This article presents the evidence for a conspiracy theory.  We need to remember that even if you are paranoid, it is still possible that ‘someone’ really is ‘out to get you’.

To the palpable dismay of the left of the LP, the unions and the total astonishment of many Labour MPs … to the incredulous delight of the Conservatives, the ultra-left and the Purple-Black contingent of the LP… Ed Balls announced in his speech to the Fabians:

… however difficult this is for me, for some of my colleagues and
for our wider supporters, we cannot make any commitments now that the
next Labour government will reverse tax rises or spending cuts. And we
will not.

.. Pay restraint in the public sector in this parliament would have been
necessary whoever was in government. (1)

Ed Balls’ speech is ambiguous, open to a lot of interpretations, possible misinterpretations, and has been the focus of much spin from vested interests.

Richard Murphy offers a measured response with the caveat “I don’t have to defend Labour – I’m not a member of Labour or any other party”

… I don’t think Balls meant Labour has embraced all the cuts just because it has recognised that, like it or not, they’re happening; and that, like it or not, come 2015, we are still going to be in the economic doldrums as a direct result of Tory policy and will not therefore have the resources to immediately reverse all Tory policies, and the harm they’ve caused. It may even be realistic to say in some cases, that he would not wish to reverse cuts – 2010 after all was not a perfect example of what government should look like and any realist would recognise that.

http://www.taxresearch.org.uk/Blog/2012/01/16/how-labour-has-to-tackle-cuts/

For Michael Meacher, it crosses a red line

Why did Balls say this anyway?   He didn’t have to make any such statement at all.   The alleged reason – that it’s necessary to swallow the entire Tory scorched earth policy in order to gain credibility – is absurd.   In fact the exact opposite is true – the Labour Party will never gain credibility whilst it continues robotically to parrot the Tory line… The only plausible explanation is pressure from the Blairite majority behind him.

http://www.michaelmeacher.info/weblog/2012/01/what-is-balls-up-to/#more-3347

The Conservative responses have been completely predictable and will not be much rehearsed here.  The much, more interesting responses to the Balls/Miliband relaunch come from approving voices, such as Adam Lent, who is a co-author of ‘In The Black Labour’:

Those who welcomed the publication of In The Black Labour just over a month ago will be cautiously relieved to hear the speech Ed Miliband delivered this morning. At last, this is a leader who is placing a commitment to deficit reduction at the heart of Labour’s message.

…That doesn’t mean adopting [Government cuts] over precisely the same timescale or in the exactly the same form but it does mean, given the size of the UK’s structural deficit, acknowledging that Labour has a very similar mountain to climb on fiscal matters as the coalition.

… Further ideas about how a Labour Government would be held to those rules by an independent body such as a strengthened Office for Budget Responsibility should also be part of this policy shift.

… The reality is if Labour is serious about a major shift in spending priorities to promote jobs, growth and inherent fairness in the economy, then the party will almost certainly have to face up to the need to save money in the big spending areas of welfare, health, and pensions.

… In short, the voters need to know that if the government won’t get British business fighting fit and ultra-competitive for this new ‘Asian Century’ then Labour will have to do the job

 

In other words, Adam Lent, welcomes Ed Miliband’s speech as indicating a return to TINA, the tenets of neoclassical economics and the neoliberal capitalism of New Labour.  The priority is ultra-competitive British business, with the withdrawal of the state from public services, a real reduction in UK wages, and the handing over of control of budgets to an undemocratic, unelected body like the OBR.  The underlying assumption of the very name ‘In the Black’ is that the so-called structural deficit must be eliminated, budgets balanced and ‘fiscal constraint’.

MMT Bill Mitchell assesses the contradiction of the LP calling for ‘fiscal constraint’ :

The dominance of “fiscal constraint” is a fabricated neo-liberal agenda without any basis in an understanding of how the monetary system actually works. It is an agenda that is part of a theoretical framework that extolled the virtues of the so-called “self-regulating” market and put pressure on governments to deregulate and relax the official oversight. The very pressure that Gordon Brown admitted he caved in to.

It is the framework that created the dynamics that manifested as the crisis and is now causing the crisis to endure at great cost to various segments in the population.

It is the framework of financial market hegemony. It is hardly an appropriate framework for “the left” to be meekly accepting as the rules of the game.

http://bilbo.economicoutlook.net/blog/?p=17681

Unsurprisingly, Len McClusky, general secretary of Unite the Union, would largely agree with such an analysis, and writes ‘Ed Miliband’s leadership is threatened by this Blairite policy coup’

Ed Balls’s sudden embrace of austerity and the public-sector pay squeeze represents a victory for discredited Blairism at the expense of the party’s core supporters. It also challenges the whole course Ed Miliband has set for the party, and perhaps his leadership itself. Unions in the public sector are bound to unite to oppose the real pay cuts for public-sector workers over the next year. When we do so, it seems we will now be fighting the Labour frontbench as well as the government.

http://www.guardian.co.uk/commentisfree/2012/jan/16/ed-miliband-leadership-threatened-blairite-coup

Len McClusky concludes, ‘This confronts those of us who have supported Ed Miliband’s bold attempt to move on from Blairism with a challenge. His leadership has been undermined as he is being dragged back into the swamp of bond market orthodoxy. And this policy coup may not be the end of the matter. Having won on the measures, new Labour will likely come for the man sooner or later. And that way lies the destruction of the Labour party as constituted, as well as certain general election defeat in my view.’

 

So, it seems that any conspiracy theory would need to not only explain the apparently bizarre volte face of Ed Balls, at the very point when George Osborne’s policies are falling disastrously apart, but such a theory would also need to offer explanation as to the desirability of alienating the Unions, Public Service workers, core voters and Left-wing MPs.

So what is the basis for the conspiracy theory?

 To begin, we need to return to just before the 2010 GE, when Tribune magazine published a story which seemed to explain Labour’s lack lustre campaign organized by Peter Mandelson; a campaign almost designed to lose the re-election of Gordon Brown.  Mark Seddon wrote of this, following the LDs going into coalition with the Tories:

‘What of the New Labour project? The 2010 general election ended the first part of the dishonest construct. The second part is now stillborn. As Tribune and others reported, Peter Mandelson, Andrew Adonis and others were furtively busy behind the scenes during the election campaign, opening lines of communication with Nick Clegg. The proposed Lib-Lab coalition was supposed to bring realignment of what is loosely described as the centre left. The new construct, after electoral reform, would have been an amalgam of those who have spent the past quarter century disposing of Labour values and whose paltry vision was of a new party without the trade unions.’

http://www.tribunemagazine.co.uk/2010/05/how-to-rescue-the-labour-party/

In other words, the new New Labour project was to complete the separation from the TU’s and the left, with a view to forming a new Centrist party with the LDs; David Miliband being the leader-in-waiting.  This was scuppered by the betrayal of Nick Clegg and the Orange bookers when they went into a full coalition with the Tories; followed by the election of the wrong brother to lead the LP.

The latest incarnation of the conspiracy theory is that Mandelson undaunted, continues to lay the groundwork for the removal of Ed Miliband and a return to the New Labour project, followed by the formation of a new party with the LDs, capable  ‘of being in power in perpetuity‘. This might well be a very attractive option for the electorally decimated LDs.

The aim would be for the Left and the TUs to abandon the LP, so that the valuable real estate, data bases and infrastructure would remain with the ‘Centrist’ party thus hobbling the formation of a new party of the Left.  In this way, all the hard work and the Constituency buildings paid for by generations of Labour activists, Unions and LP supporters would be ‘stolen’ by  a party which bears little resemblance to the core values of the original worker’s party.

So what is the evidence for a conspiracy against Ed Miliband, mediated by Lord Mandelson and his think-tank, Policy network?

(1) The right wing commentator, Guido Fawkes, has no doubts of the links:

For the second time in a month Peter Mandelson’s think-tank, Policy Network, has launched a policy salvo against the direction the Labour Party is taking under Miliband. Mandelson privately is contemptuous of young Ed, these high-minded wonkish policy exhortations are the respectable manifestation of that contempt.

… They also urge Miliband to abandon his “predators and producers” rhetoric and ”put forward a more convincing strategy for private sector growth than the Conservatives”.

http://order-order.com/2011/12/29/second-policy-salvo-against-milibandmandelson-backed-think-tank-launches-another-broadside/

(2) Owen Jones reported that:

This latest surrender to the Tory cuts agenda comes after a protracted struggle at the top of the leadership. One faction argued that, once you started specifying cuts, there would be a loss of focus on their deflationary impact, and that the Tories would come back for more and more detail on Labour’s spending plans. We now know this argument has been decisively defeated.

Arch-Blairite Jim Murphy – who harbours ambitions to stand for leadership should Ed Miliband fail – began rolling out the new strategy earlier in the month by calling for Labour to avoid ‘shallow and temporary’ populism over spending cuts, setting out his own proposed cuts as an example to his colleagues. The equally devout Blairite shadow education secretary Stephen Twigg has partly endorsed Michael Gove’s attacks on the scrapped Building Schools for Future programme, and has outlined £2bn of his own cuts. And Liam Byrne has committed Labour to a renewed attack on the welfare state, currently being hacked to pieces by the Government. I bet the word ‘vindicated’ will be used liberally around the corridors of Conservative Campaign Headquarters next week. http://www.newstatesman.com/blogs/the-staggers/2012/01/labour-cuts-tories-shadow

(3) The sustained media attacks on Ed Miliband’s leadership qualities, lack of energy and even his looks.  The Guardian in particular were notable for their undermining articles.

(4) There are briefings from various unattributed sources that David Miliband is now backing his brother against the media attacks, and might consider returning to the shadow cabinet. This may be so, but it would also put the ‘Runner-up’ in poll position were Ed Miliband to ‘decide’ to stand aside.

(5) Peter Mandelson surprised Andrew Marr, in a recent television interview, by indicating that he still hoped to play a part in national politics.

(6) LD blogger, Richard Morris noted in the Staggers http://www.newstatesman.com/blogs/the-staggers/2012/01/shadow-chancellor-balls-course:

… It’s been Balls over the last few months who’s been leading the doe-eyed flirting with us Lib Dems. What better way to lay the groundwork for a future potential pact, than to accept that all that has gone before cannot be undone? It’s like the shadow chancellor is gearing himself up to come over, give us a big hug and say ‘what’s past is past’.

It is unclear, how many ‘games’ are being played out in this battle for the survival of the Labour Party… but make no doubt this is about survival of the Labour Party.

Is Ed Balls, playing the 96/97 game of promising to match Tory cuts ‘to restore economic credibility for the LP’?  Certainly, his current take is very different from his Bloomberg speech of 2010.  Is Ed Balls, wanting to further Yvette’s prospects, or is he actually playing ‘triangulating’ the Blairite rump, in concert with Ed Miliband.

Is Ed Miliband really so naïve as to believe that a compromise can be achieved with the Blairite PLP.. or has he been keeping his ‘enemies close’ by appointing so many ultra-Blairites as Shadow Cabinet ministers? Could this be intended to be Ed Miliband’s Clause IV moment?

The only specific thing that seems completely certain for the LP, is the vulnerability of Ed Miliband’s new policy direction, the grassroots and the TU link. For the UK as a whole, Michael Meacher makes the consequences clear:

What makes all this so unconscionable is the elephant in the room.   The top 1% (300,000 persons) currently have an income of £150,200 a year (£2,888 a week), but no cap is being put on either their pay, incentive schemes, stock options, dividends, or bonuses.   The top 0.1% (still as many as 30,000 people) currently get on average £1,179,900 a year (£22,690 a week), but are still laughing all the way to the bank.   The richest 1,000 Britons, according to the Sunday Times Rich List, in the last two years alone got richer by £137bn (yes, billion), enough to pay off the entire budget deficit themselves alone, yet are making virtually no payback at all for the financial crash and economic recession many of them caused.   Justice, Ed Balls, is what the Labour Party is about, not sucking up to the Tory party or their Blairite friends.

http://www.michaelmeacher.info/weblog/2012/01/what-is-balls-up-to/#more-3347

On a personal level, I am sick to death of all the double-speak and machinations that seem to have reached new levels in the past 20y of New Labour.  We need a ‘Clement Attlee’ to repeat the trick of putting Herbert Morrison’s grandson and all his ‘fellow travellers’ back in  their Box.  Its still not too late for Ed Miliband to do exactly that.

We have a Tory/LD government, that is more vicious and devastating than Margaret Thatcher’s; there is a global banking crisis, there is unaddressed climate change and the consequences of running out of oil. These are the real battles for real people, and adherence to a neoliberal ‘ framework that created the dynamics that manifested as the crisis and is now causing the crisis to endure at great cost to various segments in the population.’ is not the answer. The ongoing struggle for power by the Blairites ( and possibly others) should be firmly squashed by the democratically elected leader of the LP.

(1)  http://labourlist.org/2012/01/ed-balls-speech-to-the-fabian-society/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+LabourListLatestPosts+%28LabourList%29