Labour clears Unite of any wrongdoing in Falkirk selection contest

The party says "no organisation or individual has been found to have breached the rules" and reinstates suspended members Karie Murphy and Stephen Deans.

In time-honoured Westminster tradition, Labour has used Friday afternoon to bury bad news. 

Following its internal inquiry into the Falkirk selection row, the party has issued a statement clearing both Unite and the suspended party members Karie Murphy (who stood for selection) and Stephen Deans of any wrongdoing. It said that "no organisation or individual has been found to have breached the rules as they stood at the time". Here's the full statement. 

The Labour Party began an internal process to examine the controversy surrounding the selection of a parliamentary candidate for Falkirk. At each step Labour’s general secretary and NEC have acted quickly to protect the interest of the party.

Since Labour began its internal process key evidence has been withdrawn and further evidence provided by individuals concerned. Karie Murphy and Steve Deans, who were suspended, will now be reinstated as they have not been guilty of any wrongdoing. No organisation or individual has been found to have breached the rules as they stood at the time.

The general secretary has determined that given these circumstances Labour should move to select its candidate for Falkirk West.

These steps will enable Labour in Falkirk without further delay to choose a candidate and prepare for the general election.

Murphy has released a simultaneous statement announcing her withdrawal from the selection.

It is no concidence that the matter has been resolved two days before the start of the TUC conference and a few weeks before Labour's gathering in Brighton. Earlier this week, Unite's Scottish branch warned that it would boycott the Labour conference unless Murphy and Deans were reinstated.

The question that will now be asked is why the row was allowed to escalate to the point that the police were called in if there was no evidence of wrongdoing. There will also be even greater pressure on the party to finally publish its report on the debacle. But most significantly, it will now be far harder for Miliband to defend his trade union reforms, which were entirely framed as a response to the alleged wrongdoing.

Unite general secretary Len McCluskey. 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.