Ed Miliband's beleaguered leadership of the Labour Party may not survive much longer but his forthright honesty in facing up to the inevitably gloomy economic backdrop to the 2015 General Election campaign should be of lasting benefit to the Labour Party.
His attempts this morning to breathe fresh life into his leadership have already been roundly mocked and his Radio 4 interview did sound rather desperate as he talked about his "inner belief' and dipped into the banal lexicon of American politics, tossing around phrases such as "Bring it on". If you look beyond that to the substance of what he said you can see the battle lines being drawn up for the next election. I don't think anything he said will unduly worry the Conservatives but the Liberal Democrats could have a real problem on their hands if Labour sticks to the Miliband line under a new leader.
His analysis of the most likely economic scenario as we go into 2015 is in line with most forecasts and his response to it is actually quite astute.
The choice in 2015 will be a grim one, rather as it was in 2010. The hopes of the Coalition Government that by 2015 the worst of the deficit cutting would have been done and that we would be seeing the first signs of the spring of economic recovery have been dashed by the Eurozone crisis. This is a far bigger blow for the Liberal Democrats than the Tories. The Lib Dems pinned their most fervent hopes on being able to detach themselves from the Tories in 2015, enabling them to say that the nasty job of cutting the deficit and setting the country back onto the road to recovery had been done. This would have given them a platform to boast about their part in securing that recovery and to set out a manifesto for the future that would offer the country undiluted Liberal Democracy. That hope has now gone.
The trap waiting for Labour
The next election will be highly polarised with the Tories arguing that the austerity programme needs to continue unabated and that they are the party to deliver it, especially if liberated from the (only mildly) restrictive confines of the Coalition Government. The trap for Labour would be to pretend that it can make all manner of promises about new spending which could not be delivered and which would merely remind the electorate of the economic disaster area that surrounded the previous Labour government. Ed Miliband has started to steer Labour away from that trap. If Labour can develop a coherent set of policies around a "fair austerity" theme then it could have the potential to win over many disillusioned Liberal Democrat voters.
It is hard to see the Liberal Democrats being able to counter the painful squeeze on their vote that an austerity election fought on these lines would exert. There is no obvious locus for them in a debate between Labour and Tory on these lines. To most people they are not a party with a strong, distinctive economic vision and are not going to be able to develop one while they are tied into the Coalition. One of the cleverest things that David Cameron did when forming the government was to give the Lib Dems the Financial Secretary to the Treasury knowing that this post would require a Liberal Democrat minister to take the lead in proposing and defending the deep cuts in public expenditure. The Lib Dems didn't help themselves by appointing David Laws to this post. His enthusiasm for swinging the public expenditure axe made George Osborne look positively restrained. Laws replacement Danny Alexander hasn't done much better as he has failed to develop a distinctive Lib Dem approach to the task, leaving his party with no option but to defend the Tory cuts at the next election.
The Tories also out manoeuvred the Lib Dems on tuition fees where they managed to saddle poor Vince Cable with the job of proposing the massive U-turn in Liberal Democrat policy on tuition fees. There is no escaping from taking responsibility for that despite attempts by some leading Liberal Democrats to argue retrospectively that the higher fees and the new system that supports them is fairer: that isn't what they told people at the last election.
This wouldn't be so bad for them if they were achieving some of their other cherished objectives such as political reform or a closer relationship with the European Union but these have all blown up in their faces.
Nick Clegg's rash charge into a referendum on the Alternative Vote was a disaster as it enabled the electorate to punish him for the betrayal over tuition fees. I don't hold out much hope for genuine reform of the House of Lords being achieved in this Parliament either.
Eurosceptic stance has boosted Cameron
Then there is Europe where Cameron has seized the first real opportunity that came his way to play the Eurosceptic card - and with some significant effect. The right of the Tory party, restless over what they were starting to see as too many concessions to their coalition partners, are now suddenly held in the palm of his hand. The wider electorate has also warmed to his Eurosceptic approach as most people fear being dragged too deep into the Euro crisis while we are still struggling with severe economic problems of our own. It has also given Cameron and Osborne a very convenient fig leaf to use as they will be able to shift some of the blame for the consequences of their draconian economic policies onto Europe while saying they are fighting the UK's corner for all they are worth.
Today might not mark the rival of Ed Miliband's leadership but he has made a good start on positioning Labour well for the next election.
His attempts this morning to breathe fresh life into his leadership have already been roundly mocked and his Radio 4 interview did sound rather desperate as he talked about his "inner belief' and dipped into the banal lexicon of American politics, tossing around phrases such as "Bring it on". If you look beyond that to the substance of what he said you can see the battle lines being drawn up for the next election. I don't think anything he said will unduly worry the Conservatives but the Liberal Democrats could have a real problem on their hands if Labour sticks to the Miliband line under a new leader.His analysis of the most likely economic scenario as we go into 2015 is in line with most forecasts and his response to it is actually quite astute.
The choice in 2015 will be a grim one, rather as it was in 2010. The hopes of the Coalition Government that by 2015 the worst of the deficit cutting would have been done and that we would be seeing the first signs of the spring of economic recovery have been dashed by the Eurozone crisis. This is a far bigger blow for the Liberal Democrats than the Tories. The Lib Dems pinned their most fervent hopes on being able to detach themselves from the Tories in 2015, enabling them to say that the nasty job of cutting the deficit and setting the country back onto the road to recovery had been done. This would have given them a platform to boast about their part in securing that recovery and to set out a manifesto for the future that would offer the country undiluted Liberal Democracy. That hope has now gone.
The trap waiting for Labour
The next election will be highly polarised with the Tories arguing that the austerity programme needs to continue unabated and that they are the party to deliver it, especially if liberated from the (only mildly) restrictive confines of the Coalition Government. The trap for Labour would be to pretend that it can make all manner of promises about new spending which could not be delivered and which would merely remind the electorate of the economic disaster area that surrounded the previous Labour government. Ed Miliband has started to steer Labour away from that trap. If Labour can develop a coherent set of policies around a "fair austerity" theme then it could have the potential to win over many disillusioned Liberal Democrat voters.
It is hard to see the Liberal Democrats being able to counter the painful squeeze on their vote that an austerity election fought on these lines would exert. There is no obvious locus for them in a debate between Labour and Tory on these lines. To most people they are not a party with a strong, distinctive economic vision and are not going to be able to develop one while they are tied into the Coalition. One of the cleverest things that David Cameron did when forming the government was to give the Lib Dems the Financial Secretary to the Treasury knowing that this post would require a Liberal Democrat minister to take the lead in proposing and defending the deep cuts in public expenditure. The Lib Dems didn't help themselves by appointing David Laws to this post. His enthusiasm for swinging the public expenditure axe made George Osborne look positively restrained. Laws replacement Danny Alexander hasn't done much better as he has failed to develop a distinctive Lib Dem approach to the task, leaving his party with no option but to defend the Tory cuts at the next election.The Tories also out manoeuvred the Lib Dems on tuition fees where they managed to saddle poor Vince Cable with the job of proposing the massive U-turn in Liberal Democrat policy on tuition fees. There is no escaping from taking responsibility for that despite attempts by some leading Liberal Democrats to argue retrospectively that the higher fees and the new system that supports them is fairer: that isn't what they told people at the last election.
This wouldn't be so bad for them if they were achieving some of their other cherished objectives such as political reform or a closer relationship with the European Union but these have all blown up in their faces.
Nick Clegg's rash charge into a referendum on the Alternative Vote was a disaster as it enabled the electorate to punish him for the betrayal over tuition fees. I don't hold out much hope for genuine reform of the House of Lords being achieved in this Parliament either.
Eurosceptic stance has boosted Cameron
Then there is Europe where Cameron has seized the first real opportunity that came his way to play the Eurosceptic card - and with some significant effect. The right of the Tory party, restless over what they were starting to see as too many concessions to their coalition partners, are now suddenly held in the palm of his hand. The wider electorate has also warmed to his Eurosceptic approach as most people fear being dragged too deep into the Euro crisis while we are still struggling with severe economic problems of our own. It has also given Cameron and Osborne a very convenient fig leaf to use as they will be able to shift some of the blame for the consequences of their draconian economic policies onto Europe while saying they are fighting the UK's corner for all they are worth.
Today might not mark the rival of Ed Miliband's leadership but he has made a good start on positioning Labour well for the next election.
One of the most striking outcomes of yesterday's discussion on referral fees at the All Party Parliamentary Group on Insurance & Financial Services was the lukewarm support from the Labour frontbench for Jack Straw's strident campaign to ban fees.
John Woodcock, Labour's new shadow transport minister (right), was less than enthusiastic about an outright ban: "What troubles me is how do you avoid over-correcting? Clearly there is a broken marketplace but we need to ensure that we retain access to legal advice for people who need it". This view was succinctly echoed by Chris Shaw, commcercial director of AI Claims who was presenting to the group: "We need more of a scalpel rather than a sledgehammer".
This seems a far cry from Mr Straw's call for an outright, all-embracing ban on referral fees in his Motor Insurance Regulation Bill. This features five key provisions:
Jonathan Evans, chairman of the group, said that his belief is that most MPs feel that the £1200 flat fee for cases coming through the electronic portal is far too high and that there is a consensus emerging around the call in Mr Straw's bill to cut that by 50%. He was far more cautious about the proposal to criminalise the taking or offering of referral fees but warned that "unless there is a move to take unjustified cost out of the system people will continue to press for drastic action".
One area he suggested could benefit from closer scrutiny was the credit hire business which he alleged pushed up costs and incentivised repairers to take too long through practices such as booking in vehicles on Fridays. He also called for an investigation into allegations that the police may be passing on information from accidents for money.
Clearly, this debate has a long way to run. Many people instinctively feel that referral fees are wrong and have added unnecessarily to motor insurance claims costs. They certainly seem too high and are often paid indiscriminately for large amounts of data with very little justification by any test of public benefit. The challenge is going to be to find precisely where to wield Mr Shaw's scalpel if the market is to avoid Mr Straw's sledgehammer crashing down on it.
One of the other elements of Mr Straw's campaign - a crackdown on whiplash claims - is the topic for the next meeting of the group:
Tuesday 15 November, 4.30pm. Portcullis House, Room N
A new consensus for tackling whiplash culture in the UK
• Can the insurance industry agree on how diagnosis, claims and treatment could be changed?
• Is there a better way?
Speakers: Andy Wigmore, on behalf of Health and Case Management
Prof Sir Mansel Aylward (TBC)
John Woodcock, Labour's new shadow transport minister (right), was less than enthusiastic about an outright ban: "What troubles me is how do you avoid over-correcting? Clearly there is a broken marketplace but we need to ensure that we retain access to legal advice for people who need it". This view was succinctly echoed by Chris Shaw, commcercial director of AI Claims who was presenting to the group: "We need more of a scalpel rather than a sledgehammer".This seems a far cry from Mr Straw's call for an outright, all-embracing ban on referral fees in his Motor Insurance Regulation Bill. This features five key provisions:
- to make it unlawful and a criminal offence to solicit, offer, or pay referral fees relating to a personal injury traffic claim
- to introduce objective evidence for whiplash claims
- to half the Ministry of Justice fixed fee for road traffic claims pursued through the portal
- to prohibit insurers from isolating risk on the basis of a geographic area smaller than a region
- to bring forward certain provisions in Data Protection Act.
Jonathan Evans, chairman of the group, said that his belief is that most MPs feel that the £1200 flat fee for cases coming through the electronic portal is far too high and that there is a consensus emerging around the call in Mr Straw's bill to cut that by 50%. He was far more cautious about the proposal to criminalise the taking or offering of referral fees but warned that "unless there is a move to take unjustified cost out of the system people will continue to press for drastic action".
One area he suggested could benefit from closer scrutiny was the credit hire business which he alleged pushed up costs and incentivised repairers to take too long through practices such as booking in vehicles on Fridays. He also called for an investigation into allegations that the police may be passing on information from accidents for money.
Clearly, this debate has a long way to run. Many people instinctively feel that referral fees are wrong and have added unnecessarily to motor insurance claims costs. They certainly seem too high and are often paid indiscriminately for large amounts of data with very little justification by any test of public benefit. The challenge is going to be to find precisely where to wield Mr Shaw's scalpel if the market is to avoid Mr Straw's sledgehammer crashing down on it.
One of the other elements of Mr Straw's campaign - a crackdown on whiplash claims - is the topic for the next meeting of the group:
Tuesday 15 November, 4.30pm. Portcullis House, Room N
A new consensus for tackling whiplash culture in the UK
• Can the insurance industry agree on how diagnosis, claims and treatment could be changed?
• Is there a better way?
Speakers: Andy Wigmore, on behalf of Health and Case Management
Prof Sir Mansel Aylward (TBC)
One of the most striking outcomes of yesterday's discussion on referral fees at the All Party Parliamentary Group on Insurance & Financial Services was the lukewarm support from the Labour frontbench for Jack Straw's strident campaign to ban fees.
John Woodcock, Labour's new shadow transport minister (right), was less than enthusiastic about an outright ban: "What troubles me is how do you avoid over-correcting? Clearly there is a broken marketplace but we need to ensure that we retain access to legal advice for people who need it". This view was succinctly echoed by Chris Shaw, commcercial director of AI Claims who was presenting to the group: "We need more of a scalpel rather than a sledgehammer".
This seems a far cry from Mr Straw's call for an outright, all-embracing ban on referral fees in his Motor Insurance Regulation Bill. This features five key provisions:
One area he suggested could benefit from closer scrutiny was the credit hire business which he alleged pushed up costs and incentivises repairers to take too long through practices such as booking vehicles in on Fridays. He also called for an investigation into allegations that the police may also be passing on information from accidents for money.
Clearly, this debate has a long way to run. Many people instinctively feel that referral fees are wrong and have added unnecessarily to motor insurance claims costs. They certainly seem too high and are often paid indiscriminately for large amounts of data with very little justification by any test of public benefit. The challenge is going to be to find precisely where to wield Mr Shaw's scalpel if the market is to avoid Mr Straw's sledgehammer crashing down on it.
One of the other elements of Mr Straw's campaign - a crackdown on whiplash claims - is the topic for the next meeting of the group:
Tuesday 15 November, 4.30pm. Portcullis House, Room N
A new consensus for tackling whiplash culture in the UK
• Can the insurance industry agree on how diagnosis, claims and treatment could be changed?
• Is there a better way?
Speakers: Andy Wigmore, on behalf of Health and Case Management
Prof Sir Mansel Aylward (TBC)
John Woodcock, Labour's new shadow transport minister (right), was less than enthusiastic about an outright ban: "What troubles me is how do you avoid over-correcting? Clearly there is a broken marketplace but we need to ensure that we retain access to legal advice for people who need it". This view was succinctly echoed by Chris Shaw, commcercial director of AI Claims who was presenting to the group: "We need more of a scalpel rather than a sledgehammer".This seems a far cry from Mr Straw's call for an outright, all-embracing ban on referral fees in his Motor Insurance Regulation Bill. This features five key provisions:
- to make it unlawful and a criminal offence to solicit, offer, or pay referral fees relating to a personal injury traffic claim
- to introduce objective evidence for whiplash claims
- to half the Ministry of Justice fixed fee for road traffic claims pursued through the portal
- to prohibit insurers from isolating risk on the basis of a geographic area smaller than a region
- to bring forward certain provisions in Data Protection Act.
One area he suggested could benefit from closer scrutiny was the credit hire business which he alleged pushed up costs and incentivises repairers to take too long through practices such as booking vehicles in on Fridays. He also called for an investigation into allegations that the police may also be passing on information from accidents for money.
Clearly, this debate has a long way to run. Many people instinctively feel that referral fees are wrong and have added unnecessarily to motor insurance claims costs. They certainly seem too high and are often paid indiscriminately for large amounts of data with very little justification by any test of public benefit. The challenge is going to be to find precisely where to wield Mr Shaw's scalpel if the market is to avoid Mr Straw's sledgehammer crashing down on it.
One of the other elements of Mr Straw's campaign - a crackdown on whiplash claims - is the topic for the next meeting of the group:
Tuesday 15 November, 4.30pm. Portcullis House, Room N
A new consensus for tackling whiplash culture in the UK
• Can the insurance industry agree on how diagnosis, claims and treatment could be changed?
• Is there a better way?
Speakers: Andy Wigmore, on behalf of Health and Case Management
Prof Sir Mansel Aylward (TBC)
Change can be painful but is sometimes very necessary. We all know that our political system is broken: electors are disconnected, cynical and untrusting of politicians and the systems and institutions in which they operate. All the parties at the last General Election apparently embraced reform. Now it seems that they are all rapidly finding reasons to run away from those commitments now they have seen the potential consequences. I can think of few things - apart from another major expenses scandal - more likely to turn voters aways from the major parties and from engaging in the political process than a conspiracy of inaction on reform among the political establishment.
The charge sheet gets longer by the week and the latest furore is over the plans to reduce the number of MPs to 600 (from the current 650). An analysis in The Guardian today shows the Liberal Democrats are getting very cold feet about this reform which is already largely opposed by Labour. I'll put my cards on the table: I have always been in favour of reducing the size of the House of Commons and equalising the size of constituencies as this piece from February 2007 argues.
Reduction in the number of MPs is, of course, the other half of the reform proposals put through in the first year of this government, the first part being the referendum on the alternative vote. Having made an horrendous mistake in rushing into holding this, Nick Clegg and his party are now just waking up to the consequences of accepting the remainder of the package.
To me much of The Guardian's analysis rings true. Without the cushion of the alternative vote the Liberal Democrats will struggle to win in many of the new, larger seats but this doesn't mean they should be pushed into a corner and be made to look as if they are now opposing the reforms. As a party they already have enough problems with former leader Lord Steel lining up as one of the leading opponents of reform of the House of Lords.The Liberal Democrats once thrived as the party of reform and if they can't keep hold of that mantle then there will be very little left to enthuse potential supporters.
So, where will the debate over the reduction of seats take us?
At a national level it will be about the government holding its nerve and limiting the rebellions among backbench Conservative and Liberal Democrat MPs who find they have signed up to abolish their own seats. Labour seems likely to continue to cast itself as the leading anti-reform party and I expect will vote against the final package.
At a local level there will be all sorts of fun and games as endless reviews of proposed new boundaries are heard. There will be all manner of specious arguments about natural boundaries, community links (or non-links as the case may be) and accusations of gerrymandering bandied about with depressing ease. Most of it will be nonsense. Indeed, it has already started with one senior Labour source quoted today in The Guardian complaining that the 'rule' that Parliamentary constituencies shouldn't cross London borough boundaries will now be broken. The only problem is that Labour and Tories accepted that this rule should go back in 1997 - just look at the constituencies on the edge of east London that bizarrely cross the boundaries of the boroughs of Waltham Forest and Redbridge. Of course, that wasn't gerrymandering and didn't break any imaginary rules. Expect alot more of this hypocritcal nonsense between now and when the final proposals are put to Parliament in two years time.
I still think that the realisation among Liberal Democrats that many will be without seats steadily increases the prospects - still small - of the next General Election being a 'Coupon Election'. This may turn out to be a neat way for the Tories to resolve the inevitable battles where two sitting Tory MPs face each other across the ballot box. It would be a small step for the 'coupon' to be extended to favoured Liberal Democrats who the Tories think have a better chance of beating Labour, returning us to the days of the National Liberals and splitting the Liberal Democrats much as the old Liberals were split in the days of Lloyd George and Asquith.
Northern Rock debate needs to revive mutuality
26 May 2011
Image via Wikipedia
As the need to set a course for returning Northern Rock to the private sector forces its way up the Chancellor's agenda, more people are looking at the mutual option. In last year's General Election, Labour made it clear that it was serious about this as an option and its new shadow business minister Chuka Umunna has has ensured that this option is seriously looked at by tabling an Early Day Motion in the House of Commons that has now gathered support from over 100 MPs, including many Liberal Democrats and a handful of Conservatives, among them Jonathan Evans, chairman of the All Party Parliamentary Group on Insurance & Financial Services.
The mutual option also got an airing this week on the back of the excellent results from Nationwide, demonstrating to many that mutual ownership does have a role in the modern financial services sector. Nationwide has been quick to rule out taking over Northern Rock because it has a huge overlap in branch locations. The suggestion has, however, ensured that the debate is now very live in advance of a Deutsche Bank report on Northern Rock's future due to be delivered to UKFI - the taxpayer owned vehicle for managing the nationalised bank assets - before the summer recess.
I have long been a fan of mutuality in the financial services sector and regretted the tidal wave of demutalisations in the 1990s, including Northern Rock, as it severely reduced what I always thought was a valuable diversity of ownership that meant longer term interests of customers had a greater chance of being taken into consideration. Mr Umunna summed this up well in The Guardian today; "A remutualised Northern Rock would inject a valuable dose of participatory democracy into an industry that too often puts the short-term interests of shareholders above all else".
It will be over to Deutsche Bank for the next instalment in this debate but at least we are having a debate.
A huge amount of broadcast time and newsprint has been expended since the end of last week analysing the election and referendum results and, in particular, what they mean for the Liberal Democrats. Quite alot of it has missed some key points, not least in the almost exclusive focus on the proposed NHS reforms as the issue that the Lib Dems can use to put some distance between them and the Conservatives. I'm not sure it will be that easy for the Lib Dems to claim credit for any changes to NHS policy, partially because Labour is already moving effectively to set the pace and partially because there are many vocal Tory critics of Andrew Lansley's proposals too. For this reason I can see the breaking up of the major banks emerging as one of the key distinguishing issues between the Coalition partners.
But first back to last week's voting and a few thoughts on what it means.
Headlines about 'Lib Dem meltdown' were some way wide of the mark. It wasn't a meltdown. It was a significant drop from last year in as much as (in percentage terms) one third of the people who voted for them last year deserted them this year. Where these votes went is by no means an even pattern across the United Kingdom. In Scotland, they almost certainly went to the Scottish National Party, in the north of England to Labour, in the south of England mainly to Labour but there was some drift back to the Tories as well and in Wales they largely held steady.
These results - apart from Scotland - are not a disaster for the Lib Dems. The third party has been in many worse places in the last fifty years and is certainly not about to drop into a grave for its opponents to dance on.
The referendum on voting reform on the other hand was a disaster for them and one largely of its leadership's making. A fundamental error was made when Nick Clegg and his colleagues decided to rush the referendum through and hold it on the same day as the local, Scottish and Welsh elections. Almost every Lib Dem council leader in the country pleaded with them not to do this but with the same blind arrogance that led Clegg to vote for tuition fees rather than exercise the opt-out to abstain that was in the original coalition agreement, they ignored this sage advice.
The consequences of this decision were three-fold.
- First, there was no opportunity for pushing for the inclusion of a third option on full proportional representation which even if voted down by the Tories would have allowed the Lib Dems to claim they were still fighting for a policy that has been dear to their hearts for over fifty years.
- Second, it would have given the Yes campaign much longer to consolidate the majority there was for reform a year ago rather than fritter it away with a shambolic campaign. By comparison look at that savvy political operator Alex Salmond and his determination to play the long game over a referendum on Scottish independence.
- Third, by linking it to the other elections it meant that the pro-reform Labour lobby was almost non-existent as it was out campaigning for Labour candidates. This also made it very easy for the No campaign to characterise voting reform as a purely Lib Dem issue and personalise their campaign around the unpopular Mr Clegg. It also showed up the new Labour leader, Ed Miliband, as very weak as he failed to swing the majority of his party behind a policy that was in their manifesto only a year ago. By the end of the campaign the Labour opponents of reform were feeling so bold that they were campaigning under the banner 'Labour No to AV' making many of their supporters think this was official Labour policy. Miliband should have stamped on this.
The upshot of the huge vote against reform is that it is off the agenda now for at least a decade, if not two, rather like devolution was after the similarly botched referenda of the late 1970s.
Now the focus has switched to what the Lib Dems should do to recover from the double blow of electoral defeat and the loss of the referendum.
It has to be said that alot of the commentary this weekend and the statements from leading Liberal Democrats betray a high degree of naivete about what life in a coalition with the Conservatives would be like. I really don't think they have been used merely as a lightening conductor for public dissatisfaction over unpopular policies such as tuition fees but that their presence around the Cabinet table has emboldened the Tories to pursue tougher and more radical policies than they would have done. I offered this as a likely scenario last summer when reviewing the first 100 days of the Coalition.
This boldness might be about to come back and bite the Tories over the rushed and ill-thought out proposals to reform the National Health Service.
There seems to be very little desire among Lib Dems to precipitate a change of leadership and this probably makes sense. However, they could do with making it feel rather more collegiate as it was before Cleggmania blinded them during the televised leadership debates last year. Prior to that Vince Cable was by some way the most respected and popular senior Liberal Democrat. He hasn't had found the transition to ministerial life that easy but does seem to have a better grasp of the need for Lib Dems to have a distinctive voice in the Coalition government. If Clegg wants to restore Lib Dem fortunes he is going to have to take some risks and one of those is to give Cable more support and a higher profile.
This would have potential implications for the policies on which the Lib Dems could chose to draw some battle lines, most obviously banking reforms.
Prior to the General Election last year, Cable was by some way the most consistent and thoughtful political critic of the banks and the way the City operates and has consistently been in favour of splitting investment banking from retail banking. The timidity of the Banking Commission report that recently landed on his desk hands him a golden opportunity to stake out some distinctive political ground. It could also wrong-foot the Labour Party which has shown little appetite for radical reform of the banks.
Obviously, there are other issues the Liberal Democrats can pursue as they struggle to shed the image of being Cameron's lapdogs - environment policy and reform of the House of Lords being two of the other obvious areas - but neither of these would restore Cable to a high profile alongside Nick Clegg which seems to me to be one of the most obvious options for the Liberal Democrats.
Image via Wikipedia
Take today, for example.
Being the first day of the new tax year, many of the changes announced by George Osborne in his recent Budget have come into force. Barely had we rubbed the sleep from our eyes this morning than Mr Balls was on the airwaves denouncing today as 'Black Wednesday'. Now, there are clearly going to be some losers when a Chancellor sets out to withdraw so much government money from the economy but the complexity of the changes means that there are alot of winners too, making it a confusing - and not altogether 'Black' - picture for most people. Stephanie Flanders in her BBC blog puts this in context as succinctly as anyone has.
My question is simple: has Mr Balls backed himself into a rhetorical corner?
If you take the view, as I do, that we are by no means out of the economic danger zone that the last Labour government drove the UK into and that many things could actually get alot worse before they start to get better then he is indeed in a tight corner. For if today is "Black Wednesday" but Thursday, Friday and Saturday turn out to be worse what is he going to term them? This is not just a clever debating point but a real fear that he may have played many of his cards too early in the electoral game. If we do face tougher times then, by comparison, today may not seem too bad and we know that for many people it is actually quite a good day so they already won't be listening to his complaints. It could become the political equivalent of crying wolf.
Of course, what he might be betraying is a belief that this is actually as bad as it gets and that the coalition government's economic policies might work. We know that Labour has admitted that it, too, would have squeezed the economy hard had it been returned to office last May so there is likely to be a nagging doubt in Mr Balls' mind that maybe Mr Osborne's slightly tougher version of the same policies will actually prove to be the right model. If this is even partially true then it would explain the all out attack launched on the current round of tax and benefit changes as the opportunity might not be there next year or the year after as the medicine begins to work its way through the system.
In these difficult economic times we need an opposition that challenges and cajoles the government but it needs to do so in a responsible manner that maintains some genuine sense of perspective.
Is Ed Miliband another William Hague?
29 Sep 2010
I have been experiencing a sense of déja vu ever since Ed Miliband snatched the leadership of the Labour Party from his brother at the weekend. As I watched his worthy but rather dull speech to the Labour Party conference yesterday this sense of experiencing a re-run of recent political history kept returning. Then, this morning, I put my finger on it. Ed Miliband has committed the same mistake as William Hague in 1997.
Cast your mind back 13 years. The Tories had just lost a General Election after a long period in office, John Major had resigned as leader and two of the big beasts of the Conservative Party, Michael Howard and Ken Clarke, were lining up to slog it out for the leadership. William Hague, then 36, agreed to run as deputy on Michael Howard's ticket and this was announced one evening. By the next day, he had decided to go it alone and run for the leadership himself. He won it and it turned out to be one of the worst decisions of his political career.
What happened was that having agreed to back Howard, Hague was then persuaded by his close aide, Alan Duncan, that he could win the leadership himself. This turned out to be the correct analysis but the wrong judgement. I've always thought the Hague could have been leader of the Conservative Party almost whenever he wanted. 1997 was certainly not the time to take it on as the Tories had too much to do to throw off the messy legacies of a once successful leader who had become deeply unpopular (Thatcher), bitter divisions over Europe and an increasingly sleeze-ridden last few years in office.
The parallels with the position the Labour Party now finds itself in are many and for the 40 year old Ed Miliband not particularly auspicious. He, like Hague, was a late entrant to the leadership contest having calculated that he could win enough trade union votes to snatch the prize from his brother. But why would you want it now? Wouldn't he have been better to let someone else take it on now, suffer all the problems that the party will have in throwing off the unpopular Blair/Brown legacy and then come in after defeat at the next election as the saviour?
Having said there are significant parallels with the position the Tories were in in 1997, it is important to highlight some differences too.
First, the scale of Labour's defeat in May was nowhere near as bad as the trouncing dished out by Blair to the Tories in 1997.
Second, Labour in 1997 inherited a pretty sound and improving economy. Labour this time bequeathed an economic disaster, the remedies for which may yet prove so politically unpopular that the Coalition collapses under the strain.
Third, Labour is a deeply sentimental party and does not ditch its leaders lightly unlike the more ruthless Tories and, in recent, years the Liberal Democrats. Failure at the polls doesn't mean an end to a leadership, as Neil Kinnock proved.
All that said, I still think it is unlikely that Labour will win a majority at the next election: if the reduction of Parliamentary constituencies and the equalisation of electorates in the 600 seats that are left goes through then it will be almost impossible for them to do so.
Which brings me back to my feeling of deja vu. Why go for it now? I think we could be watching a man who could have been Prime Minister one day but will probably never achieve his ultimate ambition for the simple reason that he let that ambition overwhelm his political judgement, let alone any sense of family loyalty.
Cast your mind back 13 years. The Tories had just lost a General Election after a long period in office, John Major had resigned as leader and two of the big beasts of the Conservative Party, Michael Howard and Ken Clarke, were lining up to slog it out for the leadership. William Hague, then 36, agreed to run as deputy on Michael Howard's ticket and this was announced one evening. By the next day, he had decided to go it alone and run for the leadership himself. He won it and it turned out to be one of the worst decisions of his political career.
What happened was that having agreed to back Howard, Hague was then persuaded by his close aide, Alan Duncan, that he could win the leadership himself. This turned out to be the correct analysis but the wrong judgement. I've always thought the Hague could have been leader of the Conservative Party almost whenever he wanted. 1997 was certainly not the time to take it on as the Tories had too much to do to throw off the messy legacies of a once successful leader who had become deeply unpopular (Thatcher), bitter divisions over Europe and an increasingly sleeze-ridden last few years in office.
The parallels with the position the Labour Party now finds itself in are many and for the 40 year old Ed Miliband not particularly auspicious. He, like Hague, was a late entrant to the leadership contest having calculated that he could win enough trade union votes to snatch the prize from his brother. But why would you want it now? Wouldn't he have been better to let someone else take it on now, suffer all the problems that the party will have in throwing off the unpopular Blair/Brown legacy and then come in after defeat at the next election as the saviour?
Having said there are significant parallels with the position the Tories were in in 1997, it is important to highlight some differences too.
First, the scale of Labour's defeat in May was nowhere near as bad as the trouncing dished out by Blair to the Tories in 1997.
Second, Labour in 1997 inherited a pretty sound and improving economy. Labour this time bequeathed an economic disaster, the remedies for which may yet prove so politically unpopular that the Coalition collapses under the strain.
Third, Labour is a deeply sentimental party and does not ditch its leaders lightly unlike the more ruthless Tories and, in recent, years the Liberal Democrats. Failure at the polls doesn't mean an end to a leadership, as Neil Kinnock proved.
All that said, I still think it is unlikely that Labour will win a majority at the next election: if the reduction of Parliamentary constituencies and the equalisation of electorates in the 600 seats that are left goes through then it will be almost impossible for them to do so.
Which brings me back to my feeling of deja vu. Why go for it now? I think we could be watching a man who could have been Prime Minister one day but will probably never achieve his ultimate ambition for the simple reason that he let that ambition overwhelm his political judgement, let alone any sense of family loyalty.
About the Author
David has been a financial journalist for 30 years and is currently Group Editorial Services Director at Incisive Media.
-
Riot Damages Act set for reform
-
Banking reform is where the real action will be for the finance sector in this Parliament
-
All Party Group value in danger of being thrown out with the murky bathwater
-
These are dangerous days for the government as it drops the pasty, the jerrycan, the supper invite ...
-
Good news for the City: you won't need to bail out the Tory Party
-
Budget 2012: Politically inept, fiscally astute, economically limp
-
Solvency 2: Now you see it, now you don't
-
Let's salute one of the few men who really changed Parliament
-
APPGIFS example
Keith Lewis (via Twitter) on All Party Group value in danger of being thrown out with the murky bathwater
-
Dangerous or hopeful days?
pamela hartley on These are dangerous days for the government as it drops the pasty, the jerrycan, the supper invite ...
-
Abolition of the Lords
David Carr (via LinkedIn) on Let's salute one of the few men who really changed Parliament
-
It's the payroll vote that's the problem
David Worsfold on Let's salute one of the few men who really changed Parliament
-
Select Committees need MPs
John Leston (via Facebook) on Let's salute one of the few men who really changed Parliament
All Party Parliamentary Group Content
