Ed Miliband speaks to journalists outside his house in north London. Photograph: Getty Images.
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Labour gains in target seats offer party cause for hope

The party is on course for its best result in London since 1998 and has won in some key general election targets.

Today did not begin well for Labour. A Ukip surge in Rotherham saw Nigel Farage's party gain nine seats and knock out the Labour leader and deputy leader. In Thurrock, the party's number two general election target, Ukip gained five seats and deprived Labour of overall control. Serial rebel Graham Stringer took to the airwaves to declare that Ed Miliband lacks "an immediate appeal to the electorate" and described the party's campaign as "unforgivably unprofessional". The narrative quickly became one of defeat and disappointment.

But as the day has continued, the picture has improved for Labour. The party made dramatic gains in London, winning the Conservative fortress of Hammersmith and Fulham ("David Cameron's favourite council") along with Merton, Croydon and Redbridge, and is on course for its best result in the capital since 1998. Sadiq Khan, who ran a radical and energetic campaign, will rightly enjoy plaudits for the performance. Taking Cambridge (another general election target) from the Lib Dems was another early success.

Ukip's gains in the north are notable, insofar as they show Farage's party replacing the Tories as the de facto opposition in some areas, but they tell us little about the general election result. There is no prospect of Ukip winning safe Labour seats next year. What matters, as Labour strategists emphasised in advance, is how the party peforms in its general election targets.

Labour hasn't done well enough to justify hopes that it will achieve a majority at the general election. It failed to take must-win councils such as Swindon and Walsall, and suffered a swing to the Tories in the bellweather seat of Gloucester. But it has performed well enough to suggest that it will be competitive in 2015. For the first time in 14 years, Labour has won control of Amber Valley after Ukip split the Tory vote, while also topping the poll in target seats such as Lincoln, Harlow, Cannock Chase, Stevenage, Hastings (where the Labour group is now the largest ever) and Crawley.

The national projection from Sky News puts Labour on 308 seats, 18 short of a majority and not where the party needs to be at this stage (although Lord Ashcroft's 26,000 sample marginals poll, released tomorrow at 1pm, will be a better guide). Given the likely swingback to the Tories before May 2015, Labour needs to be on course for a majority now if it is to be confident of victory. But if the party can draw the right lessons from where it has performed well, most notably in London, it could still win in 2015. For a first-term opposition, that is not a bad position to be in.

George Eaton is political editor of the New Statesman.

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Cabinet audit: what does the appointment of Liam Fox as International Trade Secretary mean for policy?

The political and policy-based implications of the new Secretary of State for International Trade.

Only Nixon, it is said, could have gone to China. Only a politician with the impeccable Commie-bashing credentials of the 37th President had the political capital necessary to strike a deal with the People’s Republic of China.

Theresa May’s great hope is that only Liam Fox, the newly-installed Secretary of State for International Trade, has the Euro-bashing credentials to break the news to the Brexiteers that a deal between a post-Leave United Kingdom and China might be somewhat harder to negotiate than Vote Leave suggested.

The biggest item on the agenda: striking a deal that allows Britain to stay in the single market. Elsewhere, Fox should use his political capital with the Conservative right to wait longer to sign deals than a Remainer would have to, to avoid the United Kingdom being caught in a series of bad deals. 

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.