Sell: Cable, Umunna, IDS; Buy: sensible backbench Tories

The New Statesman’s political investment guide for 2013.

It has been a turbulent year for Westminster trading. Stock in pretty much everyone and everything has fallen. It’s bearish out there. The outlook for next year is hardly less gloomy. National reserves of trust are at an all-time low. Scarcity of imagination and competence will continue. The market is over-supplied with mediocrity.

Here we present the New Statesman’s political investment guide for 2013.

Hold

All three of the main party leaders Ed Miliband, Nick Clegg and David Cameron all look relatively secure in their positions. Miliband is unassailable as long as his party is leading opinion polls. Cameron will be undermined by rebellious backbenchers but will, true to past form, make sufficient concessions to ward off the threat of a credible challenge. The overwhelming majority of Tories recognise the absence of a ready alternative. The Liberal Democrats can hardly be satisfied with their position but a majority seem to accept that unpopularity is a necessary consequence of becoming a party of government and that Clegg, as the man who is leading them on that journey, deserves more time to make it work.

George Osborne and Ed Balls  Alike in more ways than either man likes to admit, neither is liked but both are proven operators with serious staying power.

Boris Johnson The London Mayor can’t advance up the political ladder any further until he is an MP and he can’t run for parliament before the next general election without it looking like the start of a leadership bid but with no vacancy – a very exposed position. So he has to bide his time. But too many disgruntled Tories find him useful as a theoretical foil to Cameron for his stock to fall yet.

Buy

Sensible backbench Tories The Conservative leadership will be desperate next year to push forward some moderate voices to counteract the high profile enjoyed by Anglo-Tea Party, Ukip-lite fanatics. Conservatives who sound reasonable and do a good impression of belonging to 21st Century Britain are bound to start cutting through a little bit more. Lesser-known moderate Tories, such as Damien Hinds, MP for East Hampshire, and Alok Sharma, MP for Reading West are worth a look.

Fiscally serious Labour people The premium on Labour MPs who actually think about practical policy responses at a time of austerity is sure to go up. Liz Kendall, shadow social care minister, has a realistic understanding of the fiscal challenge and a detailed grasp of a vital brief. Likwise, Stella Creasy, MP for Walthamstow and scourge of payday lenders. She combines a clear attack line on the rapacious end of immoral capitalism with a quiet commitment to budget discipline. And she doesn’t speak in tedious robotic jargon as pumped out by the party press office.

Chris Huhne? One for the bargain-hunters. There are reports – as yet unconfirmed – that charges of perverting the course of justice that finished the former Energy Secretary’s cabinet career might be dropped. That would open the way for a return to active politics. He’s far too unpopular among Tories and mistrusted by Clegg to get a front line job. But he has enough support in the party rank and file to start causing mischief and right now the price is at rock bottom.

Sell

Vince Cable The Business Secretary is seriously over-priced as a consequence of Labour and Tory people ramping up the idea of him replacing Clegg as Lib Dem leader, largely just to destabilise the third party. It won’t happen. Cable doesn’t have a big enough base among Lib Dem MPs and, in any case, he wouldn’t want to be the man to wield the knife against Clegg, knowing that doing so would diminish his chances of wearing the crown. The Cable leadership talk is a bubble.

Chuka Umunna Shares in Cable’s opposite number on the Labour front bench, Chuka Umunna, have also been trading high for most of 2012. Umunna is talked up as a potential leader of his party one day. He looks and sounds good on television; he has avoided being associated too strongly with any wing of the party. But his rapid elevation through the ranks and high profile have made him a figure of envy and irritation on his own side. Questions are also starting to be asked about the rigour and depth of his economic analysis. As shadow business secretary he should be the face of Miliband’s quest for more responsible capitalism, which means leading an economic operation of sufficient gravitas to rival the more reactionary story coming out of the shadow chancellor’s office. Is Umunna heavyweight enough to counter-balance Ed Balls? Doubtful.

Andrew Mitchell On the Tory side there has been a sudden rally in Andrew Mitchell’s stock, following revelations that cast doubt on the police version of events in the “plebgate” story that finished his career as International Development Secretary. Westminster has been piling into Mitchells on the assumption that he can now return to front line politics. I’m not so sure. He didn’t resign exclusively because of what he was alleged to have said but because so few Tories felt like defending him and plenty were gleefully putting the boot in. The angry temperament that got him into trouble in the first place has plainly left a long trail of resentment that will not be forgotten quickly. This is not a man who can easily slot back into government where he left off. His current rehabilitation is a dead-cat bounce.

Iain Duncan-Smith The Work and Pensions Secretary is feted as a pioneer of “compassionate” Conservatism. Few question his moral determination to make welfare reform a mechanism to rehabilitate poor communities by helping those on benefits back into work. Sadly, that ambition is being undone by cuts inflicted by the Chancellor and by general lack of competence at every level in DWP. 2013 is the year flagship welfare reforms run aground.

Then of course there’s the alternative investment market. George Galloway’s price surely peaked in Bradford in 2012. His ambition is plainly to use Respect as the vehicle for a hard left personality cult built around him. His personality isn't attractive enough to make that work at a national level. On the right, Ukip will continue to make angry mischief up until at least 2014 elections to the European parliament. It could be worth dabbling in Farages now, but switch to safer Tory stocks before the general election.

General warning: the New Statesman is not responsible for views formed on the basis of this advice. Remember, politicians’ reputations can even further down as well as just down.

Vince Cable: "the Business Secretary is seriously over-priced". Photograph: Getty Images.

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

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The problems with ending encryption to fight terrorism

Forcing tech firms to create a "backdoor" to access messages would be a gift to cyber-hackers.

The UK has endured its worst terrorist atrocity since 7 July 2005 and the threat level has been raised to "critical" for the first time in a decade. Though election campaigning has been suspended, the debate over potential new powers has already begun.

Today's Sun reports that the Conservatives will seek to force technology companies to hand over encrypted messages to the police and security services. The new Technical Capability Notices were proposed by Amber Rudd following the Westminster terrorist attack and a month-long consultation closed last week. A Tory minister told the Sun: "We will do this as soon as we can after the election, as long as we get back in. The level of threat clearly proves there is no more time to waste now. The social media companies have been laughing in our faces for too long."

Put that way, the plan sounds reasonable (orders would be approved by the home secretary and a senior judge). But there are irrefutable problems. Encryption means tech firms such as WhatsApp and Apple can't simply "hand over" suspect messages - they can't access them at all. The technology is designed precisely so that conversations are genuinely private (unless a suspect's device is obtained or hacked into). Were companies to create an encryption "backdoor", as the government proposes, they would also create new opportunities for criminals and cyberhackers (as in the case of the recent NHS attack).

Ian Levy, the technical director of the National Cyber Security, told the New Statesman's Will Dunn earlier this year: "Nobody in this organisation or our parent organisation will ever ask for a 'back door' in a large-scale encryption system, because it's dumb."

But there is a more profound problem: once created, a technology cannot be uninvented. Should large tech firms end encryption, terrorists will merely turn to other, lesser-known platforms. The only means of barring UK citizens from using the service would be a Chinese-style "great firewall", cutting Britain off from the rest of the internet. In 2015, before entering the cabinet, Brexit Secretary David Davis warned of ending encryption: "Such a move would have had devastating consequences for all financial transactions and online commerce, not to mention the security of all personal data. Its consequences for the City do not bear thinking about."

Labour's manifesto pledged to "provide our security agencies with the resources and the powers they need to protect our country and keep us all safe." But added: "We will also ensure that such powers do not weaken our individual rights or civil liberties". The Liberal Democrats have vowed to "oppose Conservative attempts to undermine encryption."

But with a large Conservative majority inevitable, according to polls, ministers will be confident of winning parliamentary support for the plan. Only a rebellion led by Davis-esque liberals is likely to stop them.

George Eaton is political editor of the New Statesman.

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