Mandelson's third way on tuition fees

Mandelson says that Labour would have increased fees but would "never have trebled" them.

Peter Mandelson's comments on Ed Miliband at last night's Progress event have received a lot of attention this morning but some of his most revealing remarks were on another subject: tuition fees.

Mandelson conceded that Labour would have increased tuition fees but added: "We would never have trebled them and cut the teaching grant by so much." The Tories have often pointed out that Labour commissioned the Browne Review, implying that the opposition would have adopted the same policy, but Mandelson's comments suggest that Labour could have charted a third way.

Had the coalition not chosen to triple fees to £9,000 - the highest public university fees in the world - it could at least have minimised the tuition fees fiasco. The cost to the state would have been no greater since ministers would have been required to provide fewer subsidised loans (many of which will never be paid back in full), and the charge that students from poorer backgrounds will be deterred from applying would not be so strong. It was the coalition's decision to slash the teaching grant by 80 per cent that prompted around two-thirds of universities to charge the maximum £9,000 a year.

Mandelson was also right to call for Labour to "revolutionise its funding sources". As I've pointed out before, the party is now an almost wholly owned subsidiary of the trade unions. Back in 1994, when Tony Blair became Labour leader, the 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 represented 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. Mandelson was right to argue that Labour must widen its funding base as a matter of urgency.

George Eaton is political editor of the New Statesman.

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Benn vs McDonnell: how Brexit has exposed the fight over Labour's party machine

In the wake of Brexit, should Labour MPs listen more closely to voters, or their own party members?

Two Labour MPs on primetime TV. Two prominent politicians ruling themselves out of a Labour leadership contest. But that was as far as the similarity went.

Hilary Benn was speaking hours after he resigned - or was sacked - from the Shadow Cabinet. He described Jeremy Corbyn as a "good and decent man" but not a leader.

Framing his overnight removal as a matter of conscience, Benn told the BBC's Andrew Marr: "I no longer have confidence in him [Corbyn] and I think the right thing to do would be for him to take that decision."

In Benn's view, diehard leftie pin ups do not go down well in the real world, or on the ballot papers of middle England. 

But while Benn may be drawing on a New Labour truism, this in turn rests on the assumption that voters matter more than the party members when it comes to winning elections.

That assumption was contested moments later by Shadow Chancellor John McDonnell.

Dismissive of the personal appeal of Shadow Cabinet ministers - "we can replace them" - McDonnell's message was that Labour under Corbyn had rejuvenated its electoral machine.

Pointing to success in by-elections and the London mayoral election, McDonnell warned would-be rebels: "Who is sovereign in our party? The people who are soverign are the party members. 

"I'm saying respect the party members. And in that way we can hold together and win the next election."

Indeed, nearly a year on from Corbyn's surprise election to the Labour leadership, it is worth remembering he captured nearly 60% of the 400,000 votes cast. Momentum, the grassroots organisation formed in the wake of his success, now has more than 50 branches around the country.

Come the next election, it will be these grassroots members who will knock on doors, hand out leaflets and perhaps even threaten to deselect MPs.

The question for wavering Labour MPs will be whether what they trust more - their own connection with voters, or this potentially unbiddable party machine.