How well does Labour need to do in the local elections?

The party needs to win back most or all of the four councils it lost in 2009 and make significant gains in the Midlands battlegrounds.

After a troubled fortnight for Ed Miliband, today's local elections will determine whether the narrative moves back in his favour. The county councils were last fought in 2009, at the nadir of Gordon Brown's political fortunes, so Labour is certain to make gains but how many it makes and, as importantly, where it makes them will be the key test. 

At a minimum, the party needs to make net gains of around 250-300 and win back most or all of the four councils it lost in 2009: Derbyshire, Lancashire, Nottinghamshire and Staffordshire. A good result would also see it make significant gains in the Midlands battlegrounds of Northamptonshire and Warwickshire and challenge the Tories for control of Cumbria. Labour should also hope to dent the Tories' majority on councils like Kent, Lincolnshire and Norfolk and win the mayoral contests in Doncaster and North Tyneside.

Held in areas long dominated by the Conservatives, the county council elections are an imprecise guide to Labour's national standing. As Tom Watson has pointed out, "80% of the areas facing local elections this year elected a Tory MP – compared to just 11% electing a Labour MP – making their seats nearly doubly overrepresented and Labour seats massively underrepresented."

Labour's vote share last time round was just 13 per cent, so the party should hope to get close to or match the 26 per cent it polled in 2005. The ComRes poll earlier this week put it on 24 per cent, two points ahead of UKIP. Retaining that advantage will be crucial if Miliband is to continue to present Labour as a government-in-waiting. 

As well as the local elections, today also sees the South Shields by-election, triggered by David Miliband's departure to New York. Although there is no question of Labour losing the seat, where it holds a majority of 11,109, the party is engaged in extreme expectation management.

Today's Guardian reports on speculation by Labour figures that UKIP could "possibly" win the seat. It won't. It does, however, appear increasingly likely that UKIP will finish second, perhaps even bettering the result it achieved in Eastleigh (where it polled 28 per cent), its strongest by-election performance to date. Given that the party didn't even put forward a candidate in 2010, that is some measure of its dramatic progress in the last year. 

Ed Miliband waves as he makes his way to do a speech on the high street in Worcester town centre on April 25, 2013. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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What type of Brexit did we vote for? 150,000 Conservative members will decide

As Michael Gove launches his leadership bid, what Leave looks like will be decided by Conservative activists.

Why did 17 million people vote to the leave the European Union, and what did they want? That’s the question that will shape the direction of British politics and economics for the next half-century, perhaps longer.

Vote Leave triumphed in part because they fought a campaign that combined ruthless precision about what the European Union would do – the illusory £350m a week that could be clawed back with a Brexit vote, the imagined 75 million Turks who would rock up to Britain in the days after a Remain vote – with calculated ambiguity about what exit would look like.

Now that ambiguity will be clarified – by just 150,000 people.

 That’s part of why the initial Brexit losses on the stock market have been clawed back – there is still some expectation that we may end up with a more diluted version of a Leave vote than the version offered by Vote Leave. Within the Treasury, the expectation is that the initial “Brexit shock” has been pushed back until the last quarter of the year, when the election of a new Conservative leader will give markets an idea of what to expect.  

Michael Gove, who kicked off his surprise bid today, is running as the “full-fat” version offered by Vote Leave: exit from not just the European Union but from the single market, a cash bounty for Britain’s public services, more investment in science and education. Make Britain great again!

Although my reading of the Conservative parliamentary party is that Gove’s chances of getting to the top two are receding, with Andrea Leadsom the likely beneficiary. She, too, will offer something close to the unadulterated version of exit that Gove is running on. That is the version that is making officials in Whitehall and the Bank of England most nervous, as they expect it means exit on World Trade Organisation terms, followed by lengthy and severe recession.

Elsewhere, both Stephen Crabb and Theresa May, who supported a Remain vote, have kicked off their campaigns with a promise that “Brexit means Brexit” in the words of May, while Crabb has conceded that, in his view, the Leave vote means that Britain will have to take more control of its borders as part of any exit deal. May has made retaining Britain’s single market access a priority, Crabb has not.

On the Labour side, John McDonnell has set out his red lines in a Brexit negotiation, and again remaining in the single market is a red line, alongside access to the European Investment Bank, and the maintenance of “social Europe”. But he, too, has stated that Brexit means the “end of free movement”.

My reading – and indeed the reading within McDonnell’s circle – is that it is the loyalists who are likely to emerge victorious in Labour’s power struggle, although it could yet be under a different leader. (Serious figures in that camp are thinking about whether Clive Lewis might be the solution to the party’s woes.) Even if they don’t, the rebels’ alternate is likely either to be drawn from the party’s Brownite tendency or to have that faction acting as its guarantors, making an end to free movement a near-certainty on the Labour side.

Why does that matter? Well, the emerging consensus on Whitehall is that, provided you were willing to sacrifice the bulk of Britain’s financial services to Frankfurt and Paris, there is a deal to be struck in which Britain remains subject to only three of the four freedoms – free movement of goods, services, capital and people – but retains access to the single market. 

That means that what Brexit actually looks like remains a matter of conjecture, a subject of considerable consternation for British officials. For staff at the Bank of England,  who have to make a judgement call in their August inflation report as to what the impact of an out vote will be. The Office of Budget Responsibility expects that it will be heavily led by the Bank. Britain's short-term economic future will be driven not by elected politicians but by polls of the Conservative membership. A tense few months await. 

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.