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.

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Will Jeremy Corbyn stand down if Labour loses the general election?

Defeat at the polls might not be the end of Corbyn’s leadership.

The latest polls suggest that Labour is headed for heavy defeat in the June general election. Usually a general election loss would be the trigger for a leader to quit: Michael Foot, Gordon Brown and Ed Miliband all stood down after their first defeat, although Neil Kinnock saw out two losses before resigning in 1992.

It’s possible, if unlikely, that Corbyn could become prime minister. If that prospect doesn’t materialise, however, the question is: will Corbyn follow the majority of his predecessors and resign, or will he hang on in office?

Will Corbyn stand down? The rules

There is no formal process for the parliamentary Labour party to oust its leader, as it discovered in the 2016 leadership challenge. Even after a majority of his MPs had voted no confidence in him, Corbyn stayed on, ultimately winning his second leadership contest after it was decided that the current leader should be automatically included on the ballot.

This year’s conference will vote on to reform the leadership selection process that would make it easier for a left-wing candidate to get on the ballot (nicknamed the “McDonnell amendment” by centrists): Corbyn could be waiting for this motion to pass before he resigns.

Will Corbyn stand down? The membership

Corbyn’s support in the membership is still strong. Without an equally compelling candidate to put before the party, Corbyn’s opponents in the PLP are unlikely to initiate another leadership battle they’re likely to lose.

That said, a general election loss could change that. Polling from March suggests that half of Labour members wanted Corbyn to stand down either immediately or before the general election.

Will Corbyn stand down? The rumours

Sources close to Corbyn have said that he might not stand down, even if he leads Labour to a crushing defeat this June. They mention Kinnock’s survival after the 1987 general election as a precedent (although at the 1987 election, Labour did gain seats).

Will Corbyn stand down? The verdict

Given his struggles to manage his own MPs and the example of other leaders, it would be remarkable if Corbyn did not stand down should Labour lose the general election. However, staying on after a vote of no-confidence in 2016 was also remarkable, and the mooted changes to the leadership election process give him a reason to hold on until September in order to secure a left-wing succession.

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