Archive for the ‘Blogs’ Category

Briefing: Labour MPs split

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So, it’s finally happened: after months of speculation, Labour’s outspoken centrist MPs have left the party, saying that the Labour leadership no longer shares their values.

The MPs will sit in the House of Commons as The Independent Group and a website and social media channels were up and running by the time the seven took to the stage.

What does this mean for Labour? Firstly, the last time Labour split on this scale, when the Gang of Four formed the SDP in 1981, it ushered in eighteen years of Tory governments because the anti-Conservative vote was split.

Labour’s leadership will be acutely aware that this will make it harder for Jeremy Corbyn to enter Number 10. With both parties neck and neck in the polls, every vote and every seat in the Commons will count.

Secondly, an independent centre grouping in the Commons will provide a platform for dissent. The group will no longer be subject to the threat of trolling of deselection by Momentum because they have effectively deselected themselves.

This means they will be free to say whatever they like on policy issues ranging from national security to public services, but focused on Brexit – the issue that hurts Corbyn most amongst party members and left-of-centre voters. The group will also be vocal on internal party matters such as anti-Semitism where the bullying campaign against Luciana Berger in Liverpool Wavertree is known to worry Corbyn’s inner circle, simply because of how bad it looks to the public.

The group will sit as a formal bloc within Parliament with spokespeople and structures and if they are entitled to ‘short money’ they will receive public funding. Donations are also to be published. The key question is whether or not more MPs will join them and to what extent they can lay down roots across the country. Chuka Umunna made a clear call to the British public to join the group at the end of his statement.

This brings us to the People’s Vote Campaign, who announced over the weekend that there will be a mass demonstration on March 23rd. This will provide a national platform for members of the Group and if it attracts similar numbers to the demonstration last Summer you can start to see what a new national Party might look like.

The official Labour response has been that Jeremy Corbyn is disappointed to see them go. The unofficial response has been that Labour are better off without them. Twitter trolls will be out in force, led by Corbyn’s outriders in the media. Momentum have accused them of creating a ‘spoiler Blairite Party’ with the objective of splitting Labour’s vote in Tory marginals.

Vince Cable has issued a statement saying the Liberal Democrats would be “engaging in talks” to advance of a second referendum. Their network of councillors could be crucial in the formation of any new national centrist party. All eyes now will be on what the moderates in the Conservative party might be tweeting. By positioning themselves as The Independent Group it leaves the door open for people like Anna Soubry or Dominic Grieve who have worked closely with Chukka Umunna in the campaign for a second vote.

The seven Independent MPs are Chuka Umunna (Streatham), Luciana Berger (Liverpool Wavertree), Anne Coffey (Stockport), Gavin Shuker (Luton North), Mike Gapes (Ilford South), Chris Leslie (Nottingham East) and Angela Smith (Penistone and Stocksbridge).

Who holds the key to a second referendum?

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The dynamics of whether or not the Prime Minister will get her deal through Parliament has meant all eyes have been on rebels, both leave and remain, in her own party.

However, what Labour decides to do may end up having a greater significance than events on the Conservative benches.

Following months of what has been described as ‘constructive ambiguity’ Labour was forced to take a position at its conference in September, against the wishes of its leadership, because pretty much every constituent part of the movement is in favour of remaining in the EU.

Labour’s official position now is to vote against the deal on the grounds that it fails to meet its six key tests; its first preference would be for a general election; and if that was not possible all options were on the table including a second referendum with the option to remain.

This final point is crucial. Jeremy Corbyn has been as reluctant as Theresa May to countenance a second referendum principally because there is a view in the leader’s office that sees membership of the EU as a restraint on its plans to nationalise parts of the economy.

So, what are Labour’s options? Firstly, they are duty bound to move a motion of no confidence in the Prime Minister, should she lose the meaningful vote in Parliament, in order to secure a general election. The question is over timing. Should the Government win a no confidence vote, the option of a general election will be off the table for the foreseeable future. Should the Government lose, then under the Fixed Term Parliament Act, Jeremy Corbyn will have 14 days to form a government with the approval of MPs. Only after exhausting this process can a general election be triggered.

However, Labour are by no means guaranteed to win a no confidence motion as the fear of a Corbyn government will likely reunite the Conservatives with the DUP. Labour are also wary of forming a government without an election for fear of being seen as opportunistic and trying to overturn the referendum result and, ultimately, lacking a mandate for their programme. Any decision will be tactical and made at the time.

If a general election is not immediately forthcoming there are a number of other options that Labour will pursue.

According to Keir Starmer, the Shadow Brexit Secretary, the priority will be to prevent a no-deal which would require over 50 changes to legislation and could well have a profoundly damaging effect on the economy Expect Labour, with the support of Conservative remainers to table a raft of amendments designed to stop the UK crashing out of the EU and force the Prime Minister back to the negotiating table. This will be the point also where Parliament could be asked to back a second referendum.

The $64,000 question, however, is where Labour will stand if this vote were to take place. Jeremy Corbyn has repeatedly said there will no second referendum and all hell broke loose last week when he told Der Spiegel in an interview that Brexit could not be stopped. The Shadow Brexit Secretary rushed to reaffirm the Party’s position in the Sunday papers and the Shadow Chancellor let it be known that his views might be changing; even going as far to let it be publicly be known that he has met with Alastair Campbell and other key staff from the Peoples Vote Campaign. Yesterday he told the BBC that if securing an election wasn’t possible “we’ll be calling upon the government then to join us in a public vote.”

This has led to ructions at the top of the Labour Party with Corbyn effectively being overruled. Corbyn’s conundrum is that he has voted against every European Treaty and was a reluctant remainer, while every other part of the Labour Party is in favour of remaining in the EU, despite what the electorate in Stoke-on-Trent Central might think. As with his views on Israel and Palestine, Corbyn is stubbornly refusing to change his mind, while McDonnell is calculating what concessions need to be made in order to get Labour into power.

The question then becomes what position the Labour leadership, and the Prime Minister for that matter, take on a second referendum and what form the questions should take. If there is to be a realignment of British politics, then this may well be the Rubicon. Quite apart from the mainstream parties there are now well-funded campaigns, on both sides, with extensive data sets and regional and national infrastructure and a much clearer proposition facing the electorate.

Do Marches Matter?

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Comparisons have been drawn between the 700,000 strong Peoples Vote march on Saturday and the 1,000,000 who turned out to protest against the war in Iraq in 2003.

The numbers for both events are obviously huge but the question is do demonstrations of this sort actually achieve anything? After all, the war in Iraq went ahead with some terrible consequences for the region and Tony Blair still went on to win a third decisive election victory in 2005.

If the two individuals who could do most to deliver a People’s Vote – the PM and the Leader of Her Majesty’s Opposition – were both conspicuous by their absence, then why should the demonstration change the course of Brexit. We’ve had a vote, Brexiteers say, and the people voted to leave.

But demonstrations of this size and nature do matter. They are often totemic of a feeling that public opinion has got ahead of the politicians; marking a wider cultural shift in ways that are not always immediately obvious.

In 1961 CND’s Aldermaston march came on the heels of Suez and Britain’s loss of status as a major military power. It signaled the end of the age of deference which culminated in students fighting with police outside the US embassy before the end of the decade.

Famously, the 1990 Poll Tax demonstration saw wide spread rioting in Trafalgar Square and the removal of the seemingly unassailable Margaret Thatcher within weeks.

The Stop the War coalition didn’t change foreign policy, but it did reset the narrative which led to Tony Blair being viewed, not as Labour’s most successful ever politician, but to being discredited as a liar and war criminal by his own party and paving the way for Jeremy Corbyn.

In many ways Saturday’s demonstration is a game changer. 700,000 politically engaged people on the streets, without a single arrest or sign of trouble, is a big number. It represents a very polite uprising of the progressive centre, many of whom carried placards saying, “I gave up a bottomless brunch for this” and “I’m very cross”. It was even likened by some as being the longest ever Waitrose queue.

The Guardian pointed out that Saturday’s march was larger than the memberships of both Labour and the Conservatives combined. This is quite something given that Labour likes to brand itself as a mass movement. Many on the march will have been Labour and Conservative members who are at odds with their leaders.

Currently the approach of both parties has being shaped by a relatively small coterie of politicians who want Brexit but for ideologically different reasons and who strain against the grain of their parliamentary parties. As they pull in opposite directions they are creating space in the middle for a wider public view which is now finding its voice and has some wind in its sails.

When Chinese Premier, Zhou Enlai, was asked in 1972, what he thought about the impact of the French Revolution, which had taken place 200 years earlier, he replied that it’s “too early to say”.

While it might be too soon to understand the exact ramifications of Saturday’s march what’s certain is that something important has happened. Regicide apart, the next scheduled general election is 2022, by which time Theresa May will have departed and a 73 year old Jeremy Corbyn will be seven years into his leadership – the traditional point when voters get bored.

It’s likely then that the next generation of political leaders will look a bit more like the queue at Waitrose and a little less like the angry ideologues, on both left and right… A little less take back control and a bit more about life’s essentials.

This will require a policy shift in terms of funding for social care, industrial strategy and wage stagnation, immigration and house building, designed to addresses the reasons why people voted to leave in the first place. And this, perhaps, more than the wording on the ballot paper of a people’s vote, will be the true legacy of Saturday’s march.

Five things to look out for in the Autumn Parliamentary session

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With conference season firmly in the rear-view mirror, we now look ahead to the potential trials and tribulations of the Autumn session of Parliament, and it’s not all about Brexit.

Here are our top five things to look out for:

  1. Brexit

If the media reports are to be believed, Brexit negotiations are 90% complete. This marks a significant step forward, but Theresa May’s headache is far from over. She must bring the deal before Parliament for MPs to vote upon in what has been called a ‘meaningful vote’.

The terms of this meaningful vote are still to be decided with commentators saying it will be far from the binary choice of ‘deal or no deal’ the Government have been presenting. This will be the defining moment of May’s premiership.

With divisions in her own party, ever growing calls for a second referendum and an opposition hell bent on securing fresh elections, it will take all of May’s skill to hurdle this obstacle.

  1. Budget

On the 29th October, Chancellor of the Exchequer Philip Hammond will outline his vision for the UK economy in his annual Autumn Budget.

Budgets are always challenging, but Hammond will be looking to balance more than just the books. Coming after the October EU Summit, but ahead of potentially two more dates in the diary for further Brexit discussions with the EU, how much scope will the Chancellor have to allow him to use this opportunity to reset the country’s fiscal policies?

  1. The Environment Bill

Brexit has led to a significant level of inertia on the domestic policy front. Whether or not May’s Brexit deal is to go down in flames in the ‘meaningful vote’, May will be considering her legacy as Prime Minister more widely. One Minister providing a reforming impetus is the rejuvenated Michael Gove. Gove has already taken on single use plastics, ivory, bee harming pesticides, microplastics and animal cruelty, and in an announcement in June of this year he is to bring forward an Environment Bill before Parliament. In this Bill we would expect to see many of the proposals put forward in the 25 Year Environment Plan, as well as a general consolidation of different environmental legislation.

  1. The Labour Party

During Conference, you could distinctly observe that Labour (calls for militant and general strikes notwithstanding) looked to project themselves as the Government in waiting. Now back in the real world with era defining votes on the table, will Labour continue to look the real deal or will they once again fall victim to infighting and battles over Antisemitism? The big Brexit votes will serve as an early test, but undoubtedly new twists and turns will emerge – how will the party as a whole look in responding to these?

  1. The proxy leadership election

Talk of a leadership has been ongoing since Theresa May’s disastrous General Election campaign in 2017, but this time might it have some serious legs? Against a backdrop of Brexit a chasm between three distinct wings of the Conservative party, and a leader that few in the Party want to lead another election campaign, May is in a very vulnerable position. Given the growing likelihood of another election in the event of May’s Brexit plan not making it past the meaningful vote, Johnson, Gove, Hunt, Javid and Rees-Mogg are waiting in the wings.

To trigger a leadership election the Chairman of the 1922 Committee must receive 48 letters of no confidence from party MPs. A batting failure in the meaningful vote could see the Prime Minister 48 all out.

Liberal Democrat Conference: Stuck in the Middle

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As the Liberal Democrats gather in Brighton for their annual conference this week, people are asking: what’s the point? The third force in British politics appears to have been reduced to a group of angry bystanders.

After losing 49 of their 57 MPs at the 2015 General Election, Brexit should have been a turning point for the Lib Dems, the only Party that directly opposed Brexit. Seizing this momentum could have united moderates from across politics and transformed the Party’s electoral fortunes.

Except that it didn’t. Despite promising local election results and a brief membership surge, the Party won a lacklustre 13 seats at the 2017 General Election and have failed to influence the Brexit debate ever since. Vince Cable’s keynote speech to Party conference this week rehashed a number of existing policies and gave a lukewarm endorsement to a second referendum on Brexit.

So, why has the Party been unable to capitalise on these ripe conditions?

  1. The legacy of government. As some predicted in 2010, the Lib Dems fared badly as junior coalition partners. They were perceived by many voters to have betrayed their values and become complicit in Conservative spending cuts. The decision to endorse the tripling of tuition fees has become totemic and the Party’s attempted constitutional reforms, which had the potential to leave a lasting legacy, all sunk without a trace.
  2. Decline as a campaigning party: Opposition parties work effectively when they vocally campaign on key issues to voters. Labour MP David Lammy’s campaigning for the Windrush community is an example, as is SNP work to protect shipbuilding on the Clyde. Beyond opposing Brexit – which polling shows to be anathema to many voters – it’s unclear what the Lib Dems stand for these days.
  3. Talk of a new party: The constant rumours of a new centrist, pro-European Party make it hard to take the existing one seriously. Lib Dem leadership have claimed to be in “conversations” about defection with up to 20 disaffected Conservative and Labour MPs for so long that many see the threat as simply no longer credible. MPs usually hold a tribal allegiance to their current Party, though this is not shared by the Lib Dems; in his recent book, Nick Clegg argues that the best strategy for stopping Brexit would be to join Labour or the Tories and back a pro-EU candidate in a leadership contest.
  4. Movement for moderates: Moderate people are by definition unlikely to take to the streets. The Lib Dems wish to emulate Momentum and create a grassroots movement, but outside university towns, their target voters are far less likely to actively campaign for change than their counterparts in Momentum, who have a driving vision of the wholesale transformation of society.
  5. Failure of leadership: The economic impact of Brexit is becoming clear; polling shows the public are becoming more sceptical; the centre ground is noticeably vacant in British politics; Labour are gripped an antisemitism crisis; the Conservatives are on the brink of self-implosion over Europe; swathes of the population feel politically homeless. Meanwhile, the Lib Dems have a healthy membership, adequate funding and a strong grassroots organisation. The UK is a petri-dish ripe for liberal internationalism and yet the Lib Dems flounder below 10% in the polls. The leadership must be held accountable for this fact. Vince Cable’s reincarnation as an omniscient grandfather has failed; a newer, younger leader should be given an opportunity.

It seems as though only a Brexit-related crisis would inspire mass support for the Liberal Democrats and their policy on Europe. There is already talk of becoming the Party of “return”, once Brexit has taken place. Yet history shows that strong domestic liberal policies, coupled with pragmatic internationalism and charismatic leadership, are the formula for success for the Party of the centre.

Interel’s Spring Statement Analysis

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In the run up to the Spring Statement, the Treasury went to some lengths to dampen the anticipation of what would be announced – stressing on a number of occasions that there would be no new fiscal announcements, that it would be much shorter than previous Autumn Statements and moving it from the prime time post-PMQs slot usually reserved for financial statements to a lower key Tuesday afternoon. Indeed it had even been reported that Philip Hammond would have probably preferred not to have had a Spring Statement at all, were it not a legal requirement by the OBR.

There was clearly therefore a concerted effort on the part of the Chancellor to move away from the practice of his predecessors, not least Gordon Brown whose ‘Pre-Budget Reports’ quickly became an exercise in media management and evolved into what became, in effect, an interim Budget mid-way through the political and financial year – a practice continued by George Osborne. Instead the business community now have just one annual Budget to wrestle with – something met with relief by those in the financial sector in particular.

We were told not to expect much from the Spring Statement and in that sense there were no surprises. However the Chancellor did highlight potential future policy changes and signalled areas where he would consult ahead of the next Budget. Here are some of the key things to take away from today’s Statement:

1. The Government is now running a surplus on its day to day spending – with tax receipts covering ongoing spending for the first time since 2002/2003

This announcement was in fact first made a fortnight ago. However despite being presented as a triumph by the Government, it is nevertheless two years later than they had originally planned. Behind the headlines, the national debt still stands at £1.8 trillion, or 86.5 per cent of annual economic output. The Chancellor has also announced that a departmental spending review will take place in 2019 to examine departmental budgets further.

2. A consultation on single use plastics

This had been expected for some time and is a big step forward in the Government’s new ‘green agenda’ being driven by Michael Gove. However, it also follows the recent criticism from the Environmental Audit Committee that the Government was ‘dragging its feet’ on the issue of introducing a deposit return scheme for plastic bottles. Today’s Call for Evidence is expected to put greater momentum behind the issue of plastic waste and put the ball back in the Government’s court.

3. Potential changes to the taxation of multinational tech companies – switching to a tax on revenues rather than profits

This would be a dramatic shift, and is designed to tackle tax avoidance by multinational tech firms who allegedly use various companies onshore and offshore to hide their profits. However, it won’t come as a surprise, as the proposed change was first raised by Financial Secretary Mel Stride in February.

4. A review into VAT paid by small businesses – with a proposal for a gradual introduction of VAT on firms with a turnover of more than £85,000 a year

This is likely to be well received by small businesses who currently face a cliff edge VAT bill when their turnover reaches £85,000 a year, with many suppressing business growth or their recorded takings in order to maintain healthy profit margins. A tapered system would give them greater incentive to grow.

5. A consultation on the impact of VAT and Air Passenger Duty in Northern Ireland

This was something insisted upon by the DUP in return for its support for Theresa May’s minority Conservative Government. It has long been a hobby horse of Northern Ireland politicians who have argued that it has driven business south of the Irish border where rates of VAT and APD are lower. A report into the issue is expected in time for the Autumn Budget.