London Letter: Labour soul-searching continues

In defeat, dignity – preferably with humour thrown in. Ed Miliband managed both on Thursday when he stood to speak for the first time in the House of Commons since his dream of becoming British prime minister shattered.

Looking relaxed, he told of the pleasures of being able to spend more time with his two sons, even though his six-year-old boy Daniel “did bring me further down to earth last week”.

“He suddenly turned to me out of the blue and said: ‘Dad if there’s a fire in our house, I think we’ll be okay’,” Miliband told MPs. “I said, ‘why’s that Daniel?’. He replied, ‘because if we ring the fire brigade they will recognise your name, because you used to be famous’.

“‘Thanks very much’, I said,” he told MPs, to laughter, before making a speech that highlighted some of the difficulties Labour faces as it seeks to choose his replacement in coming months.

On Tuesday, those who are seeking to replace him will travel to Dublin for a hustings at Citywest before 1,000 GMB union delegates who are meeting in Ireland for the first time in more than a century.

Labour has many questions to answer, not just the rather tritely expressed arguments that have been heard so far about whether the party was “aspirational” enough for the tastes of the British electorate.

For now, many of those candidates – bar left-wing MP Jeremy Corbyn, who entered the race on Thursday – are to the right of many members of the party, and, particularly, those in the trade unions.

"I don't think the Labour Party manifesto was too left-wing. I challenge anybody to point out which parts of it were too left-wing. Was it that we were going to build more houses, protect the NHS or raise the minimum wage?" asked GMB general secretary Paul Kenny.

So far, the leading contender is the Liverpudlian Andy Burnham – who served as health secretary under Gordon Brown – who started off making left-wing noises but has moved back to the centre ground as the campaign gears up.

Largely unknown outside the party, Liz Kendall is the choice of some still holding the Blairite flame, but she may struggle to get the nominations needed from MPs to be included on the ballot paper.

Yvette Cooper, whose chances of winning the leadership have, ironically, been increased because voters in Morley and Outwood near Leeds decided to reject her husband, Ed Balls, has lagged behind in betting.

In a bid to emphasise that she is putting herself forward as a new leader for new challenges, Mary Creagh, decided to launch her campaign in the Daily Mail – an action that has done her few favours among the party electorate.

Paul Kenny’s remarks – and he is not alone in making them – illustrate the problem Labour faces as it seeks to come to terms with deciding why it lost the general election. Was it the messenger or was it the message?

Labour’s problems are much deeper, however, since it faces questions about its ability to be a British-wide party in an era of growing nationalism that has put paid to its operations, for now, in Scotland.

Spending record

In truth, the voters wanted all of Kenny’s agenda, but it wanted economic credibility, too. Labour has not been forgiven for its sins, alleged and real, before and after the 2008 economic collapse.

Kendall has already apologised, saying Labour spent too much during its years in power. Tristram Hunt, who thought about running and then pulled back, believes the same, though all of Labour's public spending was good spending.

Labour’s spending record before the crash was justifiable. The budget deficit in the last year before calamity struck was 2.7 per cent, low by normal benchmarks – even if the argument now is that it should have been running surpluses.

Labour’s regulatory sins – the same ones made in Ireland and elsewhere – meant that it was happy, however, to spend short-term tax windfalls from the financial sector, but to build them into day-to-day spending.

Meanwhile, it made gross errors, too when it brought in private investors to fund the construction of hospitals, roads and other public utilities – which leaves the British taxpayer in line for a £300 billion (€410 billion) bill.

In the Commons on Thursday, chancellor of the exchequer George Osborne had the air of a man who knew he had won the argument and will continue to go on winning the argument for some time to come.

Osborne will be helped by some of the cunning traps he has laid, particularly the plan to sell off tens of billions worth of housing association-owned properties to their tenants at sharply-discounted prices.

The idea is poorly thought out, but Osborne hardly cares. The people who will hate it are the soft-centred metropolitan Labour elites; the people who will love it are the ones that Labour needs to get back on board.