Who passes the Clegg test?

How many of Nick Clegg's four demands do Labour and Tories meet?

So Vince Cable won't be the next chancellor after all. Today's Guardian reports that the Liberal Democrats are planning to rule out forming a coalition government with either the Conservatives or Labour in the event of a hung parliament. But they will be prepared to offer parliamentary support to any party that accepts their "shopping list" of four demands.

So who, as things stand, would pass the Clegg test?

1. "Investing extra funds in education through a pupil premium for disadvantaged children."

Conservatives: The Tories have already promised to introduce a pupil premium, with extra funding for schools that take children from the poorest homes. But the party has yet to say anything about how much it would spend, or where the money would come from.

The Lib Dems have said that the policy would cost £2.5bn a year, with the average school receiving roughly £2,500 extra for every disadvantaged child on its roll.

Labour: Ed Balls opposes a pupil premium, arguing that it would not guarantee that pupils with disadvantages or extra needs actually get the support that they need.

Verdict: A point to the Tories. None for Labour.

2. "Tax reform, taking four million out of tax and raising taxes on the rich by requiring capital gains and income to be taxed at the same rate."

Conservatives: A number of Tories are impressed by Nick Clegg's plan to raise the income-tax threshold to £10,000, but David Cameron has yet to poach the idea. Instead, he plans to focus on cutting inheritance tax and recognising marriage in the tax system. In addition, George Osborne has pledged to reduce corporation tax from 30 per cent to 27 per cent. The Tories have no plans to raise capital gains tax (CGT).

Labour: No plans to cut income tax, but Alistair Darling is said to be looking at raising CGT in the Budget to stop the wealthy exploiting a tax loophole by declaring income as capital gains. This would please the Lib Dems, who could claim to have led the agenda.

Verdict: In anticipation of a rise in capital gains tax, Labour wins half a point.

3. "Rebalancing of the economy to put less emphasis on centralised banking and more on a new, greener economy."

Conservatives: Osborne is sympathetic to calls to split investment and retail banking but has stopped short of calling for a complete separation. Cameron has promised a "localist green revolution" with companies such as Tesco and Marks & Spencer helping to make homes more energy-efficient. But will his backbenchers stand in the way? A ConservativeHome/ConservativeIntelligence survey revealed that reducing Britain's carbon footprint was the lowest priority for Tory candidates.

Labour: The government has so far refused to separate retail from investment banking and is unlikely to change its position. On the "green economy", Labour has promised to create a more than a million new green jobs and to cut UK greenhouse-gas emissions by 34 per cent by 2020.

Verdict: Half a point to the Tories on banking and half a point to Labour on the green economy.

4. "Political reforms, including changes to the voting system and a democratically elected Lords, that go further than proposed by Labour."

Conservatives: The Tories are opposed to any electoral reform and support the current first-past-the-post system. Cameron opposes proportional representation on the grounds that it hands power to the "political elites".

The Tory leader has said he supports a largely elected second chamber but is reluctant to challenge his own peers on the issue, as they are opposed to reform. In private, Cameron has described Lords reform as a "third-term issue".

Labour: Supports the replacement of first-past-the-post with the Alternative Vote and has passed legislation to ensure a referendum will be held. The Lib Dems support the move as a "step in the right direction", but are disappointed that Labour did not opt for a proportional system.

The government continues to favour a predominantly elected Lords. However, Jack Straw has warned campaigners that they will have to wait more than decade before this is achieved.

Verdict: Half a point to Labour.

Final score: Conservatives: 1½ out of 4

Labour: 1½ out of 4

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George Eaton is political editor of the New Statesman.

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By refusing to stand down, Jeremy Corbyn has betrayed the British working classes

The most successful Labour politicians of the last decades brought to politics not only a burning desire to improve the lot of the working classes but also an understanding of how free market economies work.

Jeremy Corbyn has defended his refusal to resign the leadership of the Labour Party on the grounds that to do so would be betraying all his supporters in the country at large. But by staying on as leader of the party and hence dooming it to heavy defeat in the next general election he would be betraying the interests of the working classes this country. More years of Tory rule means more years of austerity, further cuts in public services, and perpetuation of the gross inequality of incomes. The former Chief Secretary to the Treasury, Seema Malhotra, made the same point when she told Newsnight that “We have an unelectable leader, and if we lose elections then the price of our failure is paid by the working people of this country and their families who do not have a government to stand up for them.”

Of course, in different ways, many leading figures in the Labour movement, particularly in the trade unions, have betrayed the interests of the working classes for several decades. For example, in contrast with their union counterparts in the Scandinavian countries who pressurised governments to help move workers out of declining industries into expanding sectors of the economy, many British trade union leaders adopted the opposite policy. More generally, the trade unions have played a big part in the election of Labour party leaders, like Corbyn, who were unlikely to win a parliamentary election, thereby perpetuating the rule of Tory governments dedicated to promoting the interests of the richer sections of society.

And worse still, even in opposition Corbyn failed to protect the interests of the working classes. He did this by his abysmal failure to understand the significance of Tory economic policies. For example, when the Chancellor of the Exchequer had finished presenting the last budget, in which taxes were reduced for the rich at the expense of public services that benefit everybody, especially the poor, the best John McConnell could do – presumably in agreement with Corbyn – was to stand up and mock the Chancellor for having failed to fulfill his party’s old promise to balance the budget by this year! Obviously neither he nor Corbyn understood that had the government done so the effects on working class standards of living would have been even worse. Neither of them seems to have learnt that the object of fiscal policy is to balance the economy, not the budget.

Instead, they have gone along with Tory myth about the importance of not leaving future generations with the burden of debt. They have never asked “To whom would future generations owe this debt?” To their dead ancestors? To Martians? When Cameron and his accomplices banged on about how important it was to cut public expenditures because the average household in Britain owed about £3,000, they never pointed out that this meant that the average household in Britain was a creditor to the tune of about the same amount (after allowing for net overseas lending). Instead they went along with all this balanced budget nonsense. They did not understand that balancing the budget was just the excuse needed to justify the prime objective of the Tory Party, namely to reduce public expenditures in order to be able to reduce taxes on the rich. For Corbyn and his allies to go along with an overriding objective of balancing the budget is breathtaking economic illiteracy. And the working classes have paid the price.

One left-wing member of the panel on Question Time last week complained that the interests of the working classes were ignored by “the elite”. But it is members of the elite who have been most successful in promoting the interests of the working classes. The most successful pro-working class governments since the war have all been led mainly by politicians who would be castigated for being part of the elite, such as Clement Atlee, Harold Wilson, Tony Crosland, Barbara Castle, Richard Crossman, Roy Jenkins, Denis Healey, Tony Blair, and many others too numerous to list. They brought to politics not only a burning desire to improve the lot of the working classes (from which some of them, like me, had emerged) and reduce inequality in society but also an understanding of how free market economies work and how to deal with its deficiencies. This happens to be more effective than ignorant rhetoric that can only stroke the egos and satisfy the vanity of demagogues

People of stature like those I have singled out above seem to be much more rare in politics these days. But there is surely no need to go to other extreme and persist with leaders like Jeremy Corbyn, a certain election loser, however pure his motives and principled his ambitions.

Wilfred Beckerman is an Emeritus Fellow of Balliol College, Oxford, and was, for several years in the 1970s, the economics correspondent for the New Statesman