Five political predictions for 2014

Labour will end the year ahead in the polls, Scotland will reject independence by a double-digit margin and Ed Balls will remain shadow chancellor.

J.K.Galbraith liked to remark that "the only function of economic forecasting is to make astrology look respectable." One could say the same of political predictions. But with that warning duly noted, here are five of mine for 2014.

1. Labour will end the year ahead in the polls

The polls will remain tight as the Tories continue to benefit (however undeservedly) from the economic recovery, but Labour will end the year in front. The proportion of 2010 Lib Dem voters supporting Miliband's party and the proportion of 2010 Conservative voters supporting UKIP will remain too great for the Tories to move ahead. As May 2015 approaches, discussion will increasingly focus on whether Labour will win an overall majority or, alternatively, become the single largest party, with many Tory MPs resigning themselves to defeat.

End of year polling averages:

Labour 38%

Conservatives 33%

UKIP 15%

Lib Dems 10%

2. Scotland will reject independence by a double-digit margin

The No campaign retained a comfortable lead throughout this year and that won't change in 2014. On 18 September, Scotland will reject independence by a margin no smaller than 10 points and conceivably as large as 25. The pessimists in the Unionist camp and the optimists on the nationalist side point to three factors that could work in the SNP's favour: the large number of undecided voters, Alex Salmond's strength as a campaigner and the unpredictability of referendums. But none of these suggests a yes vote is likely.

There is no reason to believe that the quarter of Scots yet to decide how they will vote will break for the nationalists in the number required for victory. Indeed, according to the most recent YouGov poll, which put the No side ahead by 52-33, even winning over 100 per cent would still leave the Yes camp four points behind.

The SNP might have overturned a double-digit Labour lead to triumph in the 2011 Scottish parliamentary elections, but there was at least something close to a precedent for this in the form of the party's 2007 victory. By contrast, there has never been anything close to a majority for independence and the uncertainty created by the financial crisis and its aftermath has made voters even more reluctant to take that leap into the dark.

There have been polls showing that Scots would vote for independence if they believed it would make them better off, but the problem for Salmond is that they don't. Asked earlier this month by YouGov, "Do you think Scotland would be economically better or worse off if it became an independent country, or would it make no difference?" (the defining issue of the campaign), just 26% said "better off" and 48% said "worse off". If Salmond couldn't persuade voters that Scotland would be better off alone when the UK was in an austerity-induced double-dip recession, he's not going to be able to persuade them now.

Referendums are uncertain beasts, but the clear tendency is for support for the status quo to increase as voting day approaches (as in the case of the 1975 EU referendum, the 2011 AV referendum and the 1980 Quebec referendum). Faced with the real possibility of secession, I expect a significant minority of Yes supporters to reverse their stance. Ed Miliband, who would struggle to govern if Labour was stripped of its Scottish MPs, and David Cameron, who would become known as the prime minister who lost the Union, will unite in relief.

3. Unemployment will fall to 7% but the Bank of England won't raise rates

Back in August, when Mark Carney introduced forward guidance, the Bank of England didn't expect unemployment to fall to 7% until 2016 (it then stood at 7.8%). But with joblessness already down to 7.4%, my prediction is that the 7% threshold, the trigger for the Bank to consider a rate rise, will be reached by the end of the year.

At this point, hawkish economists will demand an increase in the base rate, but Carney will reject their advice. The governor will cite the continuing weakness of household finances, with many trapped in low-paid work, as the main reason to maintain monetary stimulus and hold rates at their record low of 0.5%.

4. Labour will win the European elections

There is a consensus among the media that UKIP will triumph in the European elections as Nigel Farage turns them into a referendum on Romanian and Bulgarian immigration, but my prediction is a narrow Labour win. The most recent poll gave Miliband's party a seven-point lead over UKIP (32-25) and while this will decline as the campaign proper begins, they will retain the advantage. Quite simply, there are too many voters whose default setting is to back Labour (the elections will be held on 22 May, the same day as the locals) for Farage to win in a national contest. The Tories will finish in third place (prompting predictable panic among their backbenchers), with the Lib Dems in fourth and the Greens in fifth.

5. Ed Balls will remain shadow chancellor

Ed Miliband has stated several times, most recently last week, that Labour will go into the general election with Ed Balls as shadow chancellor, but this won't stop Fleet Street commentators speculating that he will be moved. The cries for Balls to be thrown overboard will reach a crescendo as Alistair Darling leads the Unionist side to victory in the Scottish independence referendum (see prediction number two), just days before the Labour conference opens, but Miliband will wisely disregard them.

The appointment of the man who was Chancellor at the time of the financial crisis would be a gift to the Tories and Balls's rare combination of political cunning and economic nous means he remains the best qualified individual for the job. As 2014 draws to a close, the shadow chancellor will, after years of waiting, finally be able to look forward to delivering his first Budget.

Ed Miliband will still have more to smile about than David Cameron in 2014. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Is defeat in Stoke the beginning of the end for Paul Nuttall?

The Ukip leader was his party's unity candidate. But after his defeat in Stoke, the old divisions are beginning to show again

In a speech to Ukip’s spring conference in Bolton on February 17, the party’s once and probably future leader Nigel Farage laid down the gauntlet for his successor, Paul Nuttall. Stoke’s by-election was “fundamental” to the future of the party – and Nuttall had to win.
 
One week on, Nuttall has failed that test miserably and thrown the fundamental questions hanging over Ukip’s future into harsh relief. 

For all his bullish talk of supplanting Labour in its industrial heartlands, the Ukip leader only managed to increase the party’s vote share by 2.2 percentage points on 2015. This paltry increase came despite Stoke’s 70 per cent Brexit majority, and a media narrative that was, until the revelations around Nuttall and Hillsborough, talking the party’s chances up.
 
So what now for Nuttall? There is, for the time being, little chance of him resigning – and, in truth, few inside Ukip expected him to win. Nuttall was relying on two well-rehearsed lines as get-out-of-jail free cards very early on in the campaign. 

The first was that the seat was a lowly 72 on Ukip’s target list. The second was that he had been leader of party whose image had been tarnished by infighting both figurative and literal for all of 12 weeks – the real work of his project had yet to begin. 

The chances of that project ever succeeding were modest at the very best. After yesterday’s defeat, it looks even more unlikely. Nuttall had originally stated his intention to run in the likely by-election in Leigh, Greater Manchester, when Andy Burnham wins the Greater Manchester metro mayoralty as is expected in May (Wigan, the borough of which Leigh is part, voted 64 per cent for Brexit).

If he goes ahead and stands – which he may well do – he will have to overturn a Labour majority of over 14,000. That, even before the unedifying row over the veracity of his Hillsborough recollections, was always going to be a big challenge. If he goes for it and loses, his leadership – predicated as it is on his supposed ability to win votes in the north - will be dead in the water. 

Nuttall is not entirely to blame, but he is a big part of Ukip’s problem. I visited Stoke the day before The Guardian published its initial report on Nuttall’s Hillsborough claims, and even then Nuttall’s campaign manager admitted that he was unlikely to convince the “hard core” of Conservative voters to back him. 

There are manifold reasons for this, but chief among them is that Nuttall, despite his newfound love of tweed, is no Nigel Farage. Not only does he lack his name recognition and box office appeal, but the sad truth is that the Tory voters Ukip need to attract are much less likely to vote for a party led by a Scouser whose platform consists of reassuring working-class voters their NHS and benefits are safe.
 
It is Farage and his allies – most notably the party’s main donor Arron Banks – who hold the most power over Nuttall’s future. Banks, who Nuttall publicly disowned as a non-member after he said he was “sick to death” of people “milking” the Hillsborough disaster, said on the eve of the Stoke poll that Ukip had to “remain radical” if it wanted to keep receiving his money. Farage himself has said the party’s campaign ought to have been “clearer” on immigration. 

Senior party figures are already briefing against Nuttall and his team in the Telegraph, whose proprietors are chummy with the beer-swilling Farage-Banks axis. They deride him for his efforts to turn Ukip into “NiceKip” or “Nukip” in order to appeal to more women voters, and for the heavy-handedness of his pitch to Labour voters (“There were times when I wondered whether I’ve got a purple rosette or a red one on”, one told the paper). 

It is Nuttall’s policy advisers - the anti-Farage awkward squad of Suzanne Evans, MEP Patrick O’Flynn (who famously branded Farage "snarling, thin-skinned and aggressive") and former leadership candidate Lisa Duffy – come in for the harshest criticism. Herein lies the leader's almost impossible task. Despite having pitched to members as a unity candidate, the two sides’ visions for Ukip are irreconcilable – one urges him to emulate Trump (who Nuttall says he would not have voted for), and the other urges a more moderate tack. 

Endorsing his leader on Question Time last night, Ukip’s sole MP Douglas Carswell blamed the legacy of the party’s Tea Party-inspired 2015 general election campaign, which saw Farage complain about foreigners with HIV using the NHS in ITV’s leaders debate, for the party’s poor performance in Stoke. Others, such as MEP Bill Etheridge, say precisely the opposite – that Nuttall must be more like Farage. 

Neither side has yet called for Nuttall’s head. He insists he is “not going anywhere”. With his febrile party no stranger to abortive coup and counter-coup, he is unlikely to be the one who has the final say.