Brown in, Reid out

John Reid has told the Politics Show that he will not serve in a Gordon Brown cabinet. However, he avoided attacking the Chancellor, even claiming that Brown had offered him a place in the Cabinet, which Reid declined. Reid has also said that he will back Brown for the leadership.

Speculation will be rife as to the motivation behind Reid’s announcement. One thing is certain: it has become clear even to the “anyone but Gordon” crowd that Brown is going to be the next prime minister. Usually, this would trigger a rush to embrace him before it is too late; few ministers easily give up the ministerial limo. But is may be that for the likes of Reid, serving beside Gordon Brown is too awful a prospect to face.

But why openly support Brown’s move to the leadership (it hardly warrants being called a “bid” anymore). There remains the option of retiring to the back benches, there to snipe and hope to undermine the Brown premiership. Yet Reid was categorical in his refusal to act as a lightning rod for anti-Brown New Labour sentiment (as opposed to anti-Brown old Labour sentiment, for which two lightning rods have emerged). Even from the back benches, he promised to be supportive.

Jaded political analysts among us might wonder whether this is mere window dressing, with Reid in fact planning to join the likes of Alan Milburn and Charles Clarke in fermenting dissatisfaction with Brown. But I doubt it. The Home Secretary is committed to the Labour Party, and may prove to be a wiser politician than either Milburn or Clarke.

I suspect Reid has accurately judged that any opposition to the Chancellor will damage Labour as a whole without necessarily protecting Labour or the country from the worst Brown has to offer. Battles between Brownites and Blairites have been at the root of many of Labour’s most difficult moments. It may therefore be the case that Reid is actually being frank when he says he will retire quietly to the backbenches and support Gordon Brown.

As Thursday’s election results showed, the pendulum is rapidly swinging from red to blue, and as the Tories demonstrated in the 1990s, that is not the time for party in-fighting. Reid may not like Gordon Brown, but he finds him infinitely preferable to David Cameron.

Who is Labour’s mysterious fourth candidate?

According to the Electoral Commission, which among other jobs monitors campaign contributions to party leadership elections, three Members of Parliament have informed them of donations. However, Gordon Brown is not one of them.

Mr. Brown’s camp has no website and, officially at least, has received no money. Others have suggested that a campaign is being run, but that the infrastructure is buried in other organisations.

Meanwhile, the more exciting question (as the idea of the Chancellor being secretive or circumscribing the rules is hardly newsworthy) is who has declared receipt of funds to the Electoral Commission when they have not even declared they are in the race. Michael Meacher and John McDonnell we know of, but who else has been building up a war-chest? We can only speculate.
But as a source at the Electoral Commission noted, “It would be a pity if someone’s campaign was announced through a declaration of funds to the Electoral Commission.” A pity for them, perhaps, but for the rest of us it would be comical!

Labour Party in panic over party funding plans

Sir Hayden Phillips’s second interim report on party funding has been leaked to the BBC, and it contains bad news for Labour.

Sir Hayden appears to be leaning towards capping donations at £500,000, and reducing that cap over four years to just £50,000. This would be hard for the Labour Party, as it has less high income donors than the Conservatives, who have been calling for a £50,000 cap for this very reason. How it would leave the Liberal Democrats is known only to Cowley Street insiders.

However, it is in the following section that Sir Hayden strikes at the heart of the Labour Party. With impeccable logic and no sense of the political ramifications involved, the former Permanent Secretary at the Lord Chancellor’s Department has declared that “I see no reason why donations from trades unions should be exempt from the cap”. This, and another suggestion that trades union members should be allowed to opt out of donating part of their subscription to the Labour Party, could deal a fatal blow to Labour.

Labour has traditionally relied heavily on trades union donations. If these are now capped at £50,000 it will cripple them financially at a time when they are £23.4 million in debt. More importantly, it will break the unhealthy grip that trades unions have over Labour Party policymaking, effectively freeing the party once-and-for-all from the rent seeking of these particular special interest groups.

If proof of the significance of this were needed, it was provided by John McDonnell MP, so far the only Labour member to announce his candidacy for the leadership (his slogan: “Another world is possible” – and he should know, as he must be living on one if he expects to receive anything other than a drubbing).

McDonnell claimed that the party would react with “fury” to this independent review, and that there would be “uproar” at the next National Executive Committee meeting. According to McDonnell, trades union donations are the “cleanest money in politics”, and at a time of Labour sleaze should be welcomed. Presumably, he thinks cash-for-favours is somehow better than cash-for-peerages.

While there are important liberal questions about limiting how individuals dispense with their money, this is probably a good policy. Individuals will still be able to finance their own campaigns that support particular issues and so guide the decisions of electors but their power over elected officials will be greatly reduced. Even if Labour can survive the financial pain these proposals will cause them, Sir Hayden will have provided a great service to democracy.