Acting Labour leader Harriet Harman, who has called for the party to abstain on the government's welfare bill. Photograph: Getty Images.
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Labour MPs turn on Harman over welfare cuts at PLP meeting

20 MPs speak out against acting leader's call to abstain on the government's bill, with just five in favour. 

There was no disguising the divisions within Labour over welfare cuts at tonight's PLP meeting. An aide to Harriet Harman conceded that the party was badly "split" after the acting leader called on MPs to abstain on the government's welfare reform and work bill next week. I'm told that 25 MPs spoke, with just five of those supporting her position. One rebel, Andy MacDonald, declared that the two-child limit on tax credits was a regression to the days of "Mao Tse-Tung and King Herod". Labour whips expect 60-80 MPs to vote against the welfare bill in defiance of Harman's stance. As he left the meeting and was asked what he thought, Neil Kinnock replied: "Not much". 

Harman warned the gathering in Committee Room 14 that "If we oppose everything, people will not hear those things we are opposing and why". Harman recalled that Labour voted against 13 welfare bills in the last parliament but that only its rejection of the bedroom tax was noticed. While abstaining over the welfare bill, Harman said that the party would campaign against the lowering of the Employment and Support Allowance, the scrapping of maintenance grants for poor students, the abolition of child poverty targets and tax credit cuts such as the reduction in the income threshold. But to the consternation of many MPs, Labour will not oppose the two-child tax credit cap. One told me afterwards that Harman "bombed on welfare" and that there was "no consensus on the child tax credit changes". He added: "She rather limped away, saying it needed 'further consideration'". Labour has yet to decide whether it will impose a three-line whip on MPs over the proposed abstention. 

Harman's refusal to table reasoned amendments to the welfare bill, outlining the party's differences with the government, angered Frank Field, the work and pensions select committee  chai rand the former welfare reform minister, who shouted at her that Labour had to defend the "three million strivers" who faced losing £1,000 from tax credit cuts (prompting Keith Vaz to quip that he never thought he'd see the day when Harman would be "attacked from the left" by Field). One senior MP predicted that Harman would be forced to back down at tomorrow morning's shadow cabinet meeting. 

After briefings suggesting that she has overreached, and is revelling in her status as acting leader, Harman emphasised that she "never wanted to be here" and that the job she wanted was deputy prime minister. From September, she would be on the backbenches and while she wanted to make "the right decisions" now, she would not "bind the hands" of the next leader. Harman's many critics will be looking to her putative replacements for a clear commitment to pursue a different course. 

George Eaton is political editor of the New Statesman.

Photo: Getty
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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.