the rebellion remains confined to the usual suspects -- Charles Clarke, Frank Field, Barry Sheerman -- Brown and his allies can dismiss this as another botched coup.

Third, there remains no pre-eminent, Heseltine-style challenger for disaffected MPs to coalesce around. It is noteworthy that neither Hewitt nor Hoon named an alternative leader.

Finally, as my colleague James Macintyre, who broke the story today, has pointed out, their plot comes after an unusually strong performance by Brown at PMQs, something that is likely to have lifted the mood of backbenchers.

Although he is likely to survive, the latest plot remains a disastrous development for Brown. The Tories and the Lib Dems will declare again and again (and they'll be right) that Labour is a divided party and that the electorate hates divided parties.

The psephological case against Brown remains strong. No prime minister has been as unpopular as him and gone on to win the subsequent election. But at this stage it's hard to see how a prolonged and bitter leadership contest could be anything but damaging for Labour. Should the party wish to avoid a catastrophic defeat at the election it must call time on this pitiful spectacle.

 

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George Eaton is political editor of the New Statesman.

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How the Conservatives lost the argument over austerity

After repeatedly missing their deficit targets, the Tories can no longer present spending cuts as essential.

“The age of irresponsibility is giving way to the age of austerity,” declared David Cameron at the Conservatives' 2009 spring conference. Fear of spending cuts helped deny his party a majority a year later, but by 2015 the Tories claimed vindication. By framing austerity as unavoidable, they had trapped Labour in a political no man's land. Though voters did not relish cuts, polling consistently showed that they regarded them as necessary.

But only two years later, it is the Conservatives who appear trapped. An austerity-weary electorate has deprived them of their majority and the argument for fiscal restraint is growing weaker by the day. If cuts are the supposed rule, then the £1bn gifted to the Democratic Unionist Party is the most glaring exception. Michael Fallon, the Defence Secretary, sought to justify this largesse as "investment" into "the infrastructure of Northern Ireland" from "which everybody will benefit" – a classic Keynesian argument. But this did not, he hastened to add, mean the end of austerity: "Austerity is never over until we clear the deficit."

Britain's deficit (which peaked at £153bn in 2009-10) was the original and pre-eminent justification for cuts. Unless borrowing was largely eliminated by 2015, George Osborne warned, Britain's public finances would become unsustainable. But as time has passed, this argument has become progressively weaker. The UK has cumulatively borrowed £200bn more than promised by Osborne, yet apocalypse has been averted. With its low borrowing costs, an independent currency and a lender of last resort (the Bank of England), the UK is able to tolerate consistent deficits (borrowing stood at £46.6bn in 2016-17).

In defiance of all this, Osborne vowed to achieve a budget surplus by 2019-20 (a goal achieved by the UK in just 12 years since 1948). The Tories made the target in the knowledge that promised tax cuts and spending increases would make it almost impossible to attain – but it was a political weapon with which to wound Labour.

Brexit, however, forced the Conservatives to disarm. Mindful of the economic instability to come, Philip Hammond postponed the surplus target to 2025 (15 years after Osborne's original goal). Britain's past and future borrowing levels mean the deficit has lost its political potency.

In these circumstances, it is unsurprising that voters are increasingly inclined to look for full-scale alternatives. Labour has remade itself as an unambiguously anti-austerity party and Britain's public realm is frayed from seven years of cuts: overburdened schools and hospitals, dilapidated infrastructure, potholed roads, uncollected bins.

Through a shift in rhetoric, Theresa May acknowledged voters' weariness with austerity but her policies did not match. Though the pace of cuts was slowed, signature measures such as the public sector pay cap and the freeze in working-age benefits endured. May's cold insistence to an underpaid nurse that there was no "magic money tree" exemplified the Tories' predicament.

In his recent Mansion House speech, Philip Hammond conceded that voters were impatient "after seven years of hard slog” but vowed to "make anew the case" for austerity. But other Tories believe they need to stop fighting a losing battle. The Conservatives' historic strength has been their adaptability. Depending on circumstance, they have been Europhile and Eurosceptic, statist and laissez-faire, isolationist and interventionist. If the Tories are to retain power, yet another metamorphosis may be needed: from austerity to stimulus.

George Eaton is political editor of the New Statesman.

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