Ed Miliband: a good time to play Bad Santa

An old work colleague of mine once sent an email round to the rest of the senior management at the research institution I was working for at the time with the heading: "expenses policy: Bad Santa". Although the content of the email was, by its nature, rather dull - some minor restrictions on hotel expenses that employees could claim - the title was inspired.

By the same token, I think Ed Miliband could do with delivering a couple of nasty Xmas presents to disloyal colleagues with the mince pies and mistletoe this year.

The problem for Ed is that there is a Blairite faction inside the Cabinet who are clearly never going to accept him as leader. The principal culprit seems to be Alan Johnson - and I'm surprised and saddened by this as I'd always seen Alan more as a skilled pragmatist than a Blairite ideologue. But The ever-reliable Mehdi Hasan nails the Alan problem down brilliantly in his New Statesman blog: Johnson has openly disagreed on two central planks of Ed's policy platform - the graduate tax and the 50p top tax rate.

Now, on the graduate tax, I have some sympathy with Alan. I think a graduate tax is certainly implementable; the simplest way of doing it would be to have a flag on employer PAYE returns and a box on individual tax returns for whether someone is a graduate or not, and change their tax code accordingly. No conceptual problem with that. But given that we already have a progressive income tax system, is it really worth the bother? Given the graduate earnings premium, high-paying graduates are already paying back more than most other people over a lifetime anyway. I'd be inclined to have the simplest possible system - tax-based graduate finance with means-tested grants and HE free at the point of use. So I think Alan's criticisms of the graduate tax have a certain validity; but nonetheless, using every opportunity in interviews to attack Ed on this issue, rather than attacking the Torycrats (my new name for the Coalition) for the fact they are wrecking the country in short order, is just plain stupid. (I almost wrote 'palin stupid' there - an easy slip to make...)

Alan should be hitting the Tories on economic policy and saving disagreements with Ed for behind closed doors, not trying to undermine him at every turn. Alan's stance on the 50% top income tax rate is even worse. This is one of the most popular Labour policies of all time, and indeed there is strong support for a 60% top band. So why the hell ditch a popular policy just to attempt to appeal to a gang of super-rich who would never vote Labour anyway? Just totally insane.

As Mehdi Hasan points out, the case for putting Johnson in the Shadow Chancellor job and not Ed Balls was that Johnson would be loyal whereas Balls wouldn't be. But in fact Johnson has been about as disloyal as anyone could in the job, short of mounting his own leadership challenge. Once you discount the loyalty argument, the case for having Alan in this particular job looks a lot weaker. He is articulate and popular, but by his own admission, doesn't know much economics, and maybe something like Shadow Foreign Secretary would be a better fit for his talents. Or, if Ed is feeling particularly vicious, the shadow Northern Ireland portfolio.

So I think Ed needs to deliver a particularly nasty Xmas present to Alan Johnson this year. At the very least a warning to toe the line or he'll be out of the job. At most, a reshuffle of the shadow cabinet, moving someone else to Shadow Chancellor. I'd actually be more inclined to go with the latter as it sends out a clear message to Blairite insurgents: this leader is not A Soft Touch, and if you step out of line, that Northern Ireland portfolio is waiting for you. Without making a clear stand like this there's a real danger that the Ed regime starts to look like Michael Foot circa 1982. Or even IDS's Tories circa 2002.

Ed Balls or Yvette Cooper would be the obvious choices - both of them are chomping at the bit to destroy Osborne. If that really is a no-no (and it does seem to be, at least for the moment), then as an alternative, allow me to propose Andy Burnham for Shadow Chancellor. He has been 100% on the money in his critique of Micky Gove's education "reforms" - admittedly the crapness of Gove makes that like shooting fish in a barrel, but nonetheless it's true. Burnham made some good arguments on areas like Land Value Tax in the leadership campaign and it would be great to give him an opportunity to flesh those out. So one could say that the campaign for Andy Burnham for Shadow Chancellor starts here.