Labour needs saving from itself – and Cameron is the man to do it

With Jeremy Corbyn and the loony Left on the rise, the party is teetering on the edge of oblivion

It’s looking to be a wonderful summer for Conservatives with a taste for Schadenfreude. First, the Tories unexpectedly win a majority and the Liberal Democrats collapse. Next, a fresh eurozone crisis opens a world of possibilities for David Cameron when he comes to renegotiate Britain’s EU membership. And now, Labour seems to have turned suicidal. The latest news from its leadership contest is that Jeremy Corbyn, originally assumed to be a joke candidate, is leading internal opinion polls. To the Tories, it really is beginning to look a lot like Christmas.

While Corbyn’s victory remains unlikely, the unlikely tends to happen rather a lot in politics. When Keith Joseph pulled out of the Tory leadership race in 1975, and his disgruntled campaign manager stood in his place, no one took her seriously. Margaret Thatcher, wrote the

Economist at the time, is “the sort of candidate who should be allowed to stand, and lose harmlessly… giving her party the cathartic feeling of choice.”

This is precisely what Labour thought of Mr Corbyn a few weeks ago. He represents its loony-Left tradition; he refers to Hizbollah as “friends”. When he first entered the race, bookmakers had him at 100 to 1. Now, it’s 5 to 1 – and narrowing.

Even to have Corbyn as a serious contender inflicts huge damage on Labour, and this lack-of-talent contest will run until September. The favourite, Andy Burnham, is doing nothing to shake his reputation of being Ed Miliband with a northern accent. Yvette Cooper seems to be the continuity Gordon Brown candidate. Liz Kendall talks the most sense, but is denounced as a Blairite – which is, strikingly, the ultimate insult. It is as if Labour loathes the very memory of its landslide victories and wishes to be left alone in the Siberia of defeat.

Even its innovations seem to backfire. In an attempt to copy the SNP membership surge, Labour is now letting anyone sign up for £3 – a price which includes the right to vote. I know of one Tory donor who claims to have taken out five memberships of the Labour Party, under different names, so as to vote for Corbyn five times. Yet for all that the Tories like to joke about all this, the more reflective ones recognise the danger. Labour hasn’t won a majority without Tony Blair since 1966; it could be out of action for some time. This would not just be bad for democracy, but bad for the Tories too.

In his 10 years as party leader, David Cameron has demonstrated that he is at his best when his feet are being held to the fire. When they’re not, his attention can drift; at times he seems to alternate between complacency and panic. So if the Tories want the best from their Prime Minister, they need a strong opposition to put the fear of God into him. And in George Osborne, they have a magpie Chancellor who likes to confound opponents by stealing their policies. So it’s important that he has good ones to steal.

Most of what is best about the Tory agenda today – school reform, NHS liberalisation – started off as Labour policy. Even welfare reform began in a New Labour policy laboratory; its architect, Lord Freud, was poached by the Tories and asked to complete his work. Similarly, when Labour policy started to go downhill (high speed rail, sharp minimum wage increases) these ideas also ended up as Tory policy. So Conservatives should be careful what they wish for; if Corbyn wins the Labour leadership, many of his ideas may end up in the 2020 Tory manifesto.

The great curse of the British Conservatives is remembering the Eighties too clearly. Then, Labour’s implosion allowed Nigel Lawson to go galloping off to the Right – shredding regulations and cutting the top rate of tax to 40p. But Cameron is a different kind of political animal. He has complete power, now, to do anything he likes, but he has been using it to attack Labour from the Left on the minimum wage. This week, he has pledged to keep the top rate of tax at 47p (including employees’ National Insurance), far higher than at any time under Labour. He sees his opponents’ misery as a chance to grab vast tracts of political terrain and erect a Tory Big Tent to accommodate disillusioned Labour voters.

So if Labour does fall apart, the result may not be a flowering of Tory radicalism. Cameron may instead make ever-more-dramatic overtures to Labour voters. He is, by instinct, a bridge-builder and deal-maker. Last week’s Budget assuaged the Right with higher defence spending and corporation tax cuts, but the centrepiece was a big, open and comprehensive offer to the Left in the form of a £9 Living Wage. All this stealing of policies (even bad ones) may mean longer Tory government. But it’s unlikely to mean better Tory government.

So here’s the paradox: better Toryism needs a strong Labour Party – and the trade union reforms now going through Parliament may be just the tonic. About 20 years ago, when Blair had increased party membership by a third, he was mulling a total break with unions. He had the momentum and, in membership fees, the money. The unions always made clear they were buying policy and he was, as he later put it, “determined to free us from that dependence.” He failed.

It may take Sajid Javid, the Business Secretary, to finish what Blair started. His Trade Union Bill proposes protecting union members by ensuring they are asked for permission before their money is funnelled off to Labour. The GMB union, for one, thinks so many will object that Labour will be “bankrupted”. That’s not how Blair saw it. He envisaged Labour turning away from the unions and towards the public, coming up with ideas that people thought worth paying to support through membership. Rejuvenation, through mass appeal.

The unions still provide most of the money that Labour spends, so they still call the shots. Unite and the GMB, two of the biggest unions, have both declared themselves for Jeremy Corbyn – a move more destructive than anything that David Cameron could come up with. It’s strange to say it, but if the Prime Minister does end union interference then he could be the one who saves the Labour Party. And at the moment, it’s far from clear that anyone else will.