Labour's preferred attack on pensions is going nowhere

The hated 3 per cent charge hidden in last year's spending review is non-negotiable and unions know

Coming as it does the day after George Osborne's Autumn Statement on the economy, today's strike by public sector workers feels in many respects like a broad rejection of the government's entire austerity agenda. That feeling is exaggerated by the Chancellor's decision yesterday to pay for some of his growth-boosting plans by capping public sector wages. Even if inflation falls back from its current high levels that will feel like a cut. The move will be widely interpreted by strikers as a provocation.

There is, of course, a specific dispute at the heart of today's action - the government's proposals to reform public sector pensions. There is also, within that specific dispute, a detail that is often lost in reporting, which is the distinction between reforms set out in the report by Lord Hutton, subsequently watered down in negotiations, and changes introduced in last autumn's spending review. The Hutton proposals are the basis of the deal that has been offered to -- and rejected by -- unions. But many public sector workers are just as aggrieved by a mandatory surcharge on their employee pension contributions averaging 3.2 per cent that was in the small print of the spending review. That was seen by many as a pre-emptive attack on pensions rushed through before negotiations on a long-term settlement even got under way.

Labour is keen to emphasise the surcharge for precisely that reason. It was imposed by the Treasury without discussion and looks and feels like a smash-and-grab raid. There is some disappointment at the top of the party that unions have not pushed this point further. But privately unions say they see no point going after the 3 per cent charge as they know this is a battle they cannot win. They are right. I was told recently by a cabinet minister with good knowledge of the pension negotiations with unions that the surcharge is non-negotiable. It isn't even on the table. That is precisely because it is contained in the spending review. That document has acquired hallowed status in the government - it is the agreement on which the coalition's whole commitment to fiscal discipline is based. Ministers from both governing parties see it as the measure that, more than anything else, bought the country long-term respite from any pressure from financial markets that have punished other indebted governments in Europe. (Whether or not this is a real danger -- or was a danger in autumn last year -- is an entirely different point.) The fact is, whatever disputes might arise within the coalition, there is absolute agreement that the spending review is closed and must not be re-opened. It is the emblem of fiscal credibility.

There is also, I suspect, a certain psychological element in play here. Negotiating the spending review was an early test of the coalition's staying power. It came at a time when many people still thought it implausible that Lib Dems and Tories could realistically stay in government together for long. The fact that it happened at all has created a certain esprit de corps in the quad - the coalition steering committee of David Cameron, Nick Clegg, George Osborne and Danny Alexander. They all know that revisiting the spending review would sabotage the political solidarity that is the glue holding the coalition together.

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

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The Tories are the zombie party: with an ageing, falling membership, still they stagger on to victory

One Labour MP in Brighton spotted a baby in a red Babygro and said to me: “There’s our next [Labour] prime minister.”

All football clubs have “ultras” – and, increasingly, political parties do, too: although, in the case of political parties, their loudest and angriest supporters are mostly found on the internet. The SNP got there first: in the early days of email, journalists at the Scotsman used to receive bilious missives complaining about its coverage – or, on occasion, lack of coverage – of what the Scottish National Party was up to. The rest soon followed, with Ukip, the Labour Party and even the crushed Liberal Democrats now boasting a furious electronic horde.

The exception is the Conservative Party. Britain’s table-topping team might have its first majority in 18 years and is widely expected in Westminster to remain in power for another decade. But it doesn’t have any fans. The party’s conference in Manchester, like Labour’s in Brighton, will be full to bursting. But where the Labour shindig is chock-full of members, trade unionists and hangers-on from the charitable sector, the Conservative gathering is a more corporate affair: at the fringes I attended last year, lobbyists outnumbered members by four to one. At one, the journalist Peter Oborne demanded to know how many people in the room were party members. It was standing room only – but just four people put their hands up.

During Grant Shapps’s stint at Conservative headquarters, serious attempts were made to revive membership. Shapps, a figure who is underrated because of his online blunders, and his co-chair Andrew Feldman were able to reverse some of the decline, but they were running just to stand still. Some of the biggest increases in membership came in urban centres where the Tories are not in contention to win a seat.

All this made the 2015 election win the triumph of a husk. A party with a membership in long-term and perhaps irreversible decline, which in many seats had no activists at all, delivered crushing defeats to its opponents across England and Wales.

Like José Mourinho’s sides, which, he once boasted, won “without the ball”, the Conservatives won without members. In Cumbria the party had no ground campaign and two paper candidates. But letters written by the Defence Secretary, Michael Fallon, were posted to every household where someone was employed making Trident submarines, warning that their jobs would be under threat under a Labour government. This helped the Tories come close to taking out both Labour MPs, John Woodcock in Barrow and Furness and Jamie Reed in Copeland. It was no small feat: Labour has held Barrow since 1992 and has won Copeland at every election it has fought.

The Tories have become the zombies of British politics: still moving though dead from the neck down. And not only moving, but thriving. One Labour MP in Brighton spotted a baby in a red Babygro and said to me: “There’s our next [Labour] prime minister.” His Conservative counterparts also believe that their rivals are out of power for at least a decade.

Yet there are more threats to the zombie Tories than commonly believed. The European referendum will cause endless trouble for their whips over the coming years. And for all there’s a spring in the Conservative step at the moment, the party has a majority of only 12 in the Commons. Parliamentary defeats could easily become commonplace. But now that Labour has elected Jeremy Corbyn – either a more consensual or a more chaotic leader than his predecessors, depending on your perspective – division within parties will become a feature, rather than a quirk, at Westminster. There will be “splits” aplenty on both sides of the House.

The bigger threat to Tory hegemony is the spending cuts to come, and the still vulnerable state of the British economy. In the last parliament, George Osborne’s cuts fell predominantly on the poorest and those working in the public sector. They were accompanied by an extravagant outlay to affluent retirees. As my colleague Helen Lewis wrote last week, over the next five years, cuts will fall on the sharp-elbowed middle classes, not just the vulnerable. Reductions in tax credits, so popular among voters in the abstract, may prove just as toxic as the poll tax and the abolition of the 10p bottom income-tax rate – both of which were popular until they were actually implemented.

Added to that, the British economy has what the economist Stephen King calls “the Titanic problem”: a surplus of icebergs, a deficit of lifeboats. Many of the levers used by Gordon Brown and Mervyn King in the last recession are not available to David Cameron and the chief of the Bank of England, Mark Carney: debt-funded fiscal stimulus is off the table because the public finances are already in the red. Interest rates are already at rock bottom.

Yet against that grim backdrop, the Conservatives retain the two trump cards that allowed them to win in May: questions about Labour’s economic competence, and the personal allure of David Cameron. The public is still convinced that the cuts are the result of “the mess” left by Labour, however unfair that charge may be. If a second crisis strikes, it could still be the Tories who feel the benefit, if they can convince voters that the poor state of the finances is still the result of New Labour excess rather than Cameroon failure.

As for Cameron, in 2015 it was his lead over Ed Miliband as Britons’ preferred prime minister that helped the Conservatives over the line. This time, it is his withdrawal from politics which could hand the Tories a victory even if the economy tanks or cuts become widely unpopular. He could absorb the hatred for the failures and the U-turns, and then hand over to a fresher face. Nicky Morgan or a Sajid Javid, say, could yet repeat John Major’s trick in 1992, breathing life into a seemingly doomed Conservative project. For Labour, the Tory zombie remains frustratingly lively. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.

This article first appeared in the 01 October 2015 issue of the New Statesman, The Tory tide