The Tory plan for a permanent majority gathers pace

Boundary changes, Scottish independence and party funding reform could prevent Labour ever winning a

Labour strategists have long warned of a nightmare scenario in which the party would likely never govern again. First, the coalition's proposed boundary changes are approved, depriving Labour of an estimated 25 seats (the Conservatives would have won 13 fewer seats at the last election and the Lib Dems would have won seven fewer).

Second, Alex Salmond holds a referendum on independence and Scotland votes Yes. Of the 59 Westminster seats in Scotland that automatically would be lost, 41 are Labour-held but just one is Conservative-held. Finally, the Tories and the Lib Dems introduce a cap on party donations, depriving Labour of much of its trade-union funding and bankrupting the party.

Labour is consigned to permanent opposition and a new age of Tory hegemony is born.

So far this strategy, masterminded by George Osborne, is proceeding remarkably well (Osborne doesn't support Scottish independence but he will have done the parliamentary arithmetic). The new constituency boundaries are likely to be approved by 2013 and the Alternative Vote, which would have made the formation of a "progressive alliance" more likely, has been rejected by an overwhelming majority.

Meanwhile, an independent Scotland is more likely now than at any other point in the 304-year history of the Union. There is no doubt that David Cameron is being sincere when he vows to defend the United Kingdom with "every fibre in my body", but not everyone in his party takes the same view. A 2009 ConservativeHome poll of 144 party candidates found that 46 per cent would not be "uncomfortable about Scotland becoming independent".

Never assume

To many Tories, an independent England – economically liberal, fiscally conservative, Eurosceptic, Atlanticist – is an attractive prospect. The Conservatives have not held more than one seat in Scotland for the past 19 years – there is little political incentive to preserve the Union.

As Michael Portillo told Andrew Neil on This Week in 2006: "From the point of political advantage, the Conservatives have a better chance of being in government if Scotland is not part of the affair. You are continuing to assume the Union is sacrosanct. That is not an assumption I make any more."

The third plank of this strategy – party funding reform – is about to return to the agenda. As today's Observer reports, the Tories and the Lib Dems are advancing plans to impose a cap of £50,000 on political donations. The paper notes:

An analysis of funding conducted since David Cameron became Tory leader shows Labour would have been deprived of 85 per cent of its income since 2005 if the limit had been in place. This is because the vast majority of its funds have come from hefty union donations well above the £50,000 level.

The Conservatives, on the other hand, would have forfeited just 50 per cent of their income, as the party receives a higher proportion of its income from wealthy individuals who tend to give sums below the proposed £50,000 cap.

As I've pointed out before, Labour is now remarkably dependent on the unions for its funding. Back in 1994, when Tony Blair became Labour leader, trade unions accounted for just a third of the party's annual income. They now account for more than 60 per cent.

In the last quarter, private donations accounted for just £59,503 (2 per cent) of Labour's £2,777,519 income. Just two individuals donated to the party, one of whom was Alastair Campbell. By contrast, union donations accounted for 90 per cent of all funding.

I'm a strong supporter of the trade-union link, but it's unhealthy for a progressive political party to be so dependent on a few sources of income. Labour must broaden its funding base as a matter of urgency.

But the wider challenge is clear. If history is not to record Gordon Brown as the last Labour prime minister, the party must show as much ruthlessness, cunning and ingenuity as the Tories.

George Eaton is political editor of the New Statesman.

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Why Angela Merkel's comments about the UK and US shouldn't be given too much weight

The Chancellor's comments are aimed at a domestic and European audience, and she won't be abandoning Anglo-German relationships just yet.

Angela Merkel’s latest remarks do not seem well-judged but should not be given undue significance. Speaking as part of a rally in Munich for her sister party, the CSU, the German Chancellor claimed “we Europeans must really take our own fate into our hands”.

The comments should be read in the context of September's German elections and Merkel’s determination to restrain the fortune of her main political rival, Martin Schulz – obviously a strong Europhile and a committed Trump critic. Sigmar Gabriel - previously seen as a candidate to lead the left-wing SPD - has for some time been pressing for Germany and Europe to have “enough self-confidence” to stand up to Trump. He called for a “self-confident position, not just on behalf of us Germans but all Europeans”. Merkel is in part responding to this pressure.

Her words were well received by her audience. The beer hall crowd erupted into sustained applause. But taking an implicit pop at Donald Trump is hardly likely to be a divisive tactic at such a gathering. Criticising the UK post-Brexit and the US under Trump is the sort of virtue signalling guaranteed to ensure a good clap.

It’s not clear that the comments represent that much of a new departure, as she herself has since claimed. She said something similar earlier this year. In January, after the publication of Donald Trump’s interview with The Times and Bild, she said that “we Europeans have our fate in our own hands”.

At one level what Merkel said is something of a truism: in two year’s time Britain will no longer be directly deciding the fate of the EU. In future no British Prime Minister will attend the European Council, and British MEPs will leave the Parliament at the next round of European elections in 2019. Yet Merkel’s words “we Europeans”, conflate Europe and the EU, something she has previously rejected. Back in July last year, at a joint press conference with Theresa May, she said: “the UK after all remains part of Europe, if not of the Union”.

At the same press conference, Merkel also confirmed that the EU and the UK would need to continue to work together. At that time she even used the first person plural to include Britain, saying “we have certain missions also to fulfil with the rest of the world” – there the ‘we’ meant Britain and the EU, now the 'we' excludes Britain.

Her comments surely also mark a frustration born of difficulties at the G7 summit over climate change, but Britain and Germany agreed at the meeting in Sicily on the Paris Accord. More broadly, the next few months will be crucial for determining the future relationship between Britain and the EU. There will be many difficult negotiations ahead.

Merkel is widely expected to remain the German Chancellor after this autumn’s election. As the single most powerful individual in the EU27, she is the most crucial person in determining future relations between the UK and the EU. Indeed, to some extent, it was her intransigence during Cameron’s ‘renegotiation’ which precipitated Brexit itself. She also needs to watch with care growing irritation across the EU at the (perceived) extent of German influence and control over the institutions and direction of the European project. Recent reports in the Frankfurter Allgemeine Zeitung which suggested a Merkel plan for Jens Weidmann of the Bundesbank to succeed Mario Draghi at the ECB have not gone down well across southern Europe. For those critics, the hands controlling the fate of Europe are Merkel’s.

Brexit remains a crucial challenge for the EU. How the issue is handled will shape the future of the Union. Many across Europe’s capitals are worried that Brussels risks driving Britain further away than Brexit will require; they are worried lest the Channel becomes metaphorically wider and Britain turns its back on the continent. On the UK side, Theresa May has accepted the EU, and particularly Merkel’s, insistence, that there can be no cherry picking, and therefore she has committed to leaving the single market as well as the EU. May has offered a “deep and special” partnership and a comprehensive free trading arrangement. Merkel should welcome Britain’s clarity. She must work with new French President Emmanuel Macron and others to lead the EU towards a new relationship with Britain – a close partnership which protects free trade, security and the other forms of cooperation which benefit all Europeans.

Henry Newman is the director of Open Europe. He tweets @henrynewman.

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