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The cutting edge

The endless reports of cabinet infighting ignore the close “inner circle” of Mandelson, Balls and Br

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The script for the next general election is written and the words are being tested in Norwich North, scene of the latest by-election campaign. When David Cameron travelled up to visit the constituency this past week, a member of his staff showed him a leaflet published by Labour. It listed the cuts that would be imposed under a Conservative government, implying that there would be virtually nothing left in Norwich once the Tory leader had wielded the axe. Cameron looked up at the aide who had shown him the leaflet and said angrily: “This is all lies. It even says we are going to take away the free TV licence for pensioners. We have never said any of this.” He paused, and then mused: “They are using Norwich as a dry run for the general election. This is what it is going to be like for months.”

Cameron and his shadow chancellor, George Osborne, are fairly confident that at the broadest level they have won the early skirmishes in the latest pre-election “tax and spend” debate. There is not a commentator in the land, left or right, who believes that Labour would be in a position to “spend, spend, spend” after the next election. More specifically, Norwich would not emerge unscathed if Labour won a fourth term.

Nonetheless, Gordon Brown has resurrected the old, familiar dividing line about “investment v cuts”. Cameron responds by arguing that the real divide is between honesty and dishonesty over the need for reductions in spending, a not entirely honest position, as he has not explained in any detail how he would cut. It is always the detail, and not a bland theoretical plan to reduce spending, that alarms voters.

There is an important and genuine divide between the two main parties, but it is subtler than Brown is willing to accept in public. The government has chosen to maintain high levels of spending in the recession and to bring forward some capital programmes in order to boost the economy. Cameron would have started to cut last year. In the future, the divide becomes vaguer but still marked. A Conservative government would reduce spending more quickly and also hope to cut taxes. Labour would also have no choice but to cut spending, but would do so slightly less speedily.

Probably Labour’s experimental campaign in Norwich North will fail. Local polls put the Conservatives ahead and it seems likely that the non-Conservative vote will be spread between the Greens, the Liberal Democrats and the incumbent Labour Party. But do not write off Brown as an election campaigner. Cameron and Osborne watch the fading dynamics of New Labour with the same nervy, obsessive fascination with which Blair and Brown followed the Conservatives even under William Hague and Iain Duncan Smith. They know that Brown will fight a ruthless general election campaign with one or two messages aimed at making any alternative appear truly frightening.

Osborne has pointed out to Cameron that Brown nearly turned around the elections for the Scottish Parliament in 2007 when, as chancellor, he virtually left the Treasury for a couple of weeks to take on a soaring Scottish National Party. A still better example is the first election for the parliament, when Brown moved up to Edinburgh to take control of a lacklustre Labour campaign. Under his guidance, Labour moved ahead and won easily. It is a myth that Brown is an election loser. He may not be a publicly agile politician, and Cameron’s quick wits make him seem even more lead-footed, but he knows – or did know – how to win elections.

Yet there is some acceptance within Brown’s inner circle that if he and his party are to get out of their dire position, his message requires refinement. A shift of sorts is already starting to take place. In interviews the weekend of 27 June, Ed Balls focused on the increased investment now – not least in his own domain, where he managed to get additional cash from the Treasury to fund training schemes and sixth-form places for the larger-than-expected number of kids opting to stay on at school after the age of 16. As for the longer term, Balls suggested that much depended on the scale of the recovery, but Labour would prioritise investment and would need to act “deftly”. This is deliberately vague and euphemistic, but not as mendacious as suggesting that Labour would “spend, spend, spend”.

After one performance at Prime Minister’s Questions in which Brown insisted that investment would increase under Labour, Conservative strategists pored over every one of the projected spending areas, assuming that they would find one chart which did actually show a real-terms increase, and this would be the one to which Brown had clung. They could not find one.

However, the persistent reports of differences between Balls and Peter Mandelson over the “investment v cuts” strategy are overstated and miss the main change in the dynamics of the cabinet. Indeed, they are contradicted by the same reports that highlight Mandelson’s immense power. If Mandelson wholly disapproved of the strategy, he could have stopped it. The truth is that Balls and Mandelson speak every day and attend joint strategic meetings with Brown at least twice a week.

The most significant change since the hopelessly disparate attempted coup last month is how the rest of the
cabinet relate to Brown, Mandelson and Balls, the trio who are working closely together. Recently a friend asked one cabinet minister on the so-called Blairite wing whether he thought Mandelson would tell Brown that the game was up if polls suggested Labour was heading for electoral oblivion. The minister replied that he could no longer have such a conversation with Mandelson; it would be seen as disloyal to Brown to present such a hypothesis. In his view, Mandelson now works first and foremost for Brown, and that is the end of the matter. Similarly, a cabinet minister regarded as a Brown supporter feels less engaged now that the Prime Minister has in effect formalised an inner circle with Mandelson and Balls at its heart. It is cabinet ministers outside the inner circle who dare to wonder about where all this is heading.

But they wonder shapelessly. In theory, they are strong. Brown cannot afford any more resignations. Ministers have more space to breathe than at any time since Labour came to power, when nearly all of them were stifled by the Blair/Brown duopoly, followed by the Brown coronation. The most potent example is the position of the Chancellor, Alistair Darling, who is now unsackable, having been almost sacked at the last reshuffle. Darling is aware of his peculiar security and is becoming more assertive in his determination to convey a more prudent message about future spending prospects.

However, there is little sign, as yet, that any minister in the “outer circle” has a better election strategy than the one being advanced by Brown, Balls and Mandelson. This includes Darling, who hasn’t found a compelling political message to accompany his more authoritative handling of the economy. As a senior government insider put it: “Alistair has to decide whether he wants to be like Roy Jenkins – an austere chancellor who delivered a Budget that contributed to Labour losing the election in 1970 – or a genuinely Labour chancellor who wants us to win.” The suggestion that it is up to Darling to decide which course he will take is a testament to the power that suddenly resides in the Treasury.

For now, the signs are that Brown, Balls and Mandelson are more focused than the disparate insurrectionists and bewildered internal critics. Alan Milburn’s announcement that he will not stand at the next election is a significant straw in the wind. Milburn has financial interests outside politics, but his decision signals a lack of rebellious energy among the dissenters. Milburn announced his departure at a time when Brown was giving interviews in which he declared, in that forbiddingly wooden phrase, that he still has a “job to do”. Milburn tried to stop Brown becoming Prime Minister, and played a role in the two attempted coups, and yet he is the one leaving politics.

Perhaps Milburn’s departure reflects a wider trend. The former cabinet minister is not defecting to another party. He is moving on. Voters seem to be moving on, too. The focus on the top of the Labour and Conservative parties is important, but also deceptive. It ignores how the main parties are suffering from a wider crisis of identity and purpose, one that was fuelled – but not caused by – MPs’ expenses.

At a recent debate on electoral reform at the Royal Society for the Arts, the main speakers all highlighted what one called the “historic hollowing-out of political parties”. John Keane, author of a brilliant new book, The Life and Death of Democracy, described the decline of parties as the great wild card in British politics, one that would transform the political landscape. The Labour MP Denis MacShane agreed with the assessment, but regarded the decline as ominous. Revealingly, the Conservative MP on the panel, Douglas Carswell, also agreed, but was excited by the development. Cameron has quite a few MPs on his side who are wary of more or less any institution, including the Conservative Party.

The broader assessment is confirmed by the likely multi-party battle in Norwich North, and by the outcome of the European elections. The signs are everywhere. At its recent packed annual conference, the Labour-supporting think tank Compass invited senior Greens and Liberal Democrats to speak. In her unsuccessful campaign to become Speaker, Margaret Beckett argued she would be able to handle a hung parliament, one that would include more political parties. The Lib Dems privately discuss how they can play their part in forging a progressive alliance with other, vaguely like-minded parties.

In a limited way, this is where the top of the Labour Party connects with the preoccupations below. Brown and Balls are correct to put the case for “dividing lines”, or else there would not be much point in distinctive political parties. But they need to make sure the divide is credible and capable of withstanding relentless scrutiny. Those turning away from Labour might also pause to reflect on the consequences of their defiant defections. The proliferation of smaller parties is likely to benefit Cameron – as voters in Norwich North will almost certainly demonstrate when they go to the polls and ignore Labour’s warnings about the Tories’ monster tax cuts.

Steve Richards is chief political commentator for the Independent and a contributing editor of the New Statesman

This article appears in the 06 July 2009 issue of the New Statesman, HOWZAT!