When two tribes go to war....

At the beginning of this year, I wrote that if the Coalition government survived 2011, it would in all likelihood achieve its original objective of serving out a full five-year Parliamentary term.

What I was trying to say was not so much that it will all be plain sailing from 1 January 2012 onwards, but that if there was a point of maximum danger for the Cameron-Clegg government, it will come this year rather than any other.

The past few weeks seem to have proved the point, as tensions have erupted between the Coalition partners over a series of issues ranging from the NHS to immigration.

A year on from the opening TV debate between the party leaders which shaped the 2010 election campaign, serious commentators have started to pose the question whether another election might not be so very far off.

Last week I focused on the health reforms, and the ongoing Lib Dem-inspired backlash against health secretary Andrew Lansley's plan to hand control of the NHS budget to GPs.

Although they refrained from saying as much, the Lib Dems will doubtless have been privately rubbing their hands with glee at Mr Lansley's humiliation at the hands of Royal College of Nursing conference on Wednesday.

The yellows showed no such restraint however when Chancellor George Osborne suddenly enlivened what has thus far been a sleep-inducing campaign on whether to change the voting system.

Mr Osborne criticised the role of the Electoral Reform Society in simultaneously receiving taxpayers' money to run some of the referendum ballots and helping to fund the Yes campaign, saying: "That stinks frankly."

The comments earned the Chancellor a rebuke from his own Lib Dem deputy, chief secretary to the treasury Danny Alexander, who accused his departmental boss of "pretty desperate scaremongering."

It showed that, although the two sides have agreed to disagree on the subject of voting reform, it is very hard to have a civilised disagreement when the whole future of how we conduct our politics is at stake.

Predictably, however, the week's biggest Cob-Lib bust-up arose over Prime Minister David Cameron's decision to make a speech highlighting the impact of immigration on local communities.

Lib Dem Cabinet colleague Vince Cable said his words were "very unwise" and that the PM risked inflaming extremism.

Partly this was down to the timing of the speech, three weeks before some local elections in which the British National Party will once more attempt to make inroads.

But it also exposed real disagreements over the issue at the heart of the Coalition, with business secretary Dr Cable consistently arguing that putting a cap on immigration will limit firms' abilities to recruit key workers.

The Lib Dems have pointed out that Mr Cameron's wish to take net migration back to the levels of tens of thousands a year rather than hundreds of thousands is Conservative, as opposed to government policy.

The Coalition Agreement speaks merely of an "annual limit" on people coming to the UK from outside the European Union for economic reasons, making no reference to specific numbers.

One of the commentators who openly speculated this week that the Coalition might not see out its five-year term was the constitutional expert Vernon Bogdanor.

He pointed out that while the leaderships of both parties will almost certainly want to hug together until the end, the fate of coalitions is determined by restless, committed party members whom leaders cannot always control.

Mr Bogdanor is right to point out that it is the wildly differing nature of the two parties' memberships that gives the Coalition its inherent instability, while the good relations between their respective leaderships have hitherto been its biggest strength.

If this week's events are anything to go by, however, that may not always be the case.

A listening government - or a government in retreat?

Of all the changes introduced by the Coalition government since it took office last May, it is fair to say that its proposed reforms to the National Health Service have been the most politically controversial.

What about the cuts, I hear you say? Haven't they caused much more widespread public anger and made a much deeper impact on local communities?

Well, yes. But there was a broad political consensus dating back to well before the general election that spending cutbacks needed to be made – the only real disagreement being about the extent of them.

More importantly, the Coalition had a mandate for them. Labour lost the election primarily because, rightly or wrongly, the party was seen to be in denial about the size of the deficit and the remedial action needed to address it.

By contrast, the NHS reforms were not even spelled out in the Coalition Agreement, which infamously promised that there would be "no more top down reorganisation of the NHS."

Indeed, the agreement implicitly accepted that Primary Care Trusts would remain, promising a stronger voice for patients locally through directly elected individuals on the boards of their local PCT."

However when the legislation was published, it turned out that health secretary Andrew Lansley was proposing the abolition of PCTs and the transfer of their entire commissioning role to GPs.

Much of the anger felt by Liberal Democrats over the reforms can be traced back to this piece of perceived duplicity on Mr Lansley's part.

There is said to be anger in Number 10 at the way Mr Lansley has handled the reforms – but to my mind the fault lies more with Downing Street for not paying sufficient attention to their likely political impact.

As with the Forestry Commission sell-off debacle, No 10 seems to have been so focused on deficit reduction in the government's early days that it took its eye off the ball in other, seemingly less contentious areas.

Deputy Prime Minister Nick Clegg must bear some of the blame too, for not realising the strength of feeling in his own grassroots against the proposals.

It is only since his party's Spring conference delivered a huge thumbs-down to the reforms that Mr Clegg has started to argue for changes to the legislation.

So it was no great surprise that, this week, the government was forced to announce it was taking a raincheck on the implementation of the reforms while it conducted a further "listening exercise" with the public and health professionals.

It amounted to an admission that the reforms had been introduced without the necessary buy-in from either the public or, more importantly, those people who will be charged with making them work.

Should we see it as the prelude to a dramatic U-turn? Or is it simply a belated effort by Prime Minister and ex-PR man David Cameron to 'sell' the proposed changes?

Time will tell….but Mr Cameron's apparent openness to changes in the legislation suggests this is more than mere window-dressing.

The backbench health committee of MPs, for instance, wants to see the new fund-holding commissioning bodies drawn from a much wider membership, including councillors and hospital doctors.

Although this is more in tune with the spirit of what was in the original Coalition agreement, any weakening of the central proposal to hand power to GPs will be seen as a major political reverse for Mr Cameron.

The political commentator Benedict Brogan said of this week's events: "The underlying impression was one of an administration in retreat, forced to trim on policy because it got the politics wrong."

Mr Cameron is finding that the line between being a "listening government" and a "weak government" is sometimes a very fine one.

Is Ed Miliband the man to inject some passion back into our politics?

One of the most frequent criticisms made of politicians these days is that they spend too much time agreeing with eachother.

For many, politics has become too risk-averse, a game fought over a narrow strip of ideological terrain in which the most important rule is to avoid saying or doing anything that might offend the fabled 'floating voter.'

In truth, it's an analysis that is only half-right. If you're lucky enough to be in government, or if the tide of public opinion is shifting in your direction, there is still a fair degree of scope for radical thought.

But that's not, by and large, true for opposition politicians. Here, the watchword is "don't frighten the horses," and oppositions which have tried to challenge the political consensus, such as Labour in 1983 and the Tories in 2001, have tended to come unstuck.

So in one sense, it was refreshing to see Labour leader Ed – or is it Edward? - Miliband address last weekend's protest rally in central London against the Coalition's spending cuts.

It was absolutely inevitable that he would be crucified in the right-wing press for doing so, particularly once the protests got hijacked by criminal elements which were nothing to do with either the Labour Party or the organisers.

Some in his own party even joined in, with disgruntled Blairites muttering that "Tony Blair and Gordon Brown never went on protest rallies."

If this comparison was somehow supposed to diminish Ed Miliband in the eyes of the voters, I suspect that it will actually have had the opposite effect.

Like many in the upper reaches of the Labour Party, Mr Miliband has in the past come across as something of a machine politician – a man whose career progressed seamlessly from university to researcher to special adviser to MP to Cabinet minister and finally to the party leadership without the intervention of anything resembling real life.

So the fact that he sounded, for the first time last weekend, like a leader of genuine passion and conviction is, for me, a point in his favour.

Sure, it's a gamble, particularly if the passions and convictions he is articulating turn out not to be shared by a majority of voters.

But there is just a chance that the country, bored by years of 'Blatcherite' policy clones fighting over the 'centre ground,' could warm to a leader who seems prepared to inject some genuine political idealism into our national life.

Two substantive charges have been made against Mr Miliband over his Hyde Park speech last Saturday.

The first was that he claimed to be speaking for the 'mainstream' when he wasn't – but David Cameron and George Osborne are perhaps a little too eager to dismiss people's concerns about the cuts – and the possibility that the Labour leader might be genuinely reflecting them.

The second, more serious charge is that Mr Miliband told us "there is an alternative" without actually saying what it is.

But this, too, is slightly disingenuous. As I wrote last week, Labour has fairly consistently said throughout the last election and beyond that it would aim to halve the deficit in four years – a difference of about £40bn in spending terms from what the Coalition is doing.

What the Tories really mean by the latter criticism is that Mr Miliband should tell us which cuts he agrees with rather than allowing voters to be given the impression he opposes all of them.

Here they are on slightly stronger ground. Although Mr Miliband specifically denies he is against all the cuts, he can be seen to be guilty of trying to have it both ways in this regard.

Sooner rather than later, the Labour leader will have to answer this point if he is to become a genuinely credible contender for power at the next general election.

But for now, the fact that he is starting to discover his own distinctive voice will surely stand him in good stead.

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.

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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.

Dare the government take on the boys in blue?

There was once an old political saying – variously attributed to both Stanley Baldwin and Harold Macmillan – that neatly defined the limits of state power in the middle part of the 20th century.

"There are three bodies no sensible man directly challenges: the Roman Catholic Church, the Brigade of Guards, and the National Union of Mineworkers," it went.

Times change, of course, and a modern rendition would undoubtedly have different bogeymen in the guise of those with whom no government dare fall out.

Media baron Rupert Murdoch, as we saw in last week's column, would certainly be one. The all-powerful motoring lobby might be another. But if you had to pick a third, it would probably be the Police Federation.

Attempts to reform the police over recent decades have invariably foundered as soon as the Federation – as influential a trade union as the NUM once was – started flexing its muscles.

Three years ago, the then Labour Home Secretary Jacqui Smith tried to shelve a police pay increase that had been awarded by an independent assessor – and was swiftly forced to back down.

Fifteen years earlier, Ken Clarke – no softie he – had launched a much more wholesale attempt at reform.

When Clarke moved from the Home Office to the Treasury it landed in his successor Michael Howard's inbox - but even that legendary political hardman decided a scrap with the boys in blue was not worth the candle.

So it is not without political significance that this week has seen the publication of a brace of reports which taken together amount to something of a double whammy for police pay and conditions.

On Tuesday, former rail regulator Tom Winsor published the results of a review calling for the abolition of overtime payments worth up to £4,000 a year to officers.

The following day, Lord Hutton – that's former Barrow MP John Hutton rather than Tony Blair's favourite retired judge – published a much more wide-ranging review into public sector pensions.

Among other things, it recommended not only the end of final salary pension schemes in the public sector, but an increase in the retirement age which would see police, members of the armed forces and firemen working till they were 60.

Already, the public sector unions – including the Federation - have made clear that the government has a big fight on its hands if it tries to implement this week's proposals.

As Unison's Dave Prentice put it: "This will be just one more attack on innocent public sector workers who are being expected to pay the price of the deficit, while the bankers who caused it continue to enjoy bumper pay and bonuses."

There are certain to be demonstrations, possibly even strikes, which will put the Police Federation in an interesting position to say the least.

For of course its members will be expected to control the protests called by those campaigning against the very proposals which they and their colleagues are being threatened with.

In one sense, this is a reform whose time has come. Final salary pension schemes are a thing of the past across most of the private sector, and in that context the retirement benefits enjoyed by public sector staff have started to look more and more anachronistic.

Yet the country's six million public sector workers remain a big and powerful constituency for any government to take on, especially in the aftermath of a recession.

Ultimately it may come down to a rather crude consideration, namely how many votes there are in public sector pension reform.

The answer is: probably not many. But there are a great many more potentially lost ones.

Dave's useful idiots

Of all the many insults hurled at Gordon Brown during his troubled premiership, perhaps the most wounding was the one delivered by the then Lib Dem acting leader Vince Cable during Prime Minister's Questions in November 2007.

"The House has noticed the Prime Minister’s remarkable transformation in the last few weeks from Stalin to Mr Bean," he told guffawing MPs.

But three years on, the now former Prime Minister may well have permitted himself a wry smile or two at the transformation in Mr Cable's own political fortunes.

In the space of less than 12 months, he has gone from Saint Vince, the most trusted politician in Britain, to a man now widely regarded as little more than a useful idiot for the Tory-led coalition.

Some of it is purely by virtue of his having swapped the luxuries of opposition for the harsh realities of power, at a time when the government was bound to be unpopular whoever was in it.

Yet even within that context, Mr Cable has demonstrated an unusual ability to shoot himself in the head.

His 'declaration of war' on media baron Rupert Murdoch, after being honeytrapped by a pair of female undercover reporters into speaking too frankly about his government role, has backfired more spectacularly than a turbo-charged boomerang.

The end result was that Tory culture secretary Jeremy Hunt this week nodded through a deal which will make Murdoch the dominant player in UK print and broadcast media, with even more financial clout than the BBC.

But if Dr Cable's ambitions in the field of media policy have been well and truly thwarted, the same would seem to apply to his conduct of regional policy.

After the election last May, Dr Cable put it about that he was going into bat to ensure that those English regions that wanted to would retain a region-wide political and economic voice.

Such a stance was, after all, in keeping with a Lib Dem election manifesto that promised to "reform" regional development agencies rather than abolish them wholesale as the Tories' did.

At one stage, Dr Cable was privately telling regional political leaders that the RDAs in the North East, North West and Yorkshire would be effectively be preserved, under the new guise of Local Economic Partnerships.

On the face of it, it hardly seemed Dr Cable's fault that this did not end up happening, and that communities secretary Eric Pickles prevailed in his determination to dismantle the entire regional political infrastructure.

Yet a Freedom of Information request by the Newcastle Journal has since revealed that, far from putting up a huge show of resistance, Dr Cable met his Tory counterpart just twice to discuss the issue.

In terms of the bigger picture, the RDA abolition and the Murdoch bid for BskyB point to a wider political reality - the inability of the Lib Dems to influence major policy decisions taken by this government.

And if proof was needed that this is now a widespread perception among the public, the result of Thursday's Barnsley by-election, which saw the party slumping to sixth place, surely provides it.

For some of us, the result brought back memories of those dear, dead days when world-weary Lib Dem activists used to sing a song called 'Losing Deposits' on the last night of their annual conference, to the tune of 'Waltzing Matilda.'

But for Dr Cable and his fellow Lib Dem ministers, there will be no such wallowing in nostalgia for more innocent political times.

Evidence is mounting that membership of this Coalition government is destroying the Lib Dems as a political force – possibly permanently.

How much more of it the party can take before it is obliged to go its own separate way will continue to be the defining question in British politics over the coming months.

Labour has future of electoral system in its hands

When Liberal Democrat leader Nick Clegg took the historic gamble of joining the Tory-led coalition government last May, he created for himself an excruciating political conundrum.

By forcing the Conservatives to grant a referendum on reforming the voting system, Mr Clegg opened up the tantalising prospect of turning the Lib Dems from a party of permanent opposition to one of moreorless permanent power.

Yet at the same time, by aligning himself with what was bound to be an unpopular administration, Mr Clegg simultaneously ran the risk of seeing the prize of electoral reform swept away on a tide of anti-government protest votes.

The fact that he then went on to make himself the most hated man in Britain in some quarters by breaking a 'solemn promise' on university tuition fees only served to underline the point.

For make no mistake, Mr Clegg is set to become the central figure in the May referendum that was finally given the go-ahead this week following a last-minute game of parliamentary ping-pong between the Lords and Commons.

At the moment, the 'no' campaign is not talking about him, trying instead to make the argument against the proposed new Alternative Vote system on the grounds of cost and complexity.

But don't be fooled – these are just the opening skirmishes, and before too long, this is going to get personal.

'Don't give Nick Clegg a permanent seat at the Cabinet table' is quite simply the no camp's most potent message in this campaign, and it's one we will be hearing a lot more of in the run up to the 5 May vote.

Perhaps understandably, Mr Clegg has so far been nowhere to be seen in the 'yes' campaign, even going so far as to tell Radio Four's Today programme yesterday that the referendum was "nothing to do with" him.

Instead, in the week that The King's Speech swept the board at the Baftas, the pro-reform camp wheeled out the film's much-decorated stars Colin Firth and Helena Bonham Carter to voice their support.

While Ms Bonham Carter, as the great grand-daughter of the Liberal Prime Minister Herbert Henry Asquith, does at least have some family political tradition to maintain here, one could be forgiven for asking 'who cares?'

But that is not the point. The point is that here are two high-profile personalities supporting electoral reform whose names are not Nick Clegg.

On the Labour side, several prominent ex-ministers have already got involved on the 'no' side, including John Prescott, whose track record in referendum campaigns should probably make opponents of electoral reform somewhat wary.

But what should Labour supporters of AV like party leader Ed Miliband do – stay out of it and let the luvvies do the talking, or seek to provide a measure of leadership themselves?

In a sense, it's a win-win situation for Mr Miliband. If the referendum results in a 'yes' vote, the evidence of recent elections suggests it will benefit his party.

But if the country votes 'no', the coalition will be destabilised, perhaps even to the extent that an early general election could result.

The attitude of the Labour leadership will ultimately be crucial, in that it will almost certainly be Labour voters who decide the outcome of this.

Conservative supporters will by and large vote to keep first past the post, as David Cameron urged yesterday. The Lib Dems will vote en masse for change.

The great temptation will be for Labour supporters to vote tribally against AV in order to give the Coalition a bloody nose, but given a strong enough lead from Mr Miliband, my hunch is that most of them will back the change.

That is, of course, assuming they can overcome their dislike of Nick Clegg.

'Gunboat diplomat' leaves Coalition in a pickle

More than 20 years ago, a young , Conservative council leader gained a measure of notoriety after unexpectedly seizing control of the hitherto safe Labour authority of Bradford.

Storming into office at the May 1988 local elections, he announced a five-year plan to cut the council's budget by £50m, slash the workforce by a third, and outsource most council-run services to private operators.

For a while, 'Bradford-style Toryism' became something of a by-word in local government circles, with some like-minded authorities modelling themselves on it, while others cited it as a warning of what happened when Tories took control.

After its brief flirtation with uber-Thatcherism, Bradford soon returned to the Labour fold - but that Tory council leader went on to become probably the most influential politician to emerge from local government since Labour's David Blunkett.

His name was of course Eric Pickles and, as Secretary of State for Communities and Local Government in the coalition administration, he is now in ultimate charge not just of Bradford but of every town and city hall in the country.

Among grassroots Tories, Mr Pickles is a hugely popular figure – but it is fair to say those feelings are not always shared by his Liberal Democrat Cabinet colleagues – or by political leaders in the North-East region.

During the early months of the Coalition, he fought a running battle with Business Secretary Vince Cable over whether the North-East should retain a distinctive regional voice – a battle characterised by briefing and counter-briefing on both sides.

It did not help that Prime Minister David Cameron was bored by the stalemate and told the protagonists to sort it out between themselves rather than taking sides.

What sort of regional political institutions will emerge from that process is still unclear. Many hope the proposed local economic partnership covering Durham, Northumberland and Tyne and Wear will be able to take on at least some of the role of axed regional development agency One NorthEast.

But the limitations of the scorched earth approach to all things regional employed by Mr Pickles and others in the Coalition's early days are already becoming clear.

As was revealed in a parliamentary answer this week, Dr Cable's department for Business, Innovation and Skills is having to create new local offices to carry out work previously carried out by the regional government offices.

This provides further proof of what some of us were saying all along: that if the regional tier of governance did not exist, it would be necessary to invent it.

But if Mr Pickles' pathological hatred of regionalism has caused controversy in the North-East, his attitude to local government spending has caused ripples on a far wider scale.

Newcastle council leader David Faulkner was only one of more than 90 Liberal Democrat councillors who signed a letter to The Times this week protesting at the scale and pace of cuts to their authorities.

Part of their anger stems from Mr Pickles' uncompromising political style, which they described as 'gunboat diplomacy.'

"The secretary of state's role should be to facilitate necessary savings while promoting the advance of localism and the Big Society. Unfortunately, Eric Pickles has felt it better to shake a stick at councillors than work with us," said the letter.

The reference to the Big Society was illuminating, in the context of Labour-run Liverpool's recent refusal to co-operate with Mr Cameron's flagship initiative.

But the wider political significance of the row over local government spending is that it plays into the area of relations between the two governing parties.

Lib Dem leader Nick Clegg needs to be able to take his party with him if the Coalition is to survive long-term, and on this issue he is clearly some way from succeeding.

And there is only one place that will ultimately leave the government: in a pickle.

Is there such a thing as the Big Society?

Nearly a quarter of a century ago, the then Prime Minister Margaret Thatcher gave an interview which for many summed up the 'greed is good,' every-man-for-himself culture of the era over which she presided.

"There is no such thing as society. There are individual men and women, and there are families," she said in an interview with Woman's Own magazine in October 1987.

Although she had merely been talking about the need for people to stand on their own two feet rather than relying on the state for handouts, the comment swiftly gained a life of its own.

And while it initially captured the late-80s zeitgeist, in time it came to be seen as part and parcel of the "nasty party" image that the Tories fought to shake off during their wilderness years.

At one level, the 'Big Society' was to David Cameron what 'New Labour' was to Tony Blair – a marketing slogan whose main purpose was to detoxify a brand that had become tarnished.

Its aim was to demonstrate that not only did the Tories now believe in society after all, they actually had a vision for the kind of society they wanted to create.

But whereas New Labour had a genuine philosophical basis - the embracing of the Thatcherite economic consensus and the abandonment of 'tax-and-spend' - the Big Society has always been much harder to pin down.

Tory candidates reported it had caused bemusement on the doorsteps during last year's election campaign, a state of affairs not helped by the fact that many of the candidates were similarly bemused themselves.

In government, the more urgent question has become less about what the Big Society is, and more about whether it is compatible with the kind of policies the Coalition is pursuing.

Liverpool City Council thinks not. It pulled out of a Big Society pilot project this week on the grounds that it is not deliverable in the context of £91m budget cuts and 1,500 job losses.

Although the Labour-run authority was swiftly accused of gesture politics, it is self-evident that it is hard to sustain local community activities and initiatives if the funding that underpins them disappears.

The closure of large numbers of Citizens' Advice Bureaux as a result of town hall cutbacks is surely a case in point here.

The wider problem with the 'Big Society, though, is not so much whether it is compatible with reductions in public expenditure as to whether it is compatible with free market economics at all.

Will our forests, for instance, end up in the hands of cuddly 'Big Society-ish' institutions like the Woodland Trust or other local community groups, or will they all simply be sold to the highest bidder?

Will local people really be able to club together to buy and run their failing village pub when the brewery is being offered ten times as much by a developer who wants to knock it down and build ten flats on the site?

It is for these sorts of reasons why people would not necessarily regard the Big Society and the Tory Party as the most natural of bedfellows.

Mr Cameron may be a skilled PR man, but to regard the Big Society as no more than a piece of spin is probably to do him a disservice.

He passionately believes in it, even if he sometimes struggles to articulate it in a way that the voters can relate to, and would probably like his government to be remembered for it above all else.

The great historical irony about the Big Society is that at the time Margaret Thatcher came out with her infamous quote, there was actually much more of one than exists today.

It will take much more than words if Mr Cameron is somehow to recreate it.

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.

Relief for Ed...but just what will David do next?

And so after all the hoo-ha, a relatively easy win for Labour and a creditable second place for the Liberal Democrats, with Nick Clegg's party staving off the post-tuition fees meltdown some had feared.

Both Mr Clegg and Labour's Ed Miliband went into Thursday's Oldham East and Saddleworth by-election on something of a hiding to nothing - but both appear to have got away with it.

Instead, it is Prime Minister David Cameron who may have the most difficult questions to answer after appearing to soft-pedal the party's campaign in the final week.

After their party's share of the vote was more than halved while the Lib Dems' went up, Tory backbenchers already unhappy about the direction of the government will want to know why their coalition partners were given such an easy ride.

For Mr Miliband, a result which saw Labour's majority increase from 103 to 3,558 will take the pressure off – for now.

After a decidedly lacklustre start to his leadership, Mr Miliband moved to sharpen up his press operation in the weeks before Christmas and this appears to have had pretty instantaneous results.

Victory in what was already a Labour-held seat should leave little room for complacency, however.

His appointment of the economically sub-literate Alan Johnson as Shadow Chancellor appears to be unravelling, while his own appearance on a Radio 2 show a couple of weeks back ended in embarrassment, with Middle England listeners quizzing him over his unconventional private life.

The by-election also saw a fleeting return to the political fray for elder brother David Miliband, one of 40 Labour MPs who travelled to the constituency on Thursday for some frantic last-minute door-knocking.

It concluded what to say the least has been an eventful week for the South Shields MP, with his surprise appointment as vice-chairman of Sunderland Football Club.

At the same time, reports emerged that he was being lined-up a possible new role as a TV presenter with the BBC.

Cynics might be tempted to pose the question: What next? An appearance on 'I'm a Celebrity, Get Me Out of Here' maybe?

In fairness to David, he has made clear his intention to continue as a constituency MP at least until the next election, while in an interview with this newspaper before Christmas, he signalled that he has still not given up hope of leading the Labour Party one day.

He has also appeared to set out his stall as a backbench 'Voice of the North' – although his new role at the Stadium of Light scarcely seems designed to endear him to all corners of the region!

But taken together, the two stories highlight the difficulties which can face politicians when they lose their main raison d'etre – climbing the greasy pole.

And while he is not about to join the 'Z-list' of those who are famous for being famous, Mr Miliband needs to give careful thought to what he does next if he is to remain a serious political player.

The prospect of him becoming a TV presenter inevitably drew comparisons with Michael Portillo – and not for the first time.

Mr Miliband's somewhat cack-handed attempts to unseat Gordon Brown in autumn 2008 echoed Mr Portillo's botched coup against John Major in the summer of 1995 when his supporters were caught installing phonelines for a leadership campaign HQ.

Mr Portillo was regarded by many in the Conservative Party as its natural leader, but partly through circumstance and partly through lack of judgement, he ultimately became its lost leader.

There are many still hoping that David Miliband, so long seen as the 'heir to Blair,' can avoid a similar fate.

One of them, possibly both, is going to end up a loser

Given that the British electorate as a whole only gets to vote once every 4-5 years, it is perhaps inevitable that by-elections tend to wield a somewhat disproportionate influence on our political process.

Usually they follow a fairly predictable pattern. The public – or the media – identifies which of the two main opposition parties is most likely to give the governing party a good kicking, and the 'protest vote' does the rest.

But we are in unchartered waters now. There are two governing parties, only one main opposition party, and the new-ish leader of that party is something of an unknown quantity to most voters.

All of which is what makes Thursday's Oldham and Saddleworth by-election possibly the most fascinating such encounter since the Darlington contest of 1983 which, to Labour's ultimate detriment, saved the leadership of Michael Foot.

On the face of it, it ought to be plan sailing for Labour. In a few short months, the Con-Lib coalition has slashed public spending, put up VAT, and scrapped much of the regional aid budget that was helping former industrial towns like Oldham to find a new role.

Not only that, but the seat was won by Labour in the general election last May, before MP Phil Woolas was disqualified from Parliament for having lied about his Lib Dem opponent on his election literature.

One of the many imponderables in this contest is whether the fate of Mr Woolas will help or hinder Labour's cause here.

The fact that he was actually quite a popular local MP might appear to favour the party, but some voters may feel he was too readily hung out to dry by the Labour establishment, and punish the party accordingly.

Inevitably given its status as a three-way marginal, 'Old and Sad' is being viewed as something of a mini-referendum – not just on the Coalition, but on Labour leader Ed Miliband.

If Labour cannot even win by-elections in seats it already holds, serious questions will start to be asked as to whether it can win anywhere else under Mr Miliband's leadership.

But for Lib Dem leader Nick Clegg, too, a defeat on Thursday would be seen as a significant blow.

His party's candidate, Elwyn Watkins, may well feel the seat is his by moral and indefeasible right having been on the wrong end of Mr Woolas's misdemeanours, but politics doesn't work like that.

Undoubtedly the leader with the least to lose and the most to gain here is Prime Minister David Cameron.

For one, the Conservative candidate Kashif Ali started the contest in third place. For another, the Tories have been accused of soft-pedalling their campaign in a bid to help their Lib Dem partners.

Perhaps realising he is in with an outside chance of a stunning victory Mr Cameron is now doing his best to dispel that impression, becoming the first premier to campaign in a by-election for 13 years.

Yet ironically a Tory win, in a seat where the Lib Dems began as the main challengers, might end up being more destabilising for the Coalition than a Labour triumph.

Mr Clegg would then face more tough questions from his own activists and MPs as to what exactly the Lib Dems are getting out of the Coalition.

A Tory victory would simply reinforce the idea that it is the Lib Dems who are taking all the political pain while Mr Cameron reaps the political dividends.

But whoever wins on Thursday, at least one and possibly both of Mr Cameron's fellow party leaders are going to be waking up to some difficult headlines on Friday morning.

And for either or both of them, that could set the tone for a tricky political year ahead.

Why 2011 is the Coalition's make-or-break year

Two weeks ago I concluded my review of the political year 2010 by posing a question which will, in my view, determine how the next 12 months in British politics ultimately pan out.

It was: can the Coalition government as a whole withstand the dramatic loss in popularity suffered by the Liberal Democrats since their decision to go into partnership with David Cameron’s Tories.

As Ricky Ponting can no doubt testify, a team is only as good as its weakest link, and with public support for the Lib Dems now barely registering in double figures, Nick Clegg’s party are clearly the weakest link in this government.

The big question for Mr Clegg is how much lower he can afford to allow that support to drop before continuing membership of the Coalition simply becomes politically unsustainable.

If any further proof were needed of the Coalition’s inherent instability, then the Vince Cable affair in the run-up to Christmas surely provided it.

There were several ironies about this episode, not least that a newspaper which shared Dr Cable’s hostility to Rupert Murdoch’s takeover of BSkyB managed to shoot itself so comprehensively in the foot.

But surely the biggest irony of all is that, for all the humiliation he heaped upon himself, Dr Cable turned out to be correct in his estimation that he was, in effect, unsackable.

Whatever you think of the methods used to ‘entrap’ him, any other minister who displayed such appalling naivety and lack of judgement would surely have been out of the door.

But because Mr Cameron dare not weaken the Lib Dem element of the Coalition for fear that the whole edifice will collapse, he survived - thought not without having his wings severely clipped.

So much for the events of the week before Christmas. What of the year ahead?

Well, since this is traditionally the time of year for crystal ball gazing, I’ll make a prediction. If the Coalition gets through the next 12 months, it will more than likely achieve its ambition of serving a full five-year parliamentary term.

Why is 2011 likely to prove the Coalition’s make-or-break year? Well, for starters, it is likely to become significantly more unpopular as the cuts bite, unemployment continues to rise, and the full implications of some of its more radical experiments become clear.

I have in mind here Andrew Lansley’s NHS reforms and Michael Gove’s de-municipalisation of schools, neither of which can claim much of a popular mandate.

But the biggest single threat to the Coalition’s survival is the time-bomb that is due to detonate underneath it on Thursday 5 May – the referendum on the alternative voting system.

If, as many now expect, the referendum is lost, it will remove the Lib Dems’ main incentive for having entered the partnership in the first place.

For Labour leader Ed Miliband, too, this will be a critical 12 months, as he seeks to demonstrate to a sceptical public why he, and not his elder brother, is the right man for the job.

At least he now has a clearer opposition strategy, seeking to brand this a Conservative-led government supported by reluctant Liberal Democrats rather than the marriage of true minds Messrs Clegg and Cameron would like to portray.

Yet for all that, Mr Miliband is probably no more keen to bring the government down right now than Dr Cable: his party is broke, he hasn’t had time to overhaul the policies that lost it the last election, and the public doesn’t really know him.

If the Coalition does manage to survive the year, it might simply be because none of the three main parties really wants to have another election just yet.

Review of the Political Year 2010

When future historians come to assess the political events of 2010, two big counterfactual questions are likely to loom large in their minds.

They are: what if Labour had ditched Gordon Brown before the General Election, and what if the Liberal Democrats had refused to go into coalition with David Cameron's Conservatives?

The second question is probably the easier one to answer. Mr Cameron would have formed a minority government, David and not Ed Miliband would have become Labour leader, and both would now be gearing up for a fresh election in the spring.

But the more tantalising question is whether Mr Cameron might never have become Prime Minister at all had Labour gone into the election under a more popular leader.

The political year 2010 began with Mr Brown's survival once again hanging in the balance.

Former Labour ministers Geoff Hoon and Patricia Hewitt attempted to get MPs to demand a leadership contest, but rightly or wrongly, the consensus in the party was that by then it was too late to change horses.

As it was, the election turned into a slow-motion car crash for Labour, dominated by televised debates in which Mr Brown was predictably outshone by his two younger, more charismatic opponents.

Then, in the final week of the campaign, came 'Duffygate' - the kind of incident which could have happened to any of them, but which seemed somehow fated to happen to the luckless Mr Brown.

In terms of issues, the campaign centred mainly on the question of how to deal with the country's biggest budget deficit since the 1930s.

Here Labour was on an equally sticky wicket, with voters clearly concluding that the party was 'in denial' about the extent of the problem and crediting the Tories for being at least partially honest about the scale of the forthcoming cuts.

For all that, though, the public remained largely unconvinced by Mr Cameron and his team, and the eventual result saw the Tories falling some 20 seats short of outright victory.

Days of frantic bargaining followed, but with the parliamentary maths in favour of a Lib-Lab deal failing to stack up, it was always likely that a Lib-Con coalition would be the outcome.

Faced with the task of finding a successor to Mr Brown, Labour managed to saddle itself with the lesser-known of the Miliband brothers, courtesy of a crazy electoral system which gave the unions the decisive say.

For David Miliband, brother Ed's leadership election victory came as a bitter blow and the South Shields MP stood down from his party's frontbench.

Then, in one of his first acts as leader, Ed sacked former Minister for the North-East Nick Brown from his Shadow Cabinet team, leaving the region somewhat leaderless in Whitehall.

Indeed, with the new coalition busily taking the axe to every regional institution in sight, the North-East seemed in danger of losing its political voice altogether.

Initial excitement about the coalition soon faded. The 'new politics' spoken of by Lib Dem leader Nick Clegg in the TV debates soon regressed into the old politics of broken election promises.

Chancellor George Osborne had expected that the £80bn programme of cuts unveiled in his October comprehensive spending review would swiftly make him the most unpopular man in Britain.

Instead, it was Mr Clegg who became the government's fall-guy, completing his journey from hero to zero by backing the rise in tuition fees against which he had so vehemently campaigned in April and May.

The Lib Dems' decision to trade principle for power has clearly come at a huge political cost. The key question for 2011 is whether the coalition as a whole can survive it.

Anarchy in the UK? This is not the country Cameron wants to lead

It is a moot point whether Thursday's protests over the government's decision to raise universities tuition fees to £9,000 amounted to the worst civil disturbances since the poll tax riots of 1990.

One should not forget that the fuel protests of autumn 2000 came close to bringing the country to a standstill - but they were by and large peaceful.

Measured purely in terms of street violence, this week's demonstrations almost certainly constituted the biggest outpouring of public anger seen since the days of Margaret Thatcher.

Should that be a warning sign to David Cameron and his coalition? Undoubtedly so.

The bare facts of the matter are that the government won the Commons vote on lifting the cap on fees by a majority of 21, down from its usual majority of 83.

While 28 Liberal Democrat MPs voted in support of the move, 21 defied the party leadership, including former leaders Charles Kennedy and Sir Menzies Campbell and a possible future leader, Tim Farron.

Meanwhile six Tory MPs also voted against the measure, including the former leadership contender David Davis who, like Mr Farron, appears to be positioning himself for the coalition's eventual collapse.

But while the government won the vote, the question is whether in doing so it lost the argument, as well control of the streets.

Conventional wisdom would suggest that the demonstrators have over-reached themselves, and that the ugliness of some of Thursday's scenes will turn the wider public against the students' cause.

In the short-term, it will have focused attention less on the fees issue than the question of whether security arrangements for the demo were even half way adequate.

But the debate over tuition fees is far from over. The House of Lords will certainly have a say on the matter, and there will have to be further legislation over the level and speed at which the fees are paid back.

That in turn is bound to lead to further rebellions which, if successful, could ultimately force the government to unpick the entire scheme.

So where does it leave the coalition? Well, firstly, what about the Lib Dems.

Their hope was that by getting the fees vote out of the way early on, it would enable them to move the political agenda onto other areas in which they are on firmer ground, such as political reform.

I wonder, however, whether memories will fade that easily, and whether we have not witnessed a seminal moment in terms of public perceptions of the third party.

It could well be that this will go down as the point at which the public stopped seeing the Lib Dems as a party of principle and started to see them as their opponents have always seem them – a bunch of opportunists who would break any promise for a taste of power.

Secondly, where do this week's events leave Mr Cameron? Despite his own protestations last week that he would "rather be a child of Thatcher than a son of Brown," he is not the Iron Lady.

His style is consensual rather than confrontational. Unlike his illustrious predecessor, he has no wish to see his premiership consumed by battles against the 'enemy within.'

Within weeks of those poll tax riots in the autumn of 1990, the Prime Minister had gone, albeit over a combination of that and other issues.

That is not going to happen to Mr Cameron just yet. But in his desire to lead a broadly united country, he won't want to see too many more weeks like this one.

Labour don't do assassinations, but if they did....

When Ed Miliband was elected Labour leader on the opening day of the party's conference in Manchester in September, a leading Tory blogger delivered a withering verdict on the result.

"They’ve missed out Hague and gone straight to IDS," said Paul Staines, author of the Guido Fawkes blog which, while not exactly impartial in its coverage of the political scene, is not without influence at Westminster.

Staines was, so far as I am aware, the first political pundit to make the comparison between 'Red Ed' and the failed Tory leader Iain Duncan Smith, but he certainly hasn't proved to be the last.

"It may be too early to start talking about Ed Miliband not making it to the next election as Labour leader, but many more performances at PMQs as poor as he put on today and it won’t be long before he’s in IDS territory," said another this week.

Wednesday's Prime Minister's questions should have been a breeze for Mr Miliband with the continuing three-way split in the Liberal Democrats over whether to vote for tuition fees, vote against them or abstain.

On top of that, he had the leaked critique by Bank of England governor Mervyn King describing Prime Minister David Cameron and his Chancellor George Osborne as "out of their depth."

Yet Mr Miliband chose instead to base his attack on another leaked document in which William Hague had described himself, Mr Cameron and Mr Osborne as 'Thatcher's children.'

"I would rather be a child of Thatcher than a son of Brown," the Prime Minister responded, ramming home the open goal to hoots of laughter from the government benches.

For Mr Miliband to attack the coalition for its Thatcherite tendencies was politically inept on so many levels it is hard to know where to start.

To begin with, Mrs Thatcher would not even have contemplated some of the things the coalition is doing, particularly in the area of welfare, so the comparison breaks down at the first hurdle.

But the real problem with referencing Margaret Thatcher in contemporary political debate is the wildly differing reactions she still elicits, even 20 years on from her downfall.

Labour's core voters may still regard her as the devil incarnate - but to many of the swing voters the party needs to win back, she was, and remains, a heroine.

Inevitably, the mounting discontent over Ed's slow start has led to continuing speculation that South Shields MP David Miliband might yet get a second shot at the leadership.

For my part, I can't see it. David may have deserved to get the job in September, but his brother's performance since then is in danger of trashing the entire Miliband brand.

It is simply inconceivable to my mind that, charged with finding another new leader at this stage, the party would replace a failed Miliband with….another Miliband.

Shadow Foreign Secretary Yvette Cooper, who should have stood for the job this time round, is surely in pole position to take over should the opportunity arise.

What will probably save Ed Miliband is that Labour doesn't really do leadership assassinations. They knew Michael Foot was going to lose badly in 1983, yet passed up the chance to put Denis Healey into the job instead.

They probably knew Gordon Brown was going to lose in 2010, but again, they failed to move decisively against him.

The big difference, though, between those two leaders and the current one is that while they, at least to begin with, could claim the support of their own MPs, Mr Miliband was foisted on his by the wider party.

And, of course, there was another recent party leader who found himself in exactly that position. His initials were IDS.

Ed Miliband needs to reform his party first

With his leadership of the Labour Party still barely two months old, it did not take long for talk of plots against Ed Miliband to start crawling out of the Westminster woodwork.

One national daily informed us that David Miliband was standing ready to take over should his younger brother prove a flop in the job he so narrowly beat him to in September.

I doubt very much whether David had anything to do with this 'story.' Indeed, many more stories like it and the South Shields MP will probably have to quit politics altogether, rather than risk becoming a focus for discontent over his brother's leadership.

No, I suspect this story arose, as these things tend to do at Westminster, from a Labour MP speculating idly to a journalist about what might happen if Ed Miliband were to fall under a bus.

But the story was not completely without significance. It demonstrated that some Labour MPs remain far from convinced by Ed, and that the new leader still has a big job on his hands to unite his party.

In that respect, his return from paternity leave at the start of this week came not a moment too soon.

Mr Miliband's announcement on his first day back of wholesale review of Labour policies is a wise move as far as it goes.

Barring an irretrievable bust-up if next May's referendum on the voting system goes against the Lib Dems, the coalition is likely to be in power for five years, and there is thus plenty of time for Labour to reinvent itself.

Furthermore, it is a tactic that has worked successfully for the last two Leaders of the Opposition who have managed to be promoted out of that job into Number Ten – Tony Blair and David Cameron.

Both men used policy reviews as a means of detoxifying their parties in the eyes of voters, Mr Blair from its tax-and-spend image, Mr Cameron from its 'nasty party' tag.

But it doesn't always work. Neil Kinnock launched a similarly wide-ranging review in the 1980s called 'Meet the Challenge, Make the Change', but failed to convince the electorate that Labour had done.

Likewise William Hague's much-vaunted 'Common Sense Revolution' in 1999 served only to reinforce voter perceptions of the Tories at that time as shrill and extremist.

For me, the fate of those two leaders seems to sum up the real difficulty facing Ed Miliband – whether he has the personality to connect with the British public and project a new and compelling vision of what his party stands for.

This is what ultimately distinguishes the successful opposition leaders from those who ultimately failed to make the transition to government.

Personality aside, his other big problem is whether the party under him can forge a distinctive policy agenda that is neither Old nor New Labour

For all the talk of the "death" of New Labour, and its replacement by True Labour, Real Labour or Next Labour, any departure from it will inevitably be portrayed as 'Red Ed' lurching to the left.

If anything, Mr Miliband needs to try to out-modernise the previous generation of modernisers by being prepared to tackle issues which they ultimately shied away from.

Welfare reform is one obvious example, but so is reform of the party's own archaic structures and its absurd system of electing its leaders.

It would be a brave politician indeed who, having prospered under the electoral college system, would then advocate its replacement by one member, one vote.

But if Mr Miliband is looking for a 'Clause Four Moment' which will force the electorate to sit up and take notice of him, that could well be the best option.

The quiet man finds his niche at last

For good or ill, most Prime Ministers ultimately tend to remembered for a single defining event or achievement that happened on their watch.

For Clement Attlee, it was the creation of the welfare state. For Anthony Eden, it was Suez. For Ted Heath, entry into Europe. For Jim Callaghan, the winter of discontent. For Tony Blair, Iraq.

It's early days for David Cameron. But what he most wants to avoid – apart from losing the next election - is for his government to be remembered solely for the cuts.

He wants it to go down in the history books for something else entirely – for reforming the welfare state that Attlee created and for mending the society that he claims has subsequently been broken.

It is no mean ambition. Welfare reform has proved to be a 'mission impossible' for successive Prime Ministers – even ones who told their welfare reform minsters to "think the unthinkable."

Mr Blair's failure to bring about meaningful change in this area – despite a 179-seat majority and a favourable economic headwind – has become symbolic of the many missed opportunities and thwarted hopes of his long premiership.

By contrast, Mr Cameron must depend for his parliamentary majority on the Liberal Democrats, while the economic environment could hardly be less conducive to his aim of moving people off welfare and into work.

Yet, perhaps by force of circumstances in the shape of the need to reduce the deficit, his government has embarked on a programme of change which, if successful, would amount to the biggest recasting of the welfare state since its inception.

Perhaps even more improbably, the reform programme is being overseen by Iain Duncan Smith, the quiet man who failed to turn up the volume and seemed destined to go down as no more than a footnote in Tory Party history.

Forced into the political wilderness in 2003, he skilfully reinvented himself as a Beveridge de nos jours, and now, as Work and Pensions Secretary, has the chance to put his radical ideas into practice.

At the heart of the changes announced in his White Paper this week are two relatively straightforward principles.

First, the replacement of the labyrinthine system of work-related state support with a single Universal Credit, and second, the idea that it will always pay better to work than remain on benefits.

So will it succeed where other attempts have failed? Well, in its favour is the fact that there is an unusual degree of political consensus over the central objectives of the changes.
"If the government gets this right we will support them because we accept the underlying principle of simplifying the benefits system and providing real incentives to work," said Shadow Work and Pensions Secretary Douglas Alexander.

New Labour leader Ed Miliband has already made clear he will not oppose the coalition for opposition's sake, and this is a wise strategic move on his part.

He realises there is a public consensus not just that the deficit needs to be cut, but that the dependency culture which has become entrenched in some deprived communities needs to be addressed.

But Labour's caveat, of course, is that the crackdown on benefits must go hand-in-hand with pro-growth policies to ensure the jobs are there for people to move into.

This highlights the biggest obstacle to Mr Duncan Smith's proposals – the fact that the government's cutbacks in other areas are likely to lead over the coming year to rising unemployment.

If there are not the jobs to go round, moving people off welfare into work becomes not just politically impossible but practically impossible.

As with much else, the fate of the government's welfare reform gamble depends on whether its greater economic policy gamble succeeds or fails.

Clegg will come to regret broken promise on fees

The cry of 'betrayal' is one of the most oft-heard in politics. Labour faced it on numerous issues between 1997 and 2010, not least when it introduced university tuition fees despite a manifesto pledge not to do so.

"We have no plans to introduce university top-up fees, and have legislated to prevent them" actually translated as "We have no plans to introduce them during the 2001-2005 Parliament, but we will legislate to bring them in thereafter."

The subsequent backbench revolt came close to bringing down Tony Blair, whose government only survived when a few MPs switched sides at the last moment on the orders of Gordon Brown.

One potential North-East rebel was told to support the measure with the words: "I'm not asking you, I'm [expletive deleted] telling you" - an interesting illustration of the way the Brownites used to do business.

But Labour's shameless U-turn created a huge political opportunity for the Liberal Democrats, which they subsequently sought to exploit to the full in constituencies with large student populations.

Among the seats they targeted in 2005 was Newcastle Central, and it was probably only the personal popularity of the then MP, Jim Cousins, that stopped them winning it.

The Lib Dems were again making the most of the issue during this year's campaign, which they fought on a pledge to abolish the fees in place of a 'graduate tax.'

As one Sheffield student told the BBC's Question Time on Thursday: "Nick Clegg was never out of our student union during the election. Now we can't even get a meeting with him."

The reason for that, of course, is that the Lib Dems are now part of a Tory-led coalition that is set to remove the current £3,000 cap and raise it to a maximum of £9,000.

They point out that the coalition agreement does not commit them to supporting the measure, allowing them to abstain when the proposal comes before the Commons.

But if party leader Mr Clegg saw this is some great concession wrung from his Tory partners at the height of those tense negotiations following the election in May, I suspect he has since been disabused.

In fact the public sees it for what it is – a fig-leaf to enable the Lib Dems to stand aside holding their noses while the Tories introduce a two-tier system of higher education.

The purpose of this column is not to go into the rights and wrongs of how universities should be funded and how that fits into the larger question of how to tackle the deficit.

My own personal views on the matter are inevitably coloured by my own experiences as a student in more benign economic times.

As someone who would certainly not have been able to go to university without the state support that was then on offer, I find it very hard to argue that the next generation should be denied the same benefits.

That said, alongside a 'free' university education, in those days you also used to be able to buy houses in the West End of Newcastle for a few hundred quid. It's a different world now.

No, the main point I am trying to make here is that this is yet one more example of the coalition's inherent instability.

It seems likely that a number of MPs, possibly including the former leaders Sir Menzies Campbell and Charles Kennedy, will rebel rather than abstain on the measure, calling into question Mr Clegg's control over his own party.

As the Lib Dem leader has frequently reminded us, compromise is a necessary part of politics, especially in a hung Parliament scenario, and some political promises are seemingly made to be broken

With hindsight, however, I suspect he will come to see this as one that really should have been kept.

Despite the cuts, it is Labour that has the harder task

In the normal course of political events, any government that announced the largest cutbacks in public spending for more than thirty years would be seen as batting on a particularly sticky wicket.

And it is true that there has been no shortage of criticism of the £81bn cuts programme unveiled by Chancellor George Osborne on Wednesday.

Already, the coalition’s attempts to present the package as ‘fair’ have begun to look somewhat threadbare, with think-tanks such as the Institute for Fiscal Studies claiming it will hit the poorest hardest.

Given that public spending is of necessity higher in the worst-off areas of the country, it seems to me that the IFS is making not so much a contentious political point as a statement of the bleeding obvious.

Yet for all the sound and fury directed at the coalition this week, it is my belief that the spending review – and the wider question of how to tackle the deficit - actually poses a bigger problem for the Labour Party.

Why? Because like it or not, the government has succeeded in creating a consensus that, irrespective of whether or not the cuts are fair, they are certainly necessary.

The general election in May was essentially decided on two issues: whether the public could stand another five years of Gordon Brown as Prime Minister, and how fast the deficit should be cut.

It is because Labour lost the argument on not one but both of these issues that it finds itself out of power today.

So on the question of the £18bn cuts to welfare benefits, even allowing for the undoubted human cost, there is actually a broad consensus that this is something that needs to happen.

If the coalition can succeed in reforming the welfare state – something Labour really should have done from a position of strength post-1997 – the political as well as the economic dividends will be huge.

Likewise, there is also a broad consensus that the last government created too many ‘non jobs’ in the public sector that are now having to be shed.

If as the government’s own documents appear to confirm, the cutbacks do lead to 500,000 public sector job losses, many of those not personally affected will see it as a necessary re-balancing of the economy.

It has become almost a cliché over the past week to say that Mr Osborne’s spending review will determine the result of the next election, but it is true nevertheless.

If his great gamble pays off, and the economy recovers before 2015, the coalition will have succeeded in constructing a political narrative that will be well-nigh unbeatable at the polls.

It will be the well-worn cry of Tory governments down the ages - that Labour turned the country in an economic disaster zone, leaving the coalition to clear up the mess.

However good or bad a leader Ed Miliband turns out to be, it is inconceivable in those circumstances that the country would then turn back to Labour after just one term out of office.

Yet for Labour, the alternative scenario in which Mr Osborne’s cutbacks plunge the country into a double-dip recession is almost equally baleful.

Messrs Brown and Balls would then be powerfully vindicated – but at the cost of millions of lost jobs, repossessed homes, failed businesses and shattered lives.

Hence many Labour supporters who might ordinarily hope that the Comprehensive Spending Review proves this government’s undoing will instead be praying that Mr Osborne is proved right.

It may condemn their party to a decade of opposition. But at least they might still have their jobs by the end of it.

Region losing its voice as cuts start to bite

The day after David Miliband stepped aside from the Shadow Cabinet and Nick Brown was axed as Chief Whip, a Newcastle Journal headline posed the question: "Has the North East lost its political voice?"

If that was a pertinent question to ask then in the wake of the departure from frontline politics of two genuine regional heavyweights, it is even more so now.

Since then, we have seen the Parliamentary Labour Party fail to elect any of the four North-East MPs who stood for the Shadow Cabinet while choosing no fewer than seven from Yorkshire and Humberside.

And on Thursday, final confirmation that One North East, the development agency which has presided over a regional economic renaissance, is among the 192 quangos being axed by the coalition government.

The contrast with the regional political scene of a decade ago could not be greater. We regularly saw five or six North-East MPs occupying seats around the Cabinet table – depending on whether Peter Mandelson was in or out at any given time.

Their value has been long debated. Tony Blair admitted in his memoirs that he dared not be seen to favour his home region, and at least one of those Cabinet ministers admitted the same to me.

There was also the now largely dismantled regional political infrastructure – ONE, the regional government office created under John Major, and the regional assembly made up of senior councillors and other representatives.

Later on, under Gordon Brown, the North-East had its own minister in Nick Brown. Now it does not even have a single MP in government, let alone someone dedicated to sticking up for its interests.

In retrospect, it is clear that a more concerted effort should have been made to get behind a single North-East candidate in the Shadow Cabinet elections, probably Helen Goodman as she came closest to being elected.

But as it has turned out, the region is fairly well-represented in the middle ranks of Labour leader Ed Miliband's new team unveiled last weekend.

Ms Goodman joins Kevan Jones, Sharon Hodgson, Roberta Blackman-Woods and new MPs Chi Onwurah and Catherine McKinnell as shadow ministers, while Alan Campbell has been promoted to Deputy Chief Whip.

None of them, as yet, has the parliamentary stature of a Nick Brown or a David Miliband, but at least there is hope there for the future.

But if new leadership is going to come from anywhere, it surely needs to come from within the region itself, and here the picture is much less promising.

The moreorless wholesale disappearance of region-wide political institutions has left a void which the coalition's plans for yet more elected mayors will not begin to address.

One of the arguments made at the time of the regional assembly referendum was that a future Conservative administration would find it harder to get rid of an elected body than a panoply of unelected ones.

In retrospect, this was surely right. After all, the coalition is not abolishing the Welsh Assembly or the Scottish Parliament, even though those institutions cost many times more than the RDAs.

Hopes continue to linger that the government may yet allow the creation of a region-wide Local Economic Partnership to provide a single regional perspective where necessary.

But Whitehall's signals on this have been mixed to say the least and while Business Secretary Vince Cable may be supportive, it is clear that not all of his colleagues share his viewpoint.

Much of the debate around the governance of the North-East over recent decades has essentially been about the need for a distinctive regional political voice.

It is no exaggeration to say that, in a few short months, the coalition has managed to set back that cause by at least 20 years.

As the conference season ends, which leader faces the toughest task?

Ever since he burst onto the political scene during the Tory leadership election five years ago, David Cameron has consciously or otherwise modelled himself on Tony Blair.

To begin with, he appeared to invite the comparison, describing himself as the "heir to Blair" at a dinner with a group of newspaper executives in October 2005.

One of the newspaper editors present on that occasion reputedly warned him: "David, I would not repeat that outside this room," and to be fair to Mr Cameron, he took the advice.

But though the Prime Minister is nowadays more keen to play down the comparisons, this week's Conservative Conference in Birmingham showed they have not gone away.

Political blogger and former North-East Labour official Hopi Sen produced a fascinating comparative study of Mr Cameron's conference speech on Wednesday with Mr Blair's first address as Prime Minister in 1997.

For instance, in 1997, Mr Blair said: "When people say sorry, that’s too ambitious, it can’t be done, I say: this is not a sorry country, we are not a sorry people. It can be done."

Fast forward to this year, and Mr Cameron is telling us: "Don’t let the cynics say this is some unachievable, impossible dream that won’t work in the selfish 21st century – tell them people are hungry for it."

And as Hopi points out: "In Blair’s first speech we find a young girl who writes in to say how much she liked going to a summer camp. In Cameron’s a young girl writes in to help pay off the deficit."

But what really unites Messrs Cameron and Blair is not so much their shared rhetorical style or even their presentational skill, but their tendency to want to define themselves in opposition to their own parties.

Mr Blair loved nothing better than to don the Tories' clothes – whether it was being tough on crime, a hawk in international affairs, or even privatising public services when Gordon Brown would let him.

He knew it wound his party up – but that was fine so long as it showed the wider electorate that Labour was no longer hidebound by what he saw as out-of-date ideology.

Now we have Mr Cameron wanting to make 'fairness' the defining characteristic of his government – not a value with which the Tories have always been readily associated.

The Prime Minister knew that the decision to axe child benefit for households with a higher-rate taxpayer would wind-up his own grassroots – but what mattered was whether the wider public saw it as fair.

But did they? It certainly doesn't appear to be very "fair" to families with a single-earner in the higher tax bracket whose partner stays at home – and may well have to be rethought for that reason.

Culture secretary Jeremy Hunt then broadened the debate by raising the issue of whether the state should subsidise people who have more and more children.

Was it a gaffe - or was he acting as an 'outrider' for Mr Cameron, in the way that Stephen Byers and Alan Milburn sometimes used to do for Mr Blair, saying the things the leader dare not say himself?

Time will tell – but as the post-election conference season draws to a close, how do the three parties and their leaders currently stand?

Labour's Ed Miliband must persuade a sceptical public he is a better leader than his brother would have been. Nick Clegg has to win that referendum on voting reform, or risk the Lib Dems being flattened at the next election.

As for Mr Cameron, he must convince the voters that the most savage spending cuts to be unleashed for decades are somehow "fair."

It is hard to say which of the three of them faces the most difficult task.

Ed should think twice before he buries New Labour

Within hours of Ed Miliband's victory in the Labour leadership election last Saturday, friends of Tony Blair let it be known that the former PM regarded the result as a "disaster."

It was certainly pretty disastrous for Tony Blair. His ill-judged intervention in the contest, suggesting that any departure from New Labour would consign the party to the wilderness, appears to have spectacularly backfired.

Offered the chance to choose a Blairite continuity candidate in David Miliband, the comrades opted instead for someone who has spent most of his career as an adviser to Gordon Brown.

Mr Blair's autobiography may have topped the best-seller charts. But it has lost him any lingering influence he may have had over his old party.

But if this week's conference in Manchester was a disaster for the Blairites, how was it for the party as a whole?

Well, on this point, I'm afraid I find myself in rare agreement with the former Prime Minister.

Had David won, Labour would have been right back in the game. Unlike his younger brother, he is a man who is ready to be Prime Minister now, and his election would instantly have struck fear into the coalition.

Instead - and not for the first time in its history - the party has opted to eschew the easy route back to power in favour of the long, hard road.

To my mind, there are three principal reasons why Ed's victory may ultimately come to be seen as a bad day's work for the party.

The first is nothing to do with the qualities of Ed or David, but with the flawed system that enabled Ed to come out on top despite winning fewer votes from both party members and MPs.

Much has already been written about the dangers of Ed being seen to be in the "pockets" of the union bosses, and like many Labour leaders before him, he will have to work hard to tackle that perception.

To me, the bigger problem is not that the unions got their man, but that the party members didn't, creating an issue of legitimacy that Ed will struggle to address.

Secondly, there is Ed himself. He was right in his speech on Tuesday to try to draw a line under some of the issues which have caused Labour to suffer such a catastrophic loss of trust, and the 'Red Ed' jibes will soon be shown to be ludicrous.

But for all his personal ruthlessness in fighting his elder brother for the party leadership – and in despatching Nick Brown from the job of Chief Whip - he still comes across as rather earnest and well-meaning.

For me, though, the biggest danger for Ed is that, in displaying such ruthlessness in pursuit of the top job, he may have sown the seeds of his own downfall.

It is not just that in order to win the leadership he had to humiliate his elder brother and force him out of frontline politics, but that he also had to trash the entire New Labour brand.

Yes, there were things New Labour got wrong. It did become "fixed in its own certainties" as Ed said on Tuesday. The Blairites became, like Tony Crosland, revisionists who stopped revising.

And as the North-East knows only too well, it clearly failed to balance the interests of its traditional supporters against those of 'aspirational' voters.

But the essential lesson of New Labour – that to win, the party needs to reach out beyond its ideological comfort zone - is one Ed Miliband ignores at his peril.

And I am not alone in wondering whether in declaring New Labour 'dead,' he is not also in danger of writing his own political obituary.