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What does Jeremy Corbyn’s election mean for UK politics?

Overview

On Saturday Jeremy Corbyn was elected as the new leader of the Labour Party.

The veteran left-winger won with a huge 59.5% of the vote, an astounding first round victory. Andy Burnham was a distant second, polling 19%, whilst Yvette Cooper received 17% of the vote and Liz Kendall finished last with 4.5%.

The full results are below:

Labour leadership ballot results

Although there had been concerns that the registered supporters that paid just £3 to vote in the contest would swing the result, in the end Corbyn received the overwhelming majority of votes from members, registered supporters and affiliated supporters. And in the first 24 hours of his leadership, a huge 15,500 people joined the party.

As he took to the stage after his victory, he promised to fight for a more tolerant and inclusive Britain, and to tackle “grotesque levels of inequality in our society”. He added that the leadership campaign had: “showed our party and our movement, passionate, democratic, diverse, united and absolutely determined in our quest for a decent and better society that is possible for all. They are fed up with the inequality, the injustice, the unnecessary poverty. All those issues have brought people in, in a spirit of hope and optimism.”

The election of Corbyn as leader will significantly change the shape and direction of the Labour Party, as he will look to turn the clock back and return Labour to its socialist roots of former years. To some this is tragic, to others a new dawn.

To set the context to Corbyn’s leadership, we have written this briefing to provide an analysis of the policies we might expect to see under a Corbyn Labour Party, as well as what his victory might mean for the future of the party.

Shadow Cabinet

Corbyn has now announced his full Shadow Cabinet, with other junior shadow ministerial posts to follow over the next few days. His Shadow Cabinet is:

Leader of the Opposition and Leader of the Labour Party: Jeremy Corbyn

Shadow Secretary of State for Defence: Maria Eagle

Deputy Leader of the Labour Party, Party Chair and Shadow Minister for the Cabinet Office: Tom Watson

Shadow Lord Chancellor, Shadow Secretary of State for Justice: Lord Falconer of Thoroton

Shadow First Secretary of State, Shadow Secretary of State for Business, Innovation and Skills: Angela Eagle

Shadow Secretary of State for Communities and Local Government, Shadow Minister for the Constitutional Convention: Jon Trickett

Shadow Chancellor of the Exchequer: John McDonnell

Shadow Secretary of State for Energy and Climate Change: Lisa Nandy

Shadow Chief Secretary to the Treasury: Seema Malhotra

Shadow Leader of the House of Commons: Chris Bryant

Shadow Home Secretary: Andy Burnham

Shadow Secretary of State for Transport: Lilian Greenwood

Shadow Foreign Secretary: Hilary Benn

Shadow Secretary of State for Northern Ireland: Vernon Coaker

Opposition Chief Whip: Rosie Winterton

Shadow Secretary of State for Scotland: Ian Murray

Shadow Secretary of State for Health: Heidi Alexander

Shadow Secretary of State for Wales: Nia Griffith

Shadow Secretary of State for Education: Lucy Powell

Shadow Secretary of State for Environment, Food and Rural Affairs: Kerry McCarthy

Shadow Secretary of State for Work and Pensions: Owen Smith

Shadow Minister for Women and Equalities: Kate Green

·Shadow Secretary of State for International Development: Diane Abbott

Shadow Minister for Young People and Voter Registration: Gloria De Piero

Shadow Secretary of State for Culture, Media and Sport: Michael Dugher

Shadow Leader of the House of Lords: Baroness Smith of Basildon

Shadow Minister for Mental Health: Luciana Berger

Lords Chief Whip: Lord Bassam of Brighton

Shadow Attorney General: Catherine McKinnell

Shadow Minister without Portfolio: Jonathan Ashworth

Shadow Minister for Housing and Planning: John Healey

 

As more appointments are made to the junior ranks, Corbyn will need to be mindful of the fact that he had promised that 50% of his Shadow Cabinet would be women. The new leader is already facing criticism from the media and MPs in his own party that there’s a lack of women in senior Shadow Cabinet posts.

The departure of notable experienced and rising star MPs from the frontbench is a concern – many including Yvette Cooper, Chuka Umunna, Rachel Reeves, Chris Leslie and Emma Reynolds had refused to serve in Corbyn’s Shadow Cabinet, distancing themselves from being associated with a Corbyn leadership. This casts considerable doubt on Corbyn’s ability to unite the party.

Perhaps of more concern, the appointment of John McDonnell as Shadow Chancellor will immediately repel the City and be seen as a huge step backwards in the face of business relations. McDonnell’s anti-banker rhetoric is likely to appeal to many of those that voted for Corbyn, but the Conservatives will capitalise on his previous comments regarding the independence of the Bank of England and nationalising the banks.

Labour grandees fear that the Labour Party is now effectively “fighting for its life” to remain a viable party of government. Charles Clarke has warned that Labour MPs will try and develop an alternative economic strategy, while talks of a potential coup are rife.

Policies of a Corbyn Labour Party

Corbyn is on the clear left of Labour, and would be expected to position the party as anti-austerity and also somewhat anti-business. But no one really knows the man or his followers. Some are aware of his past, and that of those close to Corbyn, but it is difficult to ascertain what the policy agenda will look like and how distinct it will be to the manifesto that lost Labour the last election.

We have set out Corbyn’s key policy positions below to give a sense of what the Labour Party may focus on under his leadership:

  • Economy: One of his key pledges is to introduce so-called People’s Quantitative Easing to fund public sector projects across the country. He would move the country away from finance towards high-growth and sustainable sectors, giving the Bank of England a new mandate to invest in new large scale housing, energy, transport and digital projects.

  • Deficit: Corbyn argues that austerity is a “political choice and not an economic necessity”, and his priority is to protect public services and support the vulnerable. Though, he does want to bring down the deficit slowly through growth and higher wages.

  • Tax: He believes that those that have more should contribute more. Tax reliefs and subsidies currently on offer to the corporate sector would be used to establish a National Investment Bank to invest in new infrastructure. He would raise corporation tax and crackdown on tax avoidance, evasion and debts, which he says totals some £120 billion and would be enough to double the NHS budget. He would also bring back the 50% tax rate for high earners as part of a new “progressive” tax system and would introduce a new national maximum wage to cap the salaries of high earners.

  • Europe: He believes that Britain should play a crucial role in Europe, but has also cites the treatment of Greece during the country’s bailout negotiations as a reason for a potential exit. On balance it’s likely that he will support the campaign to stay in the European Union – a position taken by his Shadow Foreign Secretary Hilary Benn – but he has not ruled out supporting Britain’s exit. He also opposes the Transatlantic Trade and Investment Partnership deal.

  • Nationalisation: Corbyn believes that Britain’s railways and energy companies should be nationalised. He would also seek introduce a windfall tax on former state assets such as RBS, which he says were privatised too cheaply. Further, he believes that PFI deals with the NHS should be ended by using Government funds to buy them out.

  • Housing: He strongly favours rent controls in places like central London so that families who access benefits to pay their rent could afford to stay in what would otherwise be an area that is too expensive for them.

  • Foreign policy and defence: Corbyn is a long-term CND member and, as such, argues that the arms trade should be restricted. He is against the replacement of Trident. He does not support air strikes against the Islamic State in Syria and he believes that talking to militant groups is necessary to win peace in the Middle East. He also thinks that it’s necessary to have a “serious debate” about the powers of Nato.

  • Immigration: He says: “We should let people into this country who are desperate to get somewhere safe to live.”

  • Education: He advocates that a National Education Service, modelled on the NHS, should be Under Corbyn, state-funded academies and free schools would be forced to return to local authority control while university tuition fees would be scrapped and replaced with grants. He would look at ending the charitable status of public schools, although he accepts this would be complicated and might not happen immediately.

  • Diversity: In the workplace he wants to see all companies publish details of their equal pay arrangements, not just larger firms. He wants to see more women into work with the introduction of universal childcare, while he is also a supporter of women-only train carriages. In Parliament he wants to have a Cabinet made up of 50% women and wants to work towards 50% of all Labour MPs being women.

Amid concerns that the Labour Party under Corbyn would be too anti-business, Tom Watson maintained in his victory speech that: “We are pro-worker and pro-business”. Corbyn has also tried to address concerns about his business stance during the campaign by setting up a dedicated website, CorbynForBusiness.com, to outline his support for businesses that want to co-operate and innovate for the public good. However, his appointment of John McDonnell as Shadow Chancellor threatens to undermine this.

Indeed, the business community has been rather cautious to comment on the news of Corbyn’s victory. Many of the important business groups view Corbyn’s ideas as fundamentally at odds with a successful, thriving economy, with the IoD warning that his plans to increase taxes and nationalise transport and utility services will undermine the UK’s open and competitive economy and the BBA refusing to comment. The CBI and FSB were more neutral, but emphasised the need for Labour to support a pro-enterprise, pro-growth agenda. Though, there was some business support from the BCC and RICS for Corbyn’s plans to boost infrastructure investment and support SMEs.

In the more medium term, what will be the impact of Corbyn on the EU referendum debate? It’s no secret that he himself has not ruled out campaigning for a Brexit, and this could lead to a very different type of referendum debate than may have expected several months ago. Further, Europhile Chuka Umunna has cited Corbyn’s position on the European referendum as his reason for leaving the Shadow Cabinet. The risk of a split Labour vote and a split Conservative vote in that referendum will have UK business quite worried, though this morning Hilary Benn has tried to reassure businesses that Labour will campaign to stay in the EU.

It is now up to the lobbying fraternity, media, and business to figure out how to engage with the new leader – if they think it necessary to do so. This may be difficult anyway as Corbyn and Watson, while outwardly friendly, are also protective and clannish; we expect there will be many people denied access in the early period, with Simon Fletcher acting as the gatekeeper.

The Future for Labour

During his time as an MP Corbyn has rebelled against his own party more than 500 times; he’s therefore not likely to inspire loyalty among backbenchers that may disagree with his policies and approach. Many of Labour’s most senior and experienced MPs have stood down from the frontbench, and Corbyn’s left-wing allies have been rewarded with top posts.

Although there is speculation that a Corbyn leadership could lead to a split in the party, we believe that this is unlikely as those on the right that might be tempted form a new party or join another would be aware that this would risk them being out of power for many decades. The right is also somewhat tribal, as shown by Liz Kendall’s comments that she could no more leave the Labour Party than “her own family”.

What is more likely is that Corbyn could face a leadership election in the next two to three years. Already concerned that the Party will be unelectable under Corbyn’s leadership, Chuka Umunna and Tristram Hunt have formed a new group, Labour for the Common Good – dubbed “the Resistance”. In the days before the election result, the two MPs wrote to their colleagues to call for moderates within the party to restore Labour’s “political and intellectual edge… to inspire hope in the party and the country again”.

Our analysis is that an early coup would be difficult because of the scale and manner of his victory, which have given him a big mandate to lead. To trigger a new leadership ballot, 20 per cent of Labour MPs would be required to vote that they have no confidence in him, presumably at a time when Corbyn is popular with members and Labour supporters.

Though, the next few years will be challenging, with the London mayoral, Scottish Parliament, Welsh Assembly and other local elections coming up in May, and the EU referendum after that. Labour – and Corbyn as leader – are expected to fare badly, and there is a group of other MPs waiting for their chance to challenge him.

The Government will also have to respond differently now to this Labour party leadership. We expect their stance to be one of benign indifference with attacks on the policies, not the politician; their friends in the media will support this line of attack. They will also expect, perhaps wrongly, that the new Shadow team will regularly shoot themselves in the foot so the public will clearly see that old socialist Labour is back and very dangerous to the UK.

That said, the Conservatives do view Corbynmania as a threat and wasted no time in unveiling a damning new newsletter that claims that Corbyn is a security threat to the country. David Cameron had also tweeted something similar.

Corbyn slogan

However, with the next election so far off, the Conservatives will be mindful to want to keep Corbyn in place for as long as possible as they believe he would ultimately lose the 2020 election.

To conclude, Corbyn has made politics a little more fascinating. He may not ultimately succeed in achieving power at that election, but he has already achieved something that no one expected, probably including himself.