The real reason the right is baying for Denis MacShane's blood

The former Labour MP has been targeted because he's the EU's greatest defender, not because of his expenses.

What’s really going on with this new police investigation into Denis MacShane’s expenses? Months ago, the police said there would be no charges, and there’s no new information. There’s a reason why they have suddenly reopened it, now of all times, and it’s got nothing at all to do with Denis’s expenses, and everything to do with David Cameron’s speech about Europe.

I’m not excusing MacShane (who, incidentally, is an old chum – but I’d be writing this if I’d never met him.) He had £7,000 of public money which – or some of which - he wasn’t entitled to, and claimed the money in a way which made it look dishonest even if it wasn’t. The money didn’t go into his own pocket. In a desperate attempt to save his career, he has paid back much more than £7,000 and spent another £40,000 on lawyers.

Liberal Democrat MP David Laws was recently restored to the cabinet, having, apparently, suffered enough for incorrectly claiming more than £40,000 – almost six times as much as MacShane’s £7,000. Laws, like MacShane, did not do it for gain. He didn’t need the money, for Laws, unlike MacShane, is a very rich man. He wouldn’t cross the road for £7,000.

So how come Laws sits demurely on the government benches, and MacShane risks sitting in a prison cell? The clue lies in the identities of the people who have been screaming for MacShane’s blood, and whose pressure has forced the police to reopen their investigations.

They are led by right-wing blogger Guido Fawkes, whose delight that he may be able to get the hated MacShane locked up is revolting in its slavering vindictiveness. Hearing the news, Fawkes asked: "Is it too early to open the champagne on a Monday morning?"

He and several right-wing Tories are desperate to see MacShane locked up. Why? The answer lies in a piece by the relatively civilised europhobe Daniel Hannan (who, to his credit, hasn’t joined the lynch mob.) He wrote after MacShane resigned from Parliament: "Who will the BBC find to defend Brussels on air? Seriously – who?" Right now that’s a question that matters rather a lot.

Vengeful right-wing bigots like Guido Fawkes hate him, not because of his expenses, but because he is – or was - easily the most fluent and authoritative advocate for the EU.

Former Europe minister Denis MacShane, who resigned as Labour MP for Rotherham last year. Photograph: Getty Images.
Photo: Getty
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How the Conservatives lost the argument over austerity

After repeatedly missing their deficit targets, the Tories can no longer present spending cuts as essential.

“The age of irresponsibility is giving way to the age of austerity,” declared David Cameron at the Conservatives' 2009 spring conference. Fear of spending cuts helped deny his party a majority a year later, but by 2015 the Tories claimed vindication. By framing austerity as unavoidable, they had trapped Labour in a political no man's land. Though voters did not relish cuts, polling consistently showed that they regarded them as necessary.

But only two years later, it is the Conservatives who appear trapped. An austerity-weary electorate has deprived them of their majority and the argument for fiscal restraint is growing weaker by the day. If cuts are the supposed rule, then the £1bn gifted to the Democratic Unionist Party is the most glaring exception. Michael Fallon, the Defence Secretary, sought to justify this largesse as "investment" into "the infrastructure of Northern Ireland" from "which everybody will benefit" – a classic Keynesian argument. But this did not, he hastened to add, mean the end of austerity: "Austerity is never over until we clear the deficit."

Britain's deficit (which peaked at £153bn in 2009-10) was the original and pre-eminent justification for cuts. Unless borrowing was largely eliminated by 2015, George Osborne warned, Britain's public finances would become unsustainable. But as time has passed, this argument has become progressively weaker. The UK has cumulatively borrowed £200bn more than promised by Osborne, yet apocalypse has been averted. With its low borrowing costs, an independent currency and a lender of last resort (the Bank of England), the UK is able to tolerate consistent deficits (borrowing stood at £46.6bn in 2016-17).

In defiance of all this, Osborne vowed to achieve a budget surplus by 2019-20 (a goal achieved by the UK in just 12 years since 1948). The Tories made the target in the knowledge that promised tax cuts and spending increases would make it almost impossible to attain – but it was a political weapon with which to wound Labour.

Brexit, however, forced the Conservatives to disarm. Mindful of the economic instability to come, Philip Hammond postponed the surplus target to 2025 (15 years after Osborne's original goal). Britain's past and future borrowing levels mean the deficit has lost its political potency.

In these circumstances, it is unsurprising that voters are increasingly inclined to look for full-scale alternatives. Labour has remade itself as an unambiguously anti-austerity party and Britain's public realm is frayed from seven years of cuts: overburdened schools and hospitals, dilapidated infrastructure, potholed roads, uncollected bins.

Through a shift in rhetoric, Theresa May acknowledged voters' weariness with austerity but her policies did not match. Though the pace of cuts was slowed, signature measures such as the public sector pay cap and the freeze in working-age benefits endured. May's cold insistence to an underpaid nurse that there was no "magic money tree" exemplified the Tories' predicament.

In his recent Mansion House speech, Philip Hammond conceded that voters were impatient "after seven years of hard slog” but vowed to "make anew the case" for austerity. But other Tories believe they need to stop fighting a losing battle. The Conservatives' historic strength has been their adaptability. Depending on circumstance, they have been Europhile and Eurosceptic, statist and laissez-faire, isolationist and interventionist. If the Tories are to retain power, yet another metamorphosis may be needed: from austerity to stimulus.

George Eaton is political editor of the New Statesman.

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