McCluskey ignores the deficit that Osborne will leave

Nowhere does the Unite general secretary acknowledge the £79bn deficit that Labour would inherit.

"Union chief attacks Labour leader" is rarely a headline worthy of much attention but then Len McCluskey is not any trade union leader. As general secretary of Unite he leads the country's biggest trade union and Labour's biggest donor, responsible for a quarter of all donations to the party. And, lest we forget, had it not been for McCluskey's union, among others, David Miliband, not Ed, would now be wearing the crown.

But the younger Miliband has little to thank McCluskey for this morning. His article in today's Guardian is a full-frontal attack on the Labour leader and Ed Balls for their "embrace of austerity" and the government's public sector pay squeeze. Anti-cuts protesters, he writes, have been left "disenfranchised" by a Blairite "policy coup" that threatens Miliband's leadership.

To which Balls and Miliband should reply, we have changed our mind because the facts have changed. The failure of George Osborne's plan means that, based on Office for Budget Responsibility forecasts, the next government will inherit a deficit of £79bn. As growth continues to fall below target, this figure will continue to soar upwards. Yet nowhere in his piece does McCluskey acknowledge this new fiscal reality. Ball's statement that the "starting point" for Labour (note the wriggle room) is "we're going to have to keep all these cuts" is simply an acknowledgement that the country has a lot less money than it thought. Labour cannot credibly pledge not only to avoid further cuts if elected in 2015 (Osborne would stretch his into 2017) but to reverse those that have already been made.

Contrary to what McCluskey writes, the shadow chancellor has not embraced "deficit reduction through spending cuts". He continues to oppose both the speed and the scale of the coalition's cuts, warning that they mean a reduced level of growth, higher unemployment and, consequently, a higher deficit. Osborne is now set to borrow more than Alistair Darling would have. But we cannot rerun the 2010 general election. The Chancellor plainly has no intention of changing course and the country will suffer for it. Balls's intervention was, to coin a phrase, an attempt to look forward, not back. Whether this will benefit Labour politically is an open question. At a time when some forecasters say the country is already in recession, the party's shift of emphasis risks appearing irrelevant at best and eccentric at worst. Labour's new position (cuts are harming the economy, so we won't be able to reverse them) cannot easily be sold on the doorstep. Moreover, McCluskey is right to assail Balls for buying "into the hoary old fallacy that increasing the wages of the low-paid risks unemployment." Keynes's rottweiler has endorsed a pay policy that will further squeeze demand out of the economy.

Balls's wager is that while Labour may lose short-term popularity it will win long-term credibility. His model appears to be the 1997 spending freeze (devised by the man himself) that reassured nagging doubts about "spendthrift" Labour. We will never know how the party would have fared had it simply played the "too far, too fast" tune. McCluskey's fears, then, are not ungrounded. But until he shows some awareness of the dramatically altered economic reality, he will not be an honest participant in this debate.

George Eaton is political editor of the New Statesman.

GETTY
Show Hide image

Cabinet audit: what does the appointment of Andrea Leadsom as Environment Secretary mean for policy?

The political and policy-based implications of the new Secretary of State for Environment, Food and Rural Affairs.

A little over a week into Andrea Leadsom’s new role as Secretary of State for Environment, Food and Rural Affairs (Defra), and senior industry figures are already questioning her credentials. A growing list of campaigners have called for her resignation, and even the Cabinet Office implied that her department's responsibilities will be downgraded.

So far, so bad.

The appointment would appear to be something of a consolation prize, coming just days after Leadsom pulled out of the Conservative leadership race and allowed Theresa May to enter No 10 unopposed.

Yet while Leadsom may have been able to twist the truth on her CV in the City, no amount of tampering will improve the agriculture-related side to her record: one barely exists. In fact, recent statements made on the subject have only added to her reputation for vacuous opinion: “It would make so much more sense if those with the big fields do the sheep, and those with the hill farms do the butterflies,” she told an audience assembled for a referendum debate. No matter the livelihoods of thousands of the UK’s hilltop sheep farmers, then? No need for butterflies outside of national parks?

Normally such a lack of experience is unsurprising. The department has gained a reputation as something of a ministerial backwater; a useful place to send problematic colleagues for some sobering time-out.

But these are not normal times.

As Brexit negotiations unfold, Defra will be central to establishing new, domestic policies for UK food and farming; sectors worth around £108bn to the economy and responsible for employing one in eight of the population.

In this context, Leadsom’s appointment seems, at best, a misguided attempt to make the architects of Brexit either live up to their promises or be seen to fail in the attempt.

At worst, May might actually think she is a good fit for the job. Leadsom’s one, water-tight credential – her commitment to opposing restraints on industry – certainly has its upsides for a Prime Minister in need of an alternative to the EU’s Common Agricultural Policy (CAP); a policy responsible for around 40 per cent the entire EU budget.

Why not leave such a daunting task in the hands of someone with an instinct for “abolishing” subsidies  thus freeing up money to spend elsewhere?

As with most things to do with the EU, CAP has some major cons and some equally compelling pros. Take the fact that 80 per cent of CAP aid is paid out to the richest 25 per cent of farmers (most of whom are either landed gentry or vast, industrialised, mega-farmers). But then offset this against the provision of vital lifelines for some of the UK’s most conscientious, local and insecure of food producers.

The NFU told the New Statesman that there are many issues in need of urgent attention; from an improved Basic Payment Scheme, to guarantees for agri-environment funding, and a commitment to the 25-year TB eradication strategy. But that they also hope, above all, “that Mrs Leadsom will champion British food and farming. Our industry has a great story to tell”.

The construction of a new domestic agricultural policy is a once-in-a-generation opportunity for Britain to truly decide where its priorities for food and environment lie, as well as to which kind of farmers (as well as which countries) it wants to delegate their delivery.

In the context of so much uncertainty and such great opportunity, Leadsom has a tough job ahead of her. And no amount of “speaking as a mother” will change that.

India Bourke is the New Statesman's editorial assistant.