Hester's bonus decision is a victory for Ed Miliband

It was Labour's plan to hold a Commons vote that forced the RBS chief to give up his £1m bonus.

It was Labour's plan to hold a Commons vote that forced the RBS chief to give up his £1m bonus.{C}

Explaining Stephen Hester's decision to waive his £1m bonus, RBS was clear that one man was responsible: Ed Miliband. It was Miliband's plan to force a Commons vote on the issue that prompted Hester's announcement last night. As one RBS director put it to the BBC's Robert Peston, it would have been "untenable" for a semi-nationalised bank to defy the will of parliament. Miliband probably would have preferred the row to continue for another week but this is still a significant victory for him. Like his intervention over the BSkyB deal, it is further evidence of his willingness to take on "vested interests".

For the coalition, which badly mishandled the issue, Hester's decision will come as a relief. It deprives Labour of an opportunity to inflict further damage on a dithering government. But the saga doesn't end here. Most bonuses are yet to be announced and Labour's intervention sets a significant precedent. As Faisal Islam pointed out, the logic of the party's position is that no one at RBS should receive a bonus of £1m. But around a hundred bankers pocketed that amount or more in 2010. Will Labour now scrutinise RBS pay more widely? The answer from Chuka Umunna on the Today programme this morning was "yes". He argued that RBS staff "like other public sector workers" should have their pay squeezed and promised to look at salaries "across the board".

But speaking for the government, William Hague sounded a cautionary note. He warned that politicians were not qualified to comment on "individual decisions" and the "day-to-day running of the banks". Then again, pointing to David Cameron's decision to ban cash bonuses above £2,000, he declared: "if we need to do more, we will do more." With RBS now likely to remain a state-owned institution until 2015 and beyond, both Labour and the Tories will have to think hard about how they ensure its pay is seen as fair in the eyes of the public. The government has every interest in avoiding a repeat of the furore next January.

George Eaton is political editor of the New Statesman.

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Do you see yourself as British or English? The answer could help define modern politics

The rise of English identity has left a glaring space in politics for an English nationalist party. Who is going to fill it?

Political scientists call it the “Moreno question”. In the 1980s, the Spanish academic Luis Moreno Fernández came up with a test for identity, which was originally applied to gauge interest in Catalan independence. In its English incarnation, it asks voters to grade themselves from “I feel more British than English” to “I feel more English than British”. Unsurprisingly, Ukip does best among those who describe themselves as “English, not British”, while Labour’s vote rises the more people see themselves as British. In the biggest group – the 47 per cent who see themselves as equally English and British – the Tories lead.

The Moreno question helps us make sense of three interlinking trends in modern politics. First, the stark fact that in the 2015 election, a different party won in each nation of the United Kingdom: Labour in Wales, the SNP in Scotland, the Tories in England and the Democratic Unionist Party in Northern Ireland. Second, Ukip’s lack of success north of the border: the Herald reported in July that Ukip’s only elected representative in the country, David Coburn MEP, had been forced to take on the role of treasurer at his local branch in Fife because it has so few members. Third, Labour’s declining performance in its historic northern heartlands. Many voters there want a party with a distinctively English flavour and don’t feel that Labour is it.

Devolution has had many unexpected consequences, but the rise of an English identity is one of the least explored. Because of its demographic dominance, mainstream politicians have long argued that it would be unfair to give England its own parliament. Labour is particularly resistant to the idea because it would magnify the Conservatives’ power. As it is, the principle of “English votes for English laws” will exclude the SNP and Plaid Cymru from the grand committee-stage hearings on grammar schools, because education is a devolved matter.

However, the last general election showed that there’s a problem with English voters feeling ignored. In Worcester, the Tory MP Robin Walker told me in April 2015 that arguments about the SNP holding Labour to ransom cut through on the doorstep. “There is a real concern if [voters] are saying, ‘The proceeds of the mansion tax are all going to go on nurses in Scotland. That doesn’t help us,’” he said. Many English voters felt that the SNP would be a successful lobby group at Westminster for Scotland’s interests. Where was their equivalent?

For John Denham, the former Labour MP who now leads the Centre for English Identity and Politics at the University of Winchester, the same dynamic applied this summer in the EU referendum campaign. “Scotland got ‘Scotland Stronger in Europe’,” he tells me. “England had to put up with ‘Britain Stronger in Europe’. That was an elite campaign run by people who think Britain and England are the same thing.”

Once again, the Moreno question helps us understand a fundamental divide among English voters. Denham says that 80 per cent of people who defined themselves as “English only” voted Leave, while 80 per cent of those who called themselves “British only” voted Remain.

Denham thinks that this presents an enormous challenge for Labour in northern seats where Ukip is in second place, given that its intellectuals and leading politicians feel so squeamish about Englishness. “If Labour continues as a cosmopolitan, liberal party that doesn’t want anything to do with the politics of identity,” he warns, “it won’t reach those voters.”

Other politicians worry that if Labour doesn’t occupy this space, another party will. “As nationalists go, the SNP is pretty good,” a senior left-wing politician told me recently. “An English nationalist party could be something altogether more nasty.”

In this light, the election of Diane James as the leader of Ukip looks like a rare stroke of luck for Labour. She is a southerner, educated at Rochester Grammar School, and an MEP for south-east England. Although she is polished and professional – albeit prone to outbursts of admiration for Vladimir Putin – she seems unlikely to appeal on an emotional level to working-class white voters in the north, where the greatest potential for an English nationalist party lies. Thanks to Ukip’s Caligulan internal politics, the deputy leader, Paul Nuttall (from Bootle), did not stand and the charismatic Steven Woolfe (from Burnage) was excluded from the race after the party’s executive committee ruled that he had submitted his nomination papers 17 minutes after the deadline. (Another potential candidate, Suzanne Evans, was suspended by the party, and pretty much everyone else in Ukip seems to hate its only MP, Douglas Carswell.)

If not Labour, or Ukip, perhaps the Conservatives? Theresa May’s rebranding of the party, complete with articles on bringing back grammar schools in the Daily Mail, shows that she is pitching for Ukip-leaners. “In terms of language and biography, she has a better understanding of that struggling, socially conservative, English nationalist voter than Cameron did,” says Robert Ford, a professor of political science at Manchester University and co-author of Revolt on the Right. He believes that any party that thinks a simple economic message can sway these voters is underestimating the “emotive” nature of identity-based politics. “It’s no use going to Sunderland and saying, ‘We’re going to nationalise the trains,’ and thinking, ‘They’ll come back to us.’”

There is another option. A new party could be born, perhaps even out of the ashes of post-referendum Ukip: Arron Banks, its mega-donor, has said that he fancies the idea. With the right leader, nationalist sentiment could spread like wildfire among the “English, not British”. And, as Nigel Farage has shown, you don’t need to get elected to Westminster to have an effect.

Helen Lewis is deputy editor of the New Statesman. She has presented BBC Radio 4’s Week in Westminster and is a regular panellist on BBC1’s Sunday Politics.

This article first appeared in the 22 September 2016 issue of the New Statesman, The New Times