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Brighton Rocks

25th September 2017

As the comrades gather in Brighton they share the belief in the inevitability of a Corbyn victory at the next General Election. Their belief is not borne out of any rational analysis of British politics but purely in their faith in Jeremy. He lands by helicopter to a waiting crowd of the 5,000; on the conference floor there are chants of “Oh Jeremy, Oh Jeremy”, while on Facebook people are asked “If you believe in Jeremy, share this post”.

It may well be that Labour will be the next government as it is difficult to see Theresa May managing to hold her government – never mind her party – together because, at some point, she has to recommend a Brexit deal to the country. However, the emerging possibility of a deal being reached that is saleable, coupled with a two year transition period deferring any potential economic downturn to beyond the next election, do suggest a potentially different scenario.

Government borrowing is falling faster than expected. Last month the deficit dropped to its lowest August level in a decade as VAT receipts hit a record high, while state expenditure declined. That extra income increases the possibility that Chancellor, Phillip Hammond, will use the windfall to adopt some of Labour’s populist policy planks to give his party a boost. Top amongst possible steals would be some amelioration of student debt through a reduction in student fees.

And a change has already been signalled. In a speech to the Bright Blue think tank in central London in July, First Secretary of State, Damian Green, urged the Tories to “change hard” to woo young, educated voters who backed Labour in June’s General Election.

In the run up to the next election, the Tories will showcase their track record on employment. In August unemployment rates in the UK and Scotland, fell to a 42-year low. According to official figures, unemployment in the UK fell by 57,000 in the three months to June bringing the jobless rate down to 4.4%, and it fell further in Scotland to 3.8%.

And the process of leaving the EU may also undermine Labour’s proposals for an increase in taxation. No matter what deal is secured, there is a likelihood that more London-based companies will seek to find a European site for their operations.  Increasing both corporation and personal taxation, as Labour proposed during this year’s election, would accelerate the number of companies making the trip across the channel. The reverse scenario is more likely with whichever government is in power having to bribe companies to stay in the UK.

Each party has its own problems with Brexit. Corbyn has always been anti-Europe, voting No in the 1975 referendum.  His involvement in the Remain campaign last year was minimal and he was equally culpable as Boris Johnson in securing victory for the Leave campaign. Fifteen months on from the referendum, Labour still has no agreed position.  Corbyn’s latest pronouncement that it might be difficult for Labour to implement its manifesto because of state aid rules, indicates that he is still a committed Leaver.

And here in Scotland it looks like the Corbynistas will win the leadership contest. Over 5,000 Unite members who pay the political affiliation, have now been signed up (irrespective of who they support or vote for) which makes victory for Richard Leonard all but inevitable. There is a real danger that Labour will increasingly become seen as a sect, hermetically sealed in a 1970s time capsule, secure in the past but irrelevant to the future.

Hopefully I am wrong, but even if I am, I will still place my belief in democracy and not faith-based sects.

These are the personal views of Keith Geddes, Policy Director at Pagoda Porter Novelli.

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