Why growth alone is no longer enough – Ed Miliband sets out ‘inclusive prosperity’

Miliband's challenge will be persuading people that government can make a difference without simply throwing money at things.

Ed Miliband 1 ncrj

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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18 Responses to “Why growth alone is no longer enough – Ed Miliband sets out ‘inclusive prosperity’”

  1. Jason Buck

    GDP should never be a measure of a countries success, it is too easily inflated by factors that do not contribute to the well being of citizens.

  2. longtimedead

    Same old same old,Nothing will actually change until legislation occurs which WILL allow specific financial injection which is created not as debt. Think QE – but instead of it being owed to the 9% upper echelon of the already very rich thankyou. Specific targeting of created money instead of waiting for the so called slow, oh so very slow trickle down to the other 91% of the population. Please visit http://positivemoney.org and start campaigning for charge before our politicians serve up the biggest economic collapse ever seen.

  3. Kryten2k35

    But, throwing money at things is the way to solve the recession. It’s just that the current government is throwing it at the upper echelons of society, rather than the poorest.

    I said it in another article here: poor people do not save money. Rich people do. Trickle down economics is flawed fundamentally, because rich people amass wealth and save their money. They’re the worst people to be giving money to, because they don’t spend it. They’re not wealth creators, they’re hoarders.

  4. Cole

    There’s also the small problem of the environment and climate change. Endless growth, even if the proceeds are spread around reasonably fairly, is hardly a solid basis for future policy.

  5. littleoddsandpieces

    The Labour held council of Stoke-on-Trent has starving children.

    My blogs show that all could be fed, of all ages, going hungry in the UK today:
    http://theswansnewparty.blogspot.co.uk/p/my-pages-on-hunger-in-uk-index-to-blogs.html

    Could Mr Miliband, please, assist Stoke’s Council Leader to put breakfast clubs in all his schools to prevent any kids having to bin-dip for food that is happening in the Fenton town of Stoke-on-Trent (made up of several towns). And who knows where else in the Stoke-on-Trent area?

    There is a food bank in Fenton, but if you are hungry one day, you are hungry every day, and food banks are not free cafes open every day as is done by councils throughout the EU for the working poor and poor pensioners in the main, and the minority (yet still substantial) unemployed and homeless.

    Stoke Sentinel:

    Hollings Street

    and

    Brocksford Street

    area of Fenton

    LInk to Stoke Sentinel newspaper article:
    http://www.stokesentinel.co.uk/Help-starving-kids/story-21314618-detail/story.html

    Reblogged from Vox Political.

  6. GO

    “throwing money at things is the way to solve the recession”

    This was a reasonable argument to be making *during* the recession (2008-2009), immediately after the recession when the recovery was still fragile (2010), and during the subsequent years of stagnation (2011-2012). But we now have a strong and sustained, albeit a belated, recovery. We can’t go into the 2015 election rehashing Keynesian arguments about how to tackle a recession that ended in 2009, or a period of stagnation that ended in 2012.

  7. Leon Wolfeson

    We have falling wages, massively rising house prices, poverty is rising like a rocket still.

    We’re going down rapidly. A massive, massive program of investment is a bare minimum this country needs to halt the slide, before things get even worse.

  8. Leon Wolfeson

    That’s been the Tory argument.

  9. Leon Wolfeson

    The reality of that is what we see – the poor lose out to the rich. Keep saying that we need to plan for a return to the third world. Productivity in many sectors has increased thanks to computers. Robotics will raise it again in others..,the only way your plan “works” is to end science, too.

  10. Leon Wolfeson

    “shared prosperity is a better fit than talk of a ‘crisis’.”

    No, we should be talking about disaster and collapse, from the figures.

  11. Kryten2k35

    What recovery?

  12. treborc1

    But the issue is yes recovery is starting slowly, but it’s here, but the people at the bottom are now back to where we were before we had a labour movement, because these days labour is more like the old Liberal party chasing the middle class, the issue is now we need a new party for the poor the working class because labour sadly is not socialist and it’s not a party of the working class, but the middle class a Progress party

  13. Leon Wolfeson

    WHAT recovery? It’s a bubble!

    And don’t get hung up on the “socialist” label, really. You need to appeal to the broader left, and those simply disaffected with neoliberalism.

    (The SWP’s spectre over the word is a real problem)

  14. PoundInYourPocket

    You can still promote the benefits of public ownership over private without having to wear an SWP badge. Saldy I only hear Andy Burnham making a case for public rather than private in the NHS. As for the rest of the PLP, I don’t hear anyone coming out in favour of public provision rather than private, despite being ostensibly a social democrat party.

  15. Leon Wolfeson

    Actually, I rather agree with the NEF (who I think are great, as a mutualist. And yes, I know some of them personally) that in many cases, charity and non-profit mutual bids should be considered rather than in-sourcing for local services.

    Certainly trains should be taken back into public ownership as the TOC’s run out, and the regional monopolies of water immediately nationalised. Gas and Electric…is trickier. Certainly *production* has a very good case for nationalisation, but fixed-profit margin companies competing for your business on electric and gas has advantages.

    (And I’d not really touch broadband. Maybe Virgin needs to be forced to offer LLU on it’s Cable, but we’re not badly off in general on that.)

    It’s like the “socialist” way of narrow-minded thinking the SWP promote, you can get caught up in one way of left-wing thinking.

  16. littleoddsandpieces

    Women of all ages are not offered anything by Labour’s ‘shared prosperty’.

    Ask the Fawcett Society, who on their campaigns towards politicians who might listen (fat chance?) towards next year’s general election.

    Less equal in pay and more loss than even men from benefit cuts as tend to be poorer,

    But when it comes to pension reform, women between late 50s and over 80 have good reason to fear being left to go hungry. For many of these the state pension will be their sole income, especially not being able to keep going in manual jobs.

    – Married women and people turning 80 from 2016 left with no state pension for life.

    – Men and women now get a pro rata basic state pension after 12 months NI credits, will now get nothing if below 10 years NI credits in life.

    – New claimants on basic state pension will not get the help of Pension savings credit

    https://you.38degrees.org.uk/petitions/state-pension-at-60-now

    The myth is that pensioners are well off, is not about the working class on not even a quarter of average wages throughout working life. Could not save. Erratic work history from constant redundancies. There are many pensioners on not even £10 a week left after bills to buy food. I followed such a pensioner out the supermarket the other week, with 4 small items of the basics cheap range, which must be she did not eat some days.

    With welfare and pension reform, the ‘shared prosperty’ cannot exist, if Labour thinks to keep Austerity going after 2015.

  17. tezxa

    You are so stupid it is almost unbelievable.

    It is deferring today’s consumption and SAVING that increase prosperity. It is SAVING that allows the productivity of labour to increase and consequently the rise in the general standard of living.

    You are so so stupid to think saving is bad. You know nothing Kryten2k35

  18. Kryten2k35

    Bullshit. The interest rate is a historical 0.5% for a reason. Saving during bust is bad for the economy and is bad for growth.

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