Johnson's resignation: good or bad for Miliband?

I have long argued that Labour could make life a lot harder for the Tories if they put Ed Balls or Yvette Cooper in the Shadow Chancellor's role. Now that Balls is there, expect him to make the brief his own and really push Osborne on every decision. While the Conservatives will no doubt mock Balls's closeness to Gordon Brown and lambast Miliband for his decision to hire Johnson for a job he was never suited for, after a couple of weeks this will die down and the Tories will be left facing someone who is ruthless and totally on top of his brief.

But while it's not good news for the Tories, and it definitely is good news for Ed Balls and Yvette Cooper - who will no longer be wasted shadowing William Hague - I'm not too sure that it's good news for Ed Miliband. He didn't put Balls into that role for two reasons: they have different ideas about what Labour's economic policy should be, and Miliband thought Balls would become too powerful as Shadow Chancellor. Both of these problems still exist.

Ed Balls has a different economic agenda to Miliband. It was evident in the leadership election and it is still there now. Miliband clearly had problems controlling Johnson as well, but Balls is different because unlike Johnson, he actually has a plan of action and knows what he's doing. Johnson was never really a threat even when he disagreed: Balls could be. It's not surprising that Balls has said that he is fully supportive of Darling's deficit reduction plan, because he has to show that they're on the same team. But he will deviate soon enough.

Balls is convinced his economic approach is right, and won't be worried by Tory attacks on Labour for being unwilling to tackle the deficit. Public support for that is falling anyway, and Miliband's half-hearted attempts at moderation will disappear. 2011 will not just see the pressure increase on the coalition: there will be equally as much pressure on the Labour Party to oppose cuts everywhere: across every department and across every county. Balls will heed all these calls, and Miliband won't have the political clout to stop him.

But this isn't necessarily a bad thing for Labour. The two worked closely for a long time under Gordon Brown and will have seen the chaos that was his relationship with Tony Blair. They will work hard to avoid that happening again. Even if Miliband is initially weakened personally, the Labour Party as a whole will undoubtedly be strengthened by having a competent Shadow Chancellor in the midst of the most dramatic changes to Government in over a decade. And that in turn will strengthen Miliband's claim that the Labour Party has a plausible, alternative agenda to the Coalition and that they can win in 2015. 

Decision Time: Ed Miliband can't have it both ways

Ed Miliband wrote an article in the Times today that demonstrates perfectly why Labour do not yet scare the coalition. He started by saying that "In their politically motivated desire to propagate a myth about the last Labour Government, they [the Tories] are ignoring the real lessons of the global financial crisis."

Miliband goes on to say that the Conservatives' "deceit is that the deficit was caused by chronic overspending rather than a global financial crisis that resulted in recession and a calamitous collapse in tax revenues."

Ah! I see. So chronic overspending wasn't an issue or didn't exist. Obviously the answer to the current situation is not to cut spending but to stimulate the economy in order to get tax income back to pre-crash levels, right?

Erm, no. "The real debate is not about whether or not to cut the deficit: Labour has been clear that we need to reduce borrowing from levels that are far too high." Oh, so there is a problem with the amount of money that the Government spends? Now I'm confused.

Ed Miliband is trying to have it both ways. He wants to say that the cuts are bad. But he also knows what this graph (above) from the Spectator shows: that Labour spent more than it received every year after 2002. And so he wants to show that he understands the need for cuts to be made, because apparently voters like that. So he ends up in the middle, opposing Conservative cuts while arguing that cuts need to be made.

This is cowardice. It's understandable, but it's still cowardice. It also makes his allegations that the Tories are being politically motivated in their policies totally hollow and hypocritical.

One of the things I admire about this coalition is that it has an aggressive policy to fix the economy that it believes in and that it is seeing through to completion. It is leading public opinion. That takes guts and confidence. Labour is hedging its bets, waiting to see what the public thinks. So Miliband calls the coalition strategy a gamble, and says he "hopes it pays off" but believes it's "an extreme approach.... Mr Osborne is going too far and too fast on the deficit."

He can't have it both ways. And, frankly, he shouldn't be trying to. He'll get no credit in 2015 if he once said that the coalition strategy might work. He should go with his gut and genuinely promote an alternative strategy. What would he do if he was in power? If he wouldn't cut then he should say so. Because if he does believe Osborne's got it wrong then by having a clear and 'less painful' alternative he'll be giving himself a chance to be the leader who has it right in 2015.

Labour members should be concerned by articles like these. These nuanced policies reflect a short-termism that belies a lack of faith in their own economic arguments: If they're not certain that the Tories will get it wrong then they're not certain that their policies will get it right.

As a final point, I can't help but feel that having someone like Ed Balls or Yvette Cooper in the Shadow Treasury role would give Labour's economic policies a lot more purchase. The media would certainly listen more attentively than it does to Johnson. 

2011 is full of opportunity for Ed Miliband

The Ipsos MORI poll that claims Ed Miliband is the least popular Leader of the Opposition since Iain Duncan Smith is not great news for the Labour leader, but it's hardly terminal either.

What the graph (right) shows is that recent party leaders - with the exception of Tony Blair - have all faced difficult periods in the polls. I think Miliband will feel that he has a chance to reform his party in the same way that Cameron has changed the Conservative Party during his leadership. Miliband should be confident that he will follow Cameron's trajectory, and see Labour into the next election in 2015 with a reinvigorated Labour Party behind him.

He'll also - if he actually believes in his key economic message about cuts and it isn't just political expediency - be certain that come 2015 he'll be facing a Conservative Party in government as unpopular as the Labour Party under Gordon Brown. So I don't think Miliband will be too unhappy with these figures. He will be wary, however, of falling below -20, because when that happened to IDS, Hague and Howard they never recovered.

He will also be buoyed by the figures that show 53% of Labour members are satisfied with his leadership. He should be confident of converting some of the 25% of Labour members who 'don't know' (how you can have no opinion is beyond me) into 'satisfied' supporters of his leadership over the coming year.

The overall figures, which show that opinion is split on his leadership, are an opportunity for Miliband rather than a death knell. Electoral politics is all about convincing people that you're right and he still has the time to do it.

Yet if I was Ed Miliband I would still have some serious concerns. I'd be less worried about how I appeared to the country, and more concerned how I appeared to my backbenchers and shadow cabinet colleagues. I'd also be afraid that the absence of concrete Labour policies in many areas would blunt my political attacks. So, in the spirit of Christmas, in anticipation of an exciting 2011 and in the hope that the opposition will force the government to raise its game, here are five suggestions to get Miliband's leadership moving in the right direction:

1. Ed Miliband must improve his PMQs performances in the New Year. Whatever he is doing now isn't working. If he does this he will begin to convince his backbenchers that he can actually compete nationally with David Cameron.

2. He needs to bring Balls and Cooper closer to his leadership, because at the moment they are not in his inner circle and are just itching to prove themselves better potential leaders. Plus they are in portfolios where, frankly, their talents are completely wasted. One of them at least has to replace Johnson in the shadow Treasury role if they ever want to get close to Osborne.

3. Stop picking on the Liberal Democrats. He claims to want to woo disaffected Lib Dems but he always goes for the easy line in the media or at PMQs and picks on them for some perceived 'U-turn'. Miliband should never forget that the coalition has a Conservative majority, and that they must be his primary target.

4. Choose a few policy areas and ruthlessly demonstrate to the public how the government has taken the wrong options. Eric Pickles' reforms to local government are the most radical changes to the structure of government in the UK in years, and the government has no idea how its localism agenda will turn out. The restructuring of the NHS is potentially disastrous and the changes to education are being very poorly executed. Lansley and Gove should be easy targets for their Labour shadow ministers.

5. Get real distance from the unions. If they are actually serious when they talk of huge coordinated strike action in 2011 then it would be toxic for the Labour leader to get too close. Cameron will be looking to paint Ed Miliband as a union man helping undermine the economic recovery with reckless strikes. He must avoid this. 

Cameron's EU-Turn

Europe just never brings good news for the Tories, and many of their grass-roots members will be as unhappy as Tim Montgomerie is over on Conservative Home. Last week the government was aiming to keep the EU's budget at exactly the same level in 2011: a zero per cent increase. This week, David Cameron announced that he has 'succeeded spectacularly' by preventing a 6 per cent increase. Instead, he's got agreement from eleven states to support a 2.9 per cent increase. 

That's a definite U-turn. It's not that 2.9 per cent is good or bad (which I'll discuss later), it's just that you can't say you've 'succeeded spectacularly' when you've changed your position as obviously as he has. It's awful politics. His narrative is shot to pieces. Indeed, so obvious is this that I'm genuinely amazed that the PM has used such strong language. Because he knows that there is no group that will accept this decision. 

So Labour will attack him for his U-turn - which is an easy story to sell to the press because 2.9 is so obviously not zero let alone the 25 per cent cuts our domestic budget is facing. Which is why Yvette Cooper has pointed out that Labour made it clear at the election they would not support a rise and said that the PM was 'grandstanding' over a 'complete failure'. And Tory Euro-sceptics will complain that he abandoned them and was weak because he promised a zero per cent rise last week. So we heard Norman Tebbit saying that anything other then zero per cent was a 'Vichy-style surrender'. 

Even if it was a negotiating tactic - the EU wants 6 per cent, we want zero per cent, lets meet in the middle at 2.9 per cent - the fact that Cameron publicly went for zero per cent when 2.9 per cent was already on the table was a tactical error. Because that 2.9 per cent rise is the same 2.9 per cent rise that was agreed months ago by a larger number of EU states. And this group includes Germany and France, whose leaders carry a lot more weight in Europe than Cameron does, which makes it hard for him to claim that this is his success. Even the supposed panacea to the right, Cameron's claim that from 2012 onwards the EU's budget will be linked to the budget's of member states that are planning austerity measures, looks weak. Why 2012? Why not now? And how will that work when states have very different budgets and benefit from EU spending in different ways?

As for whether or not 2.9 per cent is a good deal, it both is and isn't. Because in so far as the EU wanted a 6 per cent rise and it does need a rise if it is to fulfil its ambitions and keep up its development then yes, 2.9 per cent is a good deal for Britain. But in so far as the fact that the ambitions the EU has and the goals it sets are totally inappropriate and lacking in democratic legitimacy from the British people, it is obviously not a good deal. 

But in reality, Cameron is in a coalition with a Liberal Democrat party that is pretty pro-European. He is not from the right-wing of his party and is, at heart, a moderniser and pragmatist. It is possible he moved from zero per cent because he had to give concessions to the Lib Dems, but it's unlikely because the Lib Dems are facing a local election nightmare and more money for the EU isn't really going to help them very much. 

Frankly I think the coalition would be happy if the EU would just keep quiet for the next five years so they won't have to deal with it. Yet if Cameron hadn't made such a simple political error in driving for a zero per cent rise he could never get then things would be looking a lot better for the PM right now. 

Shadow Cabinet - Reaction

I think putting Alan Johnson into the Shadow Cabinet role was a pretty shrewd move by Red Ed. He's already said he broadly agrees with Darling's deficit reduction plan, which chimes with Ed's position. Furthermore, it keeps Ed Balls away from the job, and ensures that Balls doesn't become some Gordon Brown figure circa 2000, formulating his own economic policy independently of the leader. Given how off piste Balls' message on the deficit is that's an own goal avoided for Labour.

Yet this is by no means a great shadow cabinet, and it certainly doesn't chime with Ed's call to a 'new generation' given the prominence of Balls, Cooper, Johnson, and Harman, as well as other former ministers like Hain, Burnham, Flint and Benn.

I doubt the Tories will be unduly worried with this cabinet. They already know how difficult what they are trying to do is and they have just had a pretty successful conference period. They'll be more focussed on getting the Spending Review announcements sorted for later this month. That said, Theresa May will probably be a little concerned at facing off against Ed Balls, given his reputation. I can't wait to see Caroline Flint square off against Eric Pickles. That will definitely be entertaining!