Labour’s unity is skin-deep

Members of the shadow cabinet don’t trust their leader to cover their backs, says Dan Hodges.

So much for unity. On 19 March, Ed Miliband experienced the most damaging parliamentary rebellion of his leadership so far, when 43 Labour MPs defied the whip and voted against the Jobseekers Bill, which enables the government to withdraw benefits from those refusing to participate in the Work Programme.

On the surface, it looks like the standard fisticuffs between the hard left and the Labour leadership. Glance at the names of the rebels, however, and it soon becomes clear that these were not your daddy’s usual suspects. Gerry Sutcliffe, John Healey and Nick Brown were just three of those who defied their leader’s order to abstain and voted against the legislation.

Fault lines are widening between Miliband, his shadow cabinet, the Parliamentary Labour Party and his party activists. They have existed since Miliband’s election but his shift to the left, a succession of coalition crises and Labour’s stalled programme of policy development masked them. Not any more. No sooner had the rebels set foot in the division lobbies than what one Labour MP described as “Ed’s teenage outriders” began opening up on members of Miliband’s shadow cabinet.

“Labour will never offer a coherent alternative to the Tories so long as the likes of Liam Byrne wields influence,” the Independent’s Owen Jones wrote. “It is a question and a challenge for Jon Cruddas,” wrote Sunny Hundal on the Liberal Conspiracy website. “Will he take on Liam Byrne’s failed policies of the past or let him continue and take Labour into the ditch . . . again?”

The attacks did not go unnoticed by some of Byrne’s and Cruddas’s colleagues. They are aware that Miliband’s office has been courting Jones and Hundal. The suspicion is forming that whenever Miliband faces a backlash, individual shadow cabinet members will find themselves pressed into service as human shields, protecting their leader from criticism.

Much has been made in recent months about Labour’s “policy vacuum”. Less attention has been focused on its difficulty in holding the line on policies that have already been unveiled. In the wake of the recent debacle, Byrne wrote what was in effect a mea culpa for LabourList. Acknowledging that the party’s “decision not to support the bill in the Commons but to abstain was very, very difficult”, he meekly concluded: “I think we made the right call.” Yet in January, Ed Balls was placing welfare sanctions – which the Work Programme seeks to enshrine – at the very heart of his “tough but fair” jobs guarantee.

A vicious circle is forming. Policy is announced. It generates a backlash. Miliband ducks for cover. His “outriders” start picking targets among the shadow cabinet. The shadow cabinet dives for cover. A vacuum develops.

Meanwhile, suspicion is increasing. Members of the shadow cabinet don’t trust their leader to cover their backs. The leader doesn’t trust them to cover his. Labour MPs see a lack of authority and begin to act in their own interests – interests increasingly defined by activists, who see a leadership prepared to back down whenever they flex their muscles.

Unity may be strength but, in Miliband’s Labour Party, it is only skin-deep.

 

Ed Miliband. Photograph: Getty Images

This article first appeared in the 01 April 2013 issue of the New Statesman, Easter Special Issue

Photo: Getty Images
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There are risks as well as opportunities ahead for George Osborne

The Chancellor is in a tight spot, but expect his political wiles to be on full display, says Spencer Thompson.

The most significant fiscal event of this parliament will take place in late November, when the Chancellor presents the spending review setting out his plans for funding government departments over the next four years. This week, across Whitehall and up and down the country, ministers, lobbyists, advocacy groups and town halls are busily finalising their pitches ahead of Friday’s deadline for submissions to the review

It is difficult to overstate the challenge faced by the Chancellor. Under his current spending forecast and planned protections for the NHS, schools, defence and international aid spending, other areas of government will need to be cut by 16.4 per cent in real terms between 2015/16 and 2019/20. Focusing on services spending outside of protected areas, the cumulative cut will reach 26.5 per cent. Despite this, the Chancellor nonetheless has significant room for manoeuvre.

Firstly, under plans unveiled at the budget, the government intends to expand capital investment significantly in both 2018-19 and 2019-20. Over the last parliament capital spending was cut by around a quarter, but between now and 2019-20 it will grow by almost 20 per cent. How this growth in spending should be distributed across departments and between investment projects should be at the heart of the spending review.

In a paper published on Monday, we highlighted three urgent priorities for any additional capital spending: re-balancing transport investment away from London and the greater South East towards the North of England, a £2bn per year boost in public spending on housebuilding, and £1bn of extra investment per year in energy efficiency improvements for fuel-poor households.

Secondly, despite the tough fiscal environment, the Chancellor has the scope to fund a range of areas of policy in dire need of extra resources. These include social care, where rising costs at a time of falling resources are set to generate a severe funding squeeze for local government, 16-19 education, where many 6th-form and FE colleges are at risk of great financial difficulty, and funding a guaranteed paid job for young people in long-term unemployment. Our paper suggests a range of options for how to put these and other areas of policy on a sustainable funding footing.

There is a political angle to this as well. The Conservatives are keen to be seen as a party representing all working people, as shown by the "blue-collar Conservatism" agenda. In addition, the spending review offers the Conservative party the opportunity to return to ‘Compassionate Conservatism’ as a going concern.  If they are truly serious about being seen in this light, this should be reflected in a social investment agenda pursued through the spending review that promotes employment and secures a future for public services outside the NHS and schools.

This will come at a cost, however. In our paper, we show how the Chancellor could fund our package of proposed policies without increasing the pain on other areas of government, while remaining consistent with the government’s fiscal rules that require him to reach a surplus on overall government borrowing by 2019-20. We do not agree that the Government needs to reach a surplus in that year. But given this target wont be scrapped ahead of the spending review, we suggest that he should target a slightly lower surplus in 2019/20 of £7bn, with the deficit the year before being £2bn higher. In addition, we propose several revenue-raising measures in line with recent government tax policy that together would unlock an additional £5bn of resource for government departments.

Make no mistake, this will be a tough settlement for government departments and for public services. But the Chancellor does have a range of options open as he plans the upcoming spending review. Expect his reputation as a highly political Chancellor to be on full display.

Spencer Thompson is economic analyst at IPPR