If the economic recovery continues until May next year there is at least a possibility that the Conservatives will be the largest party after the General Election.


Since 1979 voters have rewarded governments with at least three terms in office and although the Tories didn’t win outright in 2010 they will get most of the credit for turning the economy around. Labour is still vulnerable to being characterised as the party that got us into the mess. It’s a rough old world but reference to the worldwide recession by the Shadow Chancellor Ed Balls won’t wash with many voters.


But it is only largest party status that the Conservatives can realistically hope for. The failure to reform constituency boundaries will cost them 20 odd seats. They will also lose votes to UKIP if their recent lacklustre campaign in Wythenshawe is anything to go by. The Tory candidate there was a hapless vicar who party managers allowed to be filmed on TV wandering around on his own having his leaflets refused by shoppers. They tried to pass off criticism by saying that a constituency which historically had one of the largest council estates in Europe was not their territory. That wasn’t Harold Macmillan’s view when he built hundreds of thousands of houses in the fifties or Margaret Thatcher when she introduced the right to buy.


The Tories are never going to win seats like Wythenshawe and South Shields but they should try and beat UKIP into second place. In six northern by elections in this parliament they have trailed in behind Nigel Farage. Across the north UKIP may become the default vote for blue collar workers who aren’t Labour.


All that said I still think the Tories could be the largest party in May 2015, so what happens then?


There has been speculation that David Cameron is set to promise to rule out a further coalition with the Lib Dems in advance of the poll. The advantages of this would be to focus people’s minds on a straight choice between Tories and Labour and it would avoid an embarrassing row with right wing Conservative backbenchers who are determined to reject a further deal with Nick Clegg. I think it is very likely that if Cameron tried to continue the current arrangement, he’d be removed.


The idea of a Conservative minority government has been dismissed on the grounds that it would be unstable and wouldn’t last. That presupposes that the defeated Labour and Liberal Democrat parties would be eager to force a second election. This is nonsense. In a second election the voters would likely repeat their message that they preferred the Tories and might even give them an overall majority to punish the parties that hadn’t got the message. The evidence of recent “replay” elections bears this out. Labour won narrowly in 1964 and handsomely in 1966. They were short of a majority exactly 40 years ago in March 1974 and won a slim lead the following October.


There is no reason why a Conservative minority government couldn’t rule for a parliament provided it steered a moderate course. It could even reasonably renegotiate our terms of membership with the European Union and seek to put it to a referendum. Would Labour and the Liberal Democrats oppose this with the 2020 General Election already coming into view?






Ed Balls is becoming a real liability to the Labour Party. His close association with Gordon Brown was one of the reasons why Ed Miliband didn’t appoint him Shadow Chancellor when he became leader three years ago. It’s often forgotten now that Alan Johnson was Ed’s first Shadow Chancellor.


Balls gloomy forecasts about the economy are now seen as over pessimistic. His hasty action, when Children’s Secretary, in sacking Haringey Social Services Director Sharon Shoesmith has led to a massive pay off this week. While that news was coming through, angry Labour MPs told the new Shadow Transport Secretary Mary Creagh that Balls should stop messing about with the HS2 project. This is the issue that is set to be the first big test of the Miliband-Balls relationship.


I met Ed Balls in Manchester last week and tried to find out if the negative vibes he had been sending out about this vital rail project for the North was just about keeping costs down or the start of Labour’s disengagement with the project as a matter of principal. Balls told me it was the former, but then failed to reassure me that even if spending was kept within current figures, Labour’s support was guaranteed.


That’s been the problem in recent weeks. Balls has been sending out signals that its not just the summer cost increases that he’s worried about, but that he might like to use the money on other things if he gets into power.


Then there was the removal of Halewood MP Maria Eagle from her job as Shadow Transport Secretary. Labour sources tell me she was “incandescent” at not being told about Balls Brighton conference remarks about HS2.


The leaders of Leeds and Manchester councils received high praise from Transport Secretary Patrick McLouglin for their support for HS2 at a conference in Manchester this week. When the city’s leader Sir Richard Leese joined the minister on the platform I asked the councillor for his assessment of what Ed Balls was up to.


Leese claimed that Mary Creagh was as keen on HS2 as Maria Eagle, although hours later Creagh was parroting Balls heavily caveated views to that meeting of Labour MPs. However the council leader went on to tell me that it would be “irresponsible” for his party to go into the next election opposed to HS2.


It has even been suggested that Balls has been getting some grief from his wife Shadow Home Secretary Yvette Cooper. They have neighbouring constituencies in West Yorkshire. HS2 is planned to run close to the community of Altofts in her Normanton. Pontefract and Castleford constituency and 100 people turned up at a meeting to discuss it with her. I mentioned this to Mr balls who said I’d been staying up too late reading the wrong articles.


Reports suggest Balls may not come off the fence till next spring or even closer to the General Election. This is irresponsible. Doug Oakervee, the outgoing chairman of HS2 Ltd confirmed to me at the Manchester conference that all party consensus was vital to potential investors.


Ed Miliband should tell Mr Balls to issue a statement backing HS2 if the current budget is kept to. If Balls resists he should be sacked. Labour has suffered before when its leader refused to deal with a troublesome Chancellor.


There are a number of potential successors. Two, Shadow Business Secretary Chuka Umunna and Shadow Pensions Secretary Rachel Reeves were at a Downtown Leeds event recently and were very impressive by all accounts.








We’d better get used to it. A continuing economic squeeze administered by a Conservative-Lib Dem coalition. The only difference after the General Election will be that the Tories will hold most of their cards with the Lib Dems reduced to about 30 MPs.


The Chancellor was in confident mood on Wednesday.

He shouldn’t have been. In the rose garden days three years ago the Coalition didn’t expect to still be making cuts in 2015-16. Nevertheless George, or Geoff Osborne if you prefer, has managed to convince not only the British people but the Labour Party that there is no alternative.


Labour are in serious trouble. They have broadly signed up to the cuts strategy. Having lagged behind public opinion on the need for benefit reform, they are now lurching to the right to such an extent that we are not sure that basic pensions would be safe in their hands.


George Osborne was devastating when he used Gordon Brown’s old formula for mocking the Opposition. The Chancellor told MPs he had received representations to include pensions in the welfare cap, but had resisted them. Chris Leslie, one of Ed Balls’ Shadow Treasury sidekicks wasn’t even prepared to attack plans to make people wait seven days for benefits when the TUC were warning it could mean kids going without food.


Labour are in this position largely because of Ed Balls.

I’m afraid the Shadow Chancellor has to go. He is associated in the public mind with the Brown days and people still blame that administration, and not the current one, for the mess. It may be unfair three years into the Coalition, but it is a fact.


Alistair Darling should be the Shadow Chancellor. He is currently heading up the Better Together campaign against the Scot Nats, but he could do that part time because Scotland isn’t going to vote for independence.

Darling has a reassuring manner in contrast to the bruiser Balls. More importantly he was honest about the economic troubles ahead which nearly led to his sacking by Brown.


Even with Darling as Shadow Chancellor it is going to be difficult for Labour to become the largest party in 2015. Economic green shoots are appearing and house prices are rising. Public support for benefit reform and a smaller public sector has grown during the austerity years. This doesn’t mean that millions of people aren’t suffering but the majority back the Coalition and Labour is not going to be a socialist champion.


The Coalition shows no sign of breaking up as the election approaches. These cuts are for 2015. The Lib Dems could have made far more trouble about being committed to them for the year after the election. They didn’t and Chief Secretary Danny Alexander (a Lib Dem) received fulsome praise from George Osborne.


Osborne and Alexander have pulled off another trick. Amid all the cuts there is real commitment to northern infrastructure projects like rail spending in Leeds, fast track permits to frack for gas in Lancashire and the new Mersey crossing.


The biggest black mark for the Chancellor is the woeful failure to properly fund the Single Local Growth Fund. Lord Heseltine had urged Local Enterprise Partnerships to be allowed to bid for £49bn from the fund. It was given just £2bn a year.


For that you shall be called Geoffrey, Mr Chancellor!





In 1994 in a brilliant piece of conference oratory,Tory Deputy PM Michael Heseltine was describing a complicated speech on economics that had been made by Gordon Brown. It turned out it had been written by his researcher Ed Balls. So Hezza was able to tell the conference the speech wasn’t Brown’s it was Balls.


The Autumn Statement was meant to see George Osborne discredited for having to come to the Commons confessing he’s missed his targets for growth, borrowing and debt reduction. He had to do all those things and the country remains in a dire state. But politics is often about mood and presentation.


With a string of announcements to help business, scrapping petrol price increases and measures on tax avoidance, Osborne gave a strong performance in a dire situation. Ed Balls meanwhile was left floundering. An uncertain performance in the Commons will be quickly forgotten. It will be less easy for the Shadow Chancellor and his party to respond to the measures proposed.


How for instance will Labour vote on the tiny 1% increase in benefits? Will Labour re-examine its critic of the Coalition that it is cutting too far and too fast whilst there is still political mileage in the claim that Labour got us into this mess? The Private Finance Initiative (PFI) is a case in point. The refurbishment of our schools and hospitals was long overdue but it was an expensive way to do it and the Chancellor’s PFI Mark 2 should ensure that the public purse benefits a bit more in the future.


There were a number of measures to help the economy in the North. We are shortly to see the plans for extending high speed rail to Manchester and Leeds. Salford is to get ultra fast broadband. Local Enterprise Partnerships are at last going to get some real money to play with. From 2015 they will be able to bid for a single pot of money covering local transport,housing and skills. More money is being poured into the Regional Growth Fund although it has been weakened by resignations and complaints of slow delivery. The new business bank is to have a billion pounds set aside for SME’s.


Finally back to the politics of the Autumn Statement. It is quite possible the UK will lose its AAA rating soon but leading economic commentators like Gillian Tett of the Financial Times and Robert Choate of the Office for Budget Responsibility seem relaxed about that. They claim investors have already factored the downgrade into their calculations. They also argue that most countries are struggling at the moment and the UK won’t be that disadvantaged.


Nevertheless the loss of our AAA status would be a blow to the Chancellor who must be hoping his package doesn’t unravel in the run up to Christmas. Memories of the aftermath of the Budget with rows over pasty tax and charities were clearly on the mind of key Coalition Ministers in the run up to the Autumn Statement. The senior Lib Dem Ministers involved in this process, leader Nick Clegg and Chief Secretary Danny Alexander are determined to see the economic strategy through and are working effectively with their Tory counterparts.


That reassures the markets, but its a very different picture up North. I was talking last week to a senior ex Lib Dem councillor who gained office when the Lib Dems first started to make an impact on northern councils. He has seen all that swept away. His bitterness was tangible. The price for the Lib Dems signing up to this budget reduction strategy is high.


May I wish you as happy a Christmas as austerity will allow.