Labour fires back at Blair over New Statesman piece

The party says it is right to challenge "old ways of doing things" after Blair warns against a shift to the left.

Labour has just issued a response to Tony Blair's sharply critical piece in the centenary issue of the New Statesman (180 pages, out today). A party spokesman said: 

It is always important to listen to Tony Blair because he has important points to make, including in this article where he emphasises our top priority must be growth and jobs.

As he was the first to recognise, politics always has to move on to cope with new challenges and different circumstances.

For example, on immigration, Labour is learning lessons about the mistakes in office and crafting an immigration policy that will make Britain's diversity work for all not just a few.

It is by challenging old ways of doing things, showing we have understood what we did right and wrong during our time in office that One Nation Labour will win back people's trust.

In other words, Ed Miliband's position remains as before: Blair's "third way" does not represent an appropriate response to Britain's current economic and social problems. 

It is notable that rather than rejecting his warning not to "tack left on tax and spending", the party chose to highlight the example of immigration (he urged the party not to "tack right on immigration"). Blair is known to disagree with Miliband's recent decision to apologise for not imposing transitional controls on migration from eastern Europe, which he regarded as essential to fill gaps in the labour market at a time of growth. For Miliband, this is a useful example of how he is moving on not just from New Labour's excessive economic liberalism but also what an increasing number in the party view as its excessive social liberalism. 

Ed Miliband speaks at the CBI's annual conference on November 19, 2012 in London. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Why relations between Theresa May and Philip Hammond became tense so quickly

The political imperative of controlling immigration is clashing with the economic imperative of maintaining growth. 

There is no relationship in government more important than that between the prime minister and the chancellor. When Theresa May entered No.10, she chose Philip Hammond, a dependable technocrat and long-standing ally who she had known since Oxford University. 

But relations between the pair have proved far tenser than anticipated. On Wednesday, Hammond suggested that students could be excluded from the net migration target. "We are having conversations within government about the most appropriate way to record and address net migration," he told the Treasury select committee. The Chancellor, in common with many others, has long regarded the inclusion of students as an obstacle to growth. 

The following day Hammond was publicly rebuked by No.10. "Our position on who is included in the figures has not changed, and we are categorically not reviewing whether or not students are included," a spokesman said (as I reported in advance, May believes that the public would see this move as "a fix"). 

This is not the only clash in May's first 100 days. Hammond was aggrieved by the Prime Minister's criticisms of loose monetary policy (which forced No.10 to state that it "respects the independence of the Bank of England") and is resisting tougher controls on foreign takeovers. The Chancellor has also struck a more sceptical tone on the UK's economic prospects. "It is clear to me that the British people did not vote on June 23 to become poorer," he declared in his conference speech, a signal that national prosperity must come before control of immigration. 

May and Hammond's relationship was never going to match the remarkable bond between David Cameron and George Osborne. But should relations worsen it risks becoming closer to that beween Gordon Brown and Alistair Darling. Like Hammond, Darling entered the Treasury as a calm technocrat and an ally of the PM. But the extraordinary circumstances of the financial crisis transformed him into a far more assertive figure.

In times of turmoil, there is an inevitable clash between political and economic priorities. As prime minister, Brown resisted talk of cuts for fear of the electoral consequences. But as chancellor, Darling was more concerned with the bottom line (backing a rise in VAT). By analogy, May is focused on the political imperative of controlling immigration, while Hammond is focused on the economic imperative of maintaining growth. If their relationship is to endure far tougher times they will soon need to find a middle way. 

George Eaton is political editor of the New Statesman.