PMQs review: Cameron wrongfoots Miliband on the banks

After being surprised by Cameron's commitment to banking reform, the Labour leader struggled to regain his poise.

Even before Ed Miliband got to his feet at today's PMQs, David Cameron had seized the advantage. Noting that Tristram Hunt and David Miliband were among those who would fall foul of Labour's new policy of banning unqualified teachers, he quipped: "another example of brotherly love". 

Things didn't improve much for Miliband after that. He challenged Cameron to say whether the government would use the banking bill to introduce new criminal penalties for bankers (anticipating an equivocal response) but was wrongfooted when Cameron simply replied: "we will be using that bill to take these important steps". After that, the Labour leader's subsequent (and pre-scripted) declaration that "if the government doesn't put down the amendments, we will" fell entirely flat. 

Miliband did have a smart statistic to hand, noting that bonuses had risen by 64 per cent in the last year, principally due to bankers deferring them in order to benefit from the 50p tax cut, but this only offered Cameron an opportunity to launch attack after attack on Labour for being at the wheel when Northern Rock issued 125% mortgages, when Fred Goodwin received his knighthood and when the boom turned to bust.

Bonuses, he pointed out, were 85 per cent lower now than in 2007-08, demanding that Labour finally apologise for its mismanagement. Miliband and Ed Balls have, of course, repeatedly admitted that Labour was wrong to regulate the banks so laxly but one can hardly blame Cameron for seeking to make them do so again.

Miliband declared at one point that he wasn't going to "take lectures from the guy who was the adviser on Black Wednesday" but his history lesson will resonate less with the public than Cameron's. That the Tories were calling for less, not more regulation at the time is, politically speaking, irrelevant. It is governments, not oppositions, that get the blame. 

Today's session was also notable for Cameron's refusal to deny that the government is considering increasing interest rates on student loans taken out in the last 15 years. After Vince Cable and Danny Alexander rejected the story as "false", this offers Labour a chance to go back on the attack.

Asked whether he had ever had any discussions with Lynton Crosby "about plain packaging of cigarettes or the minimum pricing of alcohol", Cameron replied: "I can tell you that Lynton Crosby has never lobbied me on anything", an answer likely to come under considerable scrutiny. But his pay-off was sharp; the only thing the pair discussed, he said, was "how we destroy the credibility of the Labour Party" but Crosby was not doing "as good a job as the party opposite". 

David Cameron and Ed Miliband walk through the Members' Lobby to listen to the Queen's Speech at the State Opening of Parliament on May 8, 2013. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Scottish Labour's defeat to the Tories confirms a political transformation

The defining divide is no longer between left and right but between unionist and nationalist.

It was Scotland where Labour's recovery was supposed to begin. Jeremy Corbyn's allies predicted that his brand of left-wing, anti-austerity politics would dent the SNP's hegemony. After becoming leader, Corbyn pledged that winning north of the border would be one of his greatest priorities. 

But in the first major elections of his leadership, it has proved to be Labour's greatest failure. A result that was long thought unthinkable has come to pass: the Conservatives have finished second (winning 31 seats). For the first time since the 1910 election, Labour has finished third (winning 24). Scottish Labour leader Kezia Dugdale stood on a left-wing platform, outflanking the SNP on tax (pledging to raise the top rate to 50p and increase the basic rate by 1p), promising to spend more on public services and opposing the renewal of Trident. But rather than advancing, the party merely retreated.

Its fate confirms how Scottish politics has been realigned. The defining divide is no longer between left and right but between unionist and nationalist. With the SNP as the only major pro-independence party, the Tories, led by the pugnacious Ruth Davidson, framed themselves as the pro-UK alternative - and prospered. In contrast, Dugdale refused to rule out supporting a second referendum and suggested that MPs and MSPs would be free to campaign for secession. The result was that Scottish Labour was left looking dangerously irrelevant. "Identity politics. Labour doesn't get it," a shadow minister told me. Its socialist pitch counted for little in a country that remains ideologically closer to England than thought. The SNP has lost its majority (denying it a mandate for a second referendum) - an outcome that the electoral system was always designed to make impossible. But its rule remains unthreatened. 

Corbyn's critics will seek to pin the baleful result on him. "We turned left and followed Jeremy's politics in Scotland, which far from solving our problems, pushed us into third," a senior opponent told me. But others will contend that a still more left-wing leader, such as Neil Findlay, is needed. Dugdale is personally supportive of Trident and was critical of Corbyn before his election. Should she be displaced, the party will be forced to elect its sixth leader in less than five years. But no one is so short-sighted as to believe that one person can revive the party's fortunes. Some Corbyn critics believe that a UK-wide recovery is a precondition of recovery north of the border. At this juncture, they say, SNP defectors would look anew at the party as they contemplate the role that Scottish MPs could play in a Westminster government. But under Corbyn, having become the first opposition to lose local election seats since 1985, it is yet further from power. 

In Scotland, the question now haunting Labour is not merely how it recovers - but whether it ever can. 

George Eaton is political editor of the New Statesman.