Labour party

One thing that was noticeably absent yesterday was Tory crowing about Labour having signed up to the coalition’s current spending plans. Instead, George Osborne’s response to Balls concentrated on whether Labour would borrow more. Given the Osborne-Balls relationship, you might have thought that the Chancellor would have relished the idea that Balls had been forced into an intellectual surrender. But the Tory leadership is acutely aware that going on about Labour having accepted their spending limits undercuts their argument that it is the same old Labour party, addicted to spending and borrowing. So instead they’ve chosen to argue that Labour’s pledges of fiscal rectitude simply aren’t credible.

The Tories are putting off Labour MPs from backing their Private Member's Bill on an EU referendum with an overly partisan campaign, Coffee House has learned. John Cryer, who chairs Labour for a Referendum, tells me that he won't be voting for the Bill because the Conservatives have turned it into a party political campaign to shore up their own position, rather than one that genuinely promotes a referendum. He says: 'I'm not voting for it, I'm abstaining. I think the way the Tories have approached it is very party political. I can understand it in a way because they want to be in a position where they are offering people a choice, they want to try to push other parties on that policy.

Michael Gove and his colleagues have enjoyed poking Labour on education policy recently. His catty letter exchange with Stephen Twigg last week left Twigg with the victory for style with a supremely bitchy reply, while Gove won on substance (largely because he asked whether Labour's education frontbench possessed any). Today he tried to assemble his own fantasy Labour education team as he took questions from MPs in the House of Commons chamber. Kate Hoey gave him a forthright prod about the delay in a school converting to an academy in her constituency. Gove didn't really answer her question, instead saying: 'I'm very grateful to the honourable lady.

Both Ed Miliband and Nick Clegg delivered speeches to their party faithful today about being realistic about 2015. Miliband's speech, briefed as 'tough', was the latest in his series of attempts to tell voters that they can trust him: he wouldn't borrow more than this government… well, no more 'day-to-day spending', which is his way of saying he would actually borrow more for capital projects. Clegg wanted to tell his councillors that they can't see May 2015 as the month when they all get to breathe a sigh of relief and return to their local authority fiefdoms without any of the inconvenience of their party being in national government too.

Russell Brand made a good point on Question Time last night. If a party derives half of its funding from a group of people, it’s not going to do anything to annoy that group. He was speaking in the (incorrect) premise that the Tories are bankrolled by the banks, bit his overall conclusion was spot on. Ed Miliband’s Labour Party takes about 80% of its funding from the trade unions, which distorts the way it sees the world. With each major battle, Labour is not becoming the party of change. It is becoming the party of the bureaucratic empire, anxious to strike back. This opens up new electoral territory, which I look at in my Telegraph column today. Ed Miliband is taking his party on a distinct direction, and has proven that he is capable of transcending the Blair/Brown era.

What a lot of fun Michael Gove is having with Stephen Twigg's latest policy pronouncements. The Education Secretary has written a fabulously long letter to his Labour shadow following up on Monday's speech with 36 questions.

Stephen Twigg is, as he probably expected, coming in for a bit of flak on his U-turn on free schools this morning. Labour's Shadow Education Secretary has launched his own plan for 'parent academies', which Toby Young and James Kirkup have had some fun with here. But he is basically doing what Lord Adonis has long hoped the party would do, accepting that free schools are a variant of the last Labour government's academies programme anyway. He just needed to find a new brand that wouldn't send the teaching unions into orbit. But what's interesting is that Twigg also devoted large sections of his speech to trying to steal the localism crown from the Conservatives.

It is easy to make a case for why all three main parties should do badly at the next election. After five years of austerity, who will vote for the Tories who didn’t in 2010? And how will they stop those dissatisfied with the compromises of coalition from sloping off to Ukip? As for Labour, why would the public want to put them back in charge just five years after booting them out? This question has special force given that the Labour leadership is so identified with that failed belief that boom and bust had been ended. Then, there’s the Liberal Democrats—they’ve alienated their left-leaning supporters and lost their status as the protest party of British politics. Oh, and they’ve broken one of their most memorable pledges: no increase in tuition fees.

From being all over the shop in the past few months when it came to message discipline, the Tories have gone into overdrive in the last two days after the launch of the Let Britain Decide website on James Wharton's EU referendum bill. It's now difficult to see the wood for the tweets on how the Tories are the only ones who will #letBritaindecide, and that has got a great deal worse now that Guido has published a leak of Labour's whipping arrangements for the vote. He’s too weak and he’s too scared to #LetBritainDecide @ed_miliband orders Labour to abstain from EU referendum vote letbritaindecide.

While dealing with the teaching unions is a simple stand-off for Michael Gove, spare a thought for poor old Stephen Twigg, Labour's shadow education secretary, who has to work out how on earth to deal with the NUT and NASUWT habit of opposing everything. There is a palpable sense of frustration on the Labour frontbenches about the way the two largest unions in particular behave. Twigg has made clear that he does not support strike action planned over a general raft of discontent over many different issues, and he has opposed the work-to-rule industrial action promoted by these unions too. On performance-related pay, the unions behave as though Voldemort is coming soon to a school near you, while Labour is merely unconvinced that it's the great saviour of educational excellence.

Ed Balls has just told Andrew Neil on the Sunday Politics that Labour will include pensions in their welfare cap. This opens up a major dividing line with the Tories who have been clear that George Osborne will exclude pensions from his spending cap. I suspect that Balls and Ed Miliband will now be badgered with questions about whether, if necessary, they’ll cut pensions — or not up-rate them — to meet the cap. Given the power of the grey vote in British politics (Labour estimates that one in every two voters in 2010 was over 55) they are going to come under massive pressure to rule this out. But, strikingly, Balls was not prepared to do this on  Sunday Politics. He even drew attention to the amount of welfare payments which go to the over-60s.

GCHQ’s use of the US monitoring system Prism is threatening to turn into a major political row. Douglas Alexander is demanding that William Hague come to the House of Commons to explain what GCHQ was doing and what the legal basis for it was. But this controversy is going to have an effect on coalition relations too. It is going to intensify Liberal Democrat opposition to the measures included in the Communications Data Bill. This comes at a time when David Cameron has decided, as he made clear in the Commons on Monday, that the measures in it are needed. In the United States, the Obama administration is pushing back against criticism of the programme.

Just because Labour has been taking a big dose of reality this week doesn't mean the party is now refusing to make the most of any botch job by the Coalition. So we've come to the funny situation where the Opposition party famed for its centralised approach to planning which failed to build enough homes in any year is taking the high ground on housebuilding. The Telegraph reports that Shadow Communities and Local Government secretary Hilary Benn now believes 'local communities should decide where they want new homes and developments to go and then give their consent in the form of planning permission' and that 'we have to make localism work'. Labour would tear up the Coalition's hated National Planning Policy Framework, Benn told the newspaper. This is extraordinary.

For months, right-wing politicians and commentators have been licking their lips waiting for the Labour party to face up to reality. We all assumed that the sort of speeches delivered by Ed Balls and Ed Miliband this week, in which the two men abandoned the party's commitment to universalism and promised to cap welfare spending, would send Labour into orbit. There was even a revolt in the Commons which appeared to be a harbinger of doom about Labour and welfare. So where's the open warfare? Sure, Peter Hain spent most of Monday having a grump into various cameras and microphones about the winter fuel payment. But the party has stayed remarkably peaceful. The answer is the amount of groundwork that Ed Miliband and his team did for this speech.

Today must count as one of the most encouraging days for the centre right in British politics in recent times. Labour’s apparent abandonment of universal child benefit is a massive blow to the 1945 settlement. It is akin in significance to when Labour began to accept the privatisations of the Thatcher era. Now, there’s no intellectual difference between declaring that better off pensioners won’t receive winter fuel payments and that better off mothers won’t receive child benefit. But in symbolic terms, the difference is huge. The winter fuel payment is a recent addition to the welfare state, introduced by the last Labour government. It is not fundamental to it.