What it all means

The political and economic impact of yesterday's spending review are huge. Politically Labour is rightly trying to tread a careful path between accepting that some cuts were needed and proposing a realistic alternative. The economics can be laid out in tables and charts though the real impact won't be felt for another two years.

Politically Labour's response was encouraging. Alan Johnson contrasted with Osborne's tone and set out a viable alternative. This is based on believing Keynesian economics instead of the fiscal orthodoxy presented by the Tories. Protecting employment is the best means to protect and encourage growth. The Tory plan to lose half a million public sector workers is likely to lead to more lay offs in the private sector as many firms (like my own) rely on government contracts. Redundancies will increase the welfare bill, not cut it. I hope that Osborne's optimism that the private sector will automatically fill the gap created by the cuts will prove me wrong.

Economically the poorest will have to dig deepest as a result of Gideon Osborne's spending review yesterday. The government's own figures (page 98) show that the bottom 10% will lose a higher percentage of their income after yesterday's changes come into force. The spending review, shown in green, takes the most from those at the poorest end of the scale.

The spending review puts growth in doubt. When business and individuals are not confident about the future they spend less. Less spending and investment threatens growth. This sort of response to fiscal crisis has in the past deepened recessions, not made it easier.

I'm reminded of the 1997 Tory slogan: "yes it hurt, yes it worked." Then as now the Tories are ideologically opposed to the state investment Labour made. They want a smaller state as much now as they did in the 1930s, 1980s or 1990s. The Tories spouted the mantra of change at the election. They were right to, because they will change the social fabric of the country, but they haven't changed at all. This will certainly hurt. I'm not sure it will work.

Opposition is not enough

I wrote on Monday that it will be insufficient for Labour simply to oppose everything the Tories do. The 1980s showed that not being the Tories just wasn't enough to put Labour into power when Labour wasn't attractive to voters in itself.

A Politics Home survey of "informed political opinion" (yes, I did take part) released today bolsters this view. Asked what Ed Miliband and Alan Johnson should do in response to today's spending review, 60% stated that Labour should focus on providing alternatives, including cuts, to show how they would do things differently. Only 35% thought Labour should focus on the pain the cuts will cause. "Simply bashing the government for cutting spending will not work for Labour."


Notably Labour "insiders" were split almost 50-50 on which course of action to take. Those identifying with other parties much more forthright. This just highlights that a core-vote strategy won't work. Labour needs to persuade those who voted Tory and Lib Dem who feel let down and will be let down by this spending review and in the next four years. Their views are clear. I await Ed and Alan's response eagerly.

It will be all about the second preferences

The race to be the next Labour leader will be decided by the second preferences votes of candidates falling out of the contest. Milliband and Milliband will have to fight over the second preferences of Andy Burnham, Ed Balls and Diane Abbott.

Gordon Brown apparently thinks Ed Milliband will win. The Sun's YouGov poll suggests that David will nudge him out slightly. The strong union support for Ed puts him in the chair to win. To win any candidate doesn't need the majority support of the membership but needs to win the electoral college. There are several unanswered questions as Peter Kellner points out.

MPs have the most individual power in the college as they make up their own third and the second preferences of those nominating Abbott, Balls and Burnham are unclear. My hunch is that the most of the votes will go to David as he is the more publicly credible candidate and MPs will want a leader that is most likely to deliver power. MPs would be foolish not to pick the most popular candidate.

Again I'm reminded that Labour loses out significantly by Alan Johnson's absence from the contest. He was rated as Labour's biggest vote winner. He is such an asset whoever wins needs to keep Johnson close. It saddens me that he has held himself back from both this and the London mayoral candidacy race. It doesn't matter who his second preference is - he is backing David Milliband.

UPDATE: I've just spotted Luke Akehurst's analysis of the MP/MEP part of the electoral college. That puts David in the lead.

Oona King for Mayor?

With Oona King joining the list of potential candidates for Labour's London mayoral candidate this particular race could be deemed more interesting than that for the Labour leadership. Alan Johnson is rumoured to be standing and previous mayor Ken Livingstone also plans to run. Is this race looking to be more heavyweight than the race to be Labour leader?

I've not yet decided who I will support for leader as I don't feel there is much choice - perhaps this is because I wanted Johnson. If Johnson runs for mayor, together with a female candidate in King, does Livingstone stand a chance? I feel that any of these three candidates gives Labour a good chance of beating incumbent Tory Boris Johnson. If Labour wins the mayoral election that will give the party a springboard for the next general election. Victory will mean that Labour is a credible option for power nationally.

Having been mayor for eight years, having made many major improvements to London but also looking to have run out of steam I don't think Ken Livingstone would be the best candidate. He would risk focusing the campaign on the past when what Labour needs is fresh ideas and a fresh candidate. I'm a big fan of (Alan) Johnson, but King could provide the freshness Labour in London needs.

House of Comments podcast

On Tuesday I took part in my first House of Comments podcast. This is a weekly political podcast run by Lib Dem blogger Mark Thompson of Mark Reckons and Stuart Sharpe of Sharpe's Opinion. Alongside me the final guest was Allen Green, Jack of Kent. You can listen to it free through iTunes. I recommend that you don't just listen but in fact subscribe. Each week a different group of bloggers from across the political spectrum discuss the issues of the day. I hope to be back on there again soon.

We discussed the ongoing Labour leadership election, the Con-Dem coalition and its prospects and the libel trial of left wing blogger Dave Osler.

Taking each issue in turn. I'm undecided about who to support for the Labour leadership. I would have supported Alan Johnson, but he isn't standing. Interestingly both Mark and Stuart thought he would be Labour's best choice. He has a great Labour story of a working class upbringing. He is from the south and Labour needs to win seats in the south if it is to regain power. He comes across naturally on TV. Without him in the race I am waiting for the other candidates to convince me that they are worthy of my vote. Though I've not decided if I'll vote for him yet I'll include a picture of one of my election campaign highlights: straightening David Milliband's tie at a fund-raiser for Edmonton MP Andy Love.

The Con-Dem coalition deal has now been set out in more detail. I think this could well last the distance though I expect there to be casualties. In the short term Vince Cable looks like a strong contender for early victim having been given little real power as Business Secretary and the responsibility for privatising Royal Mail. John Major's Tories failed to do it. Gordon Brown's Labour failed to do it. Now it looks like it is the Lib Dem's turn to get embroiled in an unpopular mess. It couldn't happen to nicer people. In the longer term the Lib Dems may well suffer electorally as a result of working with the Tories. Their seats in Scotland where the Tories are widely despised look increasingly vulnerable.

Finally, Dave Osler's libel case. He was sued for libel after linking to someone else's blog post. After two years the case was thrown out of court. Jack of Kent gives a far better account than I ever could so I suggest you read that. There In closing I'd like to congratulate Jack of Kent for being short-listed for the Orwell Prize, a great honour for some great blogging.

Johnson versus Johnson for Mayor?

Last week The Guardian's Dave Hill speculated that Alan Johnson may have withdrawn from the Labour leadership race to instead focus his attention on fighting Boris Johnson for London mayor in 2012. The Evening Standard and New Statesman has now picked up on this.

I would have voted for him in a leadership contest and would certainly back him for Mayor. He is a person first and a politician second, someone who comes across as having humility and the style to work on TV - while coming across as genuine.

I think Johnson versus Johnson would be a great fight.

Deputy Leader Hustings

Last night's Fabian - Progress Deputy Leadership hustings certainly helped me decide between the six candidates. When the carousel started I didn't see much between the candidates, though I thought that a Brown premiership should be balanced by a female deputy. My favoured female candidate was Harriet Harman, though I felt her performance was woeful.

When Harman spoke I switched off, she didn't show any passion, rambled and didn't grab my attention.

Blears = passion.
Hain = polished though not engaging.
Johnson = relaxed.
Benn = kept talking about international development. Not enough Party talk for me.
Cruddas = looked out of his depth.

You could tell it was a Fabian audience, I felt there was too much talk about education, though there was an interesting discussion about the 11+. Peter Hain said selection is not a socialist issue, Alan Johnson thought it electoral suicide to scrap the existing grammar schools and I agree. I'd like to see an end to selection, however Labour's electoral position makes that impossible at the moment.

Michael Crick thought Hazel Blears the winner of the night. I agree. She showed passion, desire and enthusiasm, exactly what the Labour Party needs to reinvigorate itself and campaign to win. At university I used to go to Salford Labour Party to phone canvass every week and she was infectious one on one as she was last ngiht in front of an audience.

Peter Hain came across as slick and polished, every bit the professional politician. However I didn't get the feeling from him that he was "one of us" - a party member in cabinet. I feel he wants the job for status, not for what Blears would do, to motivate the Party.

Alan Johnson, up to now, my choice, came across as relaxed and natural. I think he would make a very strong Deputy Leader. He had all the best quips and reminded those present that Labour needs to win elections to do anything, which is why some compromises have to be made.

I'm now undecided between Blears and Johnson, though I'm tipping in favour of Johnson. I do so because I think he comes across better in public. Blears can often come across as "media trained" and like a bit of a Blairite robot. That is harsh I know and she really isn't like that, but on TV it sometimes looks like it.