Miliband's ambition is not yet matched by policy

He pinpointed Britain's woes with laser accuracy but struggled to identify solutions.

Ed Miliband's speech to the Labour conference was the most ambitious delivered by a party leader for a generation. Last year he called time on New Labour but this year he called time on the entire neoliberal settlement that has governed the UK since the 1980s."It's all got to change," he cried, reasserting his ambition to do for the left what Thatcher did for the right. Just as she shifted the centre ground of British politics to the right, so he now hopes to pull it leftwards.

He turned his fire on Rupert Murdoch, Fred Goodwin (finally issuing a Labour apology for that knighthood), Southern Cross ("stripping assets for a quick buck") and the energy monopolies, vowing to break up "rigged markets" and, in his favoured phrase, take on "vested interests". No longer would Labour treat all businesses as equally worthy, he said, drawing a sharp distinction between "the producers" and "the predators". "For years as a country we have been neutral in that battle. They've been taxed the same. Regulated the same. Treated the same.Celebrated the same," he told the hall. "They won't be by me."

But while Miliband pinpointed Britain's woes with laser accuracy he struggled to identify solutions. This was a remarkably policy-light speech, with the most memorable policy - a £6,000 cap on tuition fees - one that even he accepts is imperfect. He insisted that "it wouldn't be responsible to make promises I can't keep." But his critics will contend that Miliband still hasn't explained what the point of Labour is when there's no money to spend.

With this in mind, Miliband launched his first sustained attempt to convince voters that they could trust his party with their taxes. He promised that the next Labour government would "only spend what it can afford" and, echoing Ed Balls, conceded that he would not able to reverse many of the coalition's cuts. But he rightly refused to apologise for Labour's alleged "profligacy" and avoided legitimising the myth that overspending, rather than the recession, was to blame for the UK's mammoth deficit.

Whatever the outcome of the next election (and another hung parliament remains a distinct possibility), we can now say with some certainty that Miliband will never form a coalition with Nick Clegg. After Clegg lambasted him as one of Gordon Brown's "backroom boys", Miliband hit back, branding Clegg a "Tory" and mocking him for his broken tuition fees pledge.

But while his attacks on Clegg felt tired and predictable, his speech came to life when he directed his ire at David Cameron. In the most memorable passage of his address, he denounced Cameron's plan "to cut the 50p tax rate for people earning over £3,000 a week" and cried: "How dare they say we're all in it together." It was reminiscent of Cameron's own attack on Labour in 2009 ("how dare Labour lecture the Tories about poverty") and proved that Miliband is at his most effective when he is at his most passionate. Displaying his intellectual heft, Miliband channelled JK Galbraith and denounced the Prime Minister's belief that "you make ordinary families work harder by making them poorer and you make the rich work harder by making them richer."

This was a serious, intellectually coherent and occasionally inspiring speech. But while Miliband has a departure point (neoliberalism) and a destination (social democracy), the route remains unclear. In time, he must identify and then articulate the policies needed to fulfil his tremendous ambition.

George Eaton is political editor of the New Statesman.

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By refusing to stand down, Jeremy Corbyn has betrayed the British working classes

The most successful Labour politicians of the last decades brought to politics not only a burning desire to improve the lot of the working classes but also an understanding of how free market economies work.

Jeremy Corbyn has defended his refusal to resign the leadership of the Labour Party on the grounds that to do so would be betraying all his supporters in the country at large. But by staying on as leader of the party and hence dooming it to heavy defeat in the next general election he would be betraying the interests of the working classes this country. More years of Tory rule means more years of austerity, further cuts in public services, and perpetuation of the gross inequality of incomes. The former Chief Secretary to the Treasury, Seema Malhotra, made the same point when she told Newsnight that “We have an unelectable leader, and if we lose elections then the price of our failure is paid by the working people of this country and their families who do not have a government to stand up for them.”

Of course, in different ways, many leading figures in the Labour movement, particularly in the trade unions, have betrayed the interests of the working classes for several decades. For example, in contrast with their union counterparts in the Scandinavian countries who pressurised governments to help move workers out of declining industries into expanding sectors of the economy, many British trade union leaders adopted the opposite policy. More generally, the trade unions have played a big part in the election of Labour party leaders, like Corbyn, who were unlikely to win a parliamentary election, thereby perpetuating the rule of Tory governments dedicated to promoting the interests of the richer sections of society.

And worse still, even in opposition Corbyn failed to protect the interests of the working classes. He did this by his abysmal failure to understand the significance of Tory economic policies. For example, when the Chancellor of the Exchequer had finished presenting the last budget, in which taxes were reduced for the rich at the expense of public services that benefit everybody, especially the poor, the best John McConnell could do – presumably in agreement with Corbyn – was to stand up and mock the Chancellor for having failed to fulfill his party’s old promise to balance the budget by this year! Obviously neither he nor Corbyn understood that had the government done so the effects on working class standards of living would have been even worse. Neither of them seems to have learnt that the object of fiscal policy is to balance the economy, not the budget.

Instead, they have gone along with Tory myth about the importance of not leaving future generations with the burden of debt. They have never asked “To whom would future generations owe this debt?” To their dead ancestors? To Martians? When Cameron and his accomplices banged on about how important it was to cut public expenditures because the average household in Britain owed about £3,000, they never pointed out that this meant that the average household in Britain was a creditor to the tune of about the same amount (after allowing for net overseas lending). Instead they went along with all this balanced budget nonsense. They did not understand that balancing the budget was just the excuse needed to justify the prime objective of the Tory Party, namely to reduce public expenditures in order to be able to reduce taxes on the rich. For Corbyn and his allies to go along with an overriding objective of balancing the budget is breathtaking economic illiteracy. And the working classes have paid the price.

One left-wing member of the panel on Question Time last week complained that the interests of the working classes were ignored by “the elite”. But it is members of the elite who have been most successful in promoting the interests of the working classes. The most successful pro-working class governments since the war have all been led mainly by politicians who would be castigated for being part of the elite, such as Clement Atlee, Harold Wilson, Tony Crosland, Barbara Castle, Richard Crossman, Roy Jenkins, Denis Healey, Tony Blair, and many others too numerous to list. They brought to politics not only a burning desire to improve the lot of the working classes (from which some of them, like me, had emerged) and reduce inequality in society but also an understanding of how free market economies work and how to deal with its deficiencies. This happens to be more effective than ignorant rhetoric that can only stroke the egos and satisfy the vanity of demagogues

People of stature like those I have singled out above seem to be much more rare in politics these days. But there is surely no need to go to other extreme and persist with leaders like Jeremy Corbyn, a certain election loser, however pure his motives and principled his ambitions.

Wilfred Beckerman is an Emeritus Fellow of Balliol College, Oxford, and was, for several years in the 1970s, the economics correspondent for the New Statesman