Balls Vs. Miliband: The First Proper Labour Bloodbath Since 70s?

January 13th, 2010 by The Parallax Brief

Labour leadership contest Balls MilibandGuido Fawkes reports that Ed Balls, the schools secretary and widely considered Gordon Brown’s closest political ally, is maneuvering to abscond himself of any responsibility for Labour’s increasingly likely election defeat, despite being closely associated with Mr. Brown and the policies which are proving unpopular with both the media and a substantial part of the Parliamentary Labour Party:

“[Balls] knows Labour is going to lose the election and he knows he will be blamed almost as much as Brown, for he is Gordon’s homunculus. The politics of reckless dividing lines, big government over-spending, the vicious briefing against internal party enemies, his personal use of “Mr” McBride to poison politics and his low, lying Machiavellian ways are not going to be faulted for Labour’s defeat if he can help it. If they are, his ambitions will be thwarted. In private he and his few allies are blaming the prospect of defeat on Hoon and Hewitt’s recent divisiveness. “

The Parallax Brief isn’t sure from whence Guido secured the story (although the Parallax Brief would love to know where Guido gets all his stories) but the interesting dynamic here is the battle which is clearly taking shape between David Miliband, the foreign secretary, and Mr. Balls, the leaders of the right and left of the parliamentary party, respectively.

Until recently, Mr. Miliband had been seen as the natural leader elect, but in recent weeks murmurs and speculation have grown suggesting that while his wonkish policy expertise was unassailable, his leadership qualities, and ability to communicate the a compelling party message to the voting public, were questionable, culminating in Labour backbencher Geraldine Smith calling the foreign secretary “immature”. Further, if Labour lose the election by a hefty margin — something which in the last week has shifted from possible to probable — the party would be reduced to representation in its core heartlands, which would indicate that the post-election parliamentary party will lean significantly further left. Such a scenario does not augur well for Mr Miliband’s chances of leadership.

Meantime, it is also true that if Labour loses emphatically, Mr. Balls, as key ally to the Prime Minister and architect of many of the governments policies, would struggle to disassociate himself from the disaster.

Both are going to run for the leadership regardless, and with both sides having plenty to get their teeth stuck into, the battle is likely to be the first proper Labour leadership bloodbath since the late 70s. Might the next Labour leader be the last man standing?

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The Department of What If…? The Brown Bounce.

January 12th, 2010 by The Parallax Brief

Remember the Brown Bounce? An increasingly unpopular Prime Minister replaced with his trusty, respected right hand man. A blizzard of new policy ideas. Invitations to opposition party members to join a more collegial cabinet of all talents. Flattering media coverage.

Remember that? With Gordon Brown now deeply unpopular both with voters and his parliamentary party, and all but certain to find himself out of office shortly after he dissolves parliament, it’s worth wondering how things might have been had he acted decisively and gone to the polls before the Labour Party conference in Autumn 2007. For Iain Martin, deputy editor of the Wall Street Journal Europe, the appearance of Peter Watt’s already infamous new book gives fresh opportunity to consider and blog about the “election that never was in the autumn of 2007.”

“It really was the most bizarre and fascinating period. However, events unfolded at such speed and with so much intensity that it has all become shrouded in myth-making.

Watt recounts his role in organizing the basis of a campaign with Douglas Alexander (Labour’s election co-ordinator). Leaflets were printed, candidates readied and limos ordered to ferry about the cabinet.

But while it is true that many believed right up until the moment that Brown called it off after Tory conference (in a humiliating interview with Andrew Marr in Number 10) that an early election would happen, it was already way too late by that point. In allowing the Tories to begin their Blackpool conference he had blown it.

What would have worked in terms of timing would have been for Brown to turn up on the first day of Labour conference having come straight from seeing the Queen (followed by the media circus) to say that he had asked for a dissolution. He could then have kicked off an election campaign from the podium, telling his troops to leave the hall and go out and fight for a fourth term etc. The Tories would have been blind-sided and all the momentum would have been with Labour.”

The Parallax Brief genuinely believes Mr. Brown would have taken Labour to an election win. The momentum was already with him, and a series of polls from ICM, YouGov, Ipsos-MORI, Populus and BPIX between September 16 and September 29 indicated as much, putting Labour 8, 6, 6, 8, 11, 13, 10, 11, 7 and 7 points ahead.

But alas…

“Instead, Brown waited, let the speculation build, delivered a stinker of a conference speech and then gave the Tories a chance to mount their fightback in Blackpool. The polls reversed and Brown pulled out in a panic on the Friday (only going public on Saturday).”

The folly of this is impossible to overestimate. Of course, Labour would likely have been returned with a reduced majority, and it is quite possible, even probable, that Mr. Brown’s personal weaknesses would have still risen to the surface to make him as unpopular with his party and the public as he is now. However, Labour would have been in power, and would have had another two and a half years from now to ride out the Great Recession, get the economy growing again, shed itself of the unpopular Brown, and give a new leader time to establish a new policy platform before what would have been a summer 2012 election. It’s not beyond the realms of possibility that Labour could have been returned for a fifth term.

It might not be overstating the case to say that the Prime Minister’s decision not to call an election in the Autumn of 2007 was the most important and influential political moment of this generation.

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Did Socialism Win After All?

January 12th, 2010 by The Parallax Brief

While Ms. Parallax Brief was watching Lost DVDs yesterday evening, the Parallax Brief settled down to catch up on some of the political writing he had missed, but archived, over his New Year vacation, and read two paradigm-shifting Peter Hitchens essays, linked at the bottom of this blog.

The Parallax Brief had always assumed, as he assumes most sensible observers assume, that a combination of the Thatcher and Reagan years, and the collapse of, and exposure as fraudulent, the communist regimes in Eastern Europe, had utterly destroyed socialism as a force (1) that had any traction in British politics and (2) to which anyone, from the general voting public through to public policy wonks, paid any heed.

Within this context, the Parallax Brief had always been puzzled, and, he is ashamed now to admit, slightly amused, by the sometimes hysterical assertions of the few hard, traditional conservatives at the Mail and the Telegraph, that Britain had become a socialist nation. But something Mr. Hitchens wrote in the first of his blog essays changed the Parallax Brief’s mind:

The goals which revolutionary Marxists of my generation sought — a radical reordering of the relations between the sexes, a weakening of the married family, a general moral, cultural and social revolution, the destruction of the taboos against abortion, illegitimacy and divorce, egalitarian education, the abolition of frontiers and of nation states, the end of restrictions on immigration and the withering away of national borders, the sociological approach to crime as opposed to the belief that wrongdoing was an act of free will that deserved punishment, the infiltration of the media, the schools and universities by radical and revolutionary ideas about history and society, the dismantling of the canon of literature and of conservative attitudes towards history, the general denigration of the British Empire, the demolition of the idea that education was a passing on of accepted knowledge, and so of the idea that teachers are figures of authority — are now the policies of the establishment and so the policies of the Modern Conservative party…

The penny finally drops. It is now perfectly clear what Mr. Hitchens and his Daily Telegraph counterpart, Simon Heffer, object to.

And Hitchens is right — to an extent.

Most people associate socialism most with its economic branch: controlling the the economy’s commanding (more…)

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Now Hoon and Hewitt Have Made Their Play, Labour Might Be Left With the Worst of Both Worlds

January 6th, 2010 by The Parallax Brief

The chickens are preparing to roost. The vultures are circling. The knives are out for Caesar. The Labour Party is in such a state that every metaphor imaginable wants to get a mention during its slow death march to electoral defeat. Make no mistake, Geoff Hoon’s and Patricia Hewitt’s attempt to trigger an internal, parliamentary Labour Party (PLP) vote of no confidence in Brown — in John Major’s vernacular, a sack me or back me vote — has undoubtedly added to the party’s woes.

But taking the action they have leaves the king makers in the Cabinet with a devil’s alternative.

What is indisputable is that the Labour Party would do far better in the general election if it could enter the campaign with a leader other than Brown. The chart below, which the Parallax Brief shamelessly pinched from Mike Smithson’s brilliant Political Betting website, shows that Brown has the kind of job approval ratings that make the last days of George W. Bush’s presidency look a paragon of popularity.

Even more concerning for Labour, the chart below shows that Brown is even unpopular with Labour voters, which must be a huge concern for the Brown-Balls “core-vote” electoral strategy.

A good way to think about Labour’s best course of action would be to try to imagine what the Conservative Party would least like it to do. And certainly, the Conservative Party wants the Prime Minister to remain in position until the election, which is why, as Guido Fawkes (back on top scoop and Robinson-baiting form again) pointed out today, David Cameron tried to kick off the election early with his speech Monday: CCHQ strategists calculate that nobody will dare challenge Brown amid an election campaign. If there was any doubt that the Conservatives would want Brown to stay, Guido’s “Save Our Gordon” campaign and Iain Dale’s attacks on Hoon and Hewitt should rapidly expel them.

Given that Brown is clearly a hindrance for the Labour Party, the key arguments for the party grandees to retain him have always been, in the Parallax Brief’s view, that (1) it wouldn’t be possible to impose two unelected prime ministers on the electorate, meaning that any new leadership would have to immediately call an election, and (2) that a leadership battle would be divisive in the absence of a clear candidate to take over.

On the former, it is perhaps close enough to May 6th to elect a new leader (which won’t happen instantly) and announce a late April or early May election. On the latter, Hoon and Hewitt’s announcement means that the public image of party has already been shattered.

If the PLP now supports Brown, it will get the worst of both worlds: Brown as leader and the appearance of a party divided.

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Has Labour Sacrificed it’s “New Labour” Credentials with 50% Top Rate, Banker Super-Tax?

December 16th, 2009 by The Parallax Brief

Via UK Polling Report, the Parallax Brief recently read an article in the Independent by John Rentoul in which he argued that the pre-budget report, with its soaking of bankers though the 50% super-tax on bonuses, “has postponed the Labour Party’s return to electability until 2028” by completely sacrificing the economically conservative credentials the party worked so hard to build in opposition and in government.

This strikes the Parallax Brief as risible proposition.

Labour’s reputation for economic soundness was destroyed long before the pre-budget report. It was destroyed by the party’s fiscal incontinence before the crisis, and the onset of that crisis, not its response to it.

Government economic policy should be counter-cyclical, cooling the economy when bubbles may be forming, and saving money in the good times, but conversely taking on more debt in the bad times to compensate for a muted private sector, while mitigating slumps by injecting stimulus. When Labour should have been saving for a rainy day, it was splurging the cash like a government fighting total war, both adding flames to the boom and leaving the country bereft of a safety net. It has meant that Britain has had to rely on monetary policy to do all the heavy lifting during the crisis, something which is enough in normal recessions, but insufficient for the current crisis, where the economy was still plummeting when monetary policy reached the zero lower bound and could therefore help no more.

Britain needed fiscal stimulus, but it hardly got any, because we were already mortgaged to the hilt; Britain needed the public sector to take up some slack left by a ravaged private sector, but the public sector couldn’t, because it was already bloated to bursting point.

To argue in the face of that damning indictment that the Labour Party’s economic reputation was poleaxed by the decisions to raise the top rate of income tax and impose a one off super-tax on bankers bonuses, seems rather like arguing that George W Bush destroyed his foreign policy credentials by not bombing Iranian nuclear facilities.

But beyond this, one must ask the question whether the policy of asking the rich to bear a greater burden was even the wrong thing to do? Is it morally reprehensible? Is it a political blunder?

No, no, and no.

From a moral and economic perspective, the super-tax on bankers’ bonuses was the right move. First, the bonuses are not deserved. Banks have been able to make such large profits only because of government guarantees — explicit and implicit — on their liabilities, as well as government equity support and regulator monetary and financial support. It is preposterous to have large portions of this support siphoned off into private hands. It is wrong for the sector of the economy which caused the crisis to reward itself after the taxpayer picked up its bills while that very same taxpayer is suffering.

Second, in the same way that one can justify the swingeing taxes imposed on packets of cigarettes as de-incentivizing socially undesirable behaviour, so one can justify taxes on bankers bonuses. The gargantuan bonuses paid to bankers encourage short term risk taking that leads banks to take on far greater risk than should be the case. Furthermore, much of the trading and financial “innovation” is not socially useful, and paying people so handsomely deprives other, more useful sectors of the economy of sharp minds. Which maths whizz kid in his or her right mind would want to become an engineer earning GBP50,000 a year, when he or she could easily earn 250 times that in the City? In which occupation would that maths whizz better serve the country?

Equally, taxing those who earn more than GBP150,000 was likely less about ideology, and more about the government proving to the bond market that it had the ability to address the country’s deficit with unpopular measures. It was likely a sign of economic rigour more than it was an ideological policy.

Finally, the Parallax Brief isn’t really sure if the move is the kind of political blunder which, as Mr. Rentoul puts it, leaves “the centre ground abandoned to the enemy”.

The centre ground is the middle classes, not the super rich. And while the centre ground generally want lower taxes for hard working people (like themselves) and less spending on welfare (on people who aren’t like themselves), there’s nothing to suggest they wouldn’t support higher taxes on those they see as grossly overpaid (people who also aren’t like themselves).

Indeed, polls by YouGov and ComRes seem to support this hypothesis. ComRes shows that 66% support the notion that those with high incomes should pay more, and YouGov shows that a whopping 79% support the super-tax on bankers’ bonuses. When was the last time a government policy had support from 79% of the population? The first Iraq War, perhaps? The Falklands?

From a moral, economic and political point of view, Labour’s moves were the right thing to do. Indeed, after the crisis hit, Labour hasn’t performed so very badly.

But that doesn’t mean it shouldn’t be punished for its pernicious pre-crisis economic policies.

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Budget Proves Labour is Approaching Election with ‘Opposition’ Mindset

December 10th, 2009 by The Parallax Brief

While the papers see the main takeaways from Alistair Darling’s pre budget report (PBR) as being the super-tax levied on bankers’ bonuses and the fact the report “deferred the pain” of the tax hikes and public service cuts that will inevitably come, the Parallax Brief believes it revealed more about Labour’s mindset going into the election more than anything else.

To be sure, the super-/windfall-tax on bankers’ bonuses and the other adjustments to National Insurance are important (more on the former later today), but there really wasn’t much in the PBR that the talkingheads hadn’t already guessed. Far more interesting, in the Parallax Brief’s view, was what it lacked: namely, any real details on how the country’s GBP178 bln deficit will be cut. It is commonplace for opposition parties to focus on grand ideas, hubristic plans and attacks on government policy: absent of the the necessity to actually set policy to govern, it is far better to deprive the government of the day of as much ammunition as possible, and not having any real, concrete policies achieves this end pretty effectively.

But this is perhaps the first time the Parallax Brief can remember that a sitting government has done it, and this is suggestive of a party with the mentality of an opposition, rather than a government, and shows just how hard Labour is likely to fight at the next election.

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Why a Hung Parliament Might Savage the Economy

November 30th, 2009 by The Parallax Brief

Benedict Brogan, on his blog on the Telegraph’s website, today highlights a point that was lost when the political hacks and talkingheads released a week or so ago their flurry of opinion editorials about the potential consequences of a hung parliament.

“Morgan Stanley Research Europe has just put out a note assessing the UK’s future prospects, and its findings are a timely addition to the hung parliament debate…”UK becomes the first of the G10 to have a major fiscal crisis as elections lead to a hung parliament. The context is an ugly fiscal picture, relatively weak economic recovery, aggressive monetary stimulus and political uncertainty”"

The easiest way to think about this point is to consider the criteria for loaning money to someone. Whether or not you loan a person money, and the interest you want for doing so, is based on your view of that person’s likelihood of paying that money back. The more likely you think it is that they will be able to pay your money back, the less interest you would want to loan them money, because the risk of not getting back the money would be reduced.

The bond market is the same. When investors buy government bonds, they set the interest rate, or yield, the government pays on those bonds. This rate is essentially a function of what the investor thinks inflation will be (because as inflation increases the investor needs a higher interest rate on the bond to cover the portion of the investment eaten by that inflation), and his view on how able the government will be to pay that money back, known as “default risk” in the trade.

Right now, the UK has high — but not catastrophically high — debt that’s fast rising because tax receipts have fallen in the face of the crisis while obligations have remained the same, or, in some cases like social security, risen. One might imagine that this would push interest rates up. But as things stand, the interest rates on government bonds in the UK are still low. Some might argue this has something to do with the Bank of England’s quantitative easing program, and there are certainly several, complex reasons for this, but it’s essentially because the UK still has enough of what’s known as “fiscal credibility”: in layman’s terms, the bond market still believes that Britain can, one way or the other, pay back it’s debt.

Paying back all that debt, though, won’t be pleasant. It will involve either tax hikes or painful public spending cuts, and more than likely both at the same time. In short, it will involve actions which will be both unpopular with the electorate and difficult to pass through parliament.

If the Conservatives are elected with a thin majority, or even take control of a minority government, how easy will it be for them to ram through an unpopular budget? Will the right of their own party let them raise taxes? Will the other parties vote for the harsh spending cuts required to get the fiscal house in order?

The bond market will have to assume that Britain’s fiscal credibility had been reduced. Wouldn’t you if it was your money?

The consequences?

The morning after an election had produced a hung parliament, the yield on British bonds would immediately increase — possibly precariously. The pound would fall, likely passing 30-year lows against the Yen, Dollar, and Swiss Franc, as well as all time lows against the Euro. The cost of borring for private businesses would jump immediately. Raising equity for larger businesses would be more difficult, as fewer investors would want to hold assets in pounds. The cost of Government borrowing would also increase, making it more difficult to continue financing the deficit, and making fiscal help for the economy ever more difficult.

The best we could hope for is that any hope of rapid recovery would be nipped in the bud, and a long, turgid slog back — something like the economic stagnation in the late 70s and early 80s — would take its place.

The worst case scenario, albeit a not particularly likely one at this stage, would be an Iceland style monetary crisis in the absence of a quick (and implausibly magnanimous) commitment from all parties to take tough steps and vote for a cross-party budget. Indeed, the effect of this type of hung parliament scenario may well be a some kind of government of national unity to get through the Commons a budget that could stave off a fiscal crisis.

Of course, this isn’t so very likely, but it’s not inconceivable. And it is through this lens that one should view the Labour Party’s decision to increase the top rate of income tax to 50p in the pound. The Parallax Brief believes that this was not to soak the rich in a pique of partisan policy making, but an effort to show the bond market that Britain, and the Labour Party, had the iron will needed to push through unpopular and politically difficult policies to get the country’s fiscal house in order.

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Categories [ Economics and Finance, UK Politics ]

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Ralph Miliband’s David is the Wrong Figure

November 26th, 2009 by The Parallax Brief

Ben Brogan recently passed on via his Telegraph blog an interesting whisper about the Labour leadership. Mr. Brogan reported that he had hitherto assumed that Harriet Harmon was “streets ahead of her colleagues” in the race to become Labour leader after Gordon Brown retired, but a Cabinet Minister had told him that Ms Harmon, “realises that she cannot muster enough support among her colleagues, which is why she has publicly ruled out the leadership. We should, I am assured, take her at her word. By contrast, Mr Miliband has discovered a new appetite and is now hungry for it.”

The Parallax Brief believes this is correct. Turning down the role as EU High Commissioner can only mean that Mr. Miliband has decided finally to aim for the Labour leadership.

But David Miliband the leader would be a poor choice for the Labour Party, in the Parallax Brief’s view. A recent op-ed by Jenni Russell on the Guardian’s Comment is Free site  summed up the point neatly.

What the electorate desperately wants is politicians who can talk clearly about how we might deal with these issues. Miliband, though, is much happier with abstractions. It means that we have no idea what would follow from his beliefs.

There was a classic example of that in September when an interviewer asked what Miliband meant by his “deeply progressive” “empowerment agenda”. Miliband’s reply is worth quoting in full.

“You can’t stand for empowerment unless you are an egalitarian. That’s the platform we then use to stand up for a strategic role of government, but also stand for decentralisation. We stand up for social mobility, and we see public service reform as critical to that, and welfare reform. We stand up for the diversity of Britain, but we know it has to be founded on strong rights and responsibilities. And, very importantly, although there’s no point in pretending it’s popular, you have to stand up for internationalism, and you have to stand up for the need to share power in Europe, to be influential in the world. That’s basically my pitch.”

Speeches like these have no clarity, no conviction, and communicate nothing except a kind of arrogance in the speaker. That is Miliband’s principal problem. Not only is there no sign that he is thinking deeply about politics, but he isn’t a natural communicator. That, in our multimedia era, is a fatal flaw. We’re no longer just in an era of 24-hour news. We’re living in the era of the 60-second minute, where effective politicians must be comfortable with the instant responses, informality and unguardedness of tweeting, blogging, YouTube and Facebook. The public still want their leaders to have big ideas. But they will warm only to those politicians who are so at ease with what they are and what they think, and so interested in engagement with others, that there is no sense of a barrier between them and the people they are trying to reach.

Miliband is not of this model.

This strikes the Parallax Brief as dead right.

Not much to add to that, beyond saying that a good place for Labour to start, and one which is rarely considered, would be a look at some polls like the ones we often see in American primary races which show how various candidates would match up against the president. Rather than thinking about which leader would be most popular, or best for the party, think about who would match up best with David Cameron — not always the same thing.  Who would contrast with Mr. Cameron in a way that exposed his weaknesses, while being able to present with conviction a cogent, congruent, persuasive message to the public?

Not David, the Parallax Brief believes.

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New Poll Throws Cold Water on Labour Comeback

November 23rd, 2009 by The Parallax Brief

A new Angus Reid Strategies poll for the Political Betting blog has Labour losing ground to the Conservatives, dropping to a 17 point deficit, only one point ahead of the Liberal Democrat Party. The news will be like political bromide for the Labour Party and its supporters, who had responded ebulliently to a MORI poll on Sunday that suggested Labour could yet close the gap.

The Angus Reid poll has the Conservatives on 39, Labour on 22 and the Liberal Democrats on 21. Of particular interest is yet another high score for “Others”, which scored 18. Is the high scoring from parties outside the big three due to genuine disaffection; the perceived lack of difference between Cameron and New Labour? Or is it indicative of voters who have not yet made up their minds: will these voters switch to Conservative once the election draws of a potential Labour 4th term into sharper focus?

It will be difficult to answer these questions without further data, which is not yet available as the poll was released by Political Betting early; however, it’s something likely to impact on the final election result, because standard models of election forecasting do not necessarily factor in such variables, and 18 points is abnormally high.

Ultimately, though, this poll might be seen as slamming the breaks on the so-called Labour comeback. Of course, it’s a poll for a blog, rather than a MORI, ICM, or YouGov poll for a big paper or TV channel, so it may not get the publicity of other polls, but certainly this early release prevents Labour from having several days to bask in the glory of two consecutive polls showing gains, making it harder for the party to generate positive momentum.

The Parallax Brief feels justified in arguing this morning that it was far too early to start predicting a hung parliament based on the MORI poll. It could, of course, be argued that the mood would change again if another poll was released showing Labour gains; however, as things stand, it looks increasingly likely that the MORI and ICM polls simply reflected the positive publicity garnered by the Glasgow NE by-election victory.

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Mandelson Bids for Foreign Office?

November 23rd, 2009 by The Parallax Brief

The Times is running a story today that Peter Mandelson is “secretly pressing” Gordon Brown to hand him the job of Foreign Secretary.

The Sunday Times understands that the business secretary was promised the job if Miliband became the EU’s high representative. When Miliband again turned down the role last week, Mandelson launched an 11th-hour bid to secure the Brussels job for himself.

[...]

In a development known to just a handful of cabinet ministers, Mandelson is now pressing Brown to move him to the Foreign Office, pushing Miliband aside.

“Gordon promised Mandelson he would get the foreign secretary job if Miliband went to Brussels,” said the high level source. “That fell through. Now Mandelson is pressing Gordon very hard to make him foreign secretary anyway. He thinks it is his last chance to achieve a life-time ambition.”

Mandelson is said to believe that Brown can risk moving ministers because it is too late for a coup against him. Brown is willing in principle, but he would have to find a suitably senior role for Miliband. One option could be a direct job swap, effectively making Miliband deputy prime minister.

[...]

However, such a limited reshuffle risks bitterly disappointing Balls, Brown’s most loyal lieutenant, who still has his sights on becoming chancellor. The No 10 source said: “Gordon told Ed that if David went to Brussels and a re-shuffle followed, he would try to make him chancellor. Ed is still hoping for the job.”

Follow that? Peter wants the Foreign office, Ed wants the Treasury, and David wants to keep the foreign office or at least take a similarly senior role. If Peter gets what he wants, then either Ed or David are going to be disappointed. But not giving Peter what he wants risks upsetting the most powerful person in the Cabinet, as well as destroying Ed’s dreams of getting the Treasury.

Gordon can’t fit three pegs into two holes.

Whatever the machinations, the Spectator notes that the leak is a “presentational nightmare” for Labour.

“But, true or no’, it still feeds into the idea that the government is divided and self-obsessed.”

The Parallax Brief believes that salient to understanding this story is to to know from whence the leak sprung.  Was the story planted to make Lord Mandelson appear to be avariciously pursuing his own ends at the expense of the government? The story would seem, if true, to tarnish his reputation for having come back into the Parliamentary fold as a kind of prodigal son and saviour. Or was the leak designed to quash a reshuffle in the making — perhaps even to relieve pressure on the Prime Minister to make the decision? Certainly, it seems unlikely that the Business Secretary could take the Foreign Office now the story has emerged.

Or perhaps the leak served both purposes?

The Times in the article quotes a “high level source”, and given that it also claims that “Neither Miliband nor Alistair Darling, the chancellor, is thought to know of the discussion,” it seems that it came from on high indeed.

For his part, Lord Mandelson has today moved to end “tensions” within the government.

However, curious minds will want to know more.

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