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.

Getty
Show Hide image

Lord Sainsbury pulls funding from Progress and other political causes

The longstanding Labour donor will no longer fund party political causes. 

Centrist Labour MPs face a funding gap for their ideas after the longstanding Labour donor Lord Sainsbury announced he will stop financing party political causes.

Sainsbury, who served as a New Labour minister and also donated to the Liberal Democrats, is instead concentrating on charitable causes. 

Lord Sainsbury funded the centrist organisation Progress, dubbed the “original Blairite pressure group”, which was founded in mid Nineties and provided the intellectual underpinnings of New Labour.

The former supermarket boss is understood to still fund Policy Network, an international thinktank headed by New Labour veteran Peter Mandelson.

He has also funded the Remain campaign group Britain Stronger in Europe. The latter reinvented itself as Open Britain after the Leave vote, and has campaigned for a softer Brexit. Its supporters include former Lib Dem leader Nick Clegg and Labour's Chuka Umunna, and it now relies on grassroots funding.

Sainsbury said he wished to “hand the baton on to a new generation of donors” who supported progressive politics. 

Progress director Richard Angell said: “Progress is extremely grateful to Lord Sainsbury for the funding he has provided for over two decades. We always knew it would not last forever.”

The organisation has raised a third of its funding target from other donors, but is now appealing for financial support from Labour supporters. Its aims include “stopping a hard-left take over” of the Labour party and “renewing the ideas of the centre-left”. 

Julia Rampen is the digital news editor of the New Statesman (previously editor of The Staggers, The New Statesman's online rolling politics blog). She has also been deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines. 

0800 7318496