Ed Miliband delivers his speech to the Labour conference in Manchester last month. Photograph: Getty Images.
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Labour might not be at war with itself, but Miliband desperately needs to inspire his supporters

The Labour leader needs to restore the faith of those he believed he offered a new political model. 

It’s not what Ed Miliband’s opponents are saying about him that should worry the Labour leader. It’s what his supporters are saying. There are some MPs who have always had low expectations of a leader who, as they point out, they did not vote for (it was the backing of Labour’s affiliated trade unions and socialist societies that carried him to victory). But these original dissenters are increasingly indistinguishable from those who once revered what they referred to as “the project”. One hitherto loyal former minister simply asks: “Where did it all go wrong?”

A recurring joke in Labour circles is that the party is now divided between those who fear defeat and those who fear victory. Some regard its restored poll lead as a transient advantage that will melt in the heat of the short campaign. One MP notes that whenever the Tories are able to secure favourable headlines, such as after the 2013 Budget and after David Cameron’s conference speech, they move ahead of Labour. Some expect the Conservatives – with the aid of Fleet Street and big business and a better-oiled election machine than in 2010 – to retain their status as the single largest party. Others predict that Labour will crawl over the finish line, most likely short of a majority, but fear that Miliband lacks the agility and guile to be a successful prime minister.

This is not a party at war. There has been no repeat of what Labour’s policy review head, Jon Cruddas, described to me as “the gang warfare” that disfigured the Blair and Brown years. By historic standards, the party that produced the MacDonald split of 1931, the epic struggle between the Bevanites and the Gaitskellites and the SDP schism of 1981 remains united. At the first meeting of the Parliamentary Labour Party following the conference season and the near-death experience of the Heywood and Middleton by-election, there were just two dissenting voices: the Warrington North MP, Helen Jones, and the former welfare minister Frank Field. “It was hard to avoid the undercurrent of anxiety but the group dynamic inevitably led to the PLP rallying around,” a shadow cabinet minister observes. But while not locked in combat, Labour is desperately in need of inspiration.

It was the belief that Miliband would guarantee this quality that once persuaded activists to rally to his standard. In contrast to his brother, who for too many exemplified the party’s technocratic tendencies, he was said to “speak human”. He possessed the emotional intelligence to recognise, as the US psychologist and author Drew Westen wrote, that: “People vote for the candidate that elicits the right feelings, not the candidate that presents the best arguments.”

After Miliband’s victory, his supporters were enthused by his decision to appoint Cruddas, a Labour romantic, to lead the policy review and by his recruitment of Arnie Graf, the US community organiser, to overhaul the party’s campaign structures and end the era of “machine politics” and “command and control”. They now feel, in the words of one MP, “betrayed”.

The “story of national transformation” (as Cruddas phrased it) that many hoped would emerge from the policy review has not been told. Rather than a vision of the future, of the kind that Labour articulated in 1945, 1966 and 1997 (its three pivotal victories), the party has been defined by remedial fixes such as a freeze in energy prices and a marginal increase in the minimum wage. Unlike the Tories, who speak of equipping Britain for “the global race”, or even Ukip, which depicts a plucky Albion liberated from the shackles of Brussels, Miliband still lacks an account of our place in the world.

What Labour does not lack is policy. When he proudly told the PLP that the party had announced more plans than in 1997, Miliband could have added that he has surpassed every recent leader of the opposition. An £8 minimum wage, 25 free hours of childcare, 200,000 new homes a year by 2020 and 8,000 more doctors – he cited all of these to MPs in the Gladstone Room and the full list exceeds a hundred. But shadow cabinet ministers tell me that they fear electorally potent ideas are being “wasted” on voters who are not yet prepared to listen to Labour. The complaint frequently heard by MPs in Scotland and in seats such as Heywood and Middleton was, “We don’t know what you stand for.” Miliband needs to remember the advice given to him by the former Obama adviser David Axelrod (who a Labour aide says is “intimately involved” in party strategy, contrary to reports): that voters must “see the forest, not the trees”.

Some attribute the narrowness of the party’s approach to the increasing dominance of its campaign machine, led by the election chair, Douglas Alexander. Miliband, who is said to be fiercely loyal to the shadow foreign secretary, is accused of deferring to New Labour orthodoxy, rather than investing in Graf’s methods. Despite the party promising earlier this year that a “programme of work” had been prepared for him, Graf has not come back. Yet in a fragmented electoral landscape, the grass-roots techniques he espoused are more relevant than ever. Tom Watson, Labour’s former campaign co-ordinator, laments to me, “The ability of candidates to run their own local campaigns has been diminished.”

MPs in need of consolation turn their gaze to the government benches. There they see the Prime Minister looking anxiously over his shoulder for the next Ukip defector and his forlorn deputy, a man seemingly incapable of lifting his party out of electoral dystopia. In these circumstances, they ask, how can Labour not win? But Miliband’s original promise was something greater than victory by default. It was to transform the party so that it could transform the country. The gap between what Labour is and what it could be weighs on MPs as they move stoically into the autumn. 

George Eaton is political editor of the New Statesman.

This article first appeared in the 15 October 2014 issue of the New Statesman, Isis can be beaten

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Scotland's vast deficit remains an obstacle to independence

Though the country's financial position has improved, independence would still risk severe austerity. 

For the SNP, the annual Scottish public spending figures bring good and bad news. The good news, such as it is, is that Scotland's deficit fell by £1.3bn in 2016/17. The bad news is that it remains £13.3bn or 8.3 per cent of GDP – three times the UK figure of 2.4 per cent (£46.2bn) and vastly higher than the white paper's worst case scenario of £5.5bn. 

These figures, it's important to note, include Scotland's geographic share of North Sea oil and gas revenue. The "oil bonus" that the SNP once boasted of has withered since the collapse in commodity prices. Though revenue rose from £56m the previous year to £208m, this remains a fraction of the £8bn recorded in 2011/12. Total public sector revenue was £312 per person below the UK average, while expenditure was £1,437 higher. Though the SNP is playing down the figures as "a snapshot", the white paper unambiguously stated: "GERS [Government Expenditure and Revenue Scotland] is the authoritative publication on Scotland’s public finances". 

As before, Nicola Sturgeon has warned of the threat posed by Brexit to the Scottish economy. But the country's black hole means the risks of independence remain immense. As a new state, Scotland would be forced to pay a premium on its debt, resulting in an even greater fiscal gap. Were it to use the pound without permission, with no independent central bank and no lender of last resort, borrowing costs would rise still further. To offset a Greek-style crisis, Scotland would be forced to impose dramatic austerity. 

Sturgeon is undoubtedly right to warn of the risks of Brexit (particularly of the "hard" variety). But for a large number of Scots, this is merely cause to avoid the added turmoil of independence. Though eventual EU membership would benefit Scotland, its UK trade is worth four times as much as that with Europe. 

Of course, for a true nationalist, economics is irrelevant. Independence is a good in itself and sovereignty always trumps prosperity (a point on which Scottish nationalists align with English Brexiteers). But if Scotland is to ever depart the UK, the SNP will need to win over pragmatists, too. In that quest, Scotland's deficit remains a vast obstacle. 

George Eaton is political editor of the New Statesman.