Labour can win either from the dark side...or the light. Photo: Getty Images
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There are two ways out of the wilderness for Labour: Jeremy Corbyn or Liz Kendall

There are two paths to a Labour victory in 2020, argues Michael Chessum: either Labour reject the principles of neoliberalism with Corbyn, or embrace them with Liz Kendall.

Deep within us all, there is a Labour centrist – a person who wants desperately to paper over all cracks and unite the party – and, by now, they long for death. Even the leadership candidates who preach unity and triangulation, Yvette Cooper and Andy Burnham, barely seem to believe what they are saying, and the desperate noises of party the grandees who have intervened to urge Labour members to support them have either backfired or fallen on deaf ears. The more that the mainstream commentariat attempts to diagnose what is happening, the more it compounds the problem, with Jonathan Freedland adeptly adding the label of “narcissist” to sit alongside “moron” as a description for Jeremy Corbyn’s burgeoning young support base.

The reason why so much of the party apparatus and its periphery in the press claim to be so concerned about any great shift in Labour is because it is using an old and rather lazy rule of thumb: move too far to the left and you become unelectable; move too far to the right and you may become more palatable to middle England, but you lose your base and threaten party unity. The unelectability of the left has always been based on a dubious conventional wisdom about the 1980s – when the SDP, which was riding high in the polls prior to the Falklands War, split the Labour vote – but it is now utterly useless as a means of understanding how the electorate votes.

Labour lost the 2015 general election because it accepted every premise that the Conservatives and mainstream press laid down, and tried, somehow, to reach a different conclusion. Ed Balls and Ed Miliband went out of their way to accept the need for austerity, cuts and a public sector pay freeze – while at the same time claiming to offer a lukewarm alternative to them. HQ produced mugs that celebrated a ‘tough’ stance on immigration, while Labour’s door-knocking army tried to persuade everyone that Labour was the alternative to racists in Ukip and the Tory Party. The public were, understandably, unconvinced: why vote for a lukewarm version of conventional wisdom when you have the real thing?

The outgoing party leadership is still pursuing a strategy of clumsy contortionism. Harriet Harman’s last substantial parliamentary decision as Acting Leader – to abstain on the Welfare Bill – was an organised act of political dishonesty designed, basically, to deceive the supposedly universally Thatcherite population of middle England into thinking that most Labour MPs agreed with some of the Tories’ approach to welfare, which they don’t. But in order for the manoeuvre to be successful, the press needed report it as a manoeuvre – so by definition everyone, including the very people who were supposed to be deceived by it, had to know that the move was dishonest. Cooper and Burnham responded by simultaneously endorsing the abstention and denouncing it, with Burnham even putting out a self-righteous Facebook post claiming in a roundabout way to have voted against the Bill, which he obviously didn’t.

There is no way to triangulate out of the electoral impasse that faces Labour: in order to build a convincing narrative, either it must reject the (broadly speaking neo-liberal) premises that have constituted the political consensus since the 1990s, or it must embrace them and follow them to their logical right-of-centre conclusions in an attempt to outperform the Conservatives on their own terrain. At present, there are only two candidates offering to do these things – Jeremy Corbyn and Liz Kendall – and, if electability was all one cared about, there is ample reason to believe that only Corbyn and Kendall could win for Labour in 2020.

Corbyn’s rejection of the mainstream political consensus – on work as the real driver of wealth creation, on reversing privatisation of public services, on redistribution, on opposing Britain’s involvement in foreign wars – is incredibly popular, and not just among the party faithful. Most of these policies carry majority support among the wider public, and, just as importantly, they are decisively different from anything currently on offer – a break with what feels like a stagnant political scene. Even in (rare) neutral reporting on Corbyn’s campaign, it is often described in terms of “taking Labour back” to the years of Bennite radicalism. But Corbyn is actually a lot more radical than that: he talks about technology and radical democratic reform, and, with his young support base, he looks an awful lot like the future, not the past.

When I started getting involved in the National Union of Students about five years ago, one of the most revealing conversations I had was with a union officer close to Labour Students – a group which has been dominated by Blairites since the mid-1990s, and until recently served as the union’s leadership. Why, I asked over a pint at a training residential, did they oppose the abolition of tuition fees? My colleague responded that to be honest, he wasn’t really sure – “it used to be because we wanted to be at the centre of higher education funding debate, but now I think we have a principled objection to it”.  Last week, Tony Blair publicly acknowledged the reality of the electability rhetoric that has dominated internal party debates since the 1980s: even if it was the path to victory, he said, he wouldn’t want to win on “a traditional leftist platform”. In other words, concerns about ‘electability’ are really a proxy for a fundamental set of political differences that separate Blair’s heirs from the rest of the party, and especially its left wing.

As centrist social democratic parties all over Europe splinter and re-form, many in the Labour Party establishment are hoping that with enough triangulation and think-tank briefings, Labour can be different. But far bigger and more powerful forces are at work, and the political trajectory that Blair plotted in the 1990s could only ever go so far inside a social democratic party. Either a Kendall or a Corbyn victory could lead to a significant split, but at least the new leadership would be able to develop a coherent political narrative, anchored either in the left or in the centre-right. In defiance of all conventional wisdom and tactical expectations, it is Labour’s left wing that might now lead it out of the wilderness. Perhaps, after decades of watching transparent “positioning” by successive Labour leaders, what the public really wants is an electoral alternative that is based on having ideas and fighting for them. 

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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.