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.

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Theresa May gambles that the EU will blink first

In her Brexit speech, the Prime Minister raised the stakes by declaring that "no deal for Britain is better than a bad deal for Britain". 

It was at Lancaster House in 1988 that Margaret Thatcher delivered a speech heralding British membership of the single market. Twenty eight years later, at the same venue, Theresa May confirmed the UK’s retreat.

As had been clear ever since her Brexit speech in October, May recognises that her primary objective of controlling immigration is incompatible with continued membership. Inside the single market, she noted, the UK would still have to accept free movement and the rulings of the European Court of Justice (ECJ). “It would to all intents and purposes mean not leaving the EU at all,” May surmised.

The Prime Minister also confirmed, as anticipated, that the UK would no longer remain a full member of the Customs Union. “We want to get out into the wider world, to trade and do business all around the globe,” May declared.

But she also recognises that a substantial proportion of this will continue to be with Europe (the destination for half of current UK exports). Her ambition, she declared, was “a new, comprehensive, bold and ambitious Free Trade Agreement”. May added that she wanted either “a completely new customs agreement” or associate membership of the Customs Union.

Though the Prime Minister has long ruled out free movement and the acceptance of ECJ jurisdiction, she has not pledged to end budget contributions. But in her speech she diminished this potential concession, warning that the days when the UK provided “vast” amounts were over.

Having signalled what she wanted to take from the EU, what did May have to give? She struck a notably more conciliatory tone, emphasising that it was “overwhelmingly and compellingly in Britain’s national interest that the EU should succeed”. The day after Donald Trump gleefully predicted the institution’s demise, her words were in marked contrast to those of the president-elect.

In an age of Isis and Russian revanchism, May also emphasised the UK’s “unique intelligence capabilities” which would help to keep “people in Europe safe from terrorism”. She added: “At a time when there is growing concern about European security, Britain’s servicemen and women, based in European countries including Estonia, Poland and Romania, will continue to do their duty. We are leaving the European Union, but we are not leaving Europe.”

The EU’s defining political objective is to ensure that others do not follow the UK out of the club. The rise of nationalists such as Marine Le Pen, Alternative für Deutschland and the Dutch Partij voor de Vrijheid (Party for Freedom) has made Europe less, rather than more, amenable to British demands. In this hazardous climate, the UK cannot be seen to enjoy a cost-free Brexit.

May’s wager is that the price will not be excessive. She warned that a “punitive deal that punishes Britain” would be “an act of calamitous self-harm”. But as Greece can testify, economic self-interest does not always trump politics.

Unlike David Cameron, however, who merely stated that he “ruled nothing out” during his EU renegotiation, May signalled that she was prepared to walk away. “No deal for Britain is better than a bad deal for Britain,” she declared. Such an outcome would prove economically calamitous for the UK, forcing it to accept punitively high tariffs. But in this face-off, May’s gamble is that Brussels will blink first.

George Eaton is political editor of the New Statesman.