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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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.