The lesson from history that is shaping Osborne's response to Miliband's price freeze

Labour won no credit when it tried to mimic Osborne's inheritance tax cut in 2007. The Chancellor is determined not to fall into the same trap with Miliband's gambit.

There was an audible sound of heads being scratched across Westminster last night as MPs and aides in all parties tried to work out what Sir John Major was up to. The former Prime Minister took the opportunity of a lunch with journalists to make what politicians like to call an "intervention" – lobbing a feral cat into a room full of particularly excitable pigeons.

There isn’t even agreement on what the better story from Major’s comments was. Tories who are obsessed with the European Union thought it was his revisiting old grudges from the Maastricht rebellions. Everyone else thought it was his suggestion of a windfall tax on energy companies. That was a recognition of the extent to which onerous gas and electricity bills – among other living costs – threaten to deprive the Tories of an economic feel-good factor even in a growing economy.

In recent years, Sir John has rationed his public pronouncements very carefully. When he has appeared on the Today programme it is usually to lend his elder statesman heft to David Cameron when the Prime Minister is under pressure (usually from somewhere in his own party). So naturally, the first response of many yesterday was to ask if this was supposed to be a spot of helpful out-riding – creating a safe political space for No.10 to move into the energy company-bashing business in pursuit of Ed Miliband. The Labour leader’s pledge to freeze bills has discombobulated Tory strategists who want to be on the side of profitable enterprise against lefty ideologues and have ended up siding with loathed corporations against consumers.

Labour MPs and aides were even texting their Tory friends and contacts to ask if that was their interpretation. It wasn’t and Downing Street fairly quickly hosed down any suggestion that it was planning something along the lines that Major proposed. The Treasury is especially disinclined to go down that route. Why?

I do not know what goes on inside George Osborne’s head but someone with a better claim than me to understand his thinking explained it roughly as follows. To best understand why the Chancellor will not want to cook up some policy wheeze to thwart Miliband’s energy offensive requires a brief trip back to autumn 2007.

A defining moment in Osborne’s career was the decision at the Conservative conference that year to call for a cut in inheritance tax. It was, famously, a popular move that disoriented Labour and led, in part, to Gordon Brown’s decision to abandon plans for a snap election. The then Prime Minister’s reputation never recovered from that humiliation. It was, in terms of Osborne’s status in his own party, a famous victory. So what does that have to do with the price of energy?

Well, what is often forgotten in the narration of that episode is that, in addition to freaking out about their election plans, Labour responded with their own half-baked inheritance tax plan. People who were close to the decision at the time insist it was something they had meant to do all along (well they would, wouldn’t they). No matter. The effect was to make the Treasury look more rattled and ineffective than it already did. Labour were never going to get any credit for a reactive inheritance tax move because the simple fact of trying only reinforced the impression that the opposition was setting the agenda and that the government had run out of ideas.

Naturally, Osborne has scrutinised this gambit from every angle. He has played it as a winner and war-gamed it from the perspective of the loser. What he will have concluded is that the Conservatives should not allow themselves to be bounced into any "big energy move". That doesn’t mean that they shouldn’t think of ways to address the fact that people think their bills are too high or that the Tories are on the side of corporate fat cats or that cost-of-living issues will play an important role in the next election. It simply means that they would be ill-advised to aim for one noisy, headline-grabbing initiative to counter Labour’s noisy headline-grabbing initiative. The very last think Osborne wants is to do is come across as a Miliband tribute act. That would be the effect of adopting Major’s windfall tax idea, even if the details of the policy – and the practicalities of implementation – are very different.

The Chancellor’s preferred response is to underline that a return to growth will be the single biggest factor alleviating the squeeze on household finances. He wants to cast the Tories as the party of grown-up economic management as contrasted with Labour’s reliance on desperate and unworkable gimmicks. He knows the Tories cannot afford to be seen as callous when people are suffering from rising living costs. Some response is required. But he also knows that any response needs to be seen to be originally Tory in inception and distinct enough from Miliband’s effort to avoid the charge of panic.

The pressure on Osborne to do something about energy prices might grow so intense that he relents and comes up with some showy response for his Autumn Statement on 4December. But for the time being his instincts and his study of recent history tell him that would be a mistake.

George Osborne at the Conservative conferene in Manchester last month. Photograph: Getty Images.

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

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David Osland: “Corbyn is actually Labour’s only chance”

The veteran Labour activist on the release of his new pamphlet, How to Select or Reselect Your MP, which lays out the current Labour party rules for reselecting an MP.

Veteran left-wing Labour activist David Osland, a member of the national committee of the Labour Representation Committee and a former news editor of left magazine Tribune, has written a pamphlet intended for Labour members, explaining how the process of selecting Labour MPs works.

Published by Spokesman Books next week (advance copies are available at Nottingham’s Five Leaves bookshop), the short guide, entitled “How to Select or Reselect Your MP”, is entertaining and well-written, and its introduction, which goes into reasoning for selecting a new MP and some strategy, as well as its historical appendix, make it interesting reading even for those who are not members of the Labour party. Although I am a constituency Labour party secretary (writing here in an expressly personal capacity), I am still learning the Party’s complex rulebook; I passed this new guide to a local rules-boffin member, who is an avowed Owen Smith supporter, to evaluate whether its description of procedures is accurate. “It’s actually quite a useful pamphlet,” he said, although he had a few minor quibbles.

Osland, who calls himself a “strong, but not uncritical” Corbyn supporter, carefully admonishes readers not to embark on a campaign of mass deselections, but to get involved and active in their local branches, and to think carefully about Labour’s election fortunes; safe seats might be better candidates for a reselection campaign than Labour marginals. After a weak performance by Owen Smith in last night’s Glasgow debate and a call for Jeremy Corbyn to toughen up against opponents by ex Norwich MP Ian Gibson, an old ally, this pamphlet – named after a 1981 work by ex-Tribune editor Chris Mullin, who would later go on to be a junior minister under Blai – seems incredibly timely.

I spoke to Osland on the telephone yesterday.

Why did you decide to put this pamphlet together now?

I think it’s certainly an idea that’s circulating in the Labour left, after the experience with Corbyn as leader, and the reaction of the right. It’s a debate that people have hinted at; people like Rhea Wolfson have said that we need to be having a conversation about it, and I’d like to kickstart that conversation here.

For me personally it’s been a lifelong fascination – I was politically formed in the early Eighties, when mandatory reselection was Bennite orthodoxy and I’ve never personally altered my belief in that. I accept that the situation has changed, so what the Labour left is calling for at the moment, so I see this as a sensible contribution to the debate.

I wonder why selection and reselection are such an important focus? One could ask, isn’t it better to meet with sitting MPs and see if one can persuade them?

I’m not calling for the “deselect this person, deselect that person” rhetoric that you sometimes see on Twitter; you shouldn’t deselect an MP purely because they disagree with Corbyn, in a fair-minded way, but it’s fair to ask what are guys who are found to be be beating their wives or crossing picket lines doing sitting as our MPs? Where Labour MPs publicly have threatened to leave the party, as some have been doing, perhaps they don’t value their Labour involvement.

So to you it’s very much not a broad tool, but a tool to be used a specific way, such as when an MP has engaged in misconduct?

I think you do have to take it case by case. It would be silly to deselect the lot, as some people argue.

In terms of bringing the party to the left, or reforming party democracy, what role do you think reselection plays?

It’s a basic matter of accountability, isn’t it? People are standing as Labour candidates – they should have the confidence and backing of their constituency parties.

Do you think what it means to be a Labour member has changed since Corbyn?

Of course the Labour party has changed in the past year, as anyone who was around in the Blair, Brown, Miliband era will tell you. It’s a completely transformed party.

Will there be a strong reaction to the release of this pamphlet from Corbyn’s opponents?

Because the main aim is to set out the rules as they stand, I don’t see how there can be – if you want to use the rules, this is how to go about it. I explicitly spelled out that it’s a level playing field – if your Corbyn supporting MP doesn’t meet the expectations of the constituency party, then she or he is just as subject to a challenge.

What do you think of the new spate of suspensions and exclusions of some people who have just joined the party, and of other people, including Ronnie Draper, the General Secretary of the Bakers’ Union, who have been around for many years?

It’s clear that the Labour party machinery is playing hardball in this election, right from the start, with the freeze date and in the way they set up the registered supporters scheme, with the £25 buy in – they’re doing everything they can to influence this election unfairly. Whether they will succeed is an open question – they will if they can get away with it.

I’ve been seeing comments on social media from people who seem quite disheartened on the Corbyn side, who feel that there’s a chance that Smith might win through a war of attrition.

Looks like a Corbyn win to me, but the gerrymandering is so extensive that a Smith win isn’t ruled out.

You’ve been in the party for quite a few years, do you think there are echoes of past events, like the push for Bennite candidates and the takeover from Foot by Kinnock?

I was around last time – it was dirty and nasty at times. Despite the narrative being put out by the Labour right that it was all about Militant bully boys and intimidation by the left, my experience as a young Bennite in Tower Hamlets Labour Party, a very old traditional right wing Labour party, the intimidation was going the other way. It was an ugly time – physical threats, people shaping up to each other at meetings. It was nasty. Its nasty in a different way now, in a social media way. Can you compare the two? Some foul things happened in that time – perhaps worse in terms of physical intimidation – but you didn’t have the social media.

There are people who say the Labour Party is poised for a split – here in Plymouth (where we don’t have a Labour MP), I’m seeing comments from both sides that emphasise that after this leadership election we need to unite to fight the Tories. What do you think will happen?

I really hope a split can be avoided, but we’re a long way down the road towards a split. The sheer extent of the bad blood – the fact that the right have been openly talking about it – a number of newspaper articles about them lining up backing from wealthy donors, operating separately as a parliamentary group, then they pretend that butter wouldn’t melt in their mouths, and that they’re not talking about a split. Of course they are. Can we stop the kamikazes from doing what they’re plotting to do? I don’t know, I hope so.

How would we stop them?

We can’t, can we? If they have the financial backing, if they lose this leadership contest, there’s no doubt that some will try. I’m old enough to remember the launch of the SDP, let’s not rule it out happening again.

We’ve talked mostly about the membership. But is Corbynism a strategy to win elections?

With the new electoral registration rules already introduced, the coming boundary changes, and the loss of Scotland thanks to decades of New Labour neglect, it will be uphill struggle for Labour to win in 2020 or whenever the next election is, under any leadership.

I still think Corbyn is Labour’s best chance. Any form of continuity leadership from the past would see the Midlands and north fall to Ukip in the same way Scotland fell to the SNP. Corbyn is actually Labour’s only chance.

Margaret Corvid is a writer, activist and professional dominatrix living in the south west.