As a credible electoral force, let alone as a government-in-waiting, the party is over. The leadership election was never a battle between Corbyn’s hard-left and the party’s more moderate wing: Owen Smith’s policies are to the left of Ed Miliband, after all. Instead, many Labour MPs saw it as a contest between incompetence and competence, unelectable and electable.
With the debate now settled (incompetence and unelectable having won the day) Smith limps off to consider his future while Corbyn & Co return to the stage emboldened. Backed by a radical membership base and supported by a loyal phalanx of self-confessed Marxists and socialists, Corbyn told reporters that he has no intention of changing either his politics or his style of leadership.
His shadow chancellor, John McDonnell, is now more powerful than ever before. Affable enough in public, the mask slips just often enough to understand why so many moderate Labour MPs fear the old bruiser. His grip on party politics will tighten, as it will when it comes to policy. One senior cabinet minister says “Corbyn is economically illiterate so we don’t have to worry about him, but McDonnell knows what he’s doing and we must be ready to challenge him.”
His stump speeches talk of public investment, higher pay and that mythical unicorn of all left-wing politicians, green jobs. But in his heart, he wants to attack and pull apart the financial system as we know it. In 2008, talking about the financial crisis, he gleefully told a room “I’ve been waiting for this for a generation.”
They may not pose an imminent electoral threat, but Corbyn and McDonnell will now devote themselves afresh to the task of (in the latter’s own words) “overthrowing capitalism.” Many in the City will choose to ignore this throw-back rhetoric, but with Corbyn’s victory we can be sure that McDonnell will give it all he’s got.