Contests & Mergers: Is talk of a Labour-Tory merger just an effort to force party members to accept status quo candidates?

Manifesto tag lines from the Labour and Conservative parties at 2015 general election.

With two leadership elections under way for Britain's two biggest political parties, David Cameron's call for a new captain to steer the ship seems to have cast the country adrift. In such messy times, its not unusual to hear odd or interesting ideas for how to get back on course.

But in British politics it is certainly far from usual to hear talk of Conservative and Labour MPs possibly being willing to put aside their tribalism and merged with each other. The proposal seems to be that the so-called moderate members of each party will withdraw and together form a new Centre party should the more extreme nominee for each party's leadership emerge the victor.

Against the background of that threat, the memberships of both parties are being pressured to put aside their extreme candidates to maintain the status quo. For the Conservatives that meant pressure to reject Andrea Leadsom in favour of Theresa May, and for Labour the pressure is to back Angela Eagle's challenge to Jeremy Corbyn's leadership.

Tory Leadership

On the Conservative side, Brexit was the big divide between the nominees. Of the two, Andrea Leadsom was clearly the outsider, the challenger to Theresa May (Kuenssberg, 2016) - who is very much the candidate representing the present Cameroonian direction. May is also most clearly the one likely to be able to continue without a new election, by representing continuity with the manifesto and policies of the Cameron Ministry.

Leadsom garnered some attention during the referendum campaign as she stood alongside Boris Johnson and Gisella Stuart on the stage for the ITV and BBC debates, arguing for Britain to exit the European Union. So much so that, with Boris Johnson's withdrawal, she was easily able to beat the other Brexit nominees - including Michael Gove, who seems to have only hurt himself with his cloak & dagger antics.

In contrast, May remained largely aloof from the EU referendum campaign. However she nonetheless courted controversy when, despite offering some support for Cameron's pro-EU stance, she suggested that the British commitment to the European Convention of Human Rights should be dropped as an inconvenience (Asthana & Mason, 2016) - a stance many have felt is consistent with her hardline positions as Home Secretary.

As Home Secretary, May has been criticised for her stances on a number of contentious issues. From her handling of the subject of Islamist extremism in schools (Adams, 2014), to her continued efforts to push through the Snooper's Charter (Mason, Asthana & Travis, 2016), and of course for her stance on the ECHR, she has been criticised by progressives. She also, and of particular relevance to conservative voters, faced criticism for her management of the border agency when it was found not to conducting proper checks (BBC, 2011).

For her part, Leadsom managed to attract most of the controversy to herself in the course of the contest. She made some ill-judged and troubling comments, from allegedly criticising Theresa May for not being a mother (Pearson, 2016) to saying she opposed equal marriage because it was 'damaging' to Christians (Cowburn, 2016). In fact, the controversies have generated so much heat that this morning Leadsom in fact withdrew from contention - much as Chuka Umunna did from the Labour contest back in 2015.

That left Theresa May to take up the Conservative leadership unopposed. While May is likely to pick up threads from Cameron's ministry, there will likely also be a turn even deeper into social conservatism that will worry progressives.

Labour Leadership

Across the floor, the intrigue that has racked the Labour Party since the referendum has moved on to a new chapter with the breakdown of talks between Deputy Leader Tom Watson, representing the Parliamentary Labour Party, and party Leader Jeremy Corbyn - which were being mediated by trade union leader Len McCluskey (The Guardian, 2016).

This seemingly final inability to close the breach has led to Angela Eagle finally announcing her long touted challenge (BBC, 2016). Pitching herself as a practical socialist, using the long favoured New Labour line that its fine to have principles but you also need to speak to a broad audience, Eagle will stand ostensibly against Corbyn in what has all the making of being the memberships' candidate versus the PLP's candidate.

Complications and potential legal challenges aside, over whether or not Corbyn will be allowed on the ballot without nominations from MPs - his opponents seem very keen to block him - such a contest does not seem to be something likely to unify the already shattered party. Of course on the one hand,  as a gay woman it would certainly be a welcome step forward in representation for the Left to have Eagle in Labour's most senior political position at Westminster.

However, her policy stances have been deeply in line with those of New Labour: she supported the Iraq War and was against an investigation; she supported New Labour's authoritarian domestic policies, like ID cards, 90 day no-charge detentions and stricter terms for asylum; and she also abstained on the Welfare Bill that sought to cut tax credits (Sinclair, 2016).

Corbyn's election was as much, if not more, a rejection of New Labour - its methods, its language and its hybrid of social democracy and neoliberalism - as it was an endorsement of the Labour Left's brand of democratic socialism. If both face the membership, it seems hard to see Eagle winning over Corbyn's supporters, or reconciling them with the mainstream if she wins.

Is a Labour-Tory merger really possible?

In the shadows behind the leadership contests - whether simply a way to galvanise their respective partisan supporters into stopping their extreme wings from taking hold, or as a genuine possibility - a merger of the mainstream of the Conservative and Labour parties has been proposed (Boffey & Helm, 2016).

Historically, such a merger would seem to be impossible. For nearly a century Labour and the Conservatives have been locked in a polemic struggle, government versus opposition - two opposite, though undeniably converging, forces that have defined the British political landscape and formed the basic reference points for any discussion of politics.

However, it wouldn't be entirely without historical precedent. After former Labour leader Ramsay MacDonald was expelled by the party, his new National Labour worked closely with the Tories until being fundamentally consumed by them. During war time, the two parties also showed they were able to work alongside one another amicably.

The referendum has also changed things, even if only temporarily. At no time in recent memory have the mainstream of the two main parties been so closely aligned, with good will so clear between them. May's unopposed run to the Conservative leadership will probably scupper any plans before they could get off the ground, but Labour's crisis makes some sort of realignment seem inevitable.

When a progressive alliance looks closer to being assembled than it ever has, a plan to bring together the so-called centre would be a big setback. If an effort to bring the 'Centrists' together in one large party of Democrats was successful, it would surely suck in Liberal Democrats too. That would leave the UK with a single major political party that is successor to the only three that have governed in more than a century.

The formation of such a party, one massive, pro-establishment, state party would be pretty much the opposite of the pluralism that Britain sorely needs. After the chaos of the referendum, the Conservatives seem to be steadying their ship while the Left remains caught in a storm and likely to run aground.

The next move appears to be in the hands of Labour MPs. The choice ahead of them seems to be between a pluralist progressive alliance, even more pro-establishment centralisation and attempting to simply prop up the shattered husk of the Labour Party - a path favoured by at least one former leader (Aitkenhead, 2016). It would be a brave person who bets on what will happen next.

Response by Blair to the Chilcot report illustrates why we need a progressive alliance and the pluralism it is supports

Tony Blair in his final year as PM and leader of Labour, even as the US planned a troop surge in Iraq, four years after the initial invasion. Photograph: Blair in 2007 by Matthew Yglesias (License) (Cropped)

Last night's progressive alliance event, hosted by the Compass think tank, began with a call for progressives to take ownership of the concepts of love and hope. From all sides there was a sentiment that building a progressive future depends on reaching across boundaries and cooperating.

This could not be in starker contrast from Tony Blair's response to the release of the Chilcot Inquiry's report. Following John Chilcot's statement, introducing the report, former Prime Minister Tony Blair spent two hours giving a response and answering questions.

After apologising and accepting full responsibility, Blair sought to justify his actions. At the centre of Blair's explanation is the portrait he paints of a singular leader whose job it is to make the decisions. That is an attitude that underlines the Blair legacy.

Particularly in the Labour Party, that attitude has opened a drastic separation between the establishment and the people who support a candidate like Jeremy Corbyn. People, active political actors, feeling separated from the decision making reserved to an elite heavily embedded within the establishment and the media.

In his report Chilcot criticised the centralisation of decision making that alienated even the cabinet from the necessary information in a political system that is not, but has become increasingly, presidential. A singular leader was able to take a momentous decision, on his own authority, overruling rules and proper process on the way.

Beneath the idea of a progressive alliance is the principle of pluralism - that decisions should be made with broad consent. It is a poignant criticism of the direction of Blair and New Labour's thinking.

From John Harris - cautioning the audience that it is a priority to speak to those in the most desperate situations and address the inequalities resting upon them and feeding a hopeless view of the future - to Amina Gichinga - calling out politicians for not facing the people, not just for accountability but to build a vision of the future that includes them - the Compass event emphasised the way in which centralisation and majoritarian thinking had alienated people and left them feeling helpless.

Rebuilding trust in politics cannot be done from the top down, without reinforcing an idea of politics being something that is done by elites while the rest wait with ears pressed to the door. The progressive alliance event was adamant on that point - connecting working across party lines with the need for electoral reform and proportional representation.

What Caroline Lucas, Clive Lewis and Vince Cable accepted in their contributions is that the divisions, caused by the ambitions of singular parties to chase majorities, were damaging to the overall aims shared by progressives of all stripes.

As centralising power on the mythical decision-making leader alienates people, so might pluralism empower and energise them. If there are lessons to be learned from the Blair leadership, the Iraq War and Chilcot, it is that decisions must not be made in isolation within the corridors of power. Progressives have to expect a better, broader and more inclusive process and start living up to it.

Chancellor quietly drops yet another target, but Labour infighting means chance to pitch positive alternative case will be missed

Under Chancellor George Osborne's stewardship, the Treasury is going to miss another of its fiscal targets. Photograph: Pound Coins from Pixabay (License) (Cropped)

On Friday, at the quiet end of the week and under the cover of the Labour and Conservative leadership wrangling, Chancellor George Osborne announced that he was relaxing the fiscal rules demanding that the government deliver a budget surplus by 2020 (Ahmed, 2016).

Paul Johnson of the Institute of Fiscal Studies immediately stressed that the measure, though it would allow for more borrowing and so less spending cuts or tax rises to cover the shortfall caused by the post-Brexit downturn, would not mean the end of austerity (BBC, 2016).

On Sunday that was confirmed when the Chancellor announced his intention to further accelerate the reduction of the Corporation Tax rate down to a new low of just 15% (Monaghan, 2016) -  a move entirely consistent with Chancellor's M.O. of managing the economy by creating seductive conditions for major firms.

With targets being quietly missed and dropped, and sweetened tax deals for major corporations being announced, it is disappointing that Labour MPs are too busy completely embroiled in their own mess to take the opportunity for a big public 'We Told You So'.

Labour are also in no position at present to step up the argument for seizing this opportunity to push for the much needed public investment plan that Shadow Chancellor John McDonnell has argued the Chancellor's fiscal rule did not allow for (Treanor & Allen, 2016).

While the first announcement was buried beneath other news on a Friday, where missed targets are often hidden, it was a move that brought the policies of Osborne and Tory leadership candidate Theresa May into alignment - as May said in her campaign announcement that she would put aside the aim to get a surplus by 2020 so as to avoid disruptive tax rises (The Independent, 2016).

While suspending the fiscal rule aligns with May's position, the decision to cut Corporation Tax may have a more complicated effect on the Tory leadership contest. Brexiter candidates have been keen to downplay the negative economic impact of the vote to leave and will seize upon any sign that life goes on as usual.

The Chancellor using the new freedom for a tax cut rather than as the first in a package of measures that include the rise in taxes that he previously warned might follow a vote to leave, could play into the hands of the Brexiter candidates. The idea that Britain still has room to manoeuvre, to make a pitch to international businesses that it is still a place to invest, will likely embolden Brexiters who accused the Remain camp of 'Project Fear'.

However, the reality is that public revenue in the UK is already tight and suspending fiscal rule only confirms the fact. Public spending is still in deficit and key benefactors like the NHS still suffer from shortfalls. Abandoning the rule means an admission by the government that only by borrowing more can it now keep up with spending demands - for now.

The big question remains as to whether borrowing, for public investment, or limiting and even eliminating borrowing, cutting public outlays and seeking private investment to cover instead - ie austerity, represents the sounder fiscal policy. Which will help produce growth and revenue?

From the OECD to the IMF (Elliott, 2016; Summers, 2014), the argument that the UK needs to borrow and increase public investment, because boosting public investment can drive the growth that delivers the tax receipts (Stewart & Asthana, 2016), has strong support. The economists who have joined John McDonnell on his New Economics tour have also made broadly the same case.

The argument from the Left is that the Chancellor's focus is on entirely the wrong part of the economy with his tax cuts, benefiting the richest in the hope that they see past their short-termist to invest with a longer view (Sikka, 2016). They also warn against the short term focus of austerity, which looks for gains by selling off parts of the government to would be rentiers, as flawed and likely to only increase problems in the longer run (Mazzucato, 2016).

The alternative is to instead start directing investment into ordinary people - whether that be through education, in skills through apprenticeships and training, through jobs repairing roads and other transport infrastructure or building thousands of much needed new homes - with every penny spent multiplying in value as it boosts the economy.

These are all long term projects, aimed at providing a stable and prosperous future. A progressive economic alternative needs to do more - from reforming welfare towards a compassionate Basic Income and improving workers' say and stake in the work they do - but public investment is the starting point.

The Chancellor has taken a step back but the pressures of austerity are not yet relieved. Progressives have to overcome their divisions so they can start building the arguments for a more prosperous future with the common good at its heart.