Clegg shows how the coalition will attack Labour in 2013

The coalition will challenge Labour to say which cuts it would keep and which it would reject, but it shouldn't expect any answers.

Nick Clegg's article in today's Times (£) offers a preview of an attack the coalition will use repeatedly against Labour in 2013: what would you do? In reference to Labour's opposition to the coalition's plan to increase benefits by just 1 per cent for the next three years, Clegg writes: "Labour must show how they’d pay for it. Would they cut hospital budgets? Schools? Defence?" He also demands that Ed Balls and Ed Miliband say which of the coalition's cuts "they would keep, which they would lose and where they would find the money instead."

But the Deputy PM shouldn't expect answers any time soon. In an end-of-year interview with the Times, Ed Balls signalled that Labour would hold back its key tax and spending commitments until 2015. "Until we know the state of the economy, the state of the public finances and how bad things have turned out, it’s very hard for us to know what we can possibly say."

Balls's argument is a reasonable one. The Office for Budget Responsibility originally expected the economy to grow by 5.7 per cent between the first quarter of 2010 and the second quarter of 2012. It actually grew by 0.9 per cent. As a result, the coalition is now forecast to borrow £212bn more than planned in June 2010. In view of this record, it would be unwise for Labour to make any hard and fast commitments until the latest moment possible. Balls has gone as far as banning shadow cabinet ministers from saying which cuts they would keep for fear of creating the impression that Labour will be able to reverse all of the others.

But with a Spending Review due to be held later this year, the coalition will begin to challenge Labour to say whether it would match its post-election spending plans, as it did with the Conservatives' in 1997. With little fanfare, the Liberal Democrats have accepted George Osborne's fiscal envelope (which now extends to 2018), if not all of his proposed cuts. For instance, while Clegg successfully rejected Osborne's bid to secure £10bn of additional welfare cuts, limiting the Chancellor to £3.8bn, he did not question the assumption that £10bn of further austerity was necessary, merely that all the savings needed to come from welfare. Whether or not Labour should adopt the same approach is the biggest decision Balls and Miliband will make before the election. A pledge to match the Tories' spending limits would insulate Labour from the charge that it is planning a tax or borrowing "bombshell" but it would enrage the left and the trade unions. I'll have more on this in my column in tomorrow's magazine.

Nick Clegg delivers a speech to the think-tank Centre Forum at The Commonwealth Club on December 17, 2012 in London. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty
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What Labour's plotters are thinking

The ground may have shifted underneath Jeremy Corbyn's feet, at least as far as the rules on nominations are concerned. 

Jeremy Corbyn’s leadership has been rocked by seven resignations from his shadow cabinet, as the attempt to remove the Labour leader gathers speed and pace.

I’m told there will be more to come. What’s going on?

As I’ve written before, the big problem for Labour’s Corbynsceptics is that Corbyn won big among party members in September and his support has, if anything increased since then. Although a lot of ink was wasted over fears of “entryism” which at the outside probably contributed about a percentage point to Corbyn’s 40-point landslide, it is “exitism”  - the exodus of anti-Corbynite members and their replacement with his supporters that is shifting the party towards its left flank.

Added to that is the unhelpfully vague wording of Labour’s constitution. It is clear that Corbyn’s challengers would need to collect 50 signatures from Labour MPs and MEPs to trigger a leadership challenge, a hurdle that the plotters are confident of hopping. It is less clear whether Corbyn himself would have to do so.

But what appears to have happened is that Iain McNicol, the party’s general secretary, has received legal advice that he should not put Corbyn on the ballot paper unless the parliamentary Labour party does so – advice that he is willing to put his job on the line to follow. McNicol believes that the NEC – which has a fragile Corbynite majority on some issues but not on all – will back him up on this matter. (Significantly, at time of writing, none of the three frontbenchers who hold NEC posts, which are in the gift of the shadow cabinet not the party’s leader, have resigned.)

McNicol himself is currently at Glastonbury. Also on his way back from that music festival is Tom Watson, the deputy leader, whose political protégés include Gloria DePiero, who resigned earlier today. Stiffening the resolve of Labour MPs that they can pull this off and survive the rage of the membership is a motion of no confidence in Jeremy Corbyn passed by Wrexham constituency Labour party. The MP there is Ian Lucas, a respected MP from the party’s right, who is now on the backbenches but resigned from Tony Blair’s government in 2006 after Blair refused to set out his departure date.  That coup, of course, was organised by Tom Watson.

Watson is respected by Labour’s general secretaries, who are publicly supportive of Corbyn but many of whom would privately prefer to see the end of him. Crucially, they are even more opposed to John McDonnell, who has been a reliable ally to their leftwing opponents in internal elections.

As for party members, having called around this morning there is certainly some movement away from Corbyn, partly due to the Vice documentary and also due to the referendum campaign. My impression, however, is that the candidate they are looking for – someone who could have much of Corbyn’s politics but with greater political nous and the ability to bring together more of the PLP – doesn’t exist in the parliamentary party. There are some lower-ranked members of the 2010 and 2015 intakes who might fit the bill, but their time is far from ripe. It's also not clear to me how significant that movement away is in percentage terms - Corbyn won by 40 points and was 19 points clear of needing a second round, so his capacity to survive erosion is strong. 

Significantly, within the parliamentary party's three anti-Corbyn tendencies, “the let him fail and strike once” and the "we're stuck with him, keep quiet and do other things" factions are currently recessional and the “strike and strike until he gives up” faction is ascendant, adding to the pressure on the leadership, at least temporarily. The prospect of what may be a winnable election post-Brexit with a different leader - as one MP said to me, "Angela [Eagle] is not that good but she is good enough [should Brexit trigger a recession] - has Corbynsceptics less inclined to write off the next election. 

At the start of the year, I thought that no attempt to replace Corbyn before the election would work. That's still my “central forecast” – but a bet that looked more reliable than a ISA now looks rather shaky.

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.