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Owen Jones: Ed Balls' surrender is a political disaster

The shadow chancellor's capitulation on cuts and public sector pay offers vindication for the Tories, says Owen Jones.

I never expected to become a defender of New Labour's record, let alone against its own most zealous supporters. At this point, I should clarify that I haven't been kidnapped by Peter Mandelson and transformed into a Blairite drone. What I mean is that among all the disappointments and betrayals of the New Labour era, there were genuine social advances. They are now being shredded at lightning speed by a radical Tory government - but with the increasing complicity of the Labour leadership.

Just after news broke on Friday that Ed Balls had regretfully announced the next Labour Government is 'going to have to keep all these cuts' and declared his support for the Government's public sector pay freeze, I spent my evening debating Tory ex-Minister Edwina Currie on Stephen Nolan's 5 Live show.

Currie was in full-on triumphalist mode, gloating that Labour had accepted that the Tories were right all along. I couldn't blame her. Before coming on air, I listened to a spokesperson for the hard-right Taxpayers Alliance similarly praising Balls to the hilt. At the same time, I scrolled through Twitter, wincing as prominent Tories and Liberal Democrats proclaimed victory. 'You lose,' tweeted right-wing blogger Harry Cole to Balls' political advisor Alex Belardinelli.

Tory MP Robert Halfon couldn't contain his glee, either: he promptly cobbled together a blog post entitled 'Ed Balls comes out... as a Conservative', bragging that the Shadow Chancellor had appeared 'to sign up to Coalition economic policy'. 'After months of opposition, the Labour Party appear to have conceded defeat,' he boasted, adding that he thought 'Coalition Ministers will be able to sleep safer in their beds in future'.

The stifling of Labour's internal democracy is taken so much for granted that no-one has even bothered to pass comment on the lack of consultation before Ed Balls' announcement. One leading MP was stunned, telling me that the Parliamentary Labour Party was given no prior warning and would be 'shellshocked' when they returned to Westminster. As for trade unions or party members -- well, you are well within your rights to chuckle that I've even bothered to mention them.

Ed Balls' surrender is a political disaster. It offers vindication for the Tories' economic strategy, even as it is proven to fail. Growth has been sucked out of the economy. Consumer confidence has plummeted. Unemployment is soaring, with no sign of the promised 'private sector-led recovery'. Even on its own terms, the Government's austerity measures have failed disastrously: George Osborne will borrow more than Alistair Darling's plan, so derided by the Tories at the last general election. As for the impact the cuts are beginning to have on our communities and those groups being pummelled hardest (women, young people, and the disabled, for instance) - well, that's simply incalculable.

But rather than trying to push a coherent argument against this disastrous austerity programme, it is now being treated as a fait accompli. Sure, the cuts are now necessary because of George Osborne's mistakes, but they are nonetheless here to stay. Labour can no longer talk about how these cuts are inherently destructive, because otherwise it would have to commit to reverse them. Neither can it aim fire at their ideological nature, as when Cameron announced they were permanent before the election: that is, after all, now Labour's starting point too.

And it will surely fuel the sense that the Conservatives are making the necessary tough economic decisions, and Labour are simply playing catch-up. This is a large part of the catastrophe that has befallen Labour since the biggest economic crisis since the 1930s began. The Tories were allowed to transform a crisis of the market into one of public spending because Labour failed to offer a coherent alternative narrative. The role of collapsing tax revenues and rising welfare spending as unemployment rose barely got a mention; the Tories managed to get away with the fact they backed Labour's spending plans pound for pound until the end of 2008.

When I complained about this suicidal strategy - or, rather, suicidal absence of one - to a shadow minister at Labour Party Conference in September, they responded quick as a flash that we did indeed have a deficit because Labour overspent. I confess that - at this point - I felt that if senior Labour figures were happy to accept dishonest blame handed out by the Tories, then it was hopeless.

This latest surrender to the Tory cuts agenda comes after a protracted struggle at the top of the leadership. One faction argued that, once you started specifying cuts, there would be a loss of focus on their deflationary impact, and that the Tories would come back for more and more detail on Labour's spending plans. We now know this argument has been decisively defeated.

Arch-Blairite Jim Murphy - who harbours ambitions to stand for leadership should Ed Miliband fail - began rolling out the new strategy earlier in the month by calling for Labour to avoid 'shallow and temporary' populism over spending cuts, setting out his own proposed cuts as an example to his colleagues. The equally devout Blairite shadow education secretary Stephen Twigg has partly endorsed Michael Gove's attacks on the scrapped Building Schools for Future programme, and has outlined £2bn of his own cuts. And Liam Byrne has committed Labour to a renewed attack on the welfare state, currently being hacked to pieces by the Government. I bet the word 'vindicated' will be used liberally around the corridors of Conservative Campaign Headquarters next week.

And so former arch-critics of Blair and Brown such as myself are forced to defend large chunks of their record from their acolytes. New Labour's major departure from Thatcherite orthodoxy was investment in public services. It is now being torched with the approval of Blairites and Brownites. Clement Attlee and Margaret Thatcher headed the two transformative governments of post-war Britain, each establishing a new political consensus by forcing their oppositions to accept the key tenets of their programmes. Cameron looks set to follow in their footsteps, with New Labour an interregnum that temporarily tinkered with the Thatcher consensus, much like the Tory governments of the 1950s and the Attlee consensus.

As the usually thoughtful Tory Peter Oborne put it:

A sea change is at work. In practically every area of British public life - state spending, the economy, education, welfare, the European Union (where Ed Miliband refused to condemn Cameron's pre-Christmas veto), mass immigration, law and order - Conservatives are winning the argument and taking policy in their direction.

It is not inevitable, of course. It is being allowed to happen because there is a lack of countervailing pressure from below. If a broad coalition of Labour activists and trade unions united around a coherent alternative and put concerted pressure on the leadership, this surrender can be stopped in its tracks. With the Shadow Cabinet set to continue its suicidal course, time is running out - but it is the only hope to stop Cameron transforming Britain forever.

Owen Jones is a left-wing columnist, author and commentator. He is a contributing writer to the New Statesman and writes a weekly column for the Guardian. He has published two books, Chavs: the Demonisation of the Working Class and The Establishment and How They Get Away With It.

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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.