Former Scottish Labour leader Johann Lamont during the independence referendum campaign. Photograph: Getty Images.
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The fall of the reluctant leader: the inside story of Scottish Labour's crisis

Even those inured to the gang warfare that periodically engulfs the party are stunned by the events of the last week. 

On Friday 17 October, Ed Miliband’s chief of staff, Tim Livesey, phoned Johann Lamont, and informed her that the Scottish Labour general secretary, Ian Price, was no longer in his position. The opening shot in what would be her final week as party leader had been fired. Enraged that Price had been driven out without Lamont’s consent, an aide told Miliband’s team that it had made her look “ridiculous” and that her position was now “untenable”. To this, the response came that this was not the intention and that Miliband wanted her to remain in place.

It was several days later that Lamont’s team concluded it had been lied to. By its account, Margaret Curran, the shadow Scottish secretary and a friend of Lamont’s since freshers’ week at Glasgow University 38 years ago, phoned members of Labour’s Scottish executive committee on Miliband’s behalf to canvass opinion on whether she should step down. It is a claim flatly denied by Curran’s office.

“The only person she spoke to that week was the chair of the Scottish executive and it wasn’t about that [Lamont’s leadership],” a spokesman told me. But Lamont’s allies maintain that Miliband was guilty of a “ham-fisted plot”. “If Ed had wanted her to go, he just needed to sit down and say to her, ‘Thanks for what you’ve done over the last three years, I think it’s time for a change of direction,’” one told me.

Several Labour MPs attributed what one described as the “brutal knifing” to polls, analysed in detail on the New Statesman’s election website May2015.com, showing that the Scottish National Party could win as many as 25 of the party’s 40 Scottish Westminster seats. One source spoke of “panic” in Miliband’s office.

Others suggested that Jim Murphy, the shadow international development secretary and the front-runner to become leader, was preparing to publish a list of MPs and MSPs calling for Lamont’s resignation. As rumours of her departure swirled, Lamont concluded that she was, in the words of a political namesake, “in office but not in power”.

Even those inured to the gang warfare that periodically engulfs Scottish Labour (an institution said to have more factions than members) are astonished by what happened next. After informing her closest aides of her intention to resign on the evening of 23 October, Lamont attended a policy meeting in Glasgow at which the deputy leader, Anas Sarwar, the Paisley MP and shadow foreign secretary, Douglas Alexander, and the business manager, Paul Martin, were present. Having chosen not to tell them of her decision to step down, she went to the offices of the Labour-supporting tabloid the Daily Record on Central Quay, Glasgow.

What resulted was one of the most remarkable political interviews of recent years. As well as announcing her resignation, of which Miliband’s team was only informed on 24 October, Lamont co-opted nationalist rhetoric and accused Labour of treating the Scottish party as the “branch office of a party based in London”. One MP spoke of a “nuclear button” having been pressed; another source compared it to “walking out of a room and throwing a grenade behind you”.

Few thought that Lamont, an amiable former English teacher, was capable of such acts of political war. “Après moi, le déluge,” she seemed to have declared. A party that six weeks ago celebrated victory in the independence referendum is now immersed in a deep crisis, while the SNP scales new heights of popularity.

How, the men and women of Scottish Labour ask, did it come to this?

When Johann Lamont, who is 57, was elected in December 2011, seven months after the SNP’s landslide victory in the Holyrood election, it was to an entirely new position. Unlike her predecessors, who were merely “leader of the Labour Party in the Scottish Parliament”, she entered office as “leader of the Scottish party” with authority over its 41 MPs (a number since reduced to 40 following the removal of the whip from Falkirk’s Eric Joyce). In theory, at least, she would wield unprecedented power.

That the reality proved so different is the subject of two diametrically opposed accounts. According to one narrative, Lamont was the victim of a power-hungry Westminster machine that, unable to relinquish its centralising habits, quashed her authority at every turn.

“The changes that were necessary to actually put that real change [the creation of the post of Scottish Labour leader] into effect haven’t really happened either culturally or practically,” Katy Clark, the left-wing MP for North Ayrshire and Arran, told me. “Johann wasn’t given the organisational support that she required to carry out her role . . . Every time I asked her to come to an event in my constituency, she turned up but she was often by herself. She didn’t have an operation around her, she didn’t have the organisational support and, clearly, she didn’t have the freedom that she required to do what was necessary for the Scottish party.”

One claim made the day after Lamont’s resignation was announced was that Miliband had barred her from denouncing the bedroom tax for a year while he “made up his mind” on the policy. It is this charge, more than any other, that has angered and bewildered those closest to the Labour leader. As they point out, the measure was condemned by all sections of the party from the moment it was implemented. It was in September 2013, six months after its introduction, that Miliband formally pledged to repeal the policy but his opposition was never in question.

A more credible complaint is that the original proposals of Lamont’s devolution commission, including the full transfer of income tax, were vetoed by the party high command at Westminster, leaving Labour as the most centralising of the main parties. “She nearly quit because Ed’s office wouldn’t move on it,” one source told me.

Those who have defended the party from Lamont’s offensive in recent days suggest that the fault lay with her, rather than with Miliband. “It was a failure of leadership, not a failure of structures,” one told me. According to this account, Lamont simply lacked the guile and agility needed to fulfil the potential of her role. “In many ways, she was too inclusive,” one Scottish Labour MP suggested. “She was very mindful of Douglas, very mindful of Margaret, very mindful of Anas, very mindful of Jim, very mindful of Ed. She didn’t use the clout that she had as effectively as she could.”

Friends and critics alike spoke of how Lamont frequently referred to herself as a “reluctant leader”, someone who did not crave office but who felt duty-bound to support the party at its lowest ebb.

The question that follows is how such a figure came to lead Scottish Labour at this most critical juncture in its history. That no one I spoke to doubted that Lamont was the best available candidate in 2011 is evidence of the paucity of talent in Holyrood. For years, even as the devolved parliament has become the defining arena of Scottish politics, Labour’s A-team has remained at Westminster, leaving the reserves to be massacred by Alex Salmond’s championship-winning side.

In Jim Murphy, some believe that the party has found its super-sub. After his “100 towns in 100 days” speaking tour made him a Unionist hero during the referendum campaign, the shadow international development secretary is regarded as having the stature necessary to first halt and then reverse the forward march of the SNP.

“He looks like a leader,” a supporter declared. A teetotal vegetarian (his one vice is Irn-Bru) who finished first among MPs in the 2013 London Marathon and the author of a well-received recent book on football, even his enemies concede that few politicians can equal his energy.

But those same figures argue that his personality, ideology and Westminster background make him ill-equipped for the task at hand. “He’s the Marmite-plus candidate,” one Labour MP told me, noting that his “fraught relationship” with Douglas Alexander had “got worse” during the referendum campaign. “Jim Murphy’s the last person you would want to heal the wounds of a divided party.”

The Labour MSP Malcolm Chisholm, meanwhile, warned that electing an MP as leader would “turn a crisis into a catastrophe”. Under the party’s rules, Murphy is required to seek election to Holyrood by 5 May 2016 (the date of the next devolved contest) at the latest. While unlikely to trigger a stand-alone by-election, several sources have suggested that he would aim to secure a seat in time for the general election, giving him a year to take on Nicola Sturgeon in the Holyrood chamber.

No Scottish Labour politician draws more opprobrium from nationalists than Murphy. To some in the party, this is proof that he is the one they fear the most. However, SNP sources deride this as wishful thinking. “He’s pro-[tuition] fees, pro-Iraq [war], pro-Trident, which are three of the things now embedded as part of the SNP’s moral and political identity,” one told me. “All of the worst aspects of Labour politics from an SNP perspective are wrapped up and embodied in Murphy. His election would hand the party a gift on a plate.”

The prospect of the trade unions – and Unite in particular (whose recent animus towards Murphy dates from the Falkirk affair) – opening fire on him during the campaign is one that they relish. “Unless Ed can do a deal with them, the unions will cause problems for Jim,” one Labour figure warned.

As will the insurgent SNP and the wider nationalist movement. Under Sturgeon’s leadership, the party will move to the left, partly out of conviction (unlike Salmond, she is an unambiguous social democrat) and partly out of necessity. The 60,000 people who have joined the SNP since the referendum demand nothing less. In the new Scotland, where a young generation of writers, thinkers and activists define themselves by their constitutional radicalism, Labour faces forces that it can no longer control.

For now, the party draws consolation from the enduring unpopularity of the Tories in Scotland, as demonstrated during the referendum campaign. By framing the general election as a choice between a Conservative government or a Labour government, it hopes to prevent critical losses to the nationalists. First, Labour needs to win the right to be heard again. After the public bloodletting of the past weeks, the contrast between the ineptitude of Scottish Labour and the ruthless competence of the SNP has never been greater. The electorate could yet respond by inflicting even greater harm on Labour. 

George Eaton is political editor of the New Statesman.

This article first appeared in the 29 October 2014 issue of the New Statesman, British jihadis fighting with Isis

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BHS is Theresa May’s big chance to reform capitalism – she’d better take it

Almost everyone is disgusted by the tale of BHS. 

Back in 2013, Theresa May gave a speech that might yet prove significant. In it, she declared: “Believing in free markets doesn’t mean we believe that anything goes.”

Capitalism wasn’t perfect, she continued: 

“Where it’s manifestly failing, where it’s losing public support, where it’s not helping to provide opportunity for all, we have to reform it.”

Three years on and just days into her premiership, May has the chance to be a reformist, thanks to one hell of an example of failing capitalism – BHS. 

The report from the Work and Pensions select committee was damning. Philip Green, the business tycoon, bought BHS and took more out than he put in. In a difficult environment, and without new investment, it began to bleed money. Green’s prize became a liability, and by 2014 he was desperate to get rid of it. He found a willing buyer, Paul Sutton, but the buyer had previously been convicted of fraud. So he sold it to Sutton’s former driver instead, for a quid. Yes, you read that right. He sold it to a crook’s driver for a quid.

This might all sound like a ludicrous but entertaining deal, if it wasn’t for the thousands of hapless BHS workers involved. One year later, the business collapsed, along with their job prospects. Not only that, but Green’s lack of attention to the pension fund meant their dreams of a comfortable retirement were now in jeopardy. 

The report called BHS “the unacceptable face of capitalism”. It concluded: 

"The truth is that a large proportion of those who have got rich or richer off the back of BHS are to blame. Sir Philip Green, Dominic Chappell and their respective directors, advisers and hangers-on are all culpable. 

“The tragedy is that those who have lost out are the ordinary employees and pensioners.”

May appears to agree. Her spokeswoman told journalists the PM would “look carefully” at policies to tackle “corporate irresponsibility”. 

She should take the opportunity.

Attempts to reshape capitalism are almost always blunted in practice. Corporations can make threats of their own. Think of Google’s sweetheart tax deals, banks’ excessive pay. Each time politicians tried to clamp down, there were threats of moving overseas. If the economy weakens in response to Brexit, the power to call the shots should tip more towards these companies. 

But this time, there will be few defenders of the BHS approach.

Firstly, the report's revelations about corporate governance damage many well-known brands, which are tarnished by association. Financial services firms will be just as keen as the public to avoid another BHS. Simon Walker, director general of the Institute of Directors, said that the circumstances of the collapse of BHS were “a blight on the reputation of British business”.

Secondly, the pensions issue will not go away. Neglected by Green until it was too late, the £571m hole in the BHS pension finances is extreme. But Tom McPhail from pensions firm Hargreaves Lansdown has warned there are thousands of other defined benefit schemes struggling with deficits. In the light of BHS, May has an opportunity to take an otherwise dusty issue – protections for workplace pensions - and place it top of the agenda. 

Thirdly, the BHS scandal is wreathed in the kind of opaque company structures loathed by voters on the left and right alike. The report found the Green family used private, offshore companies to direct the flow of money away from BHS, which made it in turn hard to investigate. The report stated: “These arrangements were designed to reduce tax bills. They have also had the effect of reducing levels of corporate transparency.”

BHS may have failed as a company, but its demise has succeeded in uniting the left and right. Trade unionists want more protection for workers; City boys are worried about their reputation; patriots mourn the death of a proud British company. May has a mandate to clean up capitalism - she should seize it.