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Philip Hammond shows the Conservatives how not to take on Jeremy Corbyn

The Chancellor's dismissal of the Labour leader as a “dinosaur” and a “Marxist” made the Tories sound like the party of the past.

A spectre is haunting the Conservatives: the spectre of Jeremy Corbyn. After losing their majority to Labour in June, the Tories now fear they are losing the battle of ideas. A man whom they long regarded as unelectable is within reach of Downing Street.

Philip Hammond's Conservative conference speech was so devoted to Corbyn that it felt like that of an opposition politician. At the opening of his address, the Chancellor quipped: "I can almost hear the warning bells going off in Conference Control Centre: 'Don't talk about the 70s!'" But Hammond then proceeded to do just that. "I think we owe it to the next generation to show how Corbyn's Marxist policies will inevitably lead us back to where Britain was in the late 1970s."

The top rate of income tax, he reminded his audience, stood at 83 per cent (98 per cent on interest and dividends), corporation tax was 52 per cent and much of industry was nationalised. There is little comparison, however, between such measures and Labour's social democratic 2017 manifesto (which proposed a top income tax rate of 50 per cent and corporation tax of 26 per cent). Corbyn's "Marxist policies", such as renationalisation, are supported by around 80 per cent of the public (a fact which strengthens Labour's claim to be "the new mainstream"). 

But Hammond wasn't done. "For those who don't like history lessons, I could equally appeal to geography," he remarked, invoking Cuba, Zimbabwe and Venezuela (hyperbole reminiscent of Churchill's 1945 warning that Labour government would lead to "a Gestapo"). Such was the length and ferocity of Hammond's attack on Labour that it was easy to forget that he was running the Treasury. "Last week at Brighton the dinosaurs had broken out of their glass cases, their political DNA apparently uncontaminated by any contact with the reality of 30 years of global economic development ... a sort of political version of Jurassic Park." 

Such attacks, ironically, made the Tories sound like the party of the past (an impression not aided by Hammond's ad-libbed quip: "An ageing population ... that's us!") Though party delegates will likely have agreed with every word, the unconverted will have been left cold. "I wouldn't trust him with a Monopoly set!" Hammond declared of John McDonnell. "Not even to give him the boot." But the Chancellor's speech dwelt too little on the reasons why an increasing number wish to evict the Conservatives. 

The housing crisis is at the root of the Tories' woes; it's hard to sell capitalism to those without capital. But beyond promising an extra £10bn in funding for Help to Buy (which merely inflates demand, rather than increasing supply), Hammond's speech offered no solutions to the problem. The Chancellor spoke of "the pressure on living standards caused by slow wage growth and a spike in inflation". Yet after the longest fall in real wages since the Napoleonic Wars, he was notably short of answers.

The spectre haunting the economy is that of Brexit. But until its close, Hammond's speech entirely evaded the subject. The Chancellor repeated his words of last year: "They [the electorate] didn't vote to get poorer or to reduce trade with our closest neighbours and biggest trading partners." Yet though Theresa May has proposed a two year transition, the UK is set to leave the EU single market and the customs union (neither mentioned in Hammond speech). As the Chancellor well knows, no British government in recent history has enacted such an act of economic self-harm. It's hard to defend capitalism when the UK is simultaneously leaving the world's largest single market.

As long as the Tories stand accused of such economic recklessness, and choose to insult Corbyn, rather than scrutinise him, they will struggle to regain their stride. 

George Eaton is political editor of the New Statesman.

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Can a “Momentum moment” revive the fortunes of Germany’s SPD?

Support for the centre-left Social Democratic Party (SPD) has sunk into third place, behind the far right Alternative for Germany.

Germany has crossed a line: for the first time in the history of the federal republic, the Social Democratic Party (SPD) has sunk into third place, polling just 15.5 per cent – half a point behind the far-right Alternative for Germany (AfD). The poll was published on the day the SPD membership received their postal ballots on whether to enter another grand coalition with Angela Merkel’s Christian Democrats, and inflamed debate further.

For the grassroots coalition opposed to the so-called GroKo (Große Koalition) the poll is proof that the SPD needs a fundamental change of political direction. Within the two grand coalitions of recent years, the SPD has completely lost its political profile. The beneficiary each time has been the far right. Yet another GroKo seems likely to usher in the end of the SPD as a Volkspartei (people’s party). Taking its place would be the AfD, a deeply disturbing prospect.

For the SPD leadership, the results are proof that the party must enter a grand coalition. Failure to do so would likely mean new elections (though this is disputed, as a minority government is also a possibility) and an SPD wipeout. The SPD’s biggest problem, they argue, is not a bad political programme, but a failure to sell the SPD’s achievements to the public.

But is it? The richest 45 Germans now own as much as the bottom 50 per cent. According to French economist Thomas Piketty, German income inequality has now sunk to levels last seen in 1913. Perhaps most shockingly, the nominally left-wing SPD has been in government for 16 of the last 20 years. Whatever it has been doing in office, it hasn’t been nearly enough. And there’s nothing in the present coalition agreement that will change that. Indeed, throughout Europe, mainstream left parties such as the SPD have stuck to their economically centrist programmes and are facing electoral meltdown as a result.

The growing popular anger at the status quo is being channeled almost exclusively into the AfD, which presents itself as the alternative to the political mainstream. Rather than blame the massive redistribution of wealth from the bottom to the top, however, the AfD points the finger at the weakest in society: immigrants and refugees.

So how can the SPD turn things around by the next federal election in 2021? 

The party leadership has promised a complete programme of political renewal, as it does after every disappointing result. But even if this promise were kept this time, how credible is political renewal within a government that stands for more of the same? The SPD would be given the finance ministry, but would be wedded to an austerity policy of no new public debt, and no increased tax rises on the rich. 

SPD members are repeatedly exhorted to separate questions of programmatic renewal from the debate about who leads the party. But these questions are fundamentally linked. The SPD’s problem is not its failure to make left-wing promises, but the failure of its leaders to actually keep them, once in office.

The clear counter-example for genuine political renewal and credibility is, of course, Labour under Jeremy Corbyn. In spite of all dire warnings that a left-wing programme was a sure-fire vote-loser, Labour’s massively expanded membership – and later electorate – responded with an unprecedented and unforeseen enthusiasm. 

A radical democratic change on the lines of Labour would save the SPD party from oblivion, and save Germany from an ascendent AfD. But it would come at the cost of the careers of the SPD leadership. Sadly, but perhaps inevitably, they are fighting it tooth and nail.

Having promised an “especially fair” debate, the conflict over the GroKo has suddenly surged to become Germany’s Momentum moment - and the SPD leadership is doing everything it can to quash the debate. Party communications and so-called “dialogue events” pump out a pro-GroKo line. The ballots sent out this week came accompanied by an authoritative three-page letter on why members should vote for the grand coalition.

Whether such desperate measures have worked or not will be revealed when the voting result is announced on 4 March 2018. Online, sentiment is overwhelmingly against the GroKo. But many SPD members (average age is 60) are not online, and are thought to be more conservative.

Whatever the outcome, the debate isn’t going away. If members can decide on a grand coalition, why not on the leadership itself? A direct election for the leadership would democratically reconnect the SPD with its grassroots.

Unless the growth in inequality is turned around, a fundamental reboot of the SPD is ultimately inevitable. Another grand coalition, however, will postpone this process even further. And what will be left of the SPD by then?

Steve Hudson is a Momentum activist and a member of both Labour and the SPD. He lives in Germany, where he chairs the NoGroKo eV campaign group.