Logic says he's bound to be the next PM - but there'll be no complacency from Ed

There are, broadly speaking, two schools of thought about what the Labour Party needs to do to win the next general election.

One is that it has to do relatively little to get back into government other than rely on the growing unpopularity of the Tories, while the other is that that it won’t regain the trust of the people unless it demonstrates that it has radically changed

The two points of view roughly correspond to the positions adopted in the period after 1992 when the “one more heave” approach personified by John Smith contended with the “modernising” tendency represented by Tony Blair.

Mr Smith’s sudden death and Mr Blair’s subsequent elevation to the leadership settled that one, but, two decades on and with the party once more seeking a way back into power, the issue has recurred.

The first point of view was forcefully expressed in a Daily Telegraph article this week by Stefan Stern, a management writer and visiting professor at Cass Business School, who exhorted readers to “do the maths.”

“Labour won 258 seats at the last general election with 29pc of the vote, which was their second worst result in 70 years. They should do better next time. Governing parties, on the other hand, rarely get more votes at the election following a term (or terms) of office,” he wrote.

“So here’s the thing: it is actually going to be quite hard for Labour not to be the largest party after the next election.

“If Labour is the largest party after the election, perhaps comfortably so, we can expect the Lib Dems to enter coalition talks with them. That was the principle that lay behind the Lib Dems’ approach three years ago. “

Stern’s logic seems impeccable. But the opposing point of view was just as cogently expressed by the YouGov pollster Peter Kellner in a recent article in Prospect magazine.

“Labour’s real challenge is to reassemble the Blairite coalition that swept the party to power in 1997. That coalition included people from across Britain’s economic and social spectrum. The party reached parts of the electorate that had seemed out of bounds,” he wrote.

“To reassemble an election-winning coalition of voters next time, these are the people Labour must win back. This means rejecting the language of ideology, class and social division, and reviving the appeal of national purpose.”

As I noted in this column following May’s local election results, Labour has by no means succeeded in doing this, with the South in particular remaining stubbornly resistant to the party’s message.

It is partly for this reason, I suspect, that within Labour leader Ed Miliband’s inner circle, Mr Kellner’s point of view currently holds more sway than that of Mr Stern.

As has been fairly clear from the recent carefully co-ordinated statements by Mr Miliband and Shadow Chancellor Ed Balls, the party leadership is well aware of the fact that it has a credibility problem with certain types of voters, and is working hard to persuade them it has genuinely changed.

Mr Balls’ announcement earlier this month that Labour would keep within George Osborne’s spending limits for its first year in office if it wins in 2015 echoed a similar pledge made by Mr Blair ahead of the 1997 election.

And Mr Miliband’s subsequent speech signalling new limits on longer-term welfare payments was designed to show the party is prepared to get tough on benefit claimants.

Will it work in persuading the public that the Labour of 2013 is essentially a different party from the one which, in many voters’ estimations, allowed public spending to get out of control in the Blair-Brown years?

Well, it’s a start, but Mr Miliband knows there is still much to do, and won’t be hoodwinked by Daily Telegraph columns telling him he is almost certain to be the next Prime Minister, however impeccable their logic.

In the run-up to polling day in 1997, Mr Blair continually warned his party against complacency, even when the whole world could see he was heading for a landslide.

In that respect, at least, Mr Miliband will be no different.

Seldon is right: Balls should fall on his sword

At the end of last week’s column, on the back of an opinion poll showing the party 11 points clear of the Tories, I suggested that the next general election in 2015 was beginning to look like it might be Labour’s to lose.

Premature? Well probably. But there seems to be a growing view in political circles – not least on the Tory backbenches - that Labour is on course to become, at worst, the largest single party in another hung Parliament.

At the same time, however, there remains a strong awareness that despite favourable poll ratings and the growing unpopularity of the Coalition, the party still has one huge Achilles Heel: the economic record of the last Labour government.

And the man who, more than any other, personifies this is the Shadow Chancellor, Ed Balls – Gordon Brown’s chief economic adviser for most of his time at the Treasury and his closest political ally once he got to Number 10.

In my political preview of 2013, published on the last Saturday of 2012, I predicted that Labour leader Ed Miliband might eventually be obliged to resolve this difficulty by relieving Mr Balls of his responsibilities.

So it came as no huge surprise, to me at any rate, to see this view being repeated by no less a figure than Anthony Seldon, Master of Wellington College and the pre-eminent historian of the Blair-Brown years.

“As somebody who has written about you for many years it falls to me to say this: the time has come for you to fall on your sword,” he told Mr Balls in a New Statesman article this week.

“Ed Miliband would be a much stronger leader without you. Forgive me, but you stop Ed breathing fresh air. With you close to him, his breath will always be stale and smell of a toxic brand… Without you, Labour could present itself as a clean party, free of the factionalism and brutalism that so tarnished it when Brown was boss and you were his consigliere. “

If the Godfather allusion seems unnecessarily brutal, Seldon at least went on to hold out the prospect that Mr Balls could one day return to the front bench as a “redeemed and respected figure.”

He even went so far as to say that he might yet succeed to the party leadership one day, predicting that the public will eventually tire of the trend towards young leaders.

Unsurprisingly, it didn’t take long for Tories to start leaping to the defence of the man they believe is their greatest electoral asset.

One prominent Conservative blogger praised his “good political brain” and grasp of economics, and suggested that, far from being a drain on Ed Miliband’s leadership, he acts as a useful lightning conductor for him.

The irony of all this is that Mr Balls has, broadly speaking, been proved right in his attack on the government’s economic policy since 2010, namely that it has cut too far, too fast and in so doing snuffed out an incipient recovery.

With growth still sluggish, it is hard to gainsay the central thrust of his argument that the Coalition needs a ‘Plan B’ in order to get the economy moving again.

But whereas people may agree with Mr Balls’ analysis of the problem, this does not mean they necessarily agree with his solutions.

And Mr Balls’ real difficulty is that, rightly or wrongly, many voters assume his much-vaunted Plan B would be no more than a return to the policies that got the country into such a mess in the first place.

One of the most successful and oft-used Tory slogans of all time is the one originally coined by Harold Macmillan’s government at the 1959 election: “Life’s better with the Conservatives – don’t let Labour ruin it.”

It was used again to good effect in the last week of the 1987 campaign after the Tories’ “wobbly Thursday,” and variants such as “Britain is booming – don’t let Labour blow it” have resurfaced from time to time.

So long as Ed Balls remains in the shadow Treasury brief, the Tories won’t need Saatchi and Saatchi to devise their next election slogan for them.

It will be quite straightforward: “Britain is on the way back. Don’t let Labour Balls it up.”

Taxi for Balls? My political predictions for 2013

Andy Murray will win Wimbledon, Roberto Mancini will be sacked as manager of Manchester City, David and Victoria Beckham will return to the UK, and the X-Factor will finally be canned after ten not always glorious years.

Those were just some of the predictions for 2013 made by members of the public in a recent poll on what we expect to see happening in the year ahead.

But so much for the sport and showbiz; what of the politics?  Well, in last week’s column looking back at 2012 I suggested that the next 12 months may well see the Con-Lib Coalition that has governed the country since May 2010 finally splitting asunder.

It seems I am not alone in this view:  the prospect of Messrs Cameron and Clegg going their separate ways was also mentioned in the aforesaid poll, along with a rise in interest rates, a strike by NHS workers and the prosecution of a major bank for fraud.

So what’s causing the present bout of Coalition-busting speculation?  Well, anyone who heard Nick Clegg’s speech at the Royal Commonwealth Society shortly before Christmas will not be surprised that talk of divorce is in the air.

The speech was less about Lib Dem achievements in government as about what Mr Clegg’s party had prevented the Tories from doing.

It was all a far cry from the government’s early days when the Lib Dem leader had been determined that his party should jointly ‘own’ all of the Coalition’s policies - not just those which it had specifically advocated.

But that strategy was only destined to work so long as the Coalition was popular.   Once it started to be unpopular – as has happened in 2012 – it was inevitable that Mr Clegg would begin to embark on a strategy of differentiation.

It has been my view from the outset that the Lib Dems would somehow have to find a way of getting out of the Coalition alive in order to stand any chance of maintaining a significant parliamentary presence at the next election, and I expect this process to be accelerated in the coming year.

The internal politics of the two parties will play a big part.   If Mr Clegg does not, by the time of his party’s annual conference, set out some kind of exit strategy, he will almost certainly face a leadership challenge before the election.

At the same time, those Tory backbench voices which loathe the Lib Dems and all their works will grow louder, as they seek to press David Cameron into the more orthodox Conservative position that they believe – mistakenly in my view – will secure them an outright majority next time round.

I would expect the upshot to be that the Lib Dems will leave the government within the next 12-15 months, with the Tories moving to a “confidence and supply” arrangement for the remainder of the five-year Parliament.

But while the Coalition may struggle to maintain the semblance of unity, Labour leader Ed Miliband will also struggle to present himself as the Prime Minister-in-waiting that Mr Cameron and Tony Blair so obviously were in their opposition days.

Mr Miliband has had his successes, but the full rashness of Labour’s decision to choose him over his brother David will become clear over the next 12 months.

Overtures will be made to the South Shields MP to return the frontline as Shadow Chancellor in place of Ed Balls, whose closeness to Gordon Brown and the errors of the New Labour years will ultimately prove a fatal barrier to the party’s attempts to regain economic credibility.

But a likelier outcome is a comeback for the respected former Chancellor, Alistair Darling, who has successfully managed to distance himself from Mr Brown’s mistakes.

Mr Balls may not be the only major economic player to be shown the door in 2013.  If the economy continues to stagnate, Mr Cameron may also be forced to find a new role for George Osborne as the election draws nearer.

And with Mr Osborne out of the Tory succession picture, attempts will be made to build up Education Secretary Michael Gove as the alternative contender from within the Cabinet to counter the continuing threat of Boris Johnson.

Unlike poor old Mr Mancini, I don’t expect we will see any of the three main party leaders actually losing their jobs in 2013.

What we will see, though, is each of them having to take fairly drastic action in order to save them.

The end of the beginning

Honeymoon period is doubtless an overworked term in politics – but all governments to some extent or other tend to enjoy a period of time in which the prevailing public attitude towards them is one of general goodwill.

Tony Blair was lucky enough that his lasted nearly five years, though that was in part down to the general uselessness of the Tory opposition of the time and the benign economic climate which he had inherited.

The public enthusiasm generated by the formation the Coalition government in 2010 was never quite on the scale of that which greeted Mr Blair’s arrival in 1997, and hence was never likely to last quite as long.

Nevertheless until relatively recently, the government was still widely seen as competent, and though its economic policies may have polarised opinion in some quarters, the press and public were still tending to give it the benefit of the doubt.

All that started to change with the Budget. The granny tax, the pasty tax and the row over tax relief on charitable giving combined to make this the biggest PR disaster to come out of the Treasury since Gordon Brown’s 75p pension increase.

There followed the woeful mishandling of the prospect of an Easter fuel strike, leading to what turned out to be a quite unnecessary spate of panic buying.

The government’s difficulties continued with the fiasco over the attempted deportation of Abu Qatada after the Jordanian terror suspect’s lawyers ran rings round Home Secretary Theresa May.

And by the end of last week, the run of mishaps had even acquired a name: omnishambles.

Things got no better at the start of this week as outspoken Tory backbencher Nadine Dorries tore into Prime Minister David Cameron and Chancellor George Osborne, branding them “arrogant posh boys who don’t know the price of milk.”

Then Jeremy Hunt, one of David Cameron's closest Cabinet allies and a potential future Tory leader, found himself accused of operating a ‘back channel’ of communication with the media mogul Rupert Murdoch during his bid for BskyB.

His special adviser took the rap and resigned, but this failed to quell opposition demands for Mr Hunt himself to fall on his sword.

It brought forth the wounding jibe from Labour’s Dennis Skinner: “When posh boys are in trouble, they sack the servants.”

But all of this really pales into insignificance besides the news that was delivered by the Office for National Statistics on Wednesday morning: that the government had, after all, led us into the dreaded double-dip recession.

Months of Labour warnings that the government was cutting too far, too fast were suddenly and dramatically vindicated.

It is too early to say whether it will prove to be a political game changer on the scale of, say the 1992 ERM debacle or Mr Brown’s election-that-never-was in 2007.

But it does, almost certainly, mean the end of a period in which the government’s claims about the economy have generally been given greater credibility than the opposition’s.

The politician whose personal fortunes have most closely mirrored those of the government over the past six weeks is Mr Osborne.

He has gone from being seen as the strategic genius of the Tory benches to being widely blamed for many of the government’s current difficulties.

The corresponding beneficiaries are Boris Johnson – Mr Osborne’s main rival for the future Tory leadership – and of course the Shadow Chancellor, Ed Balls.

As the former Labour special adviser Dan Hodges put it in the Daily Telegraph: “Ed Balls has won the right to be listened to now. That doesn’t mean people will automatically agree with what he says. But they will listen.”

In the light of the ONS figures though, perhaps the most damaging attack on the government last week came not from Mr Balls or even Mr Skinner, but from Ms Dorries.

The particularly lethal nature of her comments is that they play into a growing preconception about Messrs Cameron and Osborne that is being heightened by the worsening economic conditions.

A Prime Minster can get away with being a posh boy so long as he is competent on the one hand, and empathetic to the plight of those worse off than himself on the other.

On both of those scores, Mr Cameron is currently being found wanting.

Time for Labour to turn to its own 'Iron Lady?'

And so the new political year begins moreorless exactly where the old one left off…with Labour leader Ed Miliband’s long-term survival prospects once more being called into question.

The run-up to Christmas saw growing unease in Labour ranks over Mr Miliband’s failure to make more headway against David Cameron’s Coalition government, in what seemed like the beginnings of a whispering campaign.

Now that the season of goodwill is over, however, the muttering has broken out into the open, with Labour peer and former adviser Lord Glasman claiming that this week that the Labour leader has "no strategy and little energy."

And yesterday’s warning by Shadow Defence Secretary and leading Blairite Jim Murphy that Labour must have “genuine credibility” on spending cuts is being seen as another shot across Mr Miliband’s bows.

Lord Glasman’s comments were significant not so much in themselves as for the fact that they played into what is fast developing into an over-arching narrative about Mr Miliband’s leadership.

Perhaps his most telling point was on the economy, on which he said: “We have not won, and show no signs of winning, the economic argument…we have not articulated a constructive alternative capable of recognising our weaknesses in government and taking the argument to the coalition.”

He added: “Old faces from the Brown era still dominate the shadow cabinet and they seem to be stuck in defending Labour's record in all the wrong ways."

That was a clear reference to Shadow Chancellor Ed Balls, whose presence in that post is viewed by some as an insuperable obstacle to Labour’s attempts to regain economic credibility.

The ‘credibility’ question was also clearly uppermost in Mr Murphy’s mind as he spoke out the spending cuts issue in a national newspaper article yesterday.

Mr Murphy, who ran South Shields MP David Miliband’s leadership campaign, was ostensibly talking about defence, but the wider message was clear – that Labour needs to stop opposing every government spending cut for the sake of it.

Mr Miliband’s difficulties were compounded yesterday by a leaked memo from his press secretary Tom Baldwin claiming, somewhat absurdly, that he had led Labour to “probably the best recovery of any opposition party in history.”

And he caused himself further embarrassment by referring to the late Bob Holness as the host of ‘Blackbusters’ in a Twitter post as ill-advised as some of Gordon Brown’s YouTube appearances.

So having spent the last year trying to shed the hated ‘Red Ed’ tag, could this be the year when Mr Miliband becomes ‘Dead Ed?’

Well, it is interesting on this score is to see what some of the leading Blairite commentators are saying.

Although a lot of people in the party still believe the wrong Miliband was chosen as leader, there appears to be no great clamour for David to ride to the party’s rescue.

Instead, some of his former supporters seem to be latching onto the Brownite Shadow Home Secretary Yvette Cooper as Mr Miliband’s most likely replacement.

Take this, for instance, from The Independent’s John Rentoul, perhaps the most influential Blairite in the ranks of the commentariat.

He wrote: “Yvette Cooper could have won in 2010, had she not said that the time was not right for her and supported her husband, Ed Balls, instead. If she is clever, the Brownites and Blairites could unite behind her. “

Or this from Dan Hodges, a former Blairite insider and special adviser who now blogs for the Daily Telegraph.

He quoted a Shadow Cabinet source as saying: “Yvette’s the next leader of the party. The only question is whether it’s before the election or after.”

For my part, there is no doubt in my mind that Yvette Cooper is the potential Labour leader which the Coalition fears most.

Mr Cameron already has a ‘problem’ with women voters – some would say with women in general – and he could not get away with patronising the redoubtable Ms Cooper in the way he has tried to do with other female MPs.

The long-awaited release of the Margaret Thatcher biopic yesterday may well focus attention on why the Labour Party has so far failed to find its own ‘Iron Lady.’

Could this be the year they finally put that right?

A large slice of humble pie for Osborne - but was it really a game changer?

An extra £111bn of borrowing over the next five years. A fresh squeeze on public spending. No prospect of any tax cuts before the next general election.

It is easy to see why many commentators have described Tuesday’s Autumn Statement by Chancellor George Osborne as a ‘game changer’ in British politics.

Here we have a government that was elected in order to sort out the nation’s finances and eliminate the budget deficit by 2015 admitting that it will fail in that central objective.

Far from the being able to fight the next election on the sunlit uplands of fresh economic growth following the hard years of austerity, it will now have to do so against a continuing backdrop of cuts.

As the BBC’s James Landale put it on Tuesday evening: “Just as the facts have changed, so must the politics.”

“Until this morning, the assumption had been that the election would be about which party was best placed to use the proceeds of an incipient recovery – what taxes would they cut and what spending would they increase. That debate is now for the birds.”

And yet, and yet…I wonder if the Chancellor’s statement really has altered the terms of the underlying political debate about the country’s economic prospects all that much.

Despite all the economic doom and gloom, and the large slice of humble pie that the Chancellor has been forced to swallow this week, nothing has yet happened to demonstrate beyond doubt either that the government’s prescription is mistaken, or that a better alternative exists.

On the face of it, Labour’s narrative ought to be a compelling one. It is that an incipient recovery that was already under way by the time of the last election was then choked-off by a combination of spending cutbacks and “austerity rhetoric.”

But the public remains to be convinced that Labour’s more limited ambition to halve rather than eliminate the deficit in four years would not have landed us with a different set of problems.

There is also, still, a powerful residual feeling that Labour is really to blame for the country’s economic plight, even though history will surely show that Gordon Brown’s actions at the height of the banking crisis in 2008 saved us from a far worse fate.

This is a large part of the reason why, for all Mr Osborne’s difficulties, the opinion polls continue to show that Ed Miliband and Ed Balls are still less trusted on the economy than their Conservative counterparts.

A real political game changer is the kind of event which transforms the fortunes of the key players involved almost overnight.

Sadly for Mr Brown, his decision not to hold an election in the autumn of 2007 was one such example. After that self—inflicted humiliation, the public never saw him in the same light again and nothing he did was able to reverse that negative perception.

For the Tories, the ejection of the UK from the Exchange Rate Mechanism in 1992 is the one that sticks in the mind, destroying in one fell swoop the party’s hitherto prized reputation for economic competence.

I’m no apologist for George Osborne, but I don’t think being forced to downgrade the growth forecast for 2012 from 2.5pc to 0.7pc or even up the public sector borrowing requirement by £111bn quite falls into the same category.

For all the talk of game changers and transformed political landscapes, I actually find myself wondering whether this week’s events might not help the Conservatives in the longer-run.

If history is any guide, it suggests the answer might be yes. While voters appear to have a habit of ditching Labour governments at times of economic difficulty (1979, 2010) they seem more inclined to stick with Conservative ones (1983, 1992).

The Tories will of course hope that some of the pro-growth measures announced this week – for instance bringing forward £5bn of spending on infrastructure improvements – will have made at least some impact by the time we come to go to the polls again, even if few in this part of the world will have been fooled by the reannouncement of some old money for the Tyne and Wear Metro.

But if not, they could find that their most potent message come 2015 could well be that familiar old refrain: “Keep hold of nurse for fear of something worse.”

Cameron could lose big as Balls makes mischief

The week before last, 81 Conservative MPs ignored the blandishments of the party whips, and the pleas of Prime Minister David Cameron, to demand a referendum on EU membership.

It was the biggest rebellion of Mr Cameron's six years as party leader, but with Labour also supporting the government, it was far from being the tightest parliamentary vote since the Coalition took power.

For that, you would have to go back to July, and the vote on whether the government should contribute an additional £9bn to the International Monetary Fund to help prop up other countries’ ailing, debt-ridden economies.

On that occasion, the Coalition's majority was reduced to just 28 votes, with 32 Tories joining Labour in the lobbies to oppose the bailout plan.

At the time, Chancellor George Osborne hoped that would be the end of it, and that the international debt crisis would be making no further claims on the generosity of British taxpayers.

But in the wake of the Eurozone crisis, and specifically the Greek bailout, it seems that yet more billions will be required after all.

Mr Cameron was at great pains to stress yesterday that increasing Britain’s contributions to the IMF does not mean UK taxpayers are propping up the Euro.

“Britain will not invest in the IMF so the IMF can invest in a Eurozone bailout fund. That is not going to happen,” he said.

But nevertheless, there is a certain amount of hair-splitting, if not to say outright disingenuousness, going on here.

The role of the IMF is after all to help countries in economic distress all round the world – and there seems no reason why that could not include countries in the Eurozone.

Shadow Chancellor Ed Balls has called on the government to make clear that “directly or indirectly this money will not end up supplanting the European Central Bank and putting liquidity support in for Spain and Italy. “

As the mischievous Mr Balls knows perfectly well, there are plenty of Tory backbenchers who privately suspect this is exactly what is going to happen to the additional IMF cash.

So why is this such a potentially difficult issue for Mr Cameron? Well, do the maths.

If there was a rebellion on the latest IMF handout, only this time on the scale of the EU referendum revolt, the government would not only lose – but lose big.

It is clear that Downing Street has already wised-up to this danger and is trying to argue that a second Commons vote would be unnecessary.

Asked about it yesterday, Mr Cameron said the July vote had "allowed for some extra headroom and what we would anticipate doing would be within that headroom.”

And there is, of course, another reason why the government is keen to avoid such a vote – namely that it would further highlight the divisions in the Coalition between his party and the Liberal Democrats.

The Coalition’s inherent instability derives from the fact that it is a marriage of convenience between two parties with wildly differing worldviews, and on no single issue is this more clearly exemplified than on that of Europe.

The Lib Dems, at some cost in terms of their own popularity, have consistently advocated the concepts of European integration and “ever closer union” for most of the past 30 years.

By contrast, the Tories have been drifting steadily in the opposite direction – to the point where Mr Cameron – our most Eurosceptic premier since we joined the EU – is seen by some on the right of his party as a creature of Brussels.

Going into this year, it seemed likely that electoral reform would be the rock on which this fragile Coalition ultimately foundered, but already that seems a very distant memory.

While the debacle that was the AV referendum in May has effectively buried that issue for a decade, the issue of Europe has risen phoenix-like from the flames.

Mr Cameron spent a good part of his leadership in the early years telling his MPs to stop ‘banging on’ about Europe, doubtless conscious of the fact that the issue had destroyed the last two Conservative governments.

Now that it is back on the agenda, I suspect they won’t stop banging on about it until it has broken this one too.

Blair's last mission - to save Labour from the 'sons of Brown'

At first sight, former Labour health secretary Alan Milburn's criticisms of the Conservative-led Coalition's revamped health reforms this week might have seemed like routine political knockabout.

"The biggest car crash in the history of the NHS" was the former Darlington MP's withering verdict after Prime Minister David Cameron and his deputy Nick Clegg performed their screeching U-turn.

But closer inspection of Mr Milburn's argument reveals a rather more subtle agenda than simply Coalition-bashing.

For as well as highlighting the government's ongoing difficulties over the health changes, his comments also illuminate the continuing deep divisions within the Labour Party over its attitude to public service reform.

"David Cameron's retreat has taken his party to a far less reformist and more protectionist position than that adopted by Tony Blair and even that of Gordon Brown," Mr Milburn wrote in a newspaper article on Thursday.

"The temptation, of course, is for Labour to retreat to the comfort-zone of public sector producer-interest protectionism...it would be unwise in my view for Labour to concede rather than contest the reform territory."

This was, of course, an implicit criticism of Labour leader Ed Miliband for having allowed Mr Cameron to seize the reform mantle and supplant Labour as the "changemakers" of British politics.

And coinciding as it did with a renewed bout of internal Labour feuding , the timing of Mr Milburn's comments looked far from accidental.

First, there was the leak of documents purporting to implicate both Mr Miliband and Shadow Chancellor Ed Balls in a "plot" to overthrow Tony Blair soon after his third election victory in 2005.

Then the 'victory speech' that was to have been delivered by South Shields MP David Miliband had he not unexpectedly lost to his younger brother in last year's leadership contest mysteriously came to light.

If that wasn't enough, Mr Blair himself then plunged back into the fray, looking every bit the once-and-future-king as he broke a self-imposed four-year silence on domestic political issues in an interview with The Sun.

By showering praise on the Coalition for its education and health reforms, claiming they had carried on where he left off, he too called into question 'Red Ed's strategy.

"New Labour was the concept of a modern Labour Party in the middle ground with a set of attitudes orientated towards the future – and I believe if we had carried on doing that we would have won the last election," he said.

Asked whether Mr Miliband was right to say the New Labour era was over, he said: "It can't possibly be over, because it isn't time-related.

"It is about the Labour Party constantly being at the cutting edge, being a modernising party – always being full of creative ideas and isn’t pinned in its ideological past.

"That is always the choice for the Labour Party. It is the choice for progressive parties."

Knowing from past experience how these guys tend to operate, it is impossible to believe that this sudden spate of activity by the former Prime Minister and his allies was not in some way co-ordinated.

So what is Mr Blair up to? Is he simply trying to flog a few more copies of his book – or does he have a higher purpose in mind?

Could it be that the architect of New Labour is embarking on one last great battle to rescue the party he dominated for 13 years from the clutches of the "sons of Brown?"

The Blairites are back – and Ed Miliband had better watch his.

The Archbishop was simply doing his job

Over the course of the last couple of centuries, the Church of England has frequently if rather inaccurately been caricatured as "the Conservative Party at prayer."

If it was ever true, it certainly ceased to be so in the 1980s, when the church's trenchant critique of Margaret Thatcher's policies led to it being dubbed "Marxist" by Norman Tebbit – although perhaps the "SDP at prayer" would have been nearer the mark.

Thirty years on, the church again finds itself again in conflict with a Conservative-led administration, and for much the same sorts of reasons.

Just as Archbishop Robert Runcie in the 1980s took the Iron Lady to task over her government's apparent lack of concern for the poor and for social cohesion, so his present-day successor Rowan Williams is motivated chiefly by the impact of the government's reforms on the worst-off.

It would be tempting to think he had planned his attack to cause maximum discomfort for David Cameron in a week which has seen the Prime Minister forced to defend his handling of health and justice reforms.

Not so. The New Statesman article in which Dr Williams launched his salvo had been long planned, as the archbishop was actually guest-editing the publication.

In one sense, Dr Williams was simply doing his job. What on earth is a national church for, if not to occasionally offer a faith-based perspective on the politics of the day?

But of course his is not the only interpretation of how Christian teaching should impact on present-day political debates, as Roman Catholic archbishop Vincent Nichols reminded us when he praised the "genuine moral agenda" driving the Coalition's reforms.

Dr Williams' intervention may even have helped Mr Cameron this week by diverting attention from his internal difficulties over health and sentencing.

A fortnight ago, in this column, I posed the question whether the government's health reforms, and the career of health secretary Andrew Lansley, were now effectively dead in the water.

The answer on both counts would appear to be yes, with even the Health and Social Care Bill's central proposal for GP consortia to commission local health care now in danger of being watered-down.

And Justice Secretary Ken Clarke was forced to tear up his plan to give sentencing discounts to rapists and other offenders in return for early guilty pleas as Mr Cameron made a belated move in the direction of Prime Ministerial government.

Ordinarily this would all have presented a gift-horse to Labour, but the party is beset by internal difficulties of its own.

Party leader Ed Miliband was generally held to have had the worst of this week's Commons exchanges with Mr Cameron and the muttering over his leadership is increasing in volume.

The revelations about Shadow Chancellor Ed Balls' involvement in a "plot" to oust Tony Blair from power in 2005 will hardly help matters.

Having read some of the leaked documents myself yesterday, I would say a more accurate description of what was going on was a bid to rebrand Gordon Brown rather than oust Mr Blair, but the damage has been done.

Ultimately it is not up to archbishops to assemble a coherent critique of government policies. It is the opposition's job to do that.

And until Mr Miliband and Co can step up to the mark in that regard, Mr Cameron can continue to sleep easily in his bed at night.

That said, Dr Williams' claim that radical policies are being introduced "for which no–one voted" is a very hard one to answer – even if those self-same policies are now being trimmed.

The question of legitimacy that has dogged this Coalition from the start is not, I suspect, one that is going to go away in a hurry.

Does Ed need David back like a hole in the head?

With Labour leading in the opinion polls and the relationship between the Coalition partners growing increasingly fractious, it would be easy to make the assumption that these are good days for Ed Miliband.

And doubtless on a personal level they are, what with him having finally tied the knot with long-standing partner Justine at a ceremony in Nottinghamshire last week.

But as he returns from his short honeymoon this weekend, I suspect that Ed himself will be feeling rather less complacent about his party's prospects.

Any serious analysis of Labour's performance in last month's local and devolved elections suggests it is currently a long way away from being in a position to win power again.

Sure, the party did well in its Northern heartlands, recapturing big city councils like Newcastle after the Lib Dem interregnum – but it made few inroads in the Southern marginals it needs to win back from the Tories.

And as for Scotland and the party's defeat to Alex Salmond's resurgent SNP….well, the less said the better.

One idea increasingly doing the rounds at present is that what Ed really needs, apart from the operation on his adenoids that is due later this summer, is his brother David back on the front bench.

But while the return of the South Shields MP and former Foreign Secretary would certainly make the Shadow Cabinet look more like a government-in-waiting, I wonder if it might ultimately cause more problems than it would solve.

The biggest and most obvious danger would be that David's return in a senior role would invite comparisons between he and his younger brother which would be less-than-flattering to the latter.

Ed Miliband is already being outshone by his namesake Ed Balls, who has taken to the job of opposition like the proverbial duck to water.

But the Shadow Chancellor and Coalition-basher-in-chief is not even popular within his own party, let alone with the wider public, and as such represents no real threat to his leader.

The elder Miliband is a different matter. Not only did a significant number of Shadow Cabinet members support him for the top job, a majority of Labour members did too.

If history is any guide, neither of the Miliband brothers will be the one to lead Labour back to the promised land.

Whenever the party has lost power after a long period in government, it has usually taken several goes before alighting on a leader capable of persuading the electorate to entrust it with power again.

After the fall of the Attlee government in 1951, it took the party 12 years before it found such a leader in Harold Wilson. And after 1979, it had a 15-year wait before Tony Blair came along.

Some think Labour's next Prime Minister is likely to come from the 2010 intake - with Stella Creasy and Chuka Umunna the names most frequently mentioned - although for my part I wouldn't write off class of '97 alumnus Yvette Cooper just yet.

Either way, if David Miliband isn't going to come back onto the front bench, it calls into question why he is still in the House of Commons at all.

For all his genuinely heartfelt commitment to the people of South Shields, he is a big politician who demands a big stage for his next political role.

The trouble is that, whether David likes it or not, there are still a lot of people around who would dearly like his next role to be that of leader of the Labour Party in his brother's stead.

And so long as that remains the case, the odds must be on him staying where he is.

Steady as she goes Budget leaves dividing lines unchanged

A little late due to stuff I won't bore you with...but here's my take on the Budget as published in Saturday's Journal.

---

Over the past 18 months, throughout the 2010 general election campaign and beyond, the main point at issue in British politics has been the question of how far and how fast to the cut the country's budget deficit.

To begin with, the Tories had the better of that argument, which is essentially why they ended up as the largest single party last May and why we now have a Conservative-led Coalition government.

Because the public blamed Gordon Brown for the scale of the problem, and perceived him as having been in denial over it, the Tories were able to win backing for a much deeper package of cuts than Labour had proposed.

But latterly, doubts have crept in. We may not have ended up in the dreaded double-dip recession, but as anyone running a small or medium-sized business will know, the fabled green shoots of recovery have thus far been very slow to appear.

For all the differences of emphasis between the former Chancellor Alistair Darling and the current Shadow Chancellor Ed Balls, Labour's position on the deficit remains essentially unchanged.

It is that cutting too far, too fast, will damage growth – a view that is now starting to be borne out by the actual growth figures as well as in the everyday experiences of people up and down the country.

So the political imperative for Chancellor George Osborne as he delivered his second Budget on Wednesday was clear: to demonstrate that the coalition is not just about cuts, but has a growth strategy too.

In this he was only partially successful, his task being made all the more difficult by the need to announce – less than five minutes into his statement - a downgrading of the economic growth forecasts for 2011 from 2.1pc to 1.7pc.

Labour leader Ed Miliband's obvious glee at this announcement – "every time he comes to this House growth is downgraded" he told MPs - is scarcely misplaced, given the thrust of his party's economic message over the past year.

It is also fair to say that as a 'Budget for Growth,' Wednesday's package was somewhat underwhelming.

Sure, the 1p cut in fuel duty, coupled with the cancellation of the planned 4p rise later this year, will provide a fillip for hard-pressed businesses which have seen their profit-margins eroded by ever-escalating fuel costs, as will the additional 1p cut in Corporation Tax.

And the creation of 21 new Enterprise Zones, including the Tees Valley and Tyneside, represents a welcome recognition that some part of the country are being hit far harder by the cuts than others - even it looks suspiciously like a re-run of what Margaret Thatcher's government tried in the 1980s.

But those measures apart, this was actually rather a dull Budget – much more a case of "steady as she goes" than the kind of political game-changer which Chancellors usually like to spring on us.

Perhaps the most significant paragraph in Mr Osborne's statement was the one in which he signalled the eventual scrapping of the 50p top rate of tax, drawing a line under the Brown era and pointing to his longer-term ambitions as a tax-cutter in the Nigel Lawson mould.

Meanwhile the key political dividing lines remain unchanged – the Coalition claiming its radical deficit-reduction strategy will ultimately deliver stronger growth, Labour maintaining that it has merely delayed any prospect of real recovery.

At the moment, the economic evidence is favouring Labour. But with another four years for the green shoots to flower before it has to face the electorate again, the Coalition has time on its side.

Wrong kind of snow - or wrong kind of government?

IN last week's column, I wrote that the coalition government's key political success since taking office was to have pinned the blame for the savage spending cuts it is implementing on Labour.

It is no small matter. On the question of who takes the rap for the country's current economic plight will hang much of the politics of the next five years.

If the government can hold the line all the way to the next election, it is inconceivable that the electorate would let Labour back in after just one term in opposition to atone for its economic sins.

But this, in turn, depends utterly on how the economy actually performs – and whether Chancellor George Osborne is proved right in his strategy of putting deficit reduction before economic growth.

Up until now, the country has by and large been prepared to give Mr Osborne the benefit of the doubt on this point.

Whenever Labour politicians – notably Ed Balls –have tried to argue the opposing point of view, they have been swiftly condemned as "deficit deniers."

But this week came the first sign of a chink in the Coalition's economic armour – a 0.5pc fall in GDP during the final quarter of 2010, following two preceding quarters in which the economy grew.

Could it be that Mr Balls was right after all, and that far from providing a springboard for recovery, the Coalition's deficit reduction strategy is actually strangling it?

Timing is everything in politics and in one respect, the GDP figures could not have come at a better time for Mr Balls, newly-installed as Shadow Chancellor following Alan Johnson's surprise resignation last week.

He certainly made the most of the opportunity, tearing into Mr Osborne with a self-assuredness that made the Chancellor look like the new kid on the block.

"My message to George Osborne is – get a Plan B, get a policy for jobs and growth and do it quick," he said, winning the war of the soundbites with some ease.

Mr Osborne's cause was not helped by the fact that he tried to blame the fall in output on the weather, which, as one union leader put it, sounded "a bit like a rail boss blaming delays on leaves on the line."

Whether this week's exchanges will turn out to be of lasting significance will of course depend on where the economy goes from here.

The risk factors for the government are obvious. This month’s VAT rise seems hardly likely to encourage a resumption in the growth trend, while there remains the risk of another cold snap.

Some observers have argued that having clamped down on spending in last year’s comprehensive spending review, Mr Osborne would use his March Budget to shift to a more pro-growth strategy.

Had this week's figures turned out positive, he could have done that from a position of strength - but to do so now would look more like a panic-induced U-turn.

Either way, if the next set of figures in April show the growth trend resuming, Mr Osborne will be off the hook and Mr Balls and Labour will be back at square one.

But if on the other hand they show another fall, then the UK will officially be back in recession and the dreaded "double-dip" will have become a reality.

Not only would that give Mr Balls the whip-hand in the economic debate, it would start to shatter the current consensus that the cuts are (a) necessary, and (b) Labour’s fault.

And the voters might then start to conclude that not only did we have the wrong kind of snow last month, but that we also have the wrong kind of government.

The tough task facing Brown's children

As Sir John Chilcott's Inquiry into the war in Iraq continued to chip away at Tony Blair's historical reputation this week, another of the former Prime Minister's closest allies took his leave of frontline politics.

Amid difficulties in his private life that will surely elicit widespread sympathy, Alan Johnson became the latest in a long line of key players from the Blair Years to depart the political stage.

Looked at in terms of Labour kremlinology, the erstwhile Shadow Chancellor's surprise resignation, and his replacement by Ed Balls, means the Brownite takeover of the party is now all but complete.

Mr Balls, Ed Miliband, Yvette Cooper and Douglas Alexander were all denied Cabinet promotion by Mr Blair – but they now occupy the four most senior roles on the Labour frontbench.

But in this lies the nub of Labour's problem as it seeks to come to terms with opposition and put itself back into credible contention for government.

For as time goes on, it is becoming clearer and clearer that the general election result last May was not just a repudiation of Gordon Brown personally, but of much of what he stood for politically.

There are increasing signs that, like 1979, 2010 could come to be seen as a watershed election, a moment in history which saw a paradigm shift away from the top-down, statist brand of politics with which Mr Brown was associated.

That is certainly the way the Coalition would like us to see it, which is why the proposed reforms to the National Health Service announced this week are so central to its overall political strategy.

The reforms are certainly not without risk for Prime Minister David Cameron. With the possible exception of Coronation Street, the NHS remains Britain's best-loved institution and politicians tinker with it at their peril.

Not the least of Mr Cameron's difficulties, as Alastair Campbell pointed out on Question Time on Thursday night, is that he has no electoral mandate for it.

But the voters tend to be rather less worried about private vs public arguments in public service provision than politicians - and political commentators for that matter – tend to be.

And as long as the service improves in time for the next election – as it may well do once the dust has settled – it could even turn into a vote-winner.

The risk for Labour, on this and other issues, is that it finds itself stranded on the wrong side of a political tide – much as it did in the early 1980s as Margaret Thatcher's free-market revolution forged ahead.

Of all the blows that the Coalition has landed on Mr Miliband since he became Labour leader, none was more telling than Mr Cameron's "I'd rather be a child of Thatcher than a son of Brown."

In truth, Ed Miliband was really only ever an adopted son. The true son of Gordon, the one who was by his side in all his most important decisions, was Mr Balls.

Sure, the combative new Shadow Chancellor will give as good as he gets, but it is already clear that the Coalition will exploit his closeness to the former Prime Minister to the limit.

On the surface, Balls for Johnson looks like a good exchange for Labour – a brilliant economist and pugnacious operator for a Mr Nice Guy who seemed out of his depth in the Treasury brief.

But the whole reason Mr Johnson was appointed to the role in the first place was precisely because he had no economic baggage.

The Coalition's key success since the election has been to pin the blame for the cuts on Labour's mismanagement of the economy and to fix this in the public's mind.

Mr Balls, of all people, is going to have his work cut out to reverse that perception.

Mutually assured destruction

Behind all the brave talk of new generations, it is my fairly considered view that this Labour conference has been little short of a disaster for the party.

The outcome of the leadership election, via a flawed system that appears to have awarded the prize to the less popular, as well as the less experienced brother, has overshadowed the whole week in Manchester.

Had David Miliband won, as once seemed his appointed destiny, then the week would surely have been a breeze.

Labour would have elected an oven-ready Prime Minister who would instantly have struck fear into the coalition. Instead, the party has opted to do it the hard way.

As I have written before, I don't think Ed Miliband's politics are the problem. He was right yesterday to have distanced himself from some of the issues which caused Labour to suffer such a catastrophic loss of trust at the last two elections, and the 'Red Ed' jibs of the right-wing press will soon be shown to be self-evidently ludicrous.

Another of his nicknames, 'Forrest Gump', is perhaps nearer the mark. The trouble with Ed for me is that, for all his personal ruthlessness in fighting his elder brother for the party leadership and humiliating him in the process, he still comes across as rather well-meaning and naive.

To the Blarites, he was neither Red Ed, nor Forrest Gump, but 'The Emissary from the Planet Fuck' - apparently a reference to the fact that he was the only leading Brownite they could speak to without being told to "fuck off."

This too is revealing. Ed Miliband effectively won this contest by being the acceptable face of Brownism - by contrast with Ed Balls who was seen as its unacceptable face.

But the real problem Ed has faced this week is the psychological outworking of his brother's humiliation, culminating in today's announcement that he will not serve under him.

It undoubtedly leaves Ed weakened, and leaves Labour's already depleted top team looking even more bereft of experience, but it is merely the price he is now having to pay for upsetting the natural order of things.

Ed should perhaps have given more thought to this before he entered a contest which he did not really need to enter - that in destroying his brother, he risked ultimately destroying himself.

This self-destruction is not just a matter of whether Ed can look himself in the mirror at 3am in the morning, but whether, in laying bare the divisions within Labour in order to grab the top job, he has ultimately fatally hobbled his own election chances.

It was for all these reasons, and also partly because Ed's victory has left me feeling rather disconnected from Labour, that I posted a picture of Yvette Cooper on this blog last night under the headline "Labour's next Prime Minister."

Okay, so five years is a long time in politics, and Ed will doubtless grow in stature during that time, but in the increasingly presidential nature of our election contests, he doesn't look or sound to me like a man who could beat David Cameron.

So Dave is in for two (fixed) terms, Labour will turn to someone else for 2020, and Yvette - who in my view could have won this time and spared us this whole psychodrama - will surely make Chuka Umunna wait a while longer.

It is surprising in many ways that we have not yet had a second woman Prime Minister. The 30th anniversary of Thatcher's overthrow would seem an appopriate year in which to remedy that.

Balls holds the key

Politics has seen many changes over the past couple of decades - but if there is one thing that has changed out of all recognition, it is the science of opinion polling.

I have been in this game just about long enough to remember the infamous BBC exit poll in 1987 predicting a hung Parliament. Mrs Thatcher's Tories won a 102-seat majority.

By contrast, this year's exit poll - also predicting a hung Parliament - was very nearly spot-on, not just in terms of the overall outcome but also in terms of the number of seats won by each party.

But if most elections are becoming easier to predict, Labour leadership election are surely the exception that proves the rule.

There are two fairly straightforward reasons for this. Firstly, the single transferable voting system, which usually means that contests are decided on voters' second and sometimes even third preferences.

Secondly, the make-up of Labour's electoral college, comprising MPs, trade unions, and party members, which makes it nigh-on impossible to conduct a meaningful opinion poll.

So the widespread expectation that South Shields MP David Miliband will be crowned as Gordon Brown's successor later this month needs to be taken, at the very least, with a small pinch of salt.

While the Shadow Foreign Secretary certainly has the most support among MPs, and probably among party members, no-one quite knows what the union ballots will come up with, or how important those second preferences will prove to be.

If anyone is in any doubt about this, they only have to look at what happened in the party's deputy leadership election in 2007, when Alan Johnson and Hilary Benn were seen as favourites by the pundits.

They completely underestimated the level of support among the grassroots for Harriet Harman and Jon Cruddas, whose second preference votes ultimately won Ms Harman the job.

That said, leadership elections are not the same as deputy leadership elections where you might feel more able to vote for someone you like the sound of, without necessarily worrying about whether they are capable of winning a general election.

There is a good argument for saying that if the same six candidates as contested the deputy leadership in 2007 had been contesting the leadership, Mr Johnson would have won.

The conventional wisdom in this election has been that Ed Miliband is everyone's second favourite candidate, and that if David is not sufficiently far enough ahead on first preferences, he risks being overhauled by his brother in the latter stages.

The key to it, as with the 2007 deputy leadership election, will be what happens to the second preferences of the third-placed candidate.

Following his strong performance in bashing the coalition, and showing real fighting qualities over the course of the campaign, I think this will in all likelihood be Ed Balls.

I am quite sure this is why talk of a 'pact' under which Mr Balls would become David Miliband's Shadow Chancellor has been doing the rounds over the past couple of weeks.

As it is, I am not sure there ever was such a pact or whether it would even be deliverable.

Mr Balls and the elder Miliband do not appear to share the same views about the importance of tackling the deficit vis-à-vis the need for economic growth, and that may make his appointment as Shadow Chancellor somewhat problematical.

Either way, by my reckoning Ed Miliband will probably need to win at least three fifths of Mr Balls' transfers in order to pip his brother to the post.

My hunch is that he won't, and that it will indeed be David wearing the crown a fortnight tomorrow.

For PM, it has to be DM

No leadership election occurs in a political vacuum. For good or ill, the current race for the leadership of the Labour Party will invariably be shaped in part by the context in which it is taking place.

Like it or not, it is the Blair-Brown years, and their ultimately shattering denouement in the general election defeat of 6 May, which provide the inescapable backdrop to this contest.

For at least one of the candidates, Ed Balls, that defeat already looks likely to have dealt a terminal blow to his leadership aspirations.

For all his pugnacious qualities - none of the candidates have landed as many blows on the Lib-Con coalition as he has - the party was never going to replace the defeated Gordon Brown with, well, Gordon Brown Mark II.

But if this has been a difficult election in which to be a Brownite - all the candidates have been anxious to distance themselves to a greater or lesser degree from the former Prime Minister - being seen as a Blairite is not much of a recommendation either.

If by publishing his memoirs in the week the leadership ballot papers went out, Tony Blair hoped to influence the contest in favour of his protege David Miliband, it only goes to show how delusional he has become.

Mr Blair's account of his 'Journey' is already a bestseller, but many Labour members will be aghast at his decision to kick Mr Brown when he is down while simultaneously refusing to criticise Prime Minister David Cameron.

Then again, why would he, since he too clearly believes that the coalition is a Blairite continuity administration, doing exactly the things he would have done had he not been thwarted by nasty old Gordon.

So far from boosting the elder Miliband's candidature, the book looks likely to provoke a backlash against Mr Blair which could well harm the Shadow Foreign Secretary.

But in my view, that would be a shame, because, aside from all the factionalism, David Miliband is the best qualified candidate to take Labour back into government.

I have to confess that at the outset of this contest, I was leaning more towards Andy Burnham, which would have been the first time Durham North MP Kevan Jones and I had agreed about anything.

But while Mr Burnham is clearly the candidate most attuned to the needs of the North, his oddly tribal, Old Labour-ish campaign has seemed at odds with the 'new politics' of co-operation and coalition.

Of the other candidates, Ed Balls has already been dealt with, Diane Abbot would clearly take Labour back to irrelevance, while I wonder whether Ed Miliband is really ready for the top job.

I like a lot of what he has had to say about the need for Labour to regain its values before it can think of regaining power, and the 'Red Ed' jibes from the Blairite camp are self-evidently ludicrous.

For me, Ed's problem is not his politics, but the fact that he comes across as rather well-meaning and naive - a nice guy, an original thinker even, but not quite tough enough to be leader - and maybe PM - just yet.

By contrast, the one quality his elder brother possesses above all is that, having already held a major office of state, you can easily imagine him as Prime Minister now.

Mr Blair was at pains in his TV interview with Andrew Marr on Wednesday to stress that the South Shields MP is his own man, and that is one thing he was right about.

As a North-East Blairite, he could easily have got sucked into the silly tribalism that affected some of his former parliamentary colleagues in the region who saw any criticism of their beloved leader as a betrayal, but to his credit he never did.

I have no doubt at all that if he wins, David's first priority will be to unite the party and draw a line under the feuding once and for all.

But will he win? That is the question to which I will turn my attentions in next week's column.

'Miserable pipsqueak' won't rescue Balls

Ever since the new coalition came into office, the consensus has been that its political honeymoon would last only as long as it took for real cuts in public services to start happening.

While people seem happy for ministers to talk about efficiency savings and even 25pc cuts to government departments, they become rather less so when that starts to impact on local schools, hospitals and police.

So this week's announcement of the scrapping of the Building Schools for the Future programme, aimed at refurbishing every school in England, was one announcement the government needed to get right.

And as we all now know, Education Secretary Michael Gove managed to get it totally and spectacularly wrong, producing at least four different lists of the schools affected each of which contained inaccuracies.

In this region alone, the original announcement led to building work being halted at 46 schools including five in South Tyneside.

However it later emerged that all five of these schools had been mistakenly included on the list and that the work would, after all, be continuing as planned, although other areas were not so lucky.

Those who long to see a bit of passion restored to the political arena will have loved Labour MP Tom Watson's Commons attack on Mr Gove after the minister was forced to make one of several apologies for the blunders.

Former whip Mr Watson concluded his onslaught with the words "You're a miserable pipsqueak of a man, Gove!" – incurring the wrath of Speaker John Bercow who swiftly ordered him to withdraw.

Ultimately, though, it is not the chaotic presentation of this announcement which is the real issue. It is the fact that cuts to school building projects should be happening at all.

Once again, the government has tried to pin the blame on Labour, arguing that the Building Schools for the Future programme was wasteful and bureaucratic.

This would be all very well, had Mr Gove outlined how the new government proposes to refurbish our dilapidated school buildings in a more cost-effective and less bureaucratic fashion.

His failure to do so leads one to assume there is no such plan, and that they will consequently be left to rot.

One consequence of this week's fiasco has been talk of an upturn in the fortunes of Labour leadership contender Ed Balls, who has led the attack on Mr Gove.

The Shadow Education Secretary is currently trailing in, at best, third place behind the Miliband brothers in the race, but with voting not due to happen until the end of August, much could theoretically change before then.

For my part, I don't think it will. While accepting that Mr Gove's hapless performance this week has given Mr Balls a chance to shine, I think the party has by and large made up its mind about him.

Sure, they want to see his combative political skills used to good effect in a senior role - almost certainly Shadow Chancellor – but my hunch is they want someone more emollient as leader.

The longer-term impact of the week's events is likely to be less on Labour and more on public perceptions of the coalition.

Even within the North-East, the scrapping of the rebuilding programme runs the risk of creating a postcode lottery between areas such as Newcastle, where all the projects had already been approved, and Durham, where 14 have had to be cancelled.

It is invariably going to create a huge sense of injustice in those areas unlucky enough to miss the cut-off point and which now face an indefinite wait for new facilities.

And at some point, that sense of injustice is something the coalition will need to address.

How open is the Labour Party to persuasion?

Cross-posted from Political Betting.

Early on in the Labour leadership battle, Mike [Smithson] drew what I thought was potentially a good analogy between David Cameron’s succesful campaign for the Tory leadership in 2005 and Andy Burnham’s candidature for Labour this time round.

Young Burnham, he surmised, could turn out to be the Cameron of this campaign - a relative unknown coming from behind to win while better-known front-runners faltered.

As it is, Burnham has hardly achieved lift-off. He has fought an oddly Old Labour sort of campaign, of which the last straw - no pun intended, Jack - has been his opposition to the proposed AV referendum which Labour supported in its manifesto.

But that’s not my main point. My question is: is there actually room in this race for any of the candidates to ‘do a Cameron,’ or is the nature of the contest such that the prospect of anyone springing a surprise is already closed-off?

One major difference between this and the Tories’ 2005 race is that the candidates are not being subjected to the pressure-cauldron of a party conference hustings.

When the Tories did this, it enabled them to weed-out a front-runner in David Davis who, whatever his other virtues, was clearly incapable of making a decent platform speech, in favour of someone who wowed his audience by speaking without notes.

Another key difference is the nature of the two parties. As I have pointed out on my own blog, the Tories are historically much more open to making unexpected choices of leader - Margaret Thatcher over Ted Heath in ‘75, William Hague over Ken Clarke in ‘97, Iain Duncan Smith over the same opponent in 2001.

Labour, by contrast, almost always sticks to the front-runner, sometimes because the front-runner is clearly the best candidate (Neil Kinnock in 1983, Tony Blair in 1994) but sometimes out of sentimentality or a resdual belief in ‘Buggins’ Turn.’

My hunch is that most of Labour’s electorate has already made its mind up about this election, and it is now a contest between the brothers. While it is not yet clear which of them will win, it is clear that one of them will.

I’m not sure what current prices are available on Burnham, Ed Balls and Diane Abbott, but whatever they are, my candid advice to PB aficionados would be: ignore them.

Miliband Major has the Big Mo

The Con-Lib coalition overcame its first major crisis over the past week with the resignation of the Treasury Chief Secretary David Laws after what must be the shortest Cabinet career on record.

Doubtless it is a huge loss to the government. Mr Laws was easily the most popular Lib Dem on the Tory benches, and as such was a vital bridge between the two governing parties.

That said, it says a lot for the strength of David Cameron and Nick Clegg's alliance that Mr Laws' shock departure, after revelations about his expense claims and his private life, failed to sever it.

Although there do appear to have been some behind-the-scenes disagreements about how the resignation should be managed – and how Mr Laws should be replaced – in public at least the coalition managed to maintain a united front.

Debate will linger on over whether Mr Laws was right to resign, although my own feelings are that he made the right call in judging that he could not be the man to oversee expenditure cuts having claimed expenses he was not entitled to.

But after a month of writing mainly about the coalition, I'm going to focus instead this week at what is happening on the opposite side of the House.

Granted, Labour's leadership race hasn't exactly sprung into life yet, with most of the better-known contenders ruling themselves out on the grounds of age and the current front-runners a monochrome set of white, middle-class former policy wonks.

But with a swift return to power a real possibility for Labour if the coalition were to hit the buffers, the choice is certainly not without significance.

Many Labour activists in the North-East will doubtless be hoping South Shields MP David Miliband can emulate Tony Blair and Ramsay Macdonald and become the third party leader to hold a seat in the region.

History is certainly on his side. While the Tories are often inclined to favour the unexpected in their choice of leader, Labour almost invariably opts for the most 'obvious' candidate.

It usually pays off, too. Harold Wilson over George Brown in 1963, Jim Callaghan over Michael Foot in 1976, John Smith over Bryan Gould in 1992 and Tony Blair over Margaret Beckett in 1994 were all the right choices.

As if to prove the point, on the one occasion on which Labour passed over the obvious successor - choosing Mr Foot over Denis Healey in 1981 – it proved a disaster.

Support for the six candidates among the North-East's 25 Labour MPs is fairly evenly spread.

David Miliband currently has six nominations from the region, Ed Balls five, Ed Miliband four, and the other three candidates one each.

While left-wingers Diane Abbott and John McDonnell appear unlikely to get the 33 nominations necessary to join Mr Balls and the Milibands on the ballot paper, former health secretary Andy Burnham still might.

The one North-East MP backing him thus far is Durham North's Kevan Jones, who is not a bad person to have on your side in an internal party election.

Ed Miliband began the contest looking handily-placed, potentially the most open to fresh ideas and the least weighed-down by previous baggage. Mr Balls meanwhile is a proven campaigner who is sure to get big support from the unions.

But it is the elder Miliband who appears to have that crucial electoral asset: momentum.

Most of the heavyweights from the Brown Cabinet have lined-up behind him and as well as being the most experienced of the candidates, he both looks and sounds the most Prime Ministerial.

It is early days – but the Labour leadership is already looking like it is David Miliband's to lose.

The old politics is back

Is politics returning to normal? Even before the government's pettyfogging decision to boycott Question Time over, of all things, the presence of Bad Al Campbell on the panel, the signs were there. Here's today's Journal column.

---

After the unchartered waters of the post-election period and the initial excitement of the Lib-Con coalition deal, the political events of the past week had a reassuringly familiar feel to them.

A Conservative Chancellor unveiled a swingeing package of spending cuts. Labour frontbenchers queued up to attack them.

Meanwhile a Conservative Education Secretary unveiled plans to reduce the role of local authorities in schools – as Labour accused him of trying to recreate a two-tier education system.

So much for the 'new politics.' This was just like old times.

For the North-East, the new political era is already carrying unwelcome echoes of the Thatcher-Major years.

National newspapers have once again started to carry long features on the region's plight, and how its relatively high proportion of public sector jobs will leave it vulnerable to the spending cutbacks. Tell us something we don't know.

The one bright star on the horizon is that ministers have bowed to the demands of this newspaper among others to retain a region-wide economic body.

Communities secretary Eric Pickles moreorless confirmed on Wednesday that this would be the existing job-creation agency One NorthEast, albeit in a radically slimmed-down form.

But though some will doubtless bemoan the loss of Labour's child trust funds, there is a consensus of sorts over the cuts, the only argument being whether they should have happened now or later.

Michael Gove's education proposals - a re-run of the Major government's grant-maintained schools initiative - are however likely to be far more controversial.

By opening the way to thousands of schools to become 'academies,' the Tories' real aim appears to be to further neuter the role of local government.

For all the talk of 'localism,' all this will result in is more and more schools being directly-funded – and thus ultimately controlled – from the centre.

Labour activists, many of whom are teachers and many more of whom work in local government, will hate this measure probably more than any other to emerge from the coalition so far.

In terms of the Labour leadership contest, it ought to play into the hands of the former children's secretary, Ed Balls, who led the attack on it this week in his usual combative style.

Nevertheless Mr Balls remains very much an outsider in the race which thus far looks set to be a contest between the Miliband brothers, David and Ed.

The election of South Shields MP David as Labour leader would, at least, be some compensation for the fact that the North-East is the only region without a single MP in the government.

Of all the many vignettes that have emerged from that strange five-day post-election limbo when no-one quite knew who had won, one of the most intriguing concerns a 3am conversation between Tony Blair and Paddy Ashdown.

The former Lib Dem leader was apparently begging his old friend to broker a Lib-Lab coalition and finally realise their dream of a new 'progressive alliance.'

But Mr Blair said no, it was time Labour went into opposition, arguing that if it clung on to power this time round, it would pay a terrible price at the next election.

As the initial euphoria around the coalition subsides, and the harsh reality of its programme starts to bite, it is looking increasingly like the right judgment call.