Miliband sharpens his message

The five key points from Miliband's Today programme interview this morning.

Ed Miliband's interview on the Today programme this morning was an important coda to yesterday's speech. Here are five points that jumped out at me.

1. The centre ground has moved itself

I've previously written that Miliband is attempting to shift the centre ground to the left, just as Thatcher shifted it to the right. But it's now clear that he believes the centre has moved itself. He told Jim Naughtie: "We are going to be firmly in the middle ground of politics, but the middle ground is changing.

"The idea that you shouldn't have responsibility at the top of society - it is not a left-wing thing to say that there should be responsibility. It is absolutely in the middle ground."

I think Miliband is right but there's no guarantee that Labour will be the beneficiary of this leftwards shift.

2. A new age of state activism

Miliband rejects the policy defeatism of the last decade, the belief that, in Thatcher's words, "you can't buck the market". He vowed that free markets would no longer "land from outer space" and that the state would change the rules to encourage better practice. His pledge that government contracts would only be given to firms that hire apprentices is the clearest example of this.

Rather than distinguishing between good companies and bad companies as he did yesterday (a stance that smacks of the government "picking winners"), Miliband now emphasises that he is talking about "different business practices."

In a better soundbite than any he delivered yesterday, he said that he was "not anti business" but "anti business as usual."

3. Agreement with Vince Cable

After his rhetorical barbs against Nick Clegg, Miliband noted a rare point of agreement with a Lib Dem minister. He said he supported Vince Cable's attempts to control executive pay: "I agree with some of what he said that, for example, there should be far greater transparency about what companies do, that shareholders should vote on remuneration packages before they are agreed."

4. The limits of public spending

In an admission that was missing from yesterday's speech, Miliband said that social justice would not be achieved through higher public spending, a clear dividing line with Gordon Brown.

"For the Labour Party ... spending is not going to be the way that we achieve social justice in the next decade," he said. "[U]nless you reform our economy, unless we find ways of tackling those issues, unless you get that political economy right we're not going to get the change we want to see."

The biggest problem is that 11 million low-to-middle earners have seen no rise in their real incomes since 2003, as less of what our economy produces has been paid out in wages - and more in profits. The diagnosis is clear but the prescription is not. In time, Miliband will have to offer solutions.

5. Substance will win out

In response to the focus group finding that voters see him as "weird" (discussed by Jonathan Freedland in his column today), Miliband insisted that substance would win out over style. "[T]he times are too serious, the issues are too grave, for us to say well, you know ... it's not about substance, it is about substance. It is absolutely about substance, the problems our country faces are so serious that actually the substance matters."

One was reminded of Gordon Brown's assertion that he was "a serious man for serious times". In an age of presidential politics, Miliband's wager is that his unflashy brand of social democracy will prevail. His fate - and that of Labour - depends on him being right.

George Eaton is political editor of the New Statesman.

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Scotland's vast deficit remains an obstacle to independence

Though the country's financial position has improved, independence would still risk severe austerity. 

For the SNP, the annual Scottish public spending figures bring good and bad news. The good news, such as it is, is that Scotland's deficit fell by £1.3bn in 2016/17. The bad news is that it remains £13.3bn or 8.3 per cent of GDP – three times the UK figure of 2.4 per cent (£46.2bn) and vastly higher than the white paper's worst case scenario of £5.5bn. 

These figures, it's important to note, include Scotland's geographic share of North Sea oil and gas revenue. The "oil bonus" that the SNP once boasted of has withered since the collapse in commodity prices. Though revenue rose from £56m the previous year to £208m, this remains a fraction of the £8bn recorded in 2011/12. Total public sector revenue was £312 per person below the UK average, while expenditure was £1,437 higher. Though the SNP is playing down the figures as "a snapshot", the white paper unambiguously stated: "GERS [Government Expenditure and Revenue Scotland] is the authoritative publication on Scotland’s public finances". 

As before, Nicola Sturgeon has warned of the threat posed by Brexit to the Scottish economy. But the country's black hole means the risks of independence remain immense. As a new state, Scotland would be forced to pay a premium on its debt, resulting in an even greater fiscal gap. Were it to use the pound without permission, with no independent central bank and no lender of last resort, borrowing costs would rise still further. To offset a Greek-style crisis, Scotland would be forced to impose dramatic austerity. 

Sturgeon is undoubtedly right to warn of the risks of Brexit (particularly of the "hard" variety). But for a large number of Scots, this is merely cause to avoid the added turmoil of independence. Though eventual EU membership would benefit Scotland, its UK trade is worth four times as much as that with Europe. 

Of course, for a true nationalist, economics is irrelevant. Independence is a good in itself and sovereignty always trumps prosperity (a point on which Scottish nationalists align with English Brexiteers). But if Scotland is to ever depart the UK, the SNP will need to win over pragmatists, too. In that quest, Scotland's deficit remains a vast obstacle. 

George Eaton is political editor of the New Statesman.