David Miliband tops poll of Labour councillors

Ed Miliband comes second with 43 per cent to his brother’s 57; Ed Balls is eliminated first.

The BBC's Daily Politics show will shortly unveil the results of a new poll of Labour councillors in which David Miliband comes out first with 57 per cent of the vote, compared to his brother's 43.

Diane Abbott came third on first preferences, but the more surprising fact, perhaps, is that Ed Balls was eliminated first, with just 8 per cent, with Andy Burnham bowing out in the next round.

However, it is definitely worth noting that this poll was conducted by ComRes between 23 July and 10 August, so it will not reflect any of the more recent events in the leadership contest, in particular, Balls's recent strong performance opposing the coalition on the deficit, and the Blairites' intervention in the struggle between the Milibands.

And, need one say, a poll of 265 councillors is hardly representative of Labour's electoral college as a whole. But perhaps what this poll does reiterate is how vital second preferences are going to be in determining who becomes Labour's next leader.

Full results (via Left Foot Forward)

First preference votes

88 (33%) David Miliband
69 (26%) Ed Miliband
55 (21%) Diane Abbott
33 (12%) Andy Burnham
20 (8%) Ed Balls

Elimination round 1

96 (36%) David Miliband
74 (28%) Ed Miliband
62 (23%) Diane Abbott
33 (12%) Andy Burnham
1st eliminated: Ed Balls

Elimination round 2

110 (42%) David Miliband
82 (31%) Ed Miliband
73 (28%) Diane Abbott
2nd eliminated: Andy Burnham
1st eliminated: Ed Balls

Elimination round 3

152 (57%) David Miliband
113 (43%) Ed Miliband
3rd eliminated: Diane Abbott
2nd eliminated: Andy Burnham
1st eliminated: Ed Balls

Caroline Crampton is web editor of the New Statesman.

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Brexit has forced the Tories to retreat from austerity

George Osborne's decision to abandon his budget surplus rule is an acknowledgment of economic reality.

Before Brexit, it was intensified austerity that was threatened by George Osborne. But after the event, the Chancellor has taken the reverse course. In his speech to the Manchester Chamber of Commerce, Osborne abandoned the ambition that has defined his Treasury tenure: a budget surplus.

He said: "The referendum is expected to produce a significant negative economic shock to our economy. How we respond will determine the impact on jobs and growth.

"We must provide fiscal credibility, continuing to be tough on the deficit while being realistic about achieving a surplus by the end of the decade. That's exactly what our fiscal rules are designed for."

Rather than a dramatic reversal, Osborne's decision is now merely an acknowledgment of economic reality. The rule is automatically suspended when growth falls below 1 per cent (as it almost certainy will) in order to avoid further depressing output. But even before Brexit, Osborne was regarded by the IFS as having only a 50 per cent chance of achieving his target.

Labour is highlighting its consistent opposition to the rule, which it again called for the abandonment of after Brexit. A senior source hailed a "huge victory" for the "centrepiece of our economic criticism of the government over the last nine months since Jeremy [Corbyn] took over the leadership." I'm told that Labour will not abandon its Fiscal Credibility Rule as it is "more robust and flexible". Unlike the government's surplus target, it allows borrowing for investment, mandating only that day-to-day spending be balanced (a condition suspended if the Bank of England believes monetary stimulus has become ineffective).

As well as reflecting the new economic reality, Osborne's announcement was also an acknowledgment of the new political one. It will most likely be a future Chancellor who determines the path of fiscal policy (starting with this year's Autumn Statement). At her leadership launch yesterday, Theresa May pre-empted Osborne by declaring that "we should no longer seek to reach a budget surplus by the end of the parliament". Among the Home Secretary's notable supporters is Cabinet Office minister and arch-Osborneite Matt Hancock. The Chancellor's decision to echo May's stance is being seen by some as the prelude to an endorsement. But Michael Gove, who reportedly wants Osborne to remain in post, also acknowledged the new fiscal reality at his launch this morning.

Far from more austerity, it is already clear that Brexit will mean considerably less. As Osborne knows, there is no alternative.

George Eaton is political editor of the New Statesman.