Leader: Ed Miliband has shown leadership and courage

With a mixture of high-minded principle and political cunning, he has reimagined the Labour-unions link for a less collectivist age.

The art of political leadership lies in turning crisis into advantage and misfortune into gain. In his deft response to the Labour parliamentary selection scandal in Falkirk, Ed Miliband succeeded in doing both. It was not a fight he chose. Ever since his election in 2010, the Labour leader had resisted defining himself against his own party, shunning tiresome demands for a “Clause Four moment” and prizing unity above all else. But confronted by the imperial ambitions of Unite’s general secretary, Len McCluskey, and the insistent question “Who runs Labour?”, he has taken a path more radical than any of his recent predecessors.

His plan to require trade union members to opt in to donating to the party, rather than being automatically enrolled by general secretaries, would be the most significant change to the Labour-unions relationship since the party’s formation in 1900. If Mr Miliband’s support for democracy and transparency is to be consistent, it is also an entirely necessary one.

At present, of the 15 unions affiliated to Labour, only Unison allows new members to choose whether or not they contribute to the party when they sign up. Just two others, the Musicians’ Union and Usdaw, mention the existence of a political fund (but do not mention Labour) and six affiliated unions, including Unite and the GMB, do not mention Labour at all in the membership sections of their websites. As a result, even though all members have the formal right to opt out of paying the levy, just 10 per cent do so in practice, and many are not even aware of the fund’s existence. It is this arrangement that allows the Conservatives to argue, with some justification, that unions such as Unite (just 37.5 per cent of whose members vote Labour) dupe workers into subsidising the Labour Party.

By turning his back on such machine politics and declaring that no individual will donate to the party “unless they have deliberately chosen to do so”, Mr Miliband has confronted this charge head-on. No longer will Labour and the unions’ relationship be defined by backroom meetings between the leader and his or her representatives and the general secretaries. Instead, Mr Miliband will reach out to the three million workers who now pay the political levy and seek to rebuild Labour as a mass-membership party. At a time of corrosive cynicism with politics, his vision of a party “truly rooted in every community and every walk of life”, a party of “shopworkers, nurses, engineers, bus drivers, construction workers, people from the public and private sector”, is an inspiring one.

Comparisons with Tony Blair’s decision to rewrite Clause Four understate the boldness of the move. Mr Blair’s revision of that hallowed section of Labour’s constitution, which committed the party to “col - lective ownership of the means of production, distribution and exchange”, was of largely symbolic significance. The party had long abandoned its support for wholesale nationalisation. By contrast, the reforms announced by Mr Miliband on 9 July will have profound consequences for Labour. Party officials privately estimate that the introduction of an opt-in system would result in the loss of at least £5m of the £8m it currently receives each year in union affiliation fees. For a party with existing debts of £9.9m – more than every other party put together – the act is almost masochistic.

Worse, should relatively few trade unionists choose to join the party, it will be hard for the unions to justify remaining affiliated at all. The events set in motion by Mr Miliband could lead to the severing of all ties between Labour and its founders. It is the immensity of this gamble that prompted the rare praise for Mr Miliband from Mr Blair, who declared: “This is big stuff and it takes a real act of leadership to do it.”

If the risks are great, then so, too, are the potential rewards. Having abandoned his previous opposition to the introduction of an opt-in system, at potentially great cost to his party, he has earned the right to challenge the Conservatives and the Liberal Democrats to reopen the stalled talks on party funding. Should the Tories continue to resist his proposal of a cap of £5,000 on all donations, he will be able to present them as a party too much in hock to vested interests to reform a system that verges on corruption. The Conservatives will insist that Mr Miliband’s position contradicts past statements and that he has acted under duress. That still leaves unanswered the question of how they will respond now.

The Labour leader showed similar astuteness in calling for a limit on MPs’ outside earnings, as we did in a leader last week. He was right to recognise the public disdain for those whose second jobs often pay “higher salaries than the job of an MP itself”. As we argued, restrictions on outside earnings would also make it easier to justify any future increase in MPs’ pay. The Conservatives’ decision to respond by describing Mr Miliband’s proposal as a “smokescreen” represented a profound misreading of the public mood. As in the case of big-money donations, David Cameron has exposed himself to the charge he is defending the interests of his own side. In the 2012-2013 parliamentary session, Tory MPs declared more than £4.3m in earnings from outside directorships or jobs, compared to £2.4m by their Labour counterparts, £1.37m of which was accounted for by Gordon Brown, who did not personally benefit from any of the money.

Mr Miliband’s promise to introduce a new code of conduct for those seeking parliamentary selection, a cap on spending by candidates and organisations operating on their behalf (including trade unions) and standard constituency agreements with the unions so that no one can be subjected to undue local pressure was the minimum required to restore trust in the selection process after the Falkirk debacle.

Far bolder was his announcement that primaries will be held to select Labour’s 2016 London mayoral candidate and to choose parliamentary candidates in seats where the local party has few members or, in effect, is moribund. While seeking to recruit as many members as possible to Labour, he is also right to recognise the need to engage with those who will never be persuaded to join by allowing them to register as supporters and vote in selection contests.

Faced with his biggest crisis as leader, Mr Miliband demonstrated the ambition and idealism that were the most attractive features of his campaign in 2010. With a mixture of high-minded principle and political cunning, he has reimagined the Labour-unions link for a less collectivist age.

This past week, Mr Cameron derided him as “too weak to run Labour and certainly too weak to run the country”. The reverse may now apply. If Mr Miliband can sustain the moral courage and the stamina that will be required in order to transform his party into something that looks more like a mass movement for economic and social change, he will have proved his credentials to serve as the nation’s prime minister.

Ed Miliband delivers his speech on the Labour-trade union link at The St Bridge Foundation in London yesterday. Photograph: Getty Images.

This article first appeared in the 15 July 2013 issue of the New Statesman, The New Machiavelli

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John McDonnell interview: "We’re going to destroy Osborne’s credibility"

The shadow chancellor on the Spending Review, Jeremy Corbyn's leadership and why trade unions will have to break the law. 

When I interviewed John McDonnell in March, before the general election, he predicted that Labour would be the largest party and confessed to a “sneaking feeling that we could win a small majority – because I think the Tory vote is really soft”. As the long-standing chair of the Socialist Campaign Group, McDonnell anticipated leading the resistance inside Labour to any spending cuts made by Ed Miliband. Eight months later, he is indeed campaigning against austerity – but as shadow chancellor against a Conservative majority government.

I meet McDonnell in his new Westminster office in Norman Shaw South, a short walk down the corridor from that of his close friend and greatest ally, Jeremy Corbyn. The day before George Osborne delivers his Spending Review and Autumn Statement, his desk is cluttered with economic papers in preparation for his response.

“The message we’re trying to get across is that this concept of the Tories’ having a ‘long-term economic plan’ is an absolute myth and they’re in chaos, really in chaos on many fronts,” he tells me. McDonnell points to the revolt against cuts to tax credits and policing, and the social care crisis, as evidence that Osborne’s programme is unravelling. On health, he says: “He’s trying to dig out money as best as he can for the NHS, he’s announced the frontloading of some of it, but that simply covers the deficits that there are. Behind that, he’s looking for £22bn of savings, so this winter the NHS is going to be in crisis again.”

Asked what Labour’s equivalent is to the Tories’ undeniably effective “long-term economic plan” message, he said: “I don’t think we’re going to get into one-liners in that way. We’ll be more sophisticated in the way that we communicate. We’re going to have an intelligent and a mature economic debate. If I hear again that they’re going to ‘fix the roof while the sun shines’ I will throw up. It’s nauseating, isn’t it? It reduces debate, intellectual debate, economic debate, to the lowest level of a slogan. That’s why we’re in the mess we are.”

Having abandoned his original support for the Chancellor’s fiscal charter, which mandated a budget surplus by 2020, McDonnell makes an unashamed case for borrowing to invest. “The biggest failure of the last five years under Osborne is the failure to invest,” he says. “Borrowing at the moment is at its cheapest level, but in addition to that I’m not even sure we’ll need to borrow great amounts, because we can get more efficient spending in terms of government spending. If we can address the tax cuts that have gone ahead, particularly around corporation tax, that will give us the resources to actually start paying again in terms of investment.”

He promises a “line-by-line budget review” when I ask whether there are any areas in which he believes spending should be reduced. “My background is hard-nosed bureaucrat . . . we’ll be looking at where we can shift expenditure into more productive areas.”

From 1982 until 1985, John McDonnell, who is 64, was chair of finance at the Greater London Council under Ken Livingstone. After vowing to defy the Thatcher government’s rate-capping policy he was sacked by Livingstone, who accused him of manipulating figures for political purposes. “We’re going to look like the biggest fucking liars since Goebbels,” the future mayor of London told him. McDonnell, who later described Livingstone’s account as “complete fiction”, has since resolved his differences with the man now co-chairing Labour’s defence review.

After his election as the MP for Hayes and Harlington in 1997, McDonnell achieved renown as one of New Labour’s most vociferous opponents, rebelling with a frequency rivalled only by Corbyn. His appointment as shadow chancellor was the most divisive of the Labour leader’s reshuffle. “People like Jeremy even if they don’t agree with him. People don’t like John,” one MP told me at the time. Mindful of this, McDonnell has sought to transform his image. He has apologised for his past praise of the IRA and for joking about assassinating Margaret Thatcher, rebranding himself as a “boring bank manager”. But there are moments when his more radical side surfaces.

He told me that he supports workers breaking the law if the trade union bill, which would limit the right to strike, is passed. “It’s inevitable, I think it’s inevitable. If the bill is introduced in its existing form and is used against any particular trade unionist or trade union, I think it’s inevitable that people will resist. We established our rights by campaigning against unjust laws and taking the risk if necessary. I think that’s inevitable and I’ll support them.”

“Chaos” might be how McDonnell describes Osborne’s position but the same term is now daily applied to Labour. The party is riven over air strikes in Syria and the renewal of Trident and MPs are ever more scornful of Corbyn’s leadership.

While Corbyn has so far refused to offer Labour MPs a free vote on Syria, McDonnell says that he favours one and would oppose military action. “My position on wars has always been that it’s a moral issue and therefore I veer towards free votes . . . We’re waiting for Cameron’s statement; we’ll analyse that, there’ll be a discussion in shadow cabinet and in the PLP [Parliamentary Labour Party] and then we’ll make a decision. I’m still in a situation where I’ve expressed the view that I’m opposed to the bombing campaign or engagement. I think the history of the UK involvement in the Middle East has been a disaster, to say the least . . .This isn’t like the Second World War where you have a military campaign – you defeat the enemy, you sign a peace agreement and that’s it – this is asymmetric warfare. In addition to the risks that are in the battlefield there’s a risk in every community in our land as a result of it.”

Would he want any of the 14 former shadow cabinet members who refused to serve under Corbyn to return? “All of them, we’re trying to get them all back. We’ve got Yvette [Cooper] helping us on a review we’re doing about the economy and women . . . It’s an open door policy, I’m trying to meet them all over these next few weeks.”

Livingstone, a member of Labour’s National Executive Committee, recently called for Simon Danczuk, who revealed details of a private meeting with Corbyn in the Mail on Sunday, and Frank Field, who told me that MPs should run as independents if deselected, to be disciplined. But McDonnell takes a more conciliatory line. “With Simon [Danczuk] in particular and the others, it’s just a matter of saying look at the long-term interests of the party. People don’t vote for a divided party. They’ll accept, though, that within a party you can have democratic debate. As I said time and time again, don’t mistake democracy for division. It’s the way in which you express those different views that are important. All I’m saying is let people express their views, let’s have democratic engagement but please don’t personalise this. I think there’s a reaction within the community, not just the party, against personalised politics. It’s not Jeremy’s style, he never responds in that way. It’s unfortunate but we’ll get through it. It’s just minor elements of it, that’s all.”

McDonnell disavows moves by some in Momentum, the Corbyn-aligned group, to deselect critical MPs. “What we’re not into is deselecting people, what we want to try and do is make sure that everyone’s involved in a democratic engagement process, simple as that.

“So I’ve said time and time again, this isn’t about deselection or whatever. But at the same what we’re trying to say to everybody is even if you disagree, treat each other with respect. At the height of the debates around tuition fees and the Iraq war, even though we had heated disagreements we always treated each other with mutual respect and I think we’ve got to adhere to that. Anyone who’s not doing that just lets themselves down, that’s not the culture of the Labour Party.”

In private, the 90 per cent of MPs who did not support Corbyn’s leadership bid speak often of how and when he could be removed. One point of debate is whether, under the current rules, the Labour leader would automatically make the ballot if challenged or be forced to re-seek nominations. McDonnell is emphatic that the former is the case: “Oh yeah, that’s the rule, yeah.”

McDonnell’s recent media performances have been praised by MPs, and he is spoken of by some on the left as a possible replacement if Corbyn is removed or stands down before 2020. His speech to the PLP on 23 November was described to me by one shadow minister as a “leadership bid”. But McDonnell rules out standing in any future contest. “No, no, I’ve tried twice [in 2007 and 2010], I’m not going to try again, there’s no way I would.”

Despite opinion polls showing Labour as much as 15 points behind the Conservatives, McDonnell insists that the party can win in 2020. “Oh definitely, yeah, you’ll see that. I think this next year’s going to be pivotal for us. We’re going to destroy Osborne’s credibility over the next six months. But more importantly than that, we can’t just be a negative party . . . we’re going to present a positive view of what Labour’s future will be and the future of the economy.

“Over the next 18 months, we’ll be in a situation where we’ve destroyed the Tories’ economic reputation and we’ve built up our own but we’ll do it in a visionary way that presents people with a real alternative.”  

George Eaton is political editor of the New Statesman.