Phil Woolas's day in court

Labour MP faces expulsion from Parliament over election campaign smears.

It's going to be an uncomfortable day for former Labour minister Phil Woolas, who's in court fighting an attempt to have his election victory overturned on the grounds of "corrupt practices".

Woolas's Lib Dem opponent, Elwyn Watkins, who lost by just 103 votes at the election, took legal action after a demagogic leaflet by the MP (see below) suggested that the Lib Dems were courting support from Islamic extremists. On another occasion, Woolas and his campaign team doctored a police photo (see below) to make it appear as if Watkins had been arrested.

Leaflet

A campaign leaflet claimed that Islamic extremists "want you to vote Lib Dem to punish Phil".

Police

A doctored photo made it appear as if Lib Dem candidate Elwyn Watkins had been arrested.

The Lib Dems' central contention is that such "misleading" material swung a tightly-fought election in Labour's favour. Legal documents submitted to the High Court appear to confirm that there was a calculated attempt by the Woolas campaign to whip up racial tensions in the area in a bid to get the "white vote" behind him.

An email by Woolas's election agent, Joseph Fitzpatrick, to the candidate declared: "we need ... to explain to the white community how the Asians will take him out ... If we don't get the white vote angry he's gone." Another from Fitzpatrick to Steve Green, the MP's campaign adviser, said: "we need to go strong on the militant Moslem angle" and proposed the headline "Militant Moslems target Woolas."

A defeat for Woolas (who remains a frontbench spokesman) would see him expelled from Parliament and a by-election held in the extremely marginal seat of Oldham East and Saddleworth. He has pledged to "robustly defend" himself. But whether he loses or not, let's hope that Woolas finally apologises for one of the most disgraceful election campaigns in recent history.

George Eaton is political editor of 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.