Talking to Labour insiders, ambitious young PAds, think-tankers and old hands alike, the candid admission is that they are stuck with Ed Miliband because as with Gordon Brown, there is no-one else. Ed gets a regular mauling at PMQs despite a terrible economy, still looks and sounds like the kid who does the photocopying, has failed to impress the British public and is unable at this stage of the electoral cycle to push further ahead in the polls. His shadow chancellor can never win the argument, because the argument he makes is that the British public is wrong and because it is Ed Balls who is making the argument. Dislodging Ed Balls would risk fraticidal conflict and not getting him off the television screens will guarantee Labour won’t be given a hearing on the economy.

The Labour Party’s centrists and the realist operators who just want power have written off the 2015 electoral prospects of the Labour party under the two Eds. So it is against this backdrop that we should look at two new publications that have just come out. Labour’s Business written by Luke Bozier and Alex Smith argues that the party should be pro-business, it even has one brilliantly simple business-friendly idea that the government should steal immediately – small businesses should have one person as their point of contact at the HMRC. One person who is responsible for dealing with issues arising from the complexity of the myriad of taxes – VAT, NI, capital gains, corporation taxes and the like – burdening small businesses.

“In the Black Labour: Why fiscal conservatism and social justice go hand-in-hand” is a new Policy Network discussion paper in which the authors; Graeme Cooke, Adam Lent, Anthony Painter and Hopi Sen, call for Labour to embrace fiscal conservatism. Policy Network is backed by Peter Mandelson, so is not exactly a fringe ginger group. The paper can be seen as a direct rebuttal of the kamikaze economics of Ed Balls endorsed by Ed Miliband, which poll after poll shows is not seen as credible by the public. Despite the state the economy is in George Osborne is believed and supported by the British public.

The policy details in the two papers won’t worry their Coalition opponents, they will however be seen as part of a slow move back towards the electorally potent reality-based politics of New Labour, rather than the one-more-heave-to-the-left politics of Ed Miliband. Ed Miliband and those around him believe the electorate is moving towards the positions of the Occupy and UK Uncut activist groups, a strategic error that will guarantee them electoral defeat in 2015. If Labour’s reality-based wonks want to be in government before they are old men, they have got to either get rid of the Eds or convince them to tack to the centre. These are the opening salvos…

Given that this was meant to be Ed Miliband’s big relaunch day, back from nappy leave and hitting the ground running etc, he has been amazingly quiet. Invisible even.

After a “no huskies“ interview with The Guardian this morning there has been radio silence ever since and the lunchtime top of the hour news bulletins have barely even given him a nod. Admittedly the Irish bailout news is dominating, but it’s not as if Red Ed has even managed to secure the second headline slot - that’s gone to the high-heeled Grant Shapps and his council housing reforms.

Apparently Ed is addressing the PLP tonight with his plans for reforming the Labour Party, particularly with how to stop his own farcical technical victory from happening again. Given the slaughtering that Harman got at the last meeting after the sacking of Woolas, (that was coincidently followed up nicely with some interesting facts about her appearing in the press,) it can’t get any worse for the struggling leader. However Guido has to wonder what the point of doing the interview this morning was then? Why not wait until after the meeting (which traditionally happens on a Monday) to go all guns blazing into the press? Is Miliband set to go down the Gordon path of relaunch after tired relaunch?  Another stunning success for Miliband’s Press Manager Calamity Kenny…

It’s worth nothing that it was twenty years ago today that the Tories knifed Maggie. If Gordon had been a Tory leader he would have been out the door by Christmas after the election-that-never-happened. If Ed is really going to significantly modernise the Labour Party he better be careful to keep the rules that make it much harder to oust a Labour leader than a Tory or LibDem. Guido’s always happy to dispense helpful advice…

Paul Mason writes…

“…expect civil war between the Brown “machine” and all those hitherto excluded from it, from the moment the PM leaves office.”

The Speccie’s Fraser Nelson says the deal is on it just has to be sold to the Tory parliamentary party, half of whom are freshly minted, and the rank and file.

A deal looks likely to be agreed by Clegg and Cameron tomorrow morning, put to backbench MPs in the afternoon and then Brown will advise the Queen to send for Cameron on Tuesday.

Newsnight’s Paul Mason, who is as plugged into the Labour Party as Fraser is to the Conservatives, says the lights are going out and many want to “go gracefully into opposition and do it soon”. On the leadership issue

if the David Miliband camp and the Jon Cruddas camp were to get together it would make David Miliband hard to stop… This is being mooted but is not a done deal. Since Harriet Harman has ruled herself out of seeking the leadership [Has she really? Guido] I can see Ed Miliband emerging as a candidate backed by parts of the union movement (eg the GMB) who don’t want an alliance with David Miliband. Ed Balls would be backed to the hilt by the existing party machine, Unite and to an extent the “old Labour” left; also the Scottish Party.

The Labour NEC meets on Tuesday and Labour officials are in a rolling meeting schedule until then to decide how to respond if the party goes into opposition. One told me to expect civil war between the Brown “machine” and all those hitherto excluded from it, from the moment the PM leaves office.

Labour is heading for irrelevance…

For many years Gary Elsby was a regular contributor to the comments on this blog, much to the amusement of fellow co-conspirators. So it is without hesitation that Guido endorses his campaign “to do battle” and “carry the torch of socialism.”

The former Stoke Labour Party constituency secretary is standing as an independent, this is a bit of collateral damage in advance of the full-scale civil war that will come following a Labour defeat. Mandelson is trying to hold the line against the Whelan-Balls-Brown axis which is putting its placemen into upcoming seats using UNITE’s muscle with Tom Watson enforcing the faction’s advantage wherever he can. Mandelson in private sees the battle for Labour’s soul as his primary mission having calculated that Labour is likely to face at least one, if not two terms out of office.

The exit of so many Blairites has been a tawdry money-grubbing affair which has strengthened the Brownite / UNITE hand with ordinary disgusted Labour Party activists.  Mandelson has weakened his hand by misjudging matters and insisting that a “toff” like Tristram should be a standard bearer for his faction.

All in all, Stoke promises to be a foretaste of the chaos that will engulf the Labour Party following election day…

A Blairite source tells Guido that Ed Balls is already telling Labour colleagues that the blame for a potential Labour defeat lies with the Blairites for (a) rocking the boat with repeated attempted coups (b) getting caught money grubbing. Coincidentally he is expected to be Charlie Whelan’s chosen candidate against Blair’s protege Miliband. Nothing like getting your attack in first…

Guido has been sniffing around and now has positive confirmation that the game is really on.  Jack Straw’s claim yesterday that Gordon was secure in his job and would not be “ousted” shows that it is very much on the agenda.  If UKIP were to beat Labour, Nigel Farage is right, Brown would have to go.  No amount of spin that “all mainstream politics is disgraced” would save Gordon, that would only make sense if the Tories were beaten by UKIP as well.  Just as the end of David Owen’s SDP was signaled by them losing to the Monster Raving Loony Party, UKIP beating Gordon would confirm his demise.

This prospect is viewed with absolute horror by CCHQ.  If Tory staffers could save Gordon by voting Labour on June 4, they would.

The scenario put to Guido goes like this; Thursday June 4 is Labour’s worst nightmare, Labour’s local council low-point goes even lower.  Either the LibDems or UKIP beat Labour on the percentage share of the vote in the Euro vote.  The Sunday press is of course totally hostile to Brown with Labour MPs clamoring openly for him to stand down.  If Sarah Brown can’t or won’t save him from humiliating himself that weekend, he will on the Monday night ( June 8 ) have to face the PLP disarmed of McBride and unable any longer to put the press frighteners on critics as much as in the past.  Watch out for a recent former cabinet member making the Geoffrey Howe speech.  Not Clarke or Byers, it will have to be someone without previous, who has served in Brown’s cabinet, someone like Peter Hain or Ruth Kelly.  For the good of the party and the good of the nation he will be implored to go.  If the mood of the room goes against him, he will fall shortly after, much as the Speaker went.

Guido’s source cautions that we have been here before and Brown has a knack of hanging on by his bitten down fingernails.  Chickens are not being counted.  Campaign teams are however being assembled in readiness with the weekend of June 12/13 pencilled in for them to break cover.  Miliband’s SpAd Sarah Schaefer has sounded out a team ready to go within weeks, Alan Johnson’s unsuccessful deputy leadership campaign team is also clearing the decks.  The game is very much on…

Labour MPs are in complete disarray and the Tories in the form of Alan Duncan reckon the Prime Mentalist is “treading rapidly into realms of complete and utter lunacy”.

The thing is, Labour politicians seem to agree:

• Mandelson conceded: “It is indeed turning into a bit of a week. It never rains but it pours, it seems.”
• David Blunkett admitted “We are on a treadmill and we have got to get off”.
• Tony Wright, the level headed chair of the Public Administration Committee says: “It is rather a large under-statement to say that we are in a bit of a mess.”
• Gordon Prentice said Gordon’s loony tunes YouTube video “was just too horrible to watch.”
• Tom Harris warns: “‘Governments fall apart when discipline fails.”
• Bob Marshall-Andrews judges matters thus “He’s had it. He’s finished. The Prime Minister is complete blown chaff… All my colleagues think so too. For the first time in my life I’ve seen them united. They are united in despair.”
• Blunkett wants Labour to “avoid self-inflicted wounds”.

Meanwhile rumours circulate that Charles Clarke is ready to inflict some wounds by standing as a stalking horse candidate.  A summer of fun awaits…

James Purnell won’t thank Guido for wishing this out loud, but when the civil war starts in the Labour Party after the general election, may Purnell be on the winning side.  If he wins a not forgotten Thatcherite aspiration will be realised – we will no longer have a socialist opposition party.

He gave a speech in Chile yesterday setting out how he thinks capitalism should be saved, how it can be more egalitarian and predicting that the next decade will be capitalist.  He also wants less power for the state and politicians -  which all sounds very much like a Thatcherite agenda for popular capitalism.

The coded bit of the speech that struck Guido was this:

People are worried about the extraordinary instability that was bubbling below the long boom of the last two decades.  We can’t promise to end instability.

Who presided over that bubble? Who promised to end the instability of boom and bust? Do you think Gordon Brown will be happy with the speech?

Dear Colleague

In discussion with other colleagues I am aware that some PPS’s share my concerns regarding the proposal to bring a private partner into Royal Mail.

In line with meetings that we had with Alistair on the 10p tax changes, I am hoping to get a meeting with Lord Mandelson and Pat MacFadden and worried PPS’s. I hope that we can find a way forward that is acceptable to all parts of our party and in line with our manifesto commitment.

If you are interested in attending such a meeting can you let me know as soon as possible? My telephone number is 0790 xxxxxx and my email address is xxxxxxxxxxxx@parliament.uk.

Yours sincerely

Dave Anderson MP

Clearly the meeting didn’t go brilliantly…