James Forsyth

Thursday can’t come soon enough for shadow Cabinet loyalists. They believe that the Rochester by-election will provide Ed Miliband with some ‘breathing space’ and turn the spotlight on David Cameron’s troubles with his own side.   To be sure, losing another seat to Ukip will be bad for Cameron and the Tories. But based on conversations I’ve had in the past few days, I don’t think it will cause the crisis that many expected just a few weeks ago. Equally, Labour won't gain any positive momentum out of a by-election in which it comes third.   There are, I say in the Mail on Sunday, two reasons why the expected Cameron crisis won't materialise. The first is the difficult few weeks Ed Miliband has had and the narrowing in the polls.

Philip Hammond’s interview in The Telegraph this morning is striking for several reasons. First, Hammond admits that Britain isn’t going to regain full control of its borders in the renegotiation. As he puts it, ‘“If your ambition is that we have total unfettered control of our own borders to do what we like, that isn’t compatible with membership of the European Union, it’s as simple as that. And people who advocate that know jolly well it is not compatible with membership of the European Union. So if that’s what you want, you’re essentially talking about leaving the European Union.”   But he does seem to think that agreement on something that delivers similar results to a quota system is possible.

The knives are out again for Ed Miliband this morning. But the Labour leader is the least of his party’s problems. Labour has still not come up with answers to the two existential questions facing it, what’s the point of it when there’s no money left to spend and how should it respond to globalisation. I argue in this week’s magazine that until it does, the party will be in a death spiral. The Labour party has always believed in spending money for the common good. Even Tony Blair’s new Clause IV declared, ‘by the strength of our common endeavour we achieve more than we achieve alone.’ Public spending was the glue that held together the traditional Labour coalition and the New Labour one. Blair himself increased public spending from 40.

On Monday night, a member of the Number 10 Policy Board, Peter Lilley, voted against the government. Now, in the past, it has been made clear to the MPs on the board that if they defied the whip they would have to resign or be sacked. But despite this, Lilley is staying in place. Number 10 clearly doesn’t feel in a position to pick a fight over the European Arrest Warrant. Now, you can make a case that Lilley should be treated differently from the rest of the Policy Board. The rest of the Board is made up of new MPs, Lilley—by contrast—is a distinguished former Cabinet Minister. One can argue that on this basis, he should be cut a bit more slack.

So far, this is the Labour leadership crisis that David Cameron would have scripted. The papers this morning are full of awful poll findings for Ed Miliband, negative briefings and on the record criticism from his own side. But, there is no sign of a challenger yet nor has a frontbencher resigned. So, all this strife is doing is further turning public opinion against Miliband and turning the focus to where the Tories want it to be, is Miliband Prime Ministerial material? Where does all this go from here? Well, if Alan Johnson was at all interested things would get very interesting very quickly. But his denials seem entirely genuine.

Update: In the last few hours, there has been huge confusion and heated debate over whether the British bill has actually been halved. Click here for the verdict of Open Europe which concludes that ‘ Osborne [is] right on the amount but may be exaggerated the extent of the concession.’ A deal has been reached over the supplementary £1.7 billion bill that Britain was handed by the European Commission a fortnight ago. Britain will now pay no more than £850 million, a halving of the bill. George Osborne insisted that the Commission apply the ‘British advantage’ element of the rebate to the bill which led to this 50% reduction.

By rights, Jean-Claude Juncker should be in dire political trouble this morning, not lecturing Britain about paying an extra £1.7 billion to the European Commission. Documents obtained by the International Consortium of Investigative Journalists suggest that while Juncker was Prime Minister of Luxembourg, 548 comfort letters were issued to various international businesses about their tax arrangements. These letters allowed multinational companies to get away with paying minimal amounts of tax anywhere but Luxembourg despite the majority of their business being done elsewhere, the ICIJ alleges. The ICIJ claims that more than 340 companies secured secret tax deals with Luxembourg. The ICIJ alleges that the deal with FedEx left 99.

The Commons has a rather listless feel to it at the moment. Today’s PMQs will not live long in the memory. Ed Miliband’s strategy was to get David Cameron to say as often as possible that he wants to stay in the EU, with the hope that this would drive a wedge between Cameron and his backbenchers. This tactic was, as far as it went, quite effective. Cameron repeatedly said that he wanted to stay in a reformed EU, and wasn’t prepared to say explicitly that he would be prepared to campaign for an exit if he didn’t get what he wanted out of the renegotiation.

Norman Baker has resigned as a Home Office minister tonight. Baker has quit, blaming the difficulties of working with Theresa May and the squeeze that ministerial office has put on his time for his decision to go. Baker describes working with May as like ‘walking through mud’.   Baker’s departure is not to be lamented. At the Home Office he has been pushing for the decriminalisation of drugs, a thoroughly dangerous policy that would be disastrous for society. Baker claims that this is evidence-based policy making, and cites the Tories failure to follow this evidence as one of his reasons for quitting. Indeed, his resignation is, in a way, the logical extension of the Lib Dems’ differentiation policy.

Two things have stuck in Tory MPs’ minds from their away. The first, that painting of George Osborne. The second, Jim Messina’s presentation and his confidence that the Tories would win.   Messina managed Barack Obama’s 2012 re-election effort and last year, the Tories announced that they had signed him up to advise them. At the time, most people—including several senior Cabinet ministers—regarded it as a press release hire, a good way of tweaking Labour but not much more. But Messina has, perhaps prompted by his great rival from the Obama campaign David Axelrod joining up with Ed Miliband, got more involved in recent months. He was over for Tory conference and flew in to the UK specially to address this away day, as I report in the Mail on Sunday.

Talk to senior Labour figures about the polls that show them losing 30 or more seats in Scotland, and they say two things. The first is that these polls have been taken at the worst possible moment for them, just after the bitter resignation of the Scottish Labour leader. The second is that when it comes to a UK general election, Scottish voters will—however reluctantly—accept that it is a choice between Labour and the Tories.   But the aftermath of the referendum means that this second point will not apply as strongly as usual. Having campaigned together against independence, Labour and the Tories do not look as dramatically different as they used to in Scotland.

I suspect that the Scottish Labour gala dinner in Glasgow tonight won’t feel like much of a gala. The Scottish Labour party is in crisis: its leader has quit attacking the UK Labour party for treating it like a ‘branch office’ and now an Ipsos-Mori Westminster voting intention poll has the SNP on 52 per cent to Labour’s 23 per cent. This poll is a reminder of the scale of the challenge facing whoever is the new leader of the Scottish Labour party. I argue in the magazine this week  that Jim Murphy is, by a distance, the best candidate for the job. He has what Scottish Labour so desperately needs right now: energy, no fear of the SNP and its agenda and the ability to win elections. But Murphy’s victory is, by no means, a done deal.

[audioplayer src="http://traffic.libsyn.com/spectator/TheViewFrom22_30_Oct_2014_v4.mp3" title="James Forsyth and Isabel Hardman discuss Jim Murphy" startat=1010] Listen [/audioplayer]There should, by rights, have been a stampede of candidates to replace Johann Lamont as the leader of the Scottish Labour party. With the new powers promised to Holyrood, the Scottish First Minister promises to be a more powerful figure than most of the Cabinet. Only the holders of the great offices of state will be more influential than the occupant of Bute House. Labour might well trail the SNP by a large margin in the Holyrood polls, but their position is by no means hopeless. But since she decided to step down, there was silence.