Where next for Ed? Mehdi Hasan on a fraternal dispute

The Labour leader ended a bad January on a high - and then brother David intervened.

Ed Miliband had a bad, bad January - but ended on a high. Having fallen behind in the polls, been attacked by his guru, got his message mixed up on cuts and gaffed on Twitter, the final few days of the month saw him help force RBS chief executive Stephen Hester turn down his million-pound bonus and put Cameron on the defensive, and then put in a strong performance against the Prime Minister in Tuesday's Commons debate on Europe ("Ed Miliband was very good," admitted the frequently-critical Simon Hoggart) and at PMQs, on the first day of February, on the subjects of bank bonuses and NHS reform .

Attacking the bankers - over excessive bonuses, lack of transparency, failure to lend and the rest - has proved to be a boon for Ed M. Recent polls show Labour has slashed the Tories' 5-point lead and I suspect we'll continue to see a mild uptick in the party's poll rating in the coming days and weeks. Why? Because, in the current climate, left-populism works. The public wants the political elites to take on the financial elites. It's not rocket science - and I'm not sure how many times some of us have to make this rather simple and obvious point to a cautious Labour leadership.

In October 2010, for example, after Ed M failed to make any public comment whatsoever on a 55 per cent jump in pay for FTSE 100 executives, I wrote:

So, Ed, where are you? Still running from the "Red" tag? Let's be clear. There is nothing "red" about objecting to reckless, irresponsible and unfair pay rises and telephone-number salaries. In fact, the public would be on your side if you did - polls show voters support a high pay commission and higher taxes on bonuses and object to the growing gap between rich and poor in modern Britain.

Eighteen months later, Ed M is starting to reap the rewards of "objecting to reckless, irresponsible and unfair pay rises and telephone-number salaries". Here's political editor Joe Murphy in Monday's Evening Standard:

Ed Miliband has scored a big victory that will give his leadership a much-needed boost.

But Ed mustn't lose momentum on this issue - as he did on phone-hacking last summer, where he dropped the baton and allowed Cameron to kick the Murdoch/media reform issue into the long grass. The Labour leader has to own the issue of high pay - and keep banging on about it whenever he gets the chance. It isn't that hard, to be honest. For instance, why doesn't he come out loudly and publicly against the new bonus scheme being demanded by Network Rail chief executive Sir David Higgins, whose taxpayer-funded basic salary is already £560,000? Why doesn't he position himself at the head of a campaign to demand RBS refrains from paying out multi-million-pound, taxpayer-funded bonuses to members of its investment banking division, as is expected to happen in the not-too-distant future?

Then there's the issue of the cuts and Labour's various contortions on the subject. As a must-read, myth-busting Guardian leader points out today:

After just one year of full-blown austerity, marked by student occupations and rioting, it is sobering to be reminded that 94% of Mr Osborne's departmental spending cuts are still to come, along with another 88% of the planned reductions to benefits.

Ed M mustn't panic. The cuts have yet to fully kick in - let's see how popular (and/or effective) austerity measures are in 12 or 18 months time. Now is not the time for mixed-messaging on spending cuts, or cutting and running, otherwise Labour won't be able to reap the electoral rewards of having opposed them once the public turns - and it will turn, mark my words - against slash-and-burn, austerity-obsessed, 1930s-style economics. After all, as David Blanchflower notes in this week's magazine, the "Osborne collapse" has well and truly begun.

It is unfashionable, I know, but I've never bought into the nonsensical line from the right-wing press that Ed Miliband can't win, won't win, will never be prime minister, blah blah blah. It isn't just that, as Lord Ashcroft of all people has pointed out, he coud get "close to 40 per cent of the vote [in 2015] without needing to get out of bed". It's much more than that: Ed, at his best, brightest and boldest, understands the issues that matter to the great British public (see "squeezed middle", high pay, vested interests, etc) and, from time to time, displays excellent political judgement (phone hacking, the Hester bonus, shadow cabinet elections, etc). It's too soon to write him off. Meanwhile, the past few days have shown how unpredictable and capricious modern British politics can be: against the odds, Ed has recovered after his awful start to the year.

So, will big brother David's intervention in this week's New Statesman harm him? It wasn't, as some have claimed, an out-and-out attack on his younger brother. Nonetheless, the elder Miliband clearly isn't happy about the direction of the Ed-led Labour Party, isn't afraid to let people know that he isn't happy and surely must have known how a febrile, splits-obsessed media pack would respond to his detailed, if somewhat dry, critique of the views not so much of Ed himself but one of Ed's chief supporters, Roy Hattersley - and, that too, five months after the latter's original article on social democracy appeared in Political Quarterly. (On a side note, and to be fair, it is worth pointing out that David does volunteer four positive and named references to Ed in his NS piece.)

I'm never quite sure what David's game-plan is; what it is that he wants. The Times's Sam Coates had the best line on Twitter:

All DM's old tricks - setting up straw men (Hattersley) to knock down, loyal and disloyal simultaneously, over-complicated. Why do it?

Indeed. Whatever your view of David's intervention, the timing is bad for Ed, coming as it does after his strong performances at PMQs and in the Commons debate on Europe.

Perhaps Ed Miliband is just an unlucky leader. Not according to Steve Richards, in today's Independent. Steve makes a counter-intuitive but powerful argument in his column:

David Cameron's misguided attempt to secure an easy symbolic hit by removing the knighthood of a single banker shows how rocky the ride will be. As I have argued before, Cameron and George Osborne are not the brilliant tacticians or strategists mythology insists they are. They are middle ranking, and when they try to be too clever by half, they slip towards the relegation zone. Voters do not care a damn about the sensitivities of a greedy, incompetent banker, but they can spot a red herring as big and bright as this one.

The failure of this populist gesture shows that the issue demands more clear thinking than a bit of Bullingdon Club game-playing, and points to massive challenges for both Cameron and Ed Miliband in the coming years. For Cameron, the issue confirms my view that he is an unlucky leader.

Yet, according to Steve:

It might not seem this way to him, or to his taunting critics, but Miliband is a lucky leader. He has made a mark in responding to these events, demanding an inquiry into newspapers, while Cameron has still clung to the idea of protecting the old order, and outlining in general terms the case for a new moral capitalism. In doing so, he has had more practical impact on the course of current tumultuous dramas than any recent leader of the opposition.

He rightly concludes:

Cameron and Osborne are awestruck that in every opinion poll voters placed Tony Blair precisely on the centre ground. They want to be in the same place as their hero at the next election. But what it means to be on the centre ground is changing fast now and will have changed even more by then.

(On a related note, my colleague Rafael Behr makes the opposite case to Steve in this week's New Statesman cover story, entitled "Lucky Dave".)


Mehdi Hasan is a contributing writer for the New Statesman and the co-author of Ed: The Milibands and the Making of a Labour Leader. He was the New Statesman's senior editor (politics) from 2009-12.

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Autumn Statement 2015: whatever you hear, don't forget - there is an alternative

The goverment's programme of cuts is a choice, not a certainty, says Jolyon Maugham.

Later today you will hear George Osborne say there is no alternative to his plan to slash a further £20bn from lean public services by 2020-21. He will also say that there is no alternative to £9bn cuts to tax credits, cuts that will hit the poorest hardest, cuts of thousands of pounds per annum to the incomes of millions of households.

But there is.

As I outlined here the Conservatives plan future tax cuts which benefit, disproportionately or exclusively, the wealthy. Suspending those future tax cuts for the wealthy would say, by 2020-21, £9.3bn per annum.

I also explained here that a mere 50 of our 1,156 tax reliefs cost us over £100bn per annum. We don't know how much the other 1,106 reliefs cost us - because Government doesn't monitor them. And we don't know what public benefit they deliver - because Government doesn't check.

What we do know, as I explained here, is that they disproportionately and regressively benefit the wealthy: an average of £190,400 per annum for the wealthiest.

And we know, too, that they include (amongst the more than 1,000 uncosted reliefs) the £1bn plus “Rights for Shares Scheme” - badged by the Chancellor as for workers but identified by a leading law firm as designed for the wealthiest.

Simply by asking a question that the Chancellor chooses to ignore - do these 1,156 reliefs deliver value for money - it is entirely possible that £10bn or more extra in taxes could be collected without any loss of  public benefit

To this £19bn, we might add the indiscriminate provision - both direct and indirect - of public money to wealthy pensioners.

Those above basic state pension age enjoy a tax subsidy of up to 12% on earned income.

Moreover, this Office for National Statistics data (see Table 18) reveals that the 10% of wealthiest retired households - some 714,000 households - have gross pre-tax and pre-benefit private income of on average £43,983. Yet still they enjoy average cash benefits from government of £11,500 per annum.

Means testing benefits to exclude that top 10 per cent of retired households would save £8.2bn per annum. And why, you might wonder aloud, should means testing be thought by the government appropriate for the working age population, yet a heresy for retired households?

Add in abolition of that unprincipled tax subsidy and you'll save even more. 

So there are alternatives. Clear alternatives. Good alternatives. Alternatives that enable those with the broadest shoulders to bear some share of the pain. Don't allow yourself to be persuaded otherwise.

Jolyon Maugham is a barrister who advised Ed Miliband on tax policy. He blogs at Waiting for Tax, and writes for the NS on tax and legal issues.