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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I believe only Yvette Cooper has the breadth of support to beat Jeremy Corbyn

All the recent polling suggests Andy Burnham is losing more votes than anyone else to Jeremy Corbyn, says Diana Johnson MP.

Tom Blenkinsop MP on the New Statesman website today says he is giving his second preference to Andy Burnham as he thinks that Andy has the best chance of beating Jeremy.

This is on the basis that if Yvette goes out first all her second preferences will swing behind Andy, whereas if Andy goes out first then his second preferences, due to the broad alliance he has created behind his campaign, will all or largely switch to the other male candidate, Jeremy.

Let's take a deep breath and try and think through what will be the effect of preferential voting in the Labour leadership.

First of all, it is very difficult to know how second preferences will switch. From my telephone canvassing there is some rather interesting voting going on, but I don't accept that Tom’s analysis is correct. I have certainly picked up growing support for Yvette in recent weeks.

In fact you can argue the reverse of Tom’s analysis is true – Andy has moved further away from the centre and, as a result, his pitch to those like Tom who are supporting Liz first is now narrower. As a result, Yvette is more likely to pick up those second preferences.

Stats from the Yvette For Labour team show Yvette picking up the majority of second preferences from all candidates – from the Progress wing supporting Liz to the softer left fans of Jeremy – and Andy's supporters too. Their figures show many undecideds opting for Yvette as their first preference, as well as others choosing to switch their first preference to Yvette from one of the other candidates. It's for this reason I still believe only Yvette has the breadth of support to beat Jeremy and then to go on to win in 2020.

It's interesting that Andy has not been willing to make it clear that second preferences should go to Yvette or Liz. Yvette has been very clear that she would encourage second preferences to be for Andy or Liz.

Having watched Andy on Sky's Murnaghan show this morning, he categorically states that Labour will not get beyond first base with the electorate at a general election if we are not economically credible and that fundamentally Jeremy's economic plans do not add up. So, I am unsure why Andy is so unwilling to be clear on second preferences.

All the recent polling suggests Andy is losing more votes than anyone else to Jeremy. He trails fourth in London – where a huge proportion of our electorate is based.

So I would urge Tom to reflect more widely on who is best placed to provide the strongest opposition to the Tories, appeal to the widest group of voters and reach out to the communities we need to win back. I believe that this has to be Yvette.

The Newsnight focus group a few days ago showed that Yvette is best placed to win back those former Labour voters we will need in 2020.

Labour will pay a massive price if we ignore this.

Diana Johnson is the Labour MP for Hull North.