Mandelson begins to spin his way out of defeat

The Business Secretary suggests making Cameron PM would be a kind of victory for New Labour.

Regardless of the outcome of this election, Peter Mandelson is already trying to spin his way out of defeat. Here's what the silver-tongued First Secretary recently told the NS editor, Jason Cowley:

The point about the Conservatives is that they believe they cannot win an election by running against New Labour. They are for the political landscape that we have created.

The whole point of Cameron's Conservatives is to market his party in a way that leads people to believe they've put their past behind them, that they're a continuum of New Labour.

They are not, as it happens. But the fact that they feel they can only win power by marketing themselves in that way says a lot about the strength of New Labour.

You'll be able to read more from Mandelson in Jason's interview with Gordon Brown for this week's magazine (out tomorrow).

As he writes, it does seem like an attempt by Mandelson "to claim a kind of victory even in defeat". He speaks with the pride of a teacher whose textbook (The Blair Revolution Revisited) has been eagerly devoured, even if not all of the lessons have been learned.

Yet key figures on Labour's centre left, such as Jon Cruddas, argue that the similarities between Cameron's Conservatives and New Labour represent a defeat, not a victory for the party. It is because Labour has been insufficiently bold that the Tories have succeeded in masquerading as progressive, even while pledging to cut taxes for millionaires.

We can expect this division, between those who feel flattered and those who feel enraged by Cameron's rise, to be at the centre of any future Labour leadership contest.

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George Eaton is political editor of the New Statesman.

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Autumn Statement 2015: George Osborne abandons his target

How will George Osborne close the deficit after his U-Turns? Answer: he won't, of course. 

“Good governments U-Turn, and U-Turn frequently.” That’s Andrew Adonis’ maxim, and George Osborne borrowed heavily from him today, delivering two big U-Turns, on tax credits and on police funding. There will be no cuts to tax credits or to the police.

The Office for Budget Responsibility estimates that, in total, the government gave away £6.2 billion next year, more than half of which is the reverse to tax credits.

Osborne claims that he will still deliver his planned £12bn reduction in welfare. But, as I’ve written before, without cutting tax credits, it’s difficult to see how you can get £12bn out of the welfare bill. Here’s the OBR’s chart of welfare spending:

The government has already promised to protect child benefit and pension spending – in fact, it actually increased pensioner spending today. So all that’s left is tax credits. If the government is not going to cut them, where’s the £12bn come from?

A bit of clever accounting today got Osborne out of his hole. The Universal Credit, once it comes in in full, will replace tax credits anyway, allowing him to describe his U-Turn as a delay, not a full retreat. But the reality – as the Treasury has admitted privately for some time – is that the Universal Credit will never be wholly implemented. The pilot schemes – one of which, in Hammersmith, I have visited myself – are little more than Potemkin set-ups. Iain Duncan Smith’s Universal Credit will never be rolled out in full. The savings from switching from tax credits to Universal Credit will never materialise.

The £12bn is smaller, too, than it was this time last week. Instead of cutting £12bn from the welfare budget by 2017-8, the government will instead cut £12bn by the end of the parliament – a much smaller task.

That’s not to say that the cuts to departmental spending and welfare will be painless – far from it. Employment Support Allowance – what used to be called incapacity benefit and severe disablement benefit – will be cut down to the level of Jobseekers’ Allowance, while the government will erect further hurdles to claimants. Cuts to departmental spending will mean a further reduction in the numbers of public sector workers.  But it will be some way short of the reductions in welfare spending required to hit Osborne’s deficit reduction timetable.

So, where’s the money coming from? The answer is nowhere. What we'll instead get is five more years of the same: increasing household debt, austerity largely concentrated on the poorest, and yet more borrowing. As the last five years proved, the Conservatives don’t need to close the deficit to be re-elected. In fact, it may be that having the need to “finish the job” as a stick to beat Labour with actually helped the Tories in May. They have neither an economic imperative nor a political one to close the deficit. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.