‘There is nothing saying Labour will ever win power again’

The choice facing the governing party is between defeat and annihilation, says Fraser Nelson. For now, Labour is mired in ‘division without decision’ as Jack Straw, David Miliband and others wait to see who — if anyone — will wield the knife against Gordon Brown The catalpa trees in New Palace Yard are in bloom, a glorious heatwave has struck London. Yet dark despair is curling through the core of the Labour party. From Cabinet level to the rank and file, there is a hardening awareness that for Gordon Brown to fight the next election would be to court disaster. Yet no one can say with confidence how the Prime Minister might be persuaded to leave. Between the two political realities lies an abyss, into which the Labour party may tumble headlong. Among an increasing number of ministers, the talk is no longer of defeat — but outright electoral annihilation.

Parliament may be into the second week of recess, yet this has done nothing to restrain or slow the plotting. Jack Straw was first out of the traps, positioning himself as a stabilising force who might yet become something much more: he has, supposedly, been ‘calming’ ministers who have asked him to help remove the Prime Minister since the Glasgow East disaster. The none-too-subtle subtext, of course, is that it is he — and not David Miliband — to whom senior colleagues are looking for leadership. The Foreign Secretary has quickly responded by laying out the beginnings of a personal manifesto in a Guardian article calling for ‘radical change’. Thus — whatever is said to the contrary — the battle for the succession is already underway. Seconds out, round one.

Ministers are already on manoeuvres. Reports of Harriet Harman saying ‘this is my time’ as the Glasgow East result came in would be laughed off as innocent delusion, had she not unilaterally announced she is ‘minding the shop’ in Mr Brown’s absence (which Number 10 denies).

Jon Cruddas has told left-wing Labour MPs he despises Whitehall and will not run for the leadership — thus positioning himself adeptly as a union-friendly running mate for another candidate. James Purnell, the Work and Pensions Secretary (and my initial outside bet for leader), has thrown in his lot with his fellow graduate of the Blair team, Mr Miliband. Yet no one is able to say quite how this race will start.

Historically, Labour has been extremely squeamish about forcing out its leaders. The party that suffered Michael Foot for three years and Neil Kinnock for nine has demonstrated its ability to keep proven vote-losers in post. ‘We’re a nice party,’ one senior minister tells me. ‘We like unity, not bloody leadership battles. You can say that’s our downfall, but that’s how we are.’ Another minister told me that, while the Tories like to gamble (wrongly in 2001 but rightly in 2005) Labour as a party craves the certainty of a five-year plan.

At present, therefore, it is stuck in a bleak limbo: as one Cabinet member puts it aptly, ‘division without decision’. Mr Miliband delivers an Obama wink to the party, Mr Straw flexes his veteran’s muscles. But the nightmare scenario for Labour is that no one will actually have the courage to take on Mr Brown and the gang of seasoned character-assassins who protect him. The consequence, some senior figures fear, is that the defeat at the next general election will be one from which the party may not recover.

‘My colleagues worry about going down like the Tories did in 1997,’ says one former Cabinet member. ‘They should think more about the Liberal party [before the first world war]. There is nothing saying Labour will ever win power again. We have no base in local authorities any more. We cannot rely on the Celtic fringe. We have no money, other than what the unions choose to give us.’ On this basis, Labour risks being supplanted by the Liberal Democrats, in the same way that Labour did the Liberal party. It is striking to hear this hypothesis sketched out not by gleeful Tories but doleful Labour politicians.

No less intriguingly, the figure who most alarms the senior Labour figures I have spoken to is Alex Salmond. ‘Having an English Tory toff in Number 10 is the ideal scenario for Salmond’s independence referendum,’ says another exCabinet member. ‘If he wins — and show me a man who’ll bet against him after what he pulled off in Glasgow East last week — Westminster would lose Scotland. And the bar for Labour ever winning again is pushed far, far higher.’ It says much for Labour’s predicament that the urgency is felt most keenly — or at least expressed with the greatest candour — by those who have left Cabinet and have nothing immediately to lose. From the party’s strategic point of view, the most dangerous sound is the quiet among the younger generation — who, on present trajectories, should have most to fear, given that the best years of their life may now be spent in opposition. I am told that Andy Burnham, the Culture Secretary, is in denial. Mr Purnell waits for Mr Miliband who is determined that his campaign will involve no daggers, and no blood.

There is a daintiness to the Miliband cam paign — if, indeed, it can be called that — which exemplifies the mess into which Labour has got itself. The Cabinet, individually and collectively, recognises there is no chance of Mr Brown being chosen to lead Britain for another four years. Its members know that the economy is rapidly deteriorating (the house price crash is already the sharpest since the Great Depression) — so the waiting game is, almost axiomatically, a losing game. Yet, in spite of all this, no one will go in for the kill. Indeed one wonders, looking at these huddled bunny rabbits, caught in the headlights of oncoming disaster, whether they were chosen precisely because of their collective lack of bottle.

On Labour’s backbenches, there is growing despair about a Cabinet which is (as one MP puts it) ‘too much Balls and not enough balls.’ Yet even the Schools Secretary may put himself in play in the next few weeks with a Straw-like appeal for calm. He has spent too much time wooing Labour’s left to give up now, and they have no other candidate. However improbable his nomination may seem, especially against the backdrop of the Sats exams fiasco, he will regard this as his last chance.

As for Mr Straw, his friends say he would be willing to make the necessary move — that is, threaten to resign unless Mr Brown himself goes — but cannot take this momentous step alone. At present, he does not feel he has the necessary back-up to stage a 2008 version of the oneon-one conversations with Cabinet ministers that spelt doom for Margaret Thatcher in 1990. And the Justice Secretary abhors the idea that he might just be Mr Miliband’s hitman — doing the dirty work to the ultimate benefit of another contender. If Mr Straw does move against the Prime Minister, I am told he would certainly run for the leadership himself on the basis that he, rather than Mr Miliband, had shown the resolve to take the fight to Mr Cameron.

The timing of all this is another crucial factor, and one that troubles even the most mutinous Labour MP. A new leader would mean a general election sooner rather than later — Labour could not hope to change prime ministers twice during a Parliament without consulting the electorate — and, after Glasgow East, few Labour MPs are in a hurry to go to the country. If the current opinion polls were matched in an election, Mr Cameron would win a majority of 160, with half of Labour MPs losing their seats. Considering how few of them came from pro fessions to which they could easily return, a new leader means — for up to 175 MPs — the prospect of unemployment a year earlier than they had expected.

Herein lies an important difference with the fall of Thatcher: many of the Iron Lady’s MPs conspired in her downfall because they wanted to save their seats. But there is more fatalism on the Labour benches in 2008: if the party is destined for defeat, why not hold on to the salary and perks of an MP for a year longer by keeping Mr Brown in place? The same dreary logic may even appeal to Cabinet members, few of whom have much to look forward to after the general election. The result is that, in many cases, those who should be thinking most courageously and with most discipline are stuck in craven inertia.

That said, we can confidently expect Mr Miliband to ignore his own cheery advice in his Guardian article (‘let’s enjoy a break’) and to use the recess to try to harden his leadership claim in time for Labour’s party conference. He is already letting it be known that he did not run last year because he worried that his candidacy might jeopardise his chances of adopting Jacob, his second son. ‘At any stage, the birth parents can decide not to go through with it,’ he told the Reader’s Digest last month. ‘The most important thing last year was Jacob.’ In other words: next time, I’m in it, and in it to win it.

As for the Prime Minister himself, reports from the bunker are mixed. Civil servants who see him in his fouler moods report shouting, emails fired off in block capital letters, and the hurling of staplers at those who bring him bad news. The most recent story is that he stapled his own hand after punching the stapler in a blind fury. Yet those who have spoken to him in his calmer moments say he is not succumbing to panic which he believes has gripped his party.

Mr Brown, it seems, genuinely believes the country is recoiling from an economic shock — that, in time, the public’s anger will cool even if the economy does not quite recover. In private, he expresses confidence that voters will learn to blame global pressures for the higher prices they are paying. They will see the value of his beloved ‘long-term decisions’. They will come round to him.

In practice, he has two tools at his disposal. One is a Cabinet reshuffle. He has seen Alan Milburn in private enough times recently to stoke speculation that he may invite back his former nemesis to a top job, perhaps even that of Chancellor. Others speculate that he is mischievously stoking such speculation to remind people that, as Prime Minister, he still has cards to play. He may decide, with a glint in his eye, that Mr Miliband deserves a break from globetrotting and that his restless intellectual energy would be best deployed at the Home Office. As David Blunkett and John Reid can attest, it is hard to challenge Mr Brown from the unglamorous mire of this particular department.

Secondly, the centrepiece of Mr Brown’s autumn fightback is expected to be an economic recovery plan. There is talk of a punitive raid on oil company profits, and a package of unfunded tax cuts that would never be allowed past George Osborne’s desk. According to this speculation, Alistair Darling will simply be instructed to keep borrowing to fund tax cuts, without cutting back on state spending. It would be an extraordinary strategy, defying conventional wisdom and running up a bill of billions. But the bill, of course, might never reach Mr Brown’s in-tray. In politics as in war, a retreating army can always adopt a scorched earth policy. Even if the Prime Minister accepts defeat, he can console himself that the electoral bribes he offers today will be slapped on Mr Cameron’s Gold Card tomorrow. Prudence? Never heard of her.

After Barack Obama met Mr Brown last weekend, he went straight to New Palace Yard to see Mr Cameron — their conversation was caught on an American microphone. ‘If what you’re trying to do is micromanage and solve everything then you end up being a dilettante,’ said the senator. ‘You start making mistakes or you lose the big picture. Or you lose a sense of, I think you lose . . . ’ ‘. . . your feeling,’ Mr Cameron said. It is not hard to guess whom they had in mind.

The downfall of Mr Brown is becoming a political horror story, watched the world over. Seldom has so much political capital been destroyed so quickly. Seldom have the political tables turned so dramatically. Steeped in political history as he is, the Prime Minister knows full well the scale of what is at stake. He will worry now not only about his policy legacy, but his broader political epitaph. He did enough as Chancellor not be written off as a complete failure. But to go down as the man who destroyed the Labour party would be a horror beyond endurance.