Miliband's challenge will be persuading people that government can make a difference without simply throwing money at things.
Miliband’s challenge will be persuading people that government can make a difference without throwing money at things
In a speech in London today organised by the Policy Network, Ed Miliband will resurrect the theme of ‘one nation’ and talk about ‘inclusive prosperity’.
Lord Mandelson recently criticised Miliband for lacking a “convincing and vivid narrative”, and the emphasis on themes today (as opposed to specific policy giveaways) should be seen in this context: it’s an attempt to foster a bigger ‘narrative’ for Labour as the umbrella over its many policy offerings.
Beneath the buzzwords, Miliband will argue that only Labour can ensure the proceeds of growth are shared by all. A Labour government would not do this by big spending, however, but through major reforms:
“…reform of the way governments work and reform of the way markets work. It is the way people will succeed. It is the way business will succeed. It is the way Britain succeeds,” Miliband will say.
There will, though, be some policy detail in the speech, including pledges to:
- establish an independent National Infrastructure Commission to tackle economic short-termism and encourage long-term investment;
- create a skilled workforce with ‘gold standard’ vocational training and a welfare system that encourages young people to seek training rather than sign on for benefits;
- the devolution of £30 billion worth of government funding to ensure that good private sector jobs are available in every part of the country.
Miliband will also talk about the need for reform in Europe as well as his desire to reform the finance and energy markets so they “work for business and for Britain”.
It’s a fairly wide-ranging speech, but underlying it is a commitment to shared prosperity. In other words, growth alone isn’t enough, and the government must play an active role in ensuring that when the British economy is growing everyone sees the benefit. Britain needs a growing economy, but a growing economy is not sufficient if the proceeds of growth are reaching only those at the top.
Basic social democratic stuff, but after 30 years of a certain consensus ideas like these can seem rather revolutionary.
Many will undoubtedly view today’s speech as a break with the emphasis on the ‘cost of living crisis’ that has been a regular theme in recent years. In reality it’s more of an update on the theme rather than a complete change of tack.
It’s become fashionable among the London commentariat to disparage Labour’s ‘cost of living crisis’ simply because the economy is growing again. Yet across the country wages still aren’t keeping up with inflation and most people are considerably poorer than they were just a few years ago. The bankers in the City and their friends in the media may not have noticed (the share of post-tax income captured by the richest 1 per cent leapt from 8.2 per cent to 9.8 per cent in 2013/14) but most people aren’t seeing the proceeds of growth in their own lives.
Miliband’s emphasis on ‘shared prosperity’ recognises this but also acknowledges that the mood in the country has moved on and people are today more optimistic about the economy than they were 12 months ago: shared prosperity is a better fit than talk of a ‘crisis’.
Miliband’s biggest challenge will therefore be persuading people that, in 2014, government can still make a real difference. Labour pledges such as the energy price freeze may be ‘off the scale’ in terms of their popularity, but in an age of globalisation people are increasingly sceptical about the power of government. They may want the government to act but they’re no longer confident that it really can make a difference.
Ultimately this isn’t just a challenge for Ed Miliband, but for the social democratic left across the developed world.
The Third Way politics of Tony Blair and Bill Clinton was a response to the failures of the post-war model but also to the discrediting of economic ideas like central planning. Miliband’s task, and it is a big one, is to help to forge a post-crash model of social democracy – a model which eschews the statist dogma of the past but which also recognises the limits of the Blair/Clinton model.
As we’ve learnt to our cost, it’s not possible to let the City run riot in the hope that some of the wealth trickles down. Doing so simply stores up trouble for the future. Inequality does matter, and being ‘intensely relaxed’ about the filthy rich isn’t an option when they’re hovering up property in London and illicitly sending vast amount of money offshore.
Miliband will say today that:
“Unless we change the way we do things, we simply won’t create the high paying, high skilled jobs needed to improve the condition of our country and the rewards of growth will be unfairly shared.”
The big question is whether the Labour leader can persuade people that government can help without simply throwing money at things. The old is dying but the new is struggling to be born, as an old scribbler once said.
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