Chris Leslie, the shadow chancellor, supports the pay freeze. But his next boss disagrees. Photo: Getty Images
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Labour at odds over public sector pay freeze

Yvette Cooper, Liz Kendall, Andy Burnham and Jeremy Corbyn are all against the public sector pay freeze. But Harriet Harman and Chris Leslie both back the policy. 

Labour's leadership candidates have all announced their opposition to the continuing public sector pay freeze, putting them on a collision course with Harriet Harman, the party's acting leader, and Chris Leslie, the shadow chancellor.

Andy Burnham, the bookmakers' favourite, was the first candidate to rule out a continuation of the pay freeze, while Liz Kendall also confirmed her opposition to continuing pay restraint at a Q&A in central London this morning. The Kendall campaign believe that they can find the money to end the freeze through reducing the scale of British tax breaks - which currently stand at £100bn a year. 

Yvette Cooper believes that continuing the pay freeze - which has been in place since 2010 - will hit recruitment and retention. "Is the Chancellor really saying he can afford to cut inheritance tax for estates worth £1million," the shadow home secretary asks, "but the people who care for us and keep us safe should have to face five more years of real term pay cuts?" Cooper believes that a decade worth of cuts to public sector pay will do lasting damage to the quality and morale of public sector staff, and that, in any case, that the NHS is increasingly having to turn to more expensive agency staff to fill staffing gaps means the savings are void.

Jeremy Corbyn, meanwhile, is against cuts and will not be supporting the public sector pay freeze. That puts all four candidates in opposition to the policy position set out by Harman and Leslie.

In some respects, the fact that Harman will leave office when the new leader is elected on September 12 renders the row moot. However, Leslie, who is supporting Cooper's bid and is a longstanding ally of the shadow home secretary, was considered likely to remain in post as shadow chancellor should either Cooper or Kendall win the leadership. (Should Burnham win, Rachel Reeves is widely tipped to be appointed both his official deputy, and shadow chancellor, shadowing George Osborne both as Chancellor and as First Secretary of State.) His support of the pay freeze may imperil his chances of keeping hold of the role, or re-open the divides of the first phase of Ed Miliband's leadership, when he and Alan Johnson disagreed over the 50p rate and tuition fees. 

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics. 

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Jeremy Corbyn and his opponents are now locked in a permanent struggle

Labour MPs will neither accept Corbyn’s leadership nor abandon the party if he wins again.

 

In September 2003, outraged by Tony Blair’s support for the Iraq War, Jeremy Corbyn declared in the Morning Star that there should be “an annual election for leader”. Thirteen years later, in rather different circumstances, his wish has been granted. Yet the Labour leader has little cause for regret. There is no evidence that the sequel will end differently from the original.

Having failed to force Corbyn to re-seek MP nominations (a decision being challenged in court by the Labour donor Michael Foster as the New Statesman went to press), his opponents imposed other obstacles. Those who had been members for less than six months were barred from voting. Registered supporters were required to pay £25 to participate, rather than last year’s £3. Corbyn’s foes hoped that both decisions would shrink his support base, perhaps to the point of defeat.

Yet the early indications are that he has cleared these hurdles. A YouGov poll published on 19 July found that among eligible members Corbyn would beat Owen Smith with 56 per cent of the vote to his opponent’s 34 per cent. Of the 140,000 registered supporters likely to be approved, between 55 and 75 per cent are thought to be pro-Corbyn. Although the leadership result will not be announced until 24 September, ballot papers will be distributed from 22 August. Smith, the former shadow work and pensions secretary, has less than a month to overturn Corbyn’s advantage.

The last Labour leader to face a contest was Neil Kinnock, challenged by Tony Benn in 1988. Today, the roles have been reversed. A hard-left Bennite is the incumbent, while a soft-left Welshman is the challenger. No one expects a result as resounding as that of 1988, when Kinnock prevailed with 89 per cent to Benn’s 11 per cent. Smith’s team concede that they are “the underdogs”.

It was as a “clean skin”, untainted by the Iraq War and service in the last Labour government, that the Pontypridd MP was endorsed by colleagues over Angela Eagle. But his low profile has been exploited by his opponents. Corbyn’s allies have framed Smith as a Big Pharma lobbyist (he was formerly head of policy for Pfizer) and an NHS privatiser (he suggested in 2006 that firms could provide “valuable services”). The Labour leader’s social media presence, the terrain on which party elections are now won and lost, gives him a formidable edge.

Some MPs believe that Smith should have defined himself more clearly in the six months between signalling his leadership ambitions and launching his campaign. Comparisons are drawn with Ed Miliband, who allowed his opponents to fill the vacuum following his victory in 2010.

Smith has made electability his defining dividing line with Corbyn. The leader’s supporters, however, either do not conceive of his project in such terms or regard his opponent as no more capable of winning. Victory for Smith, they fear, would precipitate a rightward shift on austerity and immigration. Some share the assessment of a shadow cabinet minister who told me that the aspirant leader would be challenged if he won. “The Blairites won’t rest until they’ve got their party back,” he said.

Corbyn’s team is confident of victory and confronts the charge of unelectability. A source spoke of the campaign as a chance to “showcase our levels of organisation” and “build a movement that can win a general election”. Labour MPs concede that they are unlikely to beat Corbyn but hope to narrow his margin of victory and win among full members. This would deny him the right to boast of an “overwhelming” mandate and grant his opponents greater legitimacy.

In any discussion of Labour’s crisis, the 1980s are invoked. But the differences are as notable as the similarities. The left today controls the leadership, rather than merely the constituencies; the trade unions are no longer right-aligned; a “one member, one vote” system has replaced the electoral college. It was in less adverse circumstances, then, that 28 Labour MPs joined the break­away Social Democratic Party in 1981. For this reason, the possibility of a new schism endlessly recurs in media debate. Yet it is not one that MPs intend to pursue.

Labour’s tribalists have no intention of leaving their party, while the more tactically minded see little potential for a new grouping to flourish. The electoral marketplace is too crowded to achieve power without coalitions, merely replicating present divisions in a new form. Theresa May’s economic interventionism further limits the space for a centre-left insurgency to occupy.

Rather than retreating, Labour MPs intend to mount repeated challenges to Corbyn. As one told me, “We only need to get lucky once. He needs to get lucky every time.” Corbyn’s allies are hopeful that some rebels will emulate Sarah Champion MP and rejoin the front bench if he wins. One suggested that the proposed boundary changes, which will be published on 13 September, would encourage discipline in order to prevent deselection by local activists. Still, most MPs have no intention of rescinding their opposition to Corbyn.

It is deselection by the electorate at large, rather than by members, that some in Labour fear most. Though May has ruled out an early contest (having privately assured backers that she would not trigger one), the temptation could prove irresistible. An ICM poll published on 26 July gave the Tories their highest lead (16 points) since 2009. Prime ministers are rarely stronger than when they first enter office, a lesson that Gordon Brown neglected fatally. But such are Labour’s divisions that May could conclude that she need not show haste. Until the members reflect the MPs, or the MPs reflect the members, unity will remain elusive. As Corbyn and his opponents contemplate a struggle with no obvious end, the prize that both seek is rapidly diminishing in value.

George Eaton is political editor of the New Statesman.

This article first appeared in the 28 July 2016 issue of the New Statesman, Summer Double Issue