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 isn't Labour putting forward Corbynite candidates?

Despite his successes as a candidate, the organisational victories have gone the way of Corbyn's opponents. 

The contest changes, but the result remains the same: Jeremy Corbyn’s preferred candidate defeated in a parliamentary selection. Afzhal Khan is Labour’s candidate in the Manchester Gorton by-election and the overwhelming favourite to be the seat’s next MP.

Although Khan, an MEP, was one of  the minority of Labour’s European MPs to dissent from a letter from the European parliamentary Labour party calling for Jeremy Corbyn to go in the summer of 2016, he backed Andy Burnham and Tom Watson in 2015, and it is widely believed, fairly or unfairly, that Khan had, as one local activist put it, “the brains to know which way the wind was blowing” rather than being a pukka Corbynite.

For the leader’s office, it was a double defeat;  their preferred candidate, Sam Wheeler, was kept off the longlist, when the party’s Corbynsceptics allied with the party’s BAME leadership to draw up an all ethnic minority shortlist, and Yasmine Dar, their back-up option, was narrowly defeated by Khan among members in Manchester Gorton.

But even when the leadership has got its preferred candidate to the contest, they have been defeated. That even happened in Copeland, where the shortlist was drawn up by Corbynites and designed to advantage Rachel Holliday, the leader’s office preferred candidate.

Why does the Labour left keep losing? Supporters combination of bad luck and bad decisions for the defeat.

In Oldham West, where Michael Meacher, a committed supporter of Jeremy Corbyn’s, was succeeded by Jim McMahon, who voted for Liz Kendall, McMahon was seen to be so far ahead that they had no credible chance of stopping him. Rosena Allin-Khan was a near-perfect candidate to hold the seat of Tooting: a doctor at the local hospital, the seat’s largest employer, with links to both the Polish and Pakistani communities that make up the seat’s biggest minority blocs.  Gillian Troughton, who won the Copeland selection, is a respected local councillor.

But the leadership has also made bad decisions, some claim.  The failure to get a candidate in Manchester Gorton was particularly egregious, as one trade unionist puts it: “We all knew that Gerald was not going to make it [until 2020], they had a local boy with good connections to the trade unions, that contest should have been theirs for the taking”. Instead, they lost control of the selection panel because Jeremy Corbyn missed an NEC meeting – the NEC is hung at present as the Corbynsceptics sacrificed their majority of one to retain the chair – and with it their best chance of taking the seat.

Others close to the leadership point out that for the first year of Corbyn’s leadership, the leader’s office was more preoccupied with the struggle for survival than it was with getting more of its people in. Decisions in by-elections were taken on the hop and often in a way that led to problems later down the line. It made sense to keep Mo Azam, from the party’s left, off the shortlist in Oldham West when Labour MPs were worried for their own seats and about the Ukip effect if Labour selected a minority candidate. But that enraged the party’s minority politicians and led directly to the all-ethnic-minority shortlist in Manchester Gorton.

They also point out that the party's councillor base, from where many candidates are drawn, is still largely Corbynsceptic, though they hope that this will change in the next round of local government selections. (Councillors must go through a reselection process at every election.)

But the biggest shift has very little to do with the Labour leadership. The big victories for the Labour left in internal battles under Ed Miliband were the result of Unite and the GMB working together. Now they are, for various reasons, at odds and the GMB has proven significantly better at working shortlists and campaigning for its members to become MPs.  That helps Corbynsceptics. “The reason why so many of the unions supported Jeremy the first time,” one senior Corbynite argues, “Is they wanted to move the Labour party a little bit to the left. They didn’t want a socialist transformation of the Labour party. And actually if you look at the people getting selected they are not Corbynites, but they are not Blairites either, and that’s what the unions wanted.”

Regardless of why, it means that, two years into Corbyn’s leadership, the Labour left finds itself smaller in parliament than it was at the beginning.  

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.