Corbyn and McDonnell's relationship has deteriorated over the past six months – now they're at a fork in the road

Corbyn is more energised by foreign affairs than the detail of Labour’s domestic policy. He was upset by McDonnell’s criticism over antisemitism. At one point, I’m told, Corbyn refused to talk to him for a week

An old maxim is that a Budget which looks good on the day unravels by the end of the week. Despite the damaging resignation of the impressive Tracey Crouch as sports minister over Philip Hammond delaying curbs on fixed-odds betting terminals, his Budget has “landed well”, as one of his allies put it.

The chancellor can also take comfort in the old maxim being turned on its head. We have witnessed the unusual sight of the Opposition unravelling over the Budget. Labour has sent confusing and contradictory messages over Hammond’s decision to cut taxes for people on the 40p rate and whether the party would end the Tories’ freeze on most working-age benefits.

After predictions that Tory and DUP MPs might vote against the Budget on Thursday night to protest against Theresa May’s Brexit strategy, the only rebels were 20 Labour backbenchers who defied the party leadership’s line to abstain in order to oppose tax cuts that will disproportionately help higher earners.

Some senior Labour figures point the finger of blame at John McDonnell, the shadow chancellor, accusing him of making policy on the hoof in media interviews, and abandoning the discipline he displayed at last year’s general election. He raised his profile in a media blitz this summer, while Jeremy Corbyn often avoided what his aides contemptuously call “the MSM” (mainstream media) and awkward questions about Labour’s antisemitism row. McDonnell has the confidence to take questions from all-comers, which was fine during the summer news vacuum. But this laid-back approach was not suited to the big stage of the Budget.

“He didn’t have a plan,” one Labour insider told me. “Remarkably, there was no [day-to-day] grid of media interventions in the run-up.” Labour’s 10 demands on universal credit were released on the eve of Monday’s Budget, too late to win any coverage.

Internal critics say Labour’s Budget performance matters more than ever this year. That’s because the party would be subject to far more scrutiny if it secured the election it would demand if parliament rejected May’s Brexit deal.

The underlying cause of Labour’s woes is a sharp deterioration over the past six months in the relationship between Corbyn and McDonnell, the closest of friends and allies during the left’s long wilderness years. Coming so close to winning last year has proved a fork in the road for them.

McDonnell has taken the pragmatic route, believing there can be no distractions from the pursuit of power. So he announced this week that Labour would not reverse Hammond’s decision to raise the threshold for the 40p tax rate to £50,000, to avoid alienating middle-income earners, while insisting that people on £80,000 would pay more tax under Labour. Earlier this year, McDonnell was more inclined than Corbyn to blame Russia for the Salisbury nerve agent attack, and deeply worried about Team Corbyn’s handling of the antisemitism controversy.

In contrast, the Labour leader has stuck to the ideological route and sees no reason to trim his long-held views. Indeed, he attacked the Tories this week for “ideological tax cuts” (a bit odd when Labour did not oppose them). Instinctively, Corbyn is more energised by foreign affairs than the detail of Labour’s domestic policy. He was upset by McDonnell’s criticism over antisemitism. At one point, I’m told, Corbyn refused to talk to him for a week.

McDonnell’s freedom to speak out is tolerated by Team Corbyn but sends a misleading signal. On policy matters, the once-supreme shadow chancellor has been reined in by Corbyn’s all-powerful top aides – Karie Murphy, his dictatorial chief of staff; Andrew Fisher, the policy director; and, to a lesser extent, Seumas Milne, the strategy and communications director. For example, they have stopped McDonnell from repeating his recent pledge to scrap universal credit. The official line is to “pause and fix” it.

The growing tensions between the Labour leader and his Treasury right-hand man remind me of what Labour officials used to call “the TBGBs” – the endless, debilitating struggle between Tony Blair and Gordon Brown. When I first met them after they became MPs in 1983, they too were the closest of friends and allies. I was told they would never fall out and become rivals. But they did. That’s politics.

I wrote many stories about their rows. At the time, they were usually denied. One aide who rubbished them later confessed to me: “You were right all along. We had to lie.”

Similarly, reports of tensions between Corbyn and McDonnell will be denied now. Probably, like Blair and Brown, they will confirm them when they write their memoirs; the summer of 2018 will make interesting reading.

Despite the denials, something has changed, and the tensions are real. If Labour is serious about an election, it needs to sharpen up its act, and cannot afford to repeat its poor showing on the Budget.