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Sunday, September 09, 2012

Labour split on economy

Having established yesterday Labour's culpability in creating the economic mess we are facing it is interesting to read in today's Observer how badly split they remain in how to put things right and indeed, on their general approach to policy.

The paper reports that David Miliband and shadow foreign secretary Douglas Alexander, have written from the Democrat convention in Charlotte, North Carolina, that Labour needs to show it is on the side of prosperous middle-class voters as well its working-class base if it is to win the next election.

They also say that Labour must show it is committed to reform of the state, as well as reform of the markets and to economic prudence in the medium term following a burst of Keynesian stimulus advocated by the shadow chancellor, Ed Balls.

The paper says that their intervention reflects unease on the Blairite wing of the party that the Labour leader is shifting too far left, out of a belief that the financial crisis has created a fundamental change in public attitudes towards rampant wealth creation and unregulated markets.

 The Observer adds that further trouble looms for Ed Miliband as the political conference season gets under way with the TUC congress in Brighton. They say that several unions, including Labour's biggest financial backer Unite, are calling for more co-ordinated industrial action in the public sector over pay cuts.

However, in their article David Miliband and Alexander hint that they would like to see Labour relying less on union money as they call for fundamental reform of party funding:

"In Britain there is a structural imperative for Labour to take down the influence of money in politics – not just as a high-minded recognition of voter concern, but out of sheer self interest," they write.

"At the moment, party funding reform is going nowhere. So this autumn Labour should again reach out to the Liberal Democrats with the aim of working together to get big money out of politics. Some parts of the current system help us, but overall the Tories are the party that stands to benefit most from stalemate."

I understand that Ed Balls has been on Marr this morning and is reaching out to the Liberal Democrats, well to Vince Cable anyway, who looks like he doesnt want to touch him with a barge pole. Little wonder given the role that Ed Balls played in negotiations with the Liberal Democrats after the 2010 General Election.

Just consider this passage on page 143 of David Laws' very comprehensive account of coalition negotiations in the 22 days after the General Election:

Ed Balls was already rumoured to be committed to taking to Labour into opposition. He had never been a supporter of Lib-Lab links and, like Gordon Brown, he found it difficult enough to compromise within his own party, let alone with another. Ed stared off into the distance while Peter Mandelson talked, and occasionally winced or frowned at comments from either side that displeased him.

Whilst Labour remain divided and inward looking it is difficult to see how they could possibly offer any realistic possibility of cross-party working if the next General Election is also indecisive.
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