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The UK government has a problem with its budget and the deficit of the budget is the most pressing issue of this parliament. Anyone that does not acknowledge that is gravely mistaken and not in touch with the problems that face the UK’s government at the moment. This was a key issue at the recent general election and an issue that there was consensus about, in so much as there was cross party agreement that it must be dealt with. The dispute at the election was about when and how to deal with the issues.

The Conservative Party argued that the deficit should deal with by cutting spending, from the moment they assumed office by £6billion. This they argued was a down payment to prevent worse pain further down the road. They gave very little detail about what they would cut, and they even promised a series of tax cuts as well to add some confusion, but the message was clear, they had no issue with cutting budgets now. The counter argument came from the then governing Labour Party and the Liberal Democrats, that at the moment the government needs to do more to support the economy and enable more growth, before its own cuts would begin in 2011. The Liberal Democrat leader, Nick Clegg, had at numerous points of this debate had used his adopted city of Sheffield to strengthen the case for holding the cuts back. These warnings had gone so far as claiming there could be riots if people in his city voted against cuts, by voting either Labour or Lib Dem, were the ones who suffered the most at the hands of Tory cuts.

There was a hope that the Tories being in coalition with a party that is or at least was, against cutting the economy this year would hold back the worst of their excesses. This hope or belief was held up by the rhetoric that Nick Clegg, himself a Sheffield MP, was using throughout this period. However, rhetoric, like talk of attacking the Tories VAT tax bomb, and Clegg talked of riots by his constituents, if they were unfairly targeted for cuts, ended as soon as Cameron waived the carrot of power at Clegg. Why is this? Why have the same party in a matter of weeks changed from investors, supporting government aided growth, favouring the age of austerity. It seems they are either incompetent or dishonest, or perhaps both.

The Lib Dems claim that they were not aware that the government accounts were as bad as they are. This talk would suggest that the outgoing labour government had not accounted for its spending, despite the fact there was a budget laying out all public spending for all to see. They even claim that in the case of Sheffield Forgemasters that, it was just spending in marginal constituencies, as a form of electoral bribery, which is quite some claim that needs to be dealt with the utmost seriousness. It also exploits the wider public’s ignorance at the political geography of Sheffield. Not only is there only one non-Labour MP in the area (Clegg), the actual constituency where Forgemasters resides is Sheffield Brightside, home to former minister David Blunkett, where it is fair to say the Labour vote is weighed, not counted. How does this amount to political bribery?

There is, furthermore the issue of affordability of the loan and whether the loan represents value for money in the age of austerity and whether it could be served elsewhere. The government, and particularly Lib Dems on the back foot, say that not serving the loan will not cost one job at the plant. In this they are right, but it is also to fundamentally miss the intention of the loan. Forgemasters want to me the only steel plant in Europe to produce vital parts for nuclear reactors. They have the knowhow, they have the skill and they have the potential facility. Note that last point, potential. The raison d’être for the loan is to provide the final piece that was missing, which is the capital to allow expansion. This loan, would have created 180 jobs immediately, would have bought Sheffield Forgemasters as a firm to not only the forefront of the industry, but also to one of the most lucrative markets, the post carbon economy.

Thus the whole point of this investment is that it is not a bail out, the point not to protect jobs, but to create them and at the same time support British manufacturing and allowing them to become world leaders. Furthermore, it was not a grant but a loan, to be paid back at 3.5% interest. This loan would have made money for the treasury, and would have actually bought spending in other areas down, like welfare. At the general election, this was the investment and spending that the Labour Party was defending, to allow growth and solidify the recovery. There is no doubt about the seriousness with which Alistair Darling took the cuts that were to come, but they should have started next year, precisely to allow this kind of investment. By withdrawing the support now, we not only risk a return to recession, but we are damaging the recovery after that double dip.

So where do the Lib Dems stand on this? We have not had a clear answer. They supported solidifying the economy, by resisting cuts until 2011 before the election, but now they are in government the same people are proposing that cuts must come now. They have not yet explained properly what has caused switch. Were they honest at the election? Or did they betray principals to get their mitts on power?  This discrepancy must be highlighted by the Labour opposition. But whatever the cause of change of heart, it is clear that for now, they have become classical, anti-state, small government Tories. They are saying to British manufacturing, that regardless of the cause, or the long or short term benefits, it must survive on its own in the market place. If the market will not support it, it will not get support.

The British economy and manufacturing will not benefit from this economic vandalism.

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So there we have it. Three years after Brown’s infamous dithering about a snap election, two years after Labour’s by-election humiliations, after four weeks of campaigning and five days of horse trading we have a new government. The new government is unsurprisingly led by David Cameron’s Conservatives, but in coalition with the Liberal Democrats to make up the numbers. And we are told that this is the new politics in play, a new way of doing government, perhaps the change the Tories talked of.

In terms of policy from their manifestos, there has been some movement. The Lib Dems have conceded on immigration and Trident, issues that caused more harm than good to their campaign. Similarly the Tories have forsaken their pledges on the married tax allowance and the inheritance tax cut. The former was a long time pledge by Cameron to appease the right of his party and the detail, when it came; the policy had little substance, giving only £150 a year. The latter is a policy that had one objective, to stop Gordon Brown’s snap election in 2007, which it achieved, if anything it is a surprise that the policy has not been ditched earlier. Thus it is hard to envisage either party being too upset about losing said policies. The major movement appears to be giving jobs to Lib Dems. Nick Clegg has the non-job as the new Deputy Prime Minister, two of whom are subservient to George Osbourne, the new chancellor, and the other is in a role, which was earmarked for abolition in the Lib Dem manifesto.

The key issue of the election and of this parliamentary term is the budget deficit, the Lib Dems would appear to wield influence with the appointments of David Laws and Vince Cable to the treasury, yet despite these jobs, the substance is a Tory cuts agenda. Cable, like Labour, has attacked the Conservatives for risking a double dip recession with a plan to cut in this financial year. Whereas the Tories were clear that they would cut £6billion this year, as a “down payment” on the deficit. However, despite having two cabinet members in the treasury the agenda is that of the Tories, with the emergency budget to be held within 50 days to outline said cuts. The substance however, would appear to go further than even £6billion, with proposed cuts of 15-20% in most departments, with the exception of health and international aid. Coalition or not, it is clear that not only are the Tories going to cut as planned but they are going further sooner than they outlined during the election campaign.

Where the Lib Dems have influenced new government is over electoral reform and changes to the tax system. On the latter, the Lib Dem negotiators agreed to the raising of the threshold to £10,000, but did not agree to their plans on how pay for it. The initial policy was a traditional progressive tax measure, to increase the taxes on the wealthy, notably through the mansion tax, in order to cut tax at the bottom. In practice it is a classic Tory tax cut. A measure that will only reduce taxes on the poor by 6%; the greatest beneficiaries are middle income households, paid for by major reduction in public service funding. The ends were in the Lib Dem manifesto, but not the means. Thus the mandate for this measure is debateable, would Lib Dem voters have been happy with the alteration, or indeed, would the voters that they won over from Labour with a tax cut, which would not look out of place in the Tory manifesto? Similarly, there are a lot of noises about VAT, both parties campaigned saying that a rise in VAT was not in their plans. The Lib Dems went as far as, mimicking John Major’s tax bombshell poster from 1992. The Tories accused the Labour campaign of lying when it tried to pinpoint the likelihood of a VAT rise. VAT, like the tax cut was not outlined in their manifestos, both parties strongly made the case for not raising VAT, yet their coalition is implanting these measures without a mandate.

Worryingly most of all is the proposals for fixed term parliaments, a long term ambition of the Lib Dems and a clear victory from their negotiating team. However, there are two surprises in here, which are causes for concern. One is the fact that there will be five, not four year terms, surprising given how common four year terms are and that five year terms are normally reserved for when defeat is likely, as in 1992, 1997 and 2010. However, that detail aside, there is great concern about the fact that the new government, for all its talk, for all its appearance of change, is actually removing its own accountability. In this country we merge legislative and executive power, which is why a Prime Minister can only form a government with a command of a majority of MPs in the Commons. Yet, the new 55% rule means the government can lose the confidence of the house and yet carry on regardless. The key question is; would it be acceptable for legislation to pass with a vote of 45%? It means that a working majority is reduced from 326 to just 292.  Thus had the rule been in place for this election, David Cameron would have been in Downing Street on Friday, with a command of 47% of MPs. Is that democratic?

The Tories failed to get support in key parts of the country. In London, in the north, the midlands, in Wales and in Scotland, people were not flocking back to the Tories. They failed to gain more MPs in Scotland; they failed to take seats like Bolton West and Birmingham Edgbaston, which required swings of less than 5%, or 2% in the case of the latter. The new government cries that it needs the new rule to ensure government stability and to stop the markets overreacting and the four horseman of the apocalypse coming along. They want, what they call a new politics, but are they really suggesting that removing democratic accountability should be part of that new politics?

Furthermore, the 55% figure they have come up with is not in the interests of our system, or in the interests of accountability but in the interests of the Conservative and Liberal Democrat parties. They are proposing a major change to our constitution without mandate, consultation or reason. It is not done in the national interest but the interests of partisan parties clinging onto power. There are also critics who identify the Scottish model of a two thirds majority to dissolve the parliament. But that is a legislative body and does not have the executive powers of Westminster. Or, for example in Germany, where the head of state can dissolve parliament if it fails to function. In either case the two thirds rule is a super majority rule imposed for stability, but it is a rule that is imposed for different systems of government and different constitutions. The 50%+1 rule, which has been in place for centuries, it bought an end to James Callaghan’s government when Thatcher won power in 1979, and it is a clear, fair and democratic rule. The 50%+1 rule suits our system of government and constitution, other than partisan interest there is no need for this rule of democratic accountability to change.

We have a new government that says it is practicing a new politics, but in substance we have anti-democratic legislation, tax cuts for the rich, taxes increases for the poor and sweeping public services cuts. The Conservatives stood for change, but it sounds more like reversion to Thatcherite politics of division.

I am not sure that it was one of those “where were moments”, but having copiously kept a very close eye on today’s events I was very surprised to read of the Prime Minister’s decision to step down. Thus, just as is typical of the events of the post election period it was not straight forward and it was not clear. The announcement that Gordon Brown will stand down as Labour leader came as something of a surprise.  I had a assumed that he would step down as Prime Minster and as Labour leader simultaneously. The very fact that the events of today happened as they did has become typical not just of the events of the month, but of the year, in the build to the General election.

In “normal” circumstances an unpopular three term government, who have struggled in the polls for most of the third term would lose out to two youthful and energetic leaders, of two parties have been out of office for considerable time. Yet as polling day approached and as the governments economic policies started to prove their worth, the opinion polls tightened and the result in doubt. In truth that has been the case since the start of the year when the polls began to tighten and the reality is that the doubt has only exasperated as a result of the election.

The people have elected the hung parliament that has caused this week’s confusion. It is in this result that reflects the will of the people. There is not a desire, in the current circumstances, that no party will have supreme rule in this parliament. In short the public are demanding the parties work together, they have a preference at the moment for the Conservative party and they want the Labour Party to have less power, with the same body of Liberal Democrats. Against this backdrop Gordon Brown will no longer lead the country or the Labour party. It is to his credit that he will not cling onto power and he has taken on the constitutional duty that the wheels of government keep moving.

The most important factor that needs to be stated is that the need at this time is for strong government to deal with the economic crisis that is on the horizon. As much as I do not wish the Conservative party on the British public, they are the preferred choice of the British public and the parliamentary maths are clear that only with the Conservatives in power in coalition with the Liberal Democrats. It is for the Labour party to retreat to opposition and fight for what we as the social democratic party of this country from the opposition benches. The Labour government died with the last parliament and it must accept defeat and let go of power for now. This scenario is not ideal but it is far better than the prospect of attempting economic reform with the like of the Democratic Unionist Party and Alex Salmond and the SNP to hold the government to ransom at any opportunity.

It needs to be stressed that the way forward for the Labour party is unite behind a new leader.  It is my hope that leader will be David Miliband who will be able to rebuild the Labour party and prove that it has learnt the lessons of opposition and can make the argument that it is only Labour that can take the country forward. The party must pick the candidate with the right ideas and the appeal to the broadest electorate, as the Labour re-builds as the party that represents the whole of Britain. This is aligned to the fact that the Liberals will be in coalition with the Tories and the Labour party has the opportunity to portray itself as the true and strongest progressive party. This can only be achieved as the official opposition to the Tory-liberal government.

The resignation of Gordon Brown is clearly an end to an era and an end to a generation of leading Labour politicians. For all Lord Mandelson is a very influential figure, in terms of its leaders, Brown is the final Labour reformer of the 1990s New Labour revolution left. It is time for the next phase of Labour modernisation and it is the substance of this phase that is critical. This is why it is so important that David Miliband leads this new stage.

There is an old saying or cliché if you will, that cannot be stressed enough when looking at the current political stalemate; history does not repeat itself, it only appears to do so to those who do not understand its consequences. It is very easy to say that the hung parliament is a 1974 moment, or that the election is a repeat of 1992, or even parallels with hung parliaments of the 1920s. For all the comparisons, this is 2010 and the lessons of each parallel needs to be looked at and learnt from.
From a personal point of view the most important of these is 1992; an election result that although at the time was a great disaster for the Labour Party, in hindsight was very much a good election to lose. It was whilst the Tory party stumbled on and embarrassed itself that I first followed politics and I do not wish the Labour party the same fate. The Conservatives had just been given one final chance by the British public, after rejecting the alternative in Neil Kinnock’s Labour party. For the Conservatives it was a great victory, it was a victory less than two years after the resignation of Margaret Thatcher, it proved they were the serious party of government, at the same time the Labour Party was in the midst of a crisis of confidence. It was genuinely asked at the time; would Labour be the party of government again?

However, the reality of the fourth Tory term would be one of major modernisation for the Labour party, in both substance and style, at a point in which the Conservative government imploded and ultimately led to the 1997 Labour landslide. It is not identical to now, but enough similarities are there to heed warnings to Gordon Brown and today’s Labour Party. The Conservatives were not elected, not because of what they would do, but rather what they would not do, in opposition to what Labour would do. The Tory campaign is remembered for the “tax bomb” poster, which encapsulated the anti-Labour, as opposed to pro-Tory, message. The rejection of Labour was largely down to arguments about the role of income tax. The defeat for Labour meant that the party had to radically re-think its approach to tax and spending, whilst the Tories were lulled into a false sense of alignment with the British public.

Thus, Labour renewed, modernised and changed, controversially through the rightful abolition of clause four and the commitment to fund public services, whilst maintaining the level of income tax. This was the deal that Tony Blair and Gordon Brown struck with the British public in 1997, in effect the manifesto of New Labour abolished the choice posed in 1992; do you want high taxes and good services or bad services and moderate taxation? The results in 1997, and our achievements since, were a vindication of the changes that New Labour made. And this in comparison to the Conservatives that rambled on for five years, in a government that destroyed the notion that they were the natural party of government. The results of 1997 were not just an acceptance of Labour, but a wholesale rejection of the Conservative Party. Thus crucially this was the difference between a party that realised major change to its thinking was needed and another that did not.

So how does Labour learn from this, to move forward today? Eighteen years later the shoe is on the other foot. Labour, now the governing party has been seeking an unprecedented fourth term, whilst the Conservatives are desperate to get out of the footholds of opposition. Then as now, the governing party has experienced a severe fall in popularity, again, with a mid-term change in Prime Minister, who has been seeking a mandate of their own from the British people. Similarly, the leader of the opposition had enjoyed mammoth opinion poll leads, which evaporated as polling day approached; both Neil Kinnock and David Cameron failed to seal the deal with the electorate. The difference, in my personal opinion is that Cameron has two major factors in his favour that Kinnock did not; money and media support. This is the difference between Cameron being able to negotiate now with the Liberal Democrats now and facing the humiliation that was left to Kinnock after Major scrapped to a wafer thin majority.
So what does the current Labour Party learn from this? It seems clear now that the opportunity to accept defeat and reflect is the right way forward. The opportunity to heed the lessons learnt from 13 years in office, then re-boot and re-new under a new Labour leader. The opportunity to do what the Conservatives never did in the 1990s, which is to learn from the mistakes of government and rebuild to form a new government in the next five years. The price to pay for that opportunity is to see David Cameron in 10 Downing Street and George Osborne in number 11. This is not something that I can ignore, having spent the last five years desperate to keep them out. It is thanks to the fight that we put up in the campaign they do not a majority to have full reign on power.

The very fact that they will have to deal with the Liberal Democrats plays to the advantage of the British people and the electorate. The Tories cannot claim a right to govern and the Liberal Democrats can block the more extreme parts of their agenda. We know that the Tories want to cut away at the economic support now, but this will now require the support of parties that disagree with that approach. We fear, from leaked emails that they will raise VAT and cut inherence tax, essentially increasing taxes on the poorest and cutting for the richest. The risks of having Cameron and co in Downing Street are severely lessoned. Labour in opposition has the opportunity to observe and criticise the Tory-Liberal government, whilst building a new manifesto for progress.

Furthermore, the very fact that the Liberals Democrats are dealing with Tories taints their brand too. Think of those voters that voted Lib Dem in opposition to a Tory, to stop the Tories, will they be thankful for the Liberals propping up a Tory government? We know that that Liberals are an amalgamation of Liberals (large L) and social democrats. This is Labour’s chance to expose the limited Liberals and offer a home for the social democrats. The Labour Party is their natural home. We believe that people should not be abandoned to the market, that protecting people in society is more important than allowing the rich to get richer. We have had numerous majority Labour governments for 65 years and that legacy is now embedded in Britain. Be it the NHS, the welfare state, our education system, the minimum wage or rights for workers.
This is OUR social democratic legacy. This is the reason we are in the Labour Party over any other. David Cameron has stood for change, but the only party to radically change the country since the Second World War has been the Labour Party. But, democracy is not about the same party being in power and we must now accept the death of the current government, 1997-2010. The party must now re-build and move forward. We cannot afford to rest on our laurels, nor can we or the British public afford to make old achievements a case for government, we must have a manifesto that will deal with the problems of this century. New Labour was the future once, but it is now sixteen years since Tony Blair became our leader. The next election will not be about the same issues as Tony Blair faced in 1994.

Having said this, we do not have a new government until a leader can command the support of the majority in the commons. There is always government and there is always a Prime Minister, Brown should remain in place until David Cameron can command a majority in the commons, as will happen later this week. To quote Sir Humphrey Appleby “government doesn’t just stop”.

And then we need to fight for David Miliband to lead the Labour Party.

I started this blog about two years ago and basically forgot it was here, but I have decide to resurrect it. So in case you read any posts below, just bare in mind they are two years out of date.

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