When Labour last had a leadership contest, I successfully predicted Jeremy Corbyn at 24-1 for various reasons. One particularly stood out. The three ‘establishment’ candidates were terrible.
In the weeks leading up to Corbyn’s surprise entry, online campaigns were launched to find a better candidate – Lisa Nandy and Keir Starmer for example. Neither took the bait and Corbyn filled the vacuum.
Corbyn only got on the ballot paper after a Twitterstorm from members and supporters, demanding a wider range of views at a time when the party was locked in introspection following the disastrous General Election. In lending him some nominations, mainstream MPs terribly misjudged the mood of the grassroots.
Immediately, a challenge on core Labour values presented itself, with George Osborne timing his welfare cuts bill to maximum, divisive effect. When the three mainstream candidates abstained, it seemed to legitimise a frequent charge that MPs had lost touch with basic Labour aims and values, and were more concerned with positioning than principle. From that moment on, Corbyn was dominant.
One might think Corbyn’s numerous opponents would have learnt something but, on the basis of this leadership contest, that isn’t the case. With all due respect to Owen Smith and Angela Eagle, who on earth decided they were the best alternatives?
As explained recently, there is potential for the Labour rebels to beat Corbyn, given the changed circumstances and narrative from last summer. Right now, I suspect the Labour electorate is more or less split 50/50 so there is plenty to play for. Hustings, TV interviews and debates will be pivotal in determining the narrative and therefore the result.
However it looks like Labour MPs are making all the same mistakes. It appears that they are going to overwhelmingly nominate Smith, despite him being unscrutinised and never mentioned by anyone as a future leader until a few days ago.
As with Corbyn’s 2015 rivals, issues could be his undoing. Though Smith is defining himself as a left-winger, who loyally served under Corbyn, his profile tells a different story.
Back in 2006 when losing a by-election, Smith defended the Iraq war. He used to work as a lobbyist for private health firm Pfizer and advocated using the private sector in the NHS. He is a member of the Progress think-tank – regarded as the enemy by unions and the Left. Smith also abstained on welfare cuts.
It is a stone-cold certainty that these historic positions will be thrown at him during the contest by opponents and the media. Fairly or not, he will be labelled a ‘Blairite’ – a toxic term amongst Labourites that resulted in Liz Kendall (arguably a better candidate) getting just 4% last year.
In the next few days, those divisions will rise to the fore, regardless of the leadership contest. MPs are due to vote on renewing the Trident nuclear deterrant, and Smith will be one of the rebels voting against Corbyn, alongside the Tory government. He even said today that he’d be prepared to fire a nuclear weapon if necessary.
As Kendall learnt, that may be a good line for winning centre-ground voters and The Sun newspaper, but is exactly the kind of hawkish rhetoric that Labour members have ditched for the past six years. When asked in February, 68% of Labour members were against renewing Trident. The Chilcot Report into Iraq has likely strengthened anti-war sentiment.
Then there is Smith’s big new position – to campaign for a second EU referendum. In two or three years, that could look like smart politics but right now it looks opportunistic and anti-democratic. Given the MPs’ disregard for Corbyn’s huge mandate, one can almost hear Andrew Neil’s line of questioning – “What exactly is it you hate about democracy?”
Therein lies the problem. Smith is unknown and undefined. In some cases that can be an asset when a party is in the mood for change – see David Cameron’s leadership campaign in 2005. Here though, it is more likely to increase focus on all his negatives and Smith will be unable to produce a record to defend himself.
The rebels will have been buoyed by more terrible poll news for Corbyn in head-to-heads with Theresa May, proving their central argument that he is unelectable. But what happens to that argument when, in a few weeks, polls show Smith and/or Eagle faring no better or even worse? That is precisely what happened in last year’s contest.
The job of reclaiming the party is huge and requires a big beast to spearhead it. Yet, in keeping with previous contests, they just aren’t interested.
Alan Johnson would be perfect, just as he would have been a superior pick to Ed Miliband and Gordon Brown, only to sit on his hands. Chuka Umunna has shown no interest since withdrawing from last year’s contest – one he may well have won if prepared to face down press intrusion. It is bizarre that Tom Watson ceded responsibility to Angela Eagle – whom he thrashed in the deputy race.
Whilst I remain open-minded and loathe to have a big bet on the contest, as I’m awaiting for clarifications of rules and runners, my instinct is increasingly that Corbyn will win or should at least start at shorter odds than 1.92. Hence this morning’s advice on Twitter.
New #Labourleadership bet: 30 units Jeremy Corbyn @ 1.9. Piece to follow immediately.
— Political Gambler (@paulmotty) July 18, 2016
In addition to the imminent contest, I’m having a few big-priced plays on the Next Labour Leader market. If Corbyn remains leader, these bets still stand and presumably the question won’t come up for a couple of years at least. During that time, new faces will rise.
The trio that interest me are Lisa Nandy, Stephen Kinnock and Clive Lewis. The case for the first pair was laid out earlier, and Lewis has since entered my calculations.
The new Shadow Defence Secretary, who served in Afghanistan, would be perfectly poised to succeed Corbyn if the Left does inherit the party. He’s articulate, thoughtful and will become a regular face on TV now he’s in the Shadow Cabinet.
If Corbyn wins, Lewis could be a bridge to mainstream MPs and end up being a unity candidate. On first impressions, he seems infinitely more electable than Corbyn or John McDonnell!
Unfortunately there is only limited liquidity on this market, so I can’t really offer specific trading advice. I’ve been taking around 26.0 for Lewis and 70.0 for Nandy and Kinnock.
Recommended bets
30 units Jeremy Corbyn to win Labour Leadership Contest @ 1.92
Back Lisa Nandy for Next Labour Leader at around 70
Back Stephen Kinnock for Next Labour Leader at around 70
Back Clive Lewis for Next Labour Leader at around 26