Ed Miliband speaks at the CBI conference in 2012 in London. Photograph: Getty Images.
Show Hide image

Labour is in danger of finishing third in the European elections

Were the opposition to be beaten by the Tories and Ukip, it would send shockwaves through the PLP. 

With the Tories in the lead for the first time since March 2012, it's the national polls that have attracted the most attention this morning. Lord Ashcroft's survey putting the Conservatives two points ahead (34-32) was followed by an ICM poll for the Guardian similarly putting the Tories two in front (33-31). But just as notable was the European section of the latter. 

For the first time since polling on the 22 May contest began, it showed Labour in third place on 24 per cent (down a remarkable 12 points since April), with Ukip in second on 26 per cent (up four) and the Tories in first on 27 per cent (up two). After Ukip's recent surge, few in Labour have expressed hope of winning the election but they must now contemplate a worse outcome: finishing third. 

Were the principal party of opposition to be beaten by the Tories and Ukip next week (as it was in 2009), it would send shockwaves through the PLP. Those inside and outside of the shadow cabinet who demanded that Ed Miliband promise an in/out EU referendum would claim vindication. As I've reported before, Miliband has no intention of changing his current stance: that a vote will only be held in the unlikely event of a further transfer of powers to Brussels. He (rightly) regards the issue of Europe as a distraction from the defining question of how to raise living standards and fears the consequences of being forced to hold a vote as prime minister. But he will encounter significant resistance if Labour is beaten by the eurosceptics and better off outers on 22 May. 

As I revealed yesterday, some shadow cabinet ministers are unhappy at his failure to talk more about how Labour would reform the EU, which they regarded as a quid pro quo for the non-referendum pledge (which a majority of members initially opposed). Unless Miliband shifts his emphasis soon, they will regard this promise as increasingly worthless. 

George Eaton is political editor of the New Statesman.

Getty Images.
Show Hide image

Forget gaining £350m a week, Brexit would cost the UK £300m a week

Figures from the government's own Office for Budget Responsibility reveal the negative economic impact Brexit would have. 

Even now, there are some who persist in claiming that Boris Johnson's use of the £350m a week figure was accurate. The UK's gross, as opposed to net EU contribution, is precisely this large, they say. Yet this ignores that Britain's annual rebate (which reduced its overall 2016 contribution to £252m a week) is not "returned" by Brussels but, rather, never leaves Britain to begin with. 

Then there is the £4.1bn that the government received from the EU in public funding, and the £1.5bn allocated directly to British organisations. Fine, the Leavers say, the latter could be better managed by the UK after Brexit (with more for the NHS and less for agriculture).

But this entire discussion ignores that EU withdrawal is set to leave the UK with less, rather than more, to spend. As Carl Emmerson, the deputy director of the Institute for Fiscal Studies, notes in a letter in today's Times: "The bigger picture is that the forecast health of the public finances was downgraded by £15bn per year - or almost £300m per week - as a direct result of the Brexit vote. Not only will we not regain control of £350m weekly as a result of Brexit, we are likely to make a net fiscal loss from it. Those are the numbers and forecasts which the government has adopted. It is perhaps surprising that members of the government are suggesting rather different figures."

The Office for Budget Responsibility forecasts, to which Emmerson refers, are shown below (the £15bn figure appearing in the 2020/21 column).

Some on the right contend that a blitz of tax cuts and deregulation following Brexit would unleash  higher growth. But aside from the deleterious economic and social consequences that could result, there is, as I noted yesterday, no majority in parliament or in the country for this course. 

George Eaton is political editor of the New Statesman.