Labour and the Tories are in turmoil - and, despite what many say, it's nothing to do with Corbyn's leadership

The financial crash of 2008 made it impossible for both parties to exist united in their current forms

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The Independent Online

In what seems like a freakish death dance, the two big UK parties are in turmoil at the same time. Usually, when one of them is falling apart, the other projects a disciplined self -confident swagger. Now cabinet ministers row over Europe and George Osborne’s Budgets, while Labour MPs despair in public over their leader who has the passionate support of most members.

One of the great myths in relation to the death dance is that the Conservative party falls apart precisely because it faces a weak opposition. The myth is widely believed and espoused by ministers and even some in Number 10. They argue that if only they faced a decent opposition, Conservative MPs would be more disciplined and united. Instead they assume they will win the next election and so can enjoy a civil war or two.

This theory is nonsense.  The last time the Conservatives were falling apart over Europe and opposing parts of their Chancellor’s budgets was in the mid-1990s. Then they faced the most formidable opposition leader in recent decades.

Tony Blair walked on water and his party was united in its determination to win the election. Knowing they would lose, the Conservatives enjoyed a civil war or two nonetheless - the precise opposite of the current situation. Conservatives row for deeper reasons than the state of the opposition.

While Conservative MPs turn to the next leadership contest in the hope of a cathartic outcome, Labour MPs are mostly united in their disdainful opposition to Corbyn but are confused about policy and how to remove him. With good cause, they fumed last week about Corbyn’s failure to unnerve David Cameron after Iain Duncan Smith’s resignation.

Corbyn cannot do parliamentary jousting, that quick-witted mockery of an opponent that fleetingly delights MPs and impresses the media. But some of the MPs attacking Corbyn are themselves on shaky ground. 

They were thrilled when, after the last election, Labour’s acting leader Harriet Harman declared that Labour should abstain in votes on some of Osborne’s proposed welfare cuts rather than oppose them all. Some MPs argued at the time that this was a sign of a ‘responsible’ opposition showing Labour had learned its lessons about being ‘profligate’ in the run-up to the 2008 crash.

If those MPs had retained that early position, they risked being seen as to the right of Duncan Smith - who resigned over welfare cuts - and to the right of those Conservative MPs who rebelled against the cuts to tax credits on the working poor last autumn (even if their actual positions were more nuanced).

At least Corbyn was a consistent opponent of the cuts, even if he was incapable of making any impact in parliament and has not started to explain how he would pay for his various policies.

The introspective traumas of both parties seem disconnected and yet they have a common cause. Osborne fell into his latest trough a short time before the budget when he hailed a new deal with Google in which the company paid a few more miserly pennies in tax. He was slaughtered for his comments, with internal and external critics suggesting the tax deal was puny. But if Osborne had made his upbeat comments before the 2008 financial crash, they would have attracted little or no attention.

The former Chancellor Gordon Brown, after all, used to hail the UK’s low tax regime for international businesses and liked to be photographed next to the richest bankers in the world. In contrast, when Osborne proclaimed his tax deal with Google, cabinet colleagues had no choice but to disown his triumphant interpretation. He had not realised the degree to which even those on the right were gripped by the need for big multinationals to pay vaguely defined “fair” tax levels after the crash.

The row over the recent Budget, Duncan Smith’s resignation and the revolt over welfare cuts also has its roots in the financial crash. Osborne’s economic policy was shaped by what happened in 2008. After initially pretending to support Labour’s spending plans, he made deficit reduction his defining mission, missing his target in the last parliament and now resolved to reach a surplus in this one.

But a significant number of Conservative MPs will not tolerate the spending cuts required for Osborne to keep to his chosen course. In effect they are rebelling against his highly contentious interpretation of what needed to be done after 2008.

During Labour’s astonishing leadership contest, Corbyn pitched his message solely against the background of the financial crash. At the beginning of each speech he proclaimed that the 2008 crisis was not caused by “firefighters, nurses, street cleaners, but by deregulation and sheer levels of greed”. 

As a climactic he declared: “I want a civilised society where everyone cares for everyone else. Enough of free market economics! Enough of being told austerity works!”

He did not specify what his alternative would be or, of course, explain how it would work. Corbyn won the leadership because he offered a form of defiant hope in the aftermath of the crash.  

While recognising that Corbyn espouses slogans rather than worked-through policies, Labour MPs who oppose him similarly struggle to outline a distinct policy agenda in the post-crash era. It is easy to tweet that Corbyn is useless, but much more challenging to propose a policy agenda to accompany fuming taunts.

After the financial crisis the then-governor of the Bank of England Mervyn King made a candid observation:  ‘I’m surprised the real anger has not been greater than it has … The people whose jobs were destroyed were in no way responsible for the excesses of the financial sector and the crisis that followed.”

Instead, the crash has wreaked greater havoc.

The dance to the death of the two main UK parties, then, is not freakish. The crash led to Osborne’s economic policy, from which one-nation Conservative MPs who want decent public services and welfare provision are turning away.

Corbyn’s election and the impotent bewilderment of Labour MPs are also a consequence of the crash. The 2008 financial crisis may not have triggered riots, but in its aftermath the two main UK parties struggle to survive in their present forms.