Mandelson takes a swipe back at McCluskey

Labour peer says the Unite head is "the man who reminds us of where we came from and what we left behind" after McCluskey's attack on him in the NS.

In my interview with him for the NS, Len McCluskey reserved some of his fiercest barbs for Peter Mandelson. With particular reference to the Labour peer, the Unite general secretary said of the Blairite grandees who have warned Ed Miliband not to "tack left":

It may be easy for these people, who are sitting with the huge sums of money that they’ve amassed now - they’ve done pretty well out of it, remember it was Mandelson who said he was comfortable about the filthy rich, presumably that’s because he wanted to be one of the filthy rich. But the fact is that under Labour the gap between rich and poor increased...that’s a stain on what Labour stands for.

Unsurprisingly, Mandelson felt the urge to respond. A Labour source informs me that the former Business Secretary declared at last night's Friends of Labour Students dinner that McCluskey was "the man who reminds us of where we came from and what we left behind". 

But Mandelson's riposte is mild compared to that issued by Miliband, who accused McCluskey of a "reprehensible" and "disloyal" attempt to divide the party. 

McCluskey, whose union helped secure the Labour leadership for Miliband in 2010, told me that Miliband would be "defeated" and "cast into the dustbin of history" if he was "seduced" by "the Jim Murphys and the Douglas Alexanders". Of Liam Byrne, the shadow and work pensions secretary, he said: "Liam Byrne certainly doesn’t reflect the views of my members and of our union’s policy, I think some of the terminology that he uses is regrettable and I think it will damage Labour. Ed’s got to figure out what his team will be."

The irony of Miliband's denunciation of McCluskey is that the Unite head has rarely been more well disposed to the Labour leader. McCluskey told me that he thought Miliband was doing "a very good job of holding the party together" and that while there were "disgreements" between the pair, he was happy with the course he had taken since 2010. 

But it is precisely for this reason that Miliband felt it necessary to rebuke the Unite head so swiftly and explicitly. He couldn't allow the impression to form that he was willing to tolerate McCluskey's attack on the "Blairite" shadow cabinet ministers and the suggestion that they should either be ignored or sacked. As I noted in the piece, those associated with Blair are troubled by what they regard as Unite's excessive influence over European and parliamentary candidate selections. Rather than rejecting claims that the union had "stitched up" selections, McCluskey suggested to me that he was simply beating the Blairites at their own game. 

The truth is that this is a process that was set up by Tony Blair, and the right-wing and organisations like Progress have had it their own way for years and years and have seen nothing wrong it.
 
Because we're having some success, suddenly these people are crying foul. Well I’m delighted to read it. I’m delighted when Tony Blair and everyone else intervenes because it demonstrates that we are having an impact and an influence and we’ll continue to do so.
After David Miliband's departure for New York, the Blairites are increasingly anxious about their standing in the party. Miliband's intervention was an important signal that there are lines he will not allow McCluskey to cross. 
Former Labour business secretary Peter Mandelson speaks during an interview at the foreign correspondents club in Hong Kong. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty
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Scotland's vast deficit remains an obstacle to independence

Though the country's financial position has improved, independence would still risk severe austerity. 

For the SNP, the annual Scottish public spending figures bring good and bad news. The good news, such as it is, is that Scotland's deficit fell by £1.3bn in 2016/17. The bad news is that it remains £13.3bn or 8.3 per cent of GDP – three times the UK figure of 2.4 per cent (£46.2bn) and vastly higher than the white paper's worst case scenario of £5.5bn. 

These figures, it's important to note, include Scotland's geographic share of North Sea oil and gas revenue. The "oil bonus" that the SNP once boasted of has withered since the collapse in commodity prices. Though revenue rose from £56m the previous year to £208m, this remains a fraction of the £8bn recorded in 2011/12. Total public sector revenue was £312 per person below the UK average, while expenditure was £1,437 higher. Though the SNP is playing down the figures as "a snapshot", the white paper unambiguously stated: "GERS [Government Expenditure and Revenue Scotland] is the authoritative publication on Scotland’s public finances". 

As before, Nicola Sturgeon has warned of the threat posed by Brexit to the Scottish economy. But the country's black hole means the risks of independence remain immense. As a new state, Scotland would be forced to pay a premium on its debt, resulting in an even greater fiscal gap. Were it to use the pound without permission, with no independent central bank and no lender of last resort, borrowing costs would rise still further. To offset a Greek-style crisis, Scotland would be forced to impose dramatic austerity. 

Sturgeon is undoubtedly right to warn of the risks of Brexit (particularly of the "hard" variety). But for a large number of Scots, this is merely cause to avoid the added turmoil of independence. Though eventual EU membership would benefit Scotland, its UK trade is worth four times as much as that with Europe. 

Of course, for a true nationalist, economics is irrelevant. Independence is a good in itself and sovereignty always trumps prosperity (a point on which Scottish nationalists align with English Brexiteers). But if Scotland is to ever depart the UK, the SNP will need to win over pragmatists, too. In that quest, Scotland's deficit remains a vast obstacle. 

George Eaton is political editor of the New Statesman.