On the right track, but a long way to go

Ed Miliband and the Labour Party have rightly been criticised over the last two years or so for lacking policy detail. They’ve opposed pretty much every single cut brought forward by the Government, yet have not outlined any cuts that they would make. In the last couple of days, Miliband has moved to slightly eradicate these accusations by asserting that a Labour Government would bring back the 10p tax rate (abolished by Gordon Brown in 2007) on earnings above the personal allowance, funded by a mansion tax on households worth over £2 million. These progressive measures are an important step forward, but they are far from a seal of approval of their ‘One Nation’ message.

The Labour Party still face criticism for their role in the financial crisis of 2007 onwards, especially from Coalition members on the back foot during ensuing economic gloom. “Cleaning up the mess left behind by the last Labour Government” is a recurring theme that is fair but nevertheless hollow, and it wasn’t the only economic variable of the crisis. Miliband and Ed Balls have been frank, this time, in saying that the 10p tax rate abolition was a mistake. The Conservatives will no doubt counter this by saying that Balls and Miliband were Gordon Brown’s backroom team at the time of the 2007 decision, and this could come back to hurt them in 2015. Nevertheless, it is a sensible move to own up to the mistake; if the country is to trust Labour with the economy again, they will not want a Labour Party completely unrepentant of its mistakes in the 2005-2010 premiership. The poorest taxpayers were the victims in 2007 whilst Brown desperately tried to chase a headline grabbing cut in the basic rate from 22p to 20p, so restoring the 10p rate would be a progressive measure. It also places the Tories in an uneasy position ahead of the March budget; they do not want another “omnishambles” moment.

The mansion tax move is also welcome, but it is not original. It has been a Liberal Democrat policy for many years, and it is only the veto of the Conservatives in Coalition that has prevented its enactment. A few years ago, the Lib Dems initially went further and called for a tax on homes worth over £1 million, but backed down under pressure. It is hoped that the tax will raise £2 billion, far below the optimistic £7 billion estimates, but nevertheless a sign of fairness in austere times. Some legitimate concerns are raised over such a tax, and means testing would be a terrible move, but can blocking the tax be justified when people across the country on low and middle incomes are struggling with Council tax? The levy on houses over £2 million would be 0.1%; hardly crippling. The tactical advantages of the mansion tax are clear; after cutting the top rate of tax from 50% to 45%, are the Tories prepared to be portrayed as the “party of the rich” again? As The Independent alluded to, Miliband could also set the cat amongst the pigeons by forcing a commons vote on the issue, a test of Nick Clegg’s leadership. If such a vote were to occur, Clegg would be sensible to go for the jugular and vote for it, therefore proving not only that a partnership with Labour is possible in 2015, but also that the Lib Dems still have a distinct identity in Government, and are prepared to battle on the side of fairness.

Although the reintroduction of the 10p rate would be welcome, frustratingly the Labour Party has still not come out in support of the flagship Lib Dem (and now Government policy) of raising the income tax threshold to £10,000. I’ve spoken before in this blog of my desire for everyone on the minimum wage to be lifted out of income tax (a threshold of £12,500), and addressed Nick Clegg on the issue; introducing a 10p rate on earnings above £10,000 would be a step in this direction. From a threshold of around £5,100 to £8,100 already in less than three years, a noble cause previously denounced in 2010 as unaffordable by David Cameron is being met, yet the tribal instincts of Labour remain in refusing to support it. If Miliband were also to come out and praise this move, it would strengthen links again between Labour and the Lib Dems, and potentially reinforce an alignment of the Centre-Left. It would also help Miliband in defying the claim that he leads an opportunistic opposition policy that merely votes against every Government measure. Labour would also do well to support the £10 billion pupil premium (another Lib Dem flagship policy; yes they are making a difference!), which is designed to provide extra funding for the poorest primary school students.

Labour still have time to build up more policy initiatives, and it is sensible to release them bit by bit, rather than in one full-blown white paper. However, scratching beneath the surface, the Labour message is still relatively hollow; in short, they oppose every Government cut, yet will not promise to reverse any of them in 2015. This tacit attempt at economic competence is anything but inspirational, and, if maintained, hardly presents the electorate with much of an alternative to the Tory-driven unfair elements of the current Coalition. If the ‘One Nation’ message is to catch on, Miliband needs to pursue policies that offer positive alternatives to the current Government, whilst maintaining that cuts need to be made, but not with the current thrust or composition. Calling unequivocally for a restoration of the 50p tax rate to be in the 2015 manifesto would not only emphasise a fairness agenda, but it would further place unease on David Cameron; it is not easy to defend a tax cut that will benefit people earning over £150,000, and better to propose the measure now rather than before the 2015 election where it can be portrayed as another 1992-esque “tax bombshell”.

I welcome Miliband’s latest policy initiative, but he must distinctly go further in the next two years, offering both a coherent and different economic vision, not one that is essentially “we don’t like what you’re doing, but we’ll continue to do it”.  Pushing for the progressive cause is vital in austerity Britain, and it is a noble cause. Miliband is on the right track, but there is much more to do, starting with an olive branch to the Liberal Democrats.

EU referendum: Better out than in?

The terms are set. Provided that the Conservative Party wins the election in 2015, an in-out referendum on membership of the EU will be held in 2017, with the hope of new terms on the table. David Cameron does not want the UK to “slide out of Europe”, but he wants a change in Britain’s relationship with the EU, namely a repatriation of powers from Brussels. Delayed by the hostage crisis, Cameron has offered an unequivocal stance to the British people. Is it the right one?

It would be a rather optimistic view to believe that Cameron has done this for intrinsic or genuine purposes. It is an out and out tactical manoeuvre, designed with the specific intention of placating his pesky rebel backbenchers (almost 100 in number) and the growing threat of UKIP. In the short term, it could reap dividends. The EU rebels within the Conservative Party are appeased (for now), and Nigel Farage’s demagoguery is somewhat diminished; with his rallying cry of “give us a referendum”, what now can he offer that hasn’t already been offered by the Conservative Party? Furthermore, it places the Liberal Democrats and the Labour Party in particular in a tight spot; if UKIP’s supporters now flock back to the Tories, Ed Miliband’s poll lead could significantly be cut short. Miliband is pro-European like much of his party, and does not want an EU exit. However, if he sticks by these principles and doesn’t offer a referendum too then he could be lampooned as the man who doesn’t “trust the people”. If Euroscepticism really is catching on, he could ironically be categorised as “out of touch” with the public.

Despite these factors, Cameron has been shown up. Whilst many commentators will view this offer as a strength of his leadership, it conversely portrays a weakness. Just as John Major’s time in office was blighted by in-fighting over Europe, Cameron has allowed himself to cave into the demands of a section of backbenchers within the Conservative Party, all of this despite proclaiming in 2006 that the Tories should “stop banging on about Europe”.

Despite a manifesto commitment from all three of the major parties to a wholly or mainly elected House of Lords, Cameron withdrew the bill when it was obvious that he could not control the minority of Tories numerous enough to block it (although the Labour Party are guilty of intransigence on this issue, too). Whilst mainly would say that a smidgeon of democracy is not a priority, the House of Lords episode nevertheless exposes a similarity with Cameron’s handling of Europe; he is not strong enough to put into practice what he believes in. There’s no doubt that he is Eurosceptic, but equally he does not want an EU exit, something which this referendum could well speed up.

Criticism does not fall solely at Cameron’s door. Many Conservatives (rightly or wrongly) bemoaned electing the House of Lords as a “distraction” from the priority of growth and getting the economy moving. A fair riposte, yet it is these same backbench rebels that are now screaming from the rooftops about Europe; if they were to listen to the millions of low and middle income earners in the country battling with austerity Britain, do they really think that Europe will be listed as the main priority? In this context, Chris Huhne’s description of the “Tea Party tendency” within the Conservative Party is shrewdly accurate. The Tories in Britain are, mercifully, not as right-wing and zealous as the far-right Republicans in America, but this EU episode nevertheless exposes this tendency, namely their ignorant determination to pursue an ideological model of self-interest, without paying much heed to the wider issues.

David Cameron was right to say that Britain would be presented with “a false choice” if a referendum was held in this parliament, but we would arguably be presented with a false choice in 2017, too. A reasonable debate has yet to emerge on the EU. Media outlets such as The Independent, The Guardian and The Economist are fighting the pro-Europe corner, but far more numerous in circulation are the influential Eurosceptic bastions such as The Sun and The Daily Mail. Rupert Murdoch’s influence remains prominent; he has recently had private meetings with Tory leader-hopeful Boris Johnson. There’s little doubt that large swathes of the electorate are at least sceptical about Europe, but have they really been presented with the plus points of membership? Mythical figures are bandied about too readily about the cost of membership, with no detail whatsoever on what we get back, or the benefits of it. In a recent blog entry, I have already alluded to the lack of scrutiny of UKIP, and this applies too to the lack of examination of the Eurosceptic argument.

Exports to other EU countries account for 51 per cent of the UK’s exports of goods and services, worth £200 billion; trade with the US, by contrast, constitutes 13 per cent of UK exports. Even I will admit that this trade would not simply disappear if we left the EU, but it is highly unlikely (and too great a risk) that these levels of trade would be unhindered under an exit plan. The other EU members are disgruntled enough as it is with Britain; would they really be willing to offer new trade agreements with Britain? Furthermore, a senior US official recently noted that the US “welcomes an outward-looking European Union with Britain in it. We benefit when the EU is unified, speaking with a single voice, and focused on our shared interests around the world and in Europe...we want to see a strong British voice in that European Union. That is in the American interest." You would think that ‘Special Relationship’ romanticists on the Tory backbenches would sit up and take notice of this, but alas. The EU offers multilateral partnerships, which are more crucial than ever in an era of austerity and economic uncertainty.

The status quo does not have to be maintained. The EU needs to be far more democratically accountable, and any future treaties need to be ratified by the consent of the people through referenda. However, positives can still emerge from this referendum. Ed Miliband and Nick Clegg now have the opportunity to passionately stand by their pro-European principles, and (dare I say it) work together on the issue; the vote against the boundary changes could be a tentative step in this direction. The referendum could also diminish the socially conservative UKIP, a factor often overlooked. Cameron has won the battle for now, but he is kidding himself if he thinks that the Tory rebels will cut him some slack, even with an agreement on a first ever cut in the EU budget for the period 2014-2020. If a new pro-European alliance can offer a strong case for EU membership, with dogma kicked aside, Cameron could lose the war and the Election.

Chris Huhne

Chris Huhne

In 2007, Chris Huhne lost the Liberal Democrat leadership contest by a margin of 511 votes to Nick Clegg; an unofficial check of Christmas postal votes that missed the election deadline showed that Huhne had enough votes for victory. Huhne could have been Deputy Prime Minister at this moment, yet now his political career is over for perverting the course of justice over claims that his ex-wife Vicky Pryce took speeding points on his behalf.

Huhne is now in the process of resigning from his Eastleigh seat, yet, having now accepted the charge, it is worth remembering what he said when he resigned from the Cabinet as Climate Change Secretary in 2012: 

“I am innocent of these charges and I intend to fight them in the courts and I am confident a jury will agree.” 

Huhne should be rightly slated, whether he’s a fellow Liberal Democrat or not. Not only has he lied in public whilst having a senior position in Cabinet, but his actions have soured his achievements in politics somewhat; the event in question happened ten years ago. On a Coalition note, it is another notorious addition to the list of departed Cabinet members (think David Laws, Liam Fox and Andrew Mitchell). Huhne was still being touted recently as a future Lib Dem leader, but a third crack at the top job is no longer possible.

Although elected as recently as 2005 with a wafer thin 568 majority, Huhne’s political career stretches back to an SDP candidacy in Reading-East in 1983, before serving as an MEP for South East England. 

With a resignation from his Eastleigh seat soon to follow, Huhne has left a power vacuum, and a potential bust up within the Coalition. The Tories finished a close second in 2010 on 39.3% of the vote, with Labour a distant third with 9.6%. A Lib Dem collapse in their share of the vote is inevitable, but even a ‘One Nation Labour’ surge would not be enough to stop the Tories winning the seat. 

However, Nigel Farage may yet run for UKIP, which could split the right-wing vote and allow the Lib Dems back in, whilst tactical voting from Labour voters in the constituency (an unlikely case of ‘holding their nose’ and voting Lib Dem) could defeat the Tories.

It seems a long time ago now since Huhne’s “calamity Clegg” moment in the 2007 leadership contest (type it into YouTube to see a Jon Sopel-instigated battle), but his absence from Cabinet, it has to be said, has deprived the Liberal Democrats of a strong voice against the Conservatives, which is vital for Party self-confidence and identity. He was shrewd in his analysis of the Tory rebels as the “Tea Party tendency”, and was an experienced member of the Party. Nevertheless, his actions should not go unpunished because of this, and it is surely arguable that the situation could have been considerably diminished had he accepted the necessary punishment back in 2003. 

On a side note, it narrows down the Lib Dem leadership field if and when Clegg goes. Tim Farron will be popular with the Party activists, whilst Vince Cable will appeal to the Party bigwigs. Could Simon Hughes try one last time, and might Ed Davey enter the fray?

I briefly met Chris Huhne at the train station when returning home from the 2012 Spring Conference in Gateshead. Needless to say, he wasn’t in a hurry.