Whips notebook: part two

by Jon Ashworth

Just before the Christmas recess we won a vote. It was at the end of a debate on the economy and our quick thinking and experienced chief and deputy chief whip forced a division when the government was least expecting it. There was panic on the faces of government whips, with one senior government whip, with the rather splendid title of comptroller of Her Majesty household seeming especially agitated.

It was no wonder that the government whips were so hot under the collar. When the final scores on the doors were read out by the Labour whip (who just so happened to be me) only 79 government MPs voted, compared to 213 from the opposition. Of course winning a vote is nothing to get carried away with. Defeating the government on what was effectively a procedural matter doesn’t really change anything, though it does make the government look like a bit of a shambles and puts a spring in the step of a Labour MP.

Labour Uncut readers don’t need reminding that winning the central argument on the economy is vital to Labour’s future electoral success. In squaring up to George Osborne our shadow chancellor Ed Balls has a formidable opponent.

In the 2001 election campaign, when working in Labour’s Millbank head office, I had a bet with a colleague about who was most likely to be next Tory prime minister. I predicted it would be Osborne, while my shrewder colleague rightly identified Cameron. I suppose that I wasn’t far wrong and ten years later, watching the chancellor at the dispatch box, I recognise the consummate politician’s politician I noticed as a young political researcher. He is simply a politician to his finger tips. A master-strategist always looking for narrow political advantage, a calculating Svengali, constantly attempting to establish dividing lines while seeking to use incumbency to frame the next general election on his own territory. He is adored by his backbenchers, with the most eager to please apparently ahead of others in the pack for promotion.

The recent government reshuffle, following Liam Fox’s resignation, witnessed George’s boys and girls promoted across the piece. It’s not surprising that newspapers report that the mayor of London’s MP brother is a supporter of Osborne, not Johnson. If the prime minister had a proper functioning Downing Street political office they would be well advised to keep a close eye on all these manoeuvres.

But the relationship between this prime minister and chancellor is unlike any other, so we are told. Indeed it’s well documented the extent to which David Cameron relies on him. We see it every week at PMQs, where he is constantly scrambling to lean over to whisper answers and lines to Cameron while trying his best to ignore the shouts of “tell him George” from some of the more boisterous elements on the Labour backbenches. Elsewhere, we hear that he spends an unusual amount of time for a chancellor in Number Ten strategy meetings with the prime minister and staff, leading some to question whether he ought really to be spending more time on his chancellorial duties

But even though he is good at political positioning, and clearly absolutely central to Cameron’s leadership, the feature hardly remarked upon is how he has got every major economic judgement wrong since he took the treasury brief. His first months as shadow chancellor were notable for his early endorsement of a flat tax. For months he spoke glowingly of those European countries that had a flat tax, Michael Forsyth was commissioned to write a report and then it was all apparently quietly dropped.

There was the flip-flopping on matching our spending plans. When challenged on this in the Commons, he reminds us that he fought the 2005 general election (as shadow chief secretary with Oliver Letwin as shadow chancellor) on a policy of cuts, conveniently forgetting that after the 2005 general election his official position, until the financial crash of 2008, was to support every penny piece of Labour’s spending. And of course we mustn’t forget that throughout this period he was also calling for less financial regulation, not more.

His famous inheritance tax announcement was certainly triumphant and dramatic, but the costings of it totally unravelled when put under serious scrutiny. In government we’ve seen a rushed decision to sell off Northern Rock at a huge loss to the tax payer, which is now set to be investigated by the national audit office. Of course the biggest misjudgement of them all is to preside over a huge austerity drive of deep cuts and tax rises, while boasting that it would boost confidence, lead to private sector growth and more jobs – but the exact opposite has happened. Demand has fallen, unemployment soared and we’re all left with the consequence of £158 billion more borrowing than anticipated. It seems the Magdalen history graduate hasn’t learnt the lessons of history after all.

So for this chancellor, his love of the political game is his greatest strength, but also his greatest weakness. Good politics is built on good economics and policy judgement. Yet for George Osborne, even with all his political cunning, when it comes to the fundamental question of policy judgement – indeed the most fundamental policy question of this parliament – the chancellor has got it wrong and the shadow chancellor has got it right.

Jon Ashworth is Labour MP for Leicester South and an opposition whip.


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5 Responses to “Whips notebook: part two”

  1. Madasafish says:

    the chancellor has got it wrong and the shadow chancellor has got it right.

    This is the same Shadow Chancellor who helped get us into the over borrowed mess we are in: and prescribes more borrowing to solve the problem?

    Hmm.. It’s not April 1st is it?

  2. Nick says:

    His famous inheritance tax announcement was certainly triumphant and dramatic, but the costings of it totally unravelled when put under serious scrutiny. In government we’ve seen a rushed decision to sell off Northern Rock at a huge loss to the tax payer, which is now set to be investigated by the national audit office

    They should also look at why Gordon Brown and you bought Northern Rock at such an overinflated price that there never would have been a profit.

    Perhaps the same for the gold sell off.

    What about investigating your insurance contracts with the banks insuring them against losses when the losses had already taken place.

    Perhaps we should surcharge you to recover some of the losses.

    Or don’t you take responsibility for your negligence?

  3. figurewizard says:

    ‘the chancellor has got it wrong and the shadow chancellor has got it right?’

    This country’s economy is paying a touch above 2% on its sovereign debt despite the whopping structural deficit (not forgetting PFI) inherited from the last Labour government and all this at a time when the rest of Europe have witnessed their rates going up and counting in most cases, Germany included.

    If that is supposed to mean that Osborne has ‘got it wrong’ I shudder to think what it is that Balls has got right.

  4. Madasafish says:

    Figurewizard.

    Maybe.. But part of it is QE – which the Euro countries cannot do – letting the BOE buy Gov’t debt .. and forcing banks and other lenders to hold Government Debt as collateral.

    So yes, having a viable plan does have an impact .. but there are other factors as well..

    (Note: I don’t disagree about Balls.. he has a good track record of being on the wrong side..)

  5. figurewizard says:

    Madasafish

    QE may be disallowed in the Eurozone rule book but the ECB putting €489bn on offer at 1% for three years to member countries’ banks sounds awfully close to it. Mind you even if this were to have been a blatant breach of the rules, what would be new in that?

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