Future visions

With the outlook so bleak for Labour, the government is reacting nervously to ideas of change. But s

Depending on which version of the new Labour tragicomedy you sign up to, the government is either ripping itself apart, with various younger members of the cabinet feverishly jostling to replace Gordon Brown as leader after his ultimate demise, or, in a separate but no less gruesome scenario, ministers are calmly allowing the Prime Minister to slide to defeat before embarking on the slow road to recovery.

Elements of both are true. With the outlook so bleak, ambitious ministers, with a long career in politics to contemplate, can be forgiven for preparing for a future without Brown. On the other hand, there are no immediate plans for a leadership challenge and, as a result, a certain degree of drift has inevitably set in.

So here we have it. A circle of increasingly isolated Brown allies and cheerleaders continues to believe the Prime Minister can pull it off in time for the next election. The cabinet and most of the Parliamentary Labour Party remain remarkably loyal, considering the scale of the slide in the polls. A handful of restive former ministers, nostalgic for the high days of Blairism, continue to cause trouble, while backbenchers on slim majorities have begun surveying for prospects in the political wilderness.

A sense of the state of government nerves can be found in the reaction to an article in the June issue of Prospect magazine, written by the former No 10 speechwriter Phil Collins and Richard Reeves, a biographer of the liberal philosopher John Stuart Mill and contributor to the New Statesman.

Collins and Reeves argue that the Labour Party must reject its statist instincts and embrace liberalism, or face oblivion. The dividing line is no longer between left and right, but between liberal and authoritarian, something that the Liberal Democrats and the Conservatives have begun to grasp, but Labour has not.

The thoughtful essay was dismissed by Downing Street as an act of gross treachery. The Work and Pensions Secretary, James Purnell, for whom Collins was doing some contract work, was told to sack the speechwriter. His refusal fuelled further stories about cabinet-level splits and Purnell's leadership ambitions. Make no mistake, Collins is hated by some people around Brown, but the reaction was out of all proportion to the offence. (Indeed, I understand that once the Prime Minister's fury had subsided, and he found time to read the article, he decided to hold out the olive branch to Collins and has invited him to No 10 to discuss his ideas.)

Conventional wisdom now traces the decline in Labour fortunes to the aftermath of "the election that never was" in October 2007. But some in the party saw the warning signs long before. The following words, for instance, come from a pamphlet called New Labour: Rebuilding the Coalition, published for Labour's 2006 conference. "At a time when we are in danger of talking only to ourselves, we need to show that we are motivated by the problems that people face in their own lives.

"We need to describe those problems clearly and to provide an explanation that makes sense. We need to show that we can tackle those problems because we share, with voters, a set of values and beliefs of how Britain could and should be. We need to regain our belief that individual aspiration and opportunity can best be met in a society that also promotes . . . fairness and the common good." The pamphlet, which amoun ted to a mini-manifesto, was co-authored by a group of 12 MPs led by John Denham, and included Joan Ruddock, Angela Eagle and Martin Salter. It provided a sound and sobering analysis of the situation facing Labour long before the present crisis. It argued that Labour should forget tailoring messages to individual niche groups in society based on focus-group evidence. It should also avoid the temptation of chasing the tiny number of centre-ground voters in marginal constituencies. Both strategies have been adopted under Brown, with disastrous consequences.

Denham's appointment as Secretary of State at the newly created Department for Innovation, Universities and Skills in Brown's first cabinet was an important symbolic statement. Denham famously resigned from the Blair government in 2003 over his opposition to the war in Iraq, just at the time when he was being tipped for promotion to a cabinet post. Until that point he had been a loyal new Labour crusader, both at the Department of Health and the Home Office. He was a committed moderniser who backed NHS reform and the "Respect" agenda. In his post-Iraq role as chair of the Commons home affairs select committee he remained largely supportive of the government. The committee's June 2005 report on the much-maligned antisocial behaviour orders, for example, gave Asbos a cautious thumbs-up.

Real New Labour

But around the same time, Denham and a few like-minded individuals were already developing a dissident vision for the future of the party, which the New Statesman dubbed "Real New Labour". While attention was focused on the future of Tony Blair and the question of the succession, many on the left of the party hoped that Gordon Brown would show his true progressive colours once inside No 10 Downing Street. Denham was far more sanguine, believing on the evidence of detailed research with his constituents in Southampton that many still believed life had dealt them an unfair hand despite the improvements in health and education made possible by the Labour government's investment in public services. This led him to the view that Labour was at risk of once again losing constituencies such as his in the south of England, a theme to which he returned in a Fabian Society lecture just last month.

To my knowledge, John Denham has no leadership ambitions and has certainly not been plotting to depose Brown. In his year at Innovation, Universities and Skills, he has annoyed some higher education institutions by shifting funding from people taking second degrees to provide more money for first-time students. At the same time, he has increased the number of students eligible for maintenance grants. In short, he got on with his job.

Denham's analysis of the Labour Party's predicament has been consistently correct, but the party leadership is running out of time to take note. If it waits much longer, Denham himself will be swept from his Southampton constituency, along with dozens of other Labour MPs in the south of England.

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John McDonnell interview: "We’re going to destroy Osborne’s credibility"

The shadow chancellor on the Spending Review, Jeremy Corbyn's leadership and why trade unions will have to break the law. 

When I interviewed John McDonnell in March, before the general election, he predicted that Labour would be the largest party and confessed to a “sneaking feeling that we could win a small majority – because I think the Tory vote is really soft”. As the long-standing chair of the Socialist Campaign Group, McDonnell anticipated leading the resistance inside Labour to any spending cuts made by Ed Miliband. Eight months later, he is indeed campaigning against austerity – but as shadow chancellor against a Conservative majority government.

I meet McDonnell in his new Westminster office in Norman Shaw South, a short walk down the corridor from that of his close friend and greatest ally, Jeremy Corbyn. The day before George Osborne delivers his Spending Review and Autumn Statement, his desk is cluttered with economic papers in preparation for his response.

“The message we’re trying to get across is that this concept of the Tories’ having a ‘long-term economic plan’ is an absolute myth and they’re in chaos, really in chaos on many fronts,” he tells me. McDonnell points to the revolt against cuts to tax credits and policing, and the social care crisis, as evidence that Osborne’s programme is unravelling. On health, he says: “He’s trying to dig out money as best as he can for the NHS, he’s announced the frontloading of some of it, but that simply covers the deficits that there are. Behind that, he’s looking for £22bn of savings, so this winter the NHS is going to be in crisis again.”

Asked what Labour’s equivalent is to the Tories’ undeniably effective “long-term economic plan” message, he said: “I don’t think we’re going to get into one-liners in that way. We’ll be more sophisticated in the way that we communicate. We’re going to have an intelligent and a mature economic debate. If I hear again that they’re going to ‘fix the roof while the sun shines’ I will throw up. It’s nauseating, isn’t it? It reduces debate, intellectual debate, economic debate, to the lowest level of a slogan. That’s why we’re in the mess we are.”

Having abandoned his original support for the Chancellor’s fiscal charter, which mandated a budget surplus by 2020, McDonnell makes an unashamed case for borrowing to invest. “The biggest failure of the last five years under Osborne is the failure to invest,” he says. “Borrowing at the moment is at its cheapest level, but in addition to that I’m not even sure we’ll need to borrow great amounts, because we can get more efficient spending in terms of government spending. If we can address the tax cuts that have gone ahead, particularly around corporation tax, that will give us the resources to actually start paying again in terms of investment.”

He promises a “line-by-line budget review” when I ask whether there are any areas in which he believes spending should be reduced. “My background is hard-nosed bureaucrat . . . we’ll be looking at where we can shift expenditure into more productive areas.”

From 1982 until 1985, John McDonnell, who is 64, was chair of finance at the Greater London Council under Ken Livingstone. After vowing to defy the Thatcher government’s rate-capping policy he was sacked by Livingstone, who accused him of manipulating figures for political purposes. “We’re going to look like the biggest fucking liars since Goebbels,” the future mayor of London told him. McDonnell, who later described Livingstone’s account as “complete fiction”, has since resolved his differences with the man now co-chairing Labour’s defence review.

After his election as the MP for Hayes and Harlington in 1997, McDonnell achieved renown as one of New Labour’s most vociferous opponents, rebelling with a frequency rivalled only by Corbyn. His appointment as shadow chancellor was the most divisive of the Labour leader’s reshuffle. “People like Jeremy even if they don’t agree with him. People don’t like John,” one MP told me at the time. Mindful of this, McDonnell has sought to transform his image. He has apologised for his past praise of the IRA and for joking about assassinating Margaret Thatcher, rebranding himself as a “boring bank manager”. But there are moments when his more radical side surfaces.

He told me that he supports workers breaking the law if the trade union bill, which would limit the right to strike, is passed. “It’s inevitable, I think it’s inevitable. If the bill is introduced in its existing form and is used against any particular trade unionist or trade union, I think it’s inevitable that people will resist. We established our rights by campaigning against unjust laws and taking the risk if necessary. I think that’s inevitable and I’ll support them.”

“Chaos” might be how McDonnell describes Osborne’s position but the same term is now daily applied to Labour. The party is riven over air strikes in Syria and the renewal of Trident and MPs are ever more scornful of Corbyn’s leadership.

While Corbyn has so far refused to offer Labour MPs a free vote on Syria, McDonnell says that he favours one and would oppose military action. “My position on wars has always been that it’s a moral issue and therefore I veer towards free votes . . . We’re waiting for Cameron’s statement; we’ll analyse that, there’ll be a discussion in shadow cabinet and in the PLP [Parliamentary Labour Party] and then we’ll make a decision. I’m still in a situation where I’ve expressed the view that I’m opposed to the bombing campaign or engagement. I think the history of the UK involvement in the Middle East has been a disaster, to say the least . . .This isn’t like the Second World War where you have a military campaign – you defeat the enemy, you sign a peace agreement and that’s it – this is asymmetric warfare. In addition to the risks that are in the battlefield there’s a risk in every community in our land as a result of it.”

Would he want any of the 14 former shadow cabinet members who refused to serve under Corbyn to return? “All of them, we’re trying to get them all back. We’ve got Yvette [Cooper] helping us on a review we’re doing about the economy and women . . . It’s an open door policy, I’m trying to meet them all over these next few weeks.”

Livingstone, a member of Labour’s National Executive Committee, recently called for Simon Danczuk, who revealed details of a private meeting with Corbyn in the Mail on Sunday, and Frank Field, who told me that MPs should run as independents if deselected, to be disciplined. But McDonnell takes a more conciliatory line. “With Simon [Danczuk] in particular and the others, it’s just a matter of saying look at the long-term interests of the party. People don’t vote for a divided party. They’ll accept, though, that within a party you can have democratic debate. As I said time and time again, don’t mistake democracy for division. It’s the way in which you express those different views that are important. All I’m saying is let people express their views, let’s have democratic engagement but please don’t personalise this. I think there’s a reaction within the community, not just the party, against personalised politics. It’s not Jeremy’s style, he never responds in that way. It’s unfortunate but we’ll get through it. It’s just minor elements of it, that’s all.”

McDonnell disavows moves by some in Momentum, the Corbyn-aligned group, to deselect critical MPs. “What we’re not into is deselecting people, what we want to try and do is make sure that everyone’s involved in a democratic engagement process, simple as that.

“So I’ve said time and time again, this isn’t about deselection or whatever. But at the same what we’re trying to say to everybody is even if you disagree, treat each other with respect. At the height of the debates around tuition fees and the Iraq war, even though we had heated disagreements we always treated each other with mutual respect and I think we’ve got to adhere to that. Anyone who’s not doing that just lets themselves down, that’s not the culture of the Labour Party.”

In private, the 90 per cent of MPs who did not support Corbyn’s leadership bid speak often of how and when he could be removed. One point of debate is whether, under the current rules, the Labour leader would automatically make the ballot if challenged or be forced to re-seek nominations. McDonnell is emphatic that the former is the case: “Oh yeah, that’s the rule, yeah.”

McDonnell’s recent media performances have been praised by MPs, and he is spoken of by some on the left as a possible replacement if Corbyn is removed or stands down before 2020. His speech to the PLP on 23 November was described to me by one shadow minister as a “leadership bid”. But McDonnell rules out standing in any future contest. “No, no, I’ve tried twice [in 2007 and 2010], I’m not going to try again, there’s no way I would.”

Despite opinion polls showing Labour as much as 15 points behind the Conservatives, McDonnell insists that the party can win in 2020. “Oh definitely, yeah, you’ll see that. I think this next year’s going to be pivotal for us. We’re going to destroy Osborne’s credibility over the next six months. But more importantly than that, we can’t just be a negative party . . . we’re going to present a positive view of what Labour’s future will be and the future of the economy.

“Over the next 18 months, we’ll be in a situation where we’ve destroyed the Tories’ economic reputation and we’ve built up our own but we’ll do it in a visionary way that presents people with a real alternative.”  

George Eaton is political editor of the New Statesman.