Ed Miliband: It would be "politically crackers" to spend like the last Labour government

The comeback interview.

After a notably low-key summer, Ed Miliband returns to the fray with an interview in tomorrow's New Statesman, his first of the new political season. You can read the full piece by NS editor Jason Cowley in tomorrow's issue but, as a preview for Staggers readers, here are some of the key quotes from it.

On public spending

Asked whether the party’s position has changed since Ed Balls said in January it would have to keep “all these cuts”, Miliband says:

Our position hasn’t changed [from January.] Look, we absolutely hold to everything we said at the beginning of the year, and what Ed and I said was that the next Labour government is going to take over in very different circumstances and is going to have to have a very different prospectus than the last.

And if we came along and said ‘look, we can just carry on like the last Labour government did’ – I mean it's politically crackers to do that, because we wouldn't win the election and we wouldn't deserve to win the election. We can’t say: ‘Look, we just want to sort of carry on where we left off, you know, the electorate was wrong, we were right, thanks very much…" It's not realistic.

Ed Balls is not going to go to the Labour party conference and say, ‘It's going to be the old model where we have economic growth and then we'll use lots of that money to spend lots, to spend billions of pounds.’ It's not realistic and it's not credible.

The next Labour government, he adds, will be unable to restore those benefits abolished by the coalition such as the Education Maintenance Allowance.

"I can’t make a promise on EMA. You can't both say to me there's less money to spend and are you realistic about the economic circumstances and then I spray around lots of promises. That's why Ed's speech [on accepting Tory cuts and fiscal discipline] in January and my speech were important."

Reports of tensions with Balls “nonsense”

The Labour leader says that reports of tensions between himself and Ed Balls are "nonsense" and that relations with his shadow chancellor are "good".

Asked why he originally gave the position to Alan Johnson, rather than Balls, he says: "Look, you make the decisions you make. We’ve been working together now for 18 months. Everybody said at the time that it would be a repeat of Blair and Brown and all that. But it’s total nonsense, honestly. He’s been proved right about austerity."

Balls is physically intimidating - and that’s a good thing

Asked whether he finds Balls physically and intellectually intimidating, he replies: "To the Tory opponents he is, yes, and that’s a jolly good thing."

Labour’s new big idea: predistribution

With the next Labour government unable to spend as much as its predecessors did, Miliband says that he will focus on changing "the rules of the economy". In a major speech on the economy tomorrow, he will say that while “redistribution is still necessary and will remain a key aim”, the party will  need to care more about "predistribution".

The Government’s economic failure means that whoever wins the next election will still face a deficit that needs to be reduced. The redistribution of the last Labour government relied on revenue which the next Labour government will not enjoy. The option of simply increasing tax credits in the way we did before will not be open to us.

We need to care more about predistribution.  Centre-left governments of the past tried to make work pay better by spending more on transfer payments.  Centre-left governments of the future will have to make work pay better by doing more to make work itself pay.  That is how we are going to build growth based not just on credit, but on real demand.

I think this is a centre-left moment. Why might you think it’s a centre-right moment? Well, because of issues of fiscal responsibility, which is why we must be strong on that. But for me it’s a centre-left moment because people think there’s something unfair and unjust about our society. You’ve got to bring the vested interest to heel; you’ve got to change the way the economy works. That’s our opportunity.

Why I don’t support the “Brown model”

Miliband accepts that the old Labour model of deciding targets for public services cannot be replicated. "There’s one way that says you just set lots of targets centrally and that’s the way you make public services work. That’s the Brown model, slightly caricatured. The second model is – if it doesn’t work, tender it out. Outsource it. That has its problems of fragmentation. Take what [Michael] Gove is doing in education. He’s a great centraliser, actually. He’s trying to run 1,500 academies from central government. The Labour response should not be simply to say that all academies’ powers should be sucked back to local authorities. I want to devolve more power to all schools – about the curriculum, about the way they work, but at the same time we’ve got to have some local co-ordination.

"People are out of love with an uncontrolled market but they’re certainly not in love with a remote state."

On welfare and responsibility

On welfare and benefits, the Labour leader insists that some form of contribution from the recipients of welfare must replace what Liam Byrne, former head of the Labour policy review, called "unearned support".

"I do think we need a society where people make a contribution,” Miliband says. “You build a successful society out of people showing responsibility. That’s an important principle at the top, it’s an important principle elsewhere. But people at the top have a particular responsibility because they help define the ethic of the country."

On Liam Byrne’s “punishment beating”

Miliband scoffs at the suggestion that Liam Byrne, the former head of Labour’s policy review, received a "punishment beating" for speaking out on the ills of welfare dependency. "I have a lot of time for Liam," he says.

What I’ve been reading

While on holiday in Greece, Miliband says he read "The Fear Index by Robert Harris, Skios by Michael Frayn, which is about Greece. And then I read a couple of more serious books – The New Few by Ferdinand Mount, How Much is Enough? By Robert and Edward Skidelsky and also the [Michael] Sandel [What Money Can’t Buy: Markets and Morals]."

I didn’t take my phone on holiday

The Labour leader reveals that while on holiday, his first extended break since 2009, he left his phone behind in London, read no British newspapers and watched no television news.

"It was such a relief and a liberation not having a phone," he says. Those who wanted to contact him were told to ring his wife, Justine, "which of course they were reluctant to do".

Why the Olympics mattered

Reflecting on the Olympics, Miliband says, "for the first time in my life, I got a sense of what my dad [the Marxist academic Ralph Miliband] used to talk to me about, about the wartime spirit, his time in the navy. You can’t have a permanent Olympic Games, but I think there’s something about what kind of country do we feel like. Do we feel a sense of obligation to each other? Do people feel the benefits and burdens of life are fairly distributed? Those things are partly economic but they go deeper than that."

On mental health

He adds that one of the biggest policy agendas for Labour is the future of mental health.

"We are a stressed out country. That’s everything from depression to general stress – and there’s a great taboo about mental health ...  What kind of economy you have shapes what kind of society you are. If you’re a country where people need to work two or three jobs, 50/60 hours a week, don’t get a chance to see their kids, all of that – then you’re not a country that is at ease with itself and you’re not a country where people have the well being that they need."

My “problem with free schools”

In the week that it was announced that 55 of Michael Gove’s free schools will open this autumn, Miliband toughens his party's stance against them.

While he concedes that Labour will "judge each one by what it does", he declares: "the problem with free schools is that you’re robbing Peter to pay Paul, so there are kids in my constituency who aren’t getting the [school] buildings rebuilt."

He adds: "The Tories and Gove don’t seem to see schools as an instrument of the local community, but it’s just let’s have schools popping up all over like supermarkets and through this competitive alchemy it will make the school system better. I just don’t buy that argument."

Why I’m still opposed to a third runway at Heathrow

With the government attempting to dilute its pledge not to build a third runway at Heathrow airport, Miliband says that he remains “sceptical” of the proposal and criticises the coalition for its lack of commitment to the environment. He says:

We have a cross-party consensus that we must cut our carbon emissions by 80 per cent by 2050. What does that mean for our aviation emissions? You can’t just have unlimited expansion. The coalition is rocking like a drunken sailor on this issue of runways and airports. But where is the debate about the environment in this?

The Lib Dems’ "terrible, tragic mistake"

Reflecting on the fortunes of Nick Clegg’s party, Miliband says: "What’s happened to them is very bad for the country. I feel they made a terrible, tragic mistake [in entering the coalition]. I remember sitting in the coalition negotiations, the unsuccessful ones, and saying to them: ‘Do you realise what supporting the Tory deficit plan would mean? They all looked at me slightly blank. They hadn’t really thought it through."

What I’ve learned most: to follow my instincts

"The truth about modern politics is that the only way in which you can feel long in the future that you’ve done the right thing is by doing what you believe," Miliband says. "What have I learned most in the job? Follow my instincts."

How Justine sustains me

Asked what has sustained him during times of difficulty, Miliband says: "Justine, plus my instincts. My family is the most important thing in my life and therefore that’s always what you fall back on."

He adds: "I think what you learn most of all is, er – is it Zen? I’m not sure Zen is quite right, but I’m a pretty stoical guy. You know it’s not a walk in the park . . . but I’m sanguine. I know that conventional wisdom can swing one way, it can swing the other. I think I’ve just got to keep doing what I think is right and setting out my agenda. I think it’s the right agenda for the country. We’re going to expand it and broaden it in the months ahead."

Ed Miliband, pictured in the garden of his north London home. Photograph: Kate Peters / Institute
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Jeremy Corbyn vows not to resign. What next for Labour?

The leader's decision to fight the rebels sets the stage for a new leadership contest or a protracted legal battle.  

Throughout Sunday as the shadow cabinet resignations mounted up (reaching 11 by the evening), Jeremy Corbyn's allies insisted that he was unfazed. "He's not wavering," one told me, adding that Corbyn would seek to form a new frontbench. At 21:54pm, the Labour leader released a statement confirming as much. "I regret there have been resignations today from my shadow cabinet," Corbyn said. "But I am not going to betray the trust of those who voted for me - or the millions of supporters across the country who need Labour to represent them."

Corbyn added that "those who want to change Labour's leadership" would "have to stand in a democratic election, in which I will be a candidate". The shadow cabinet, he said, would be reshaped "over the next 24 hours" ("On past experience, 24 hours to pick a shadow cabinet is ambitious," a Labour source quipped in reference to January's marathon reshuffle). 

Any hope that Corbyn would retreat without a fight has been dispelled. Tom Watson will meet him tomorrow morning to "discuss the way forward", a statement regarded as "ominous" by some of the leader's allies. Labour's deputy failed to back Corbyn's leadeership and warned of the need to be "ready to form a government" following an early election. But even if Watson calls on the leader to resign (which insiders say is far from guaranteed), few believe he will do so. 

Corbyn retains the support of his closest allies, John McDonnell, Diane Abbott and Jon Trickett, and has been backed by shadow defence secretary Emily Thornberry and Andy Burnham ("Those who put personal ambition before the party won't be forgiven or forgotten," a senior MP declared of the Manchester mayoral contender). He will look to repopulate the shadow cabinet with supporters from the 2015 intake, such as Clive Lewis, Richard Burgon, Cat Smith and Rebecca Long-Bailey. 

The Parliamentary Labour Party will meet on Monday at 6pm and discuss a motion of no confidence against Corbyn, tabled by veteran MPs Margaret Hodge and Ann Coffey. This will likely be followed by a secret ballot on Tuesday between 9am and 5pm. The rebels are confident of winning a majority (though dismiss reports that as many as 80 per cent will oppose Corbyn). But the Labour leader is still unlikely to resign at this juncture. Having entered office with the backing of just 15 MPs (now 14 following the death of Michael Meacher), he is untroubled by losing support that he never truly had. "He's an oddity. Very gentle but very robust," an ally told me. 

At this point, Corbyn's opponents would be forced to launch a direct leadership challenge, most likely in the form of a "stalking horse". John Spellar, a veteran of Labour's 1980s strife, Hodge and Barry Sheerman have been touted for the role. A matter of fierce dispute on Sunday was whether Corbyn would automatically make the ballot if challenged. Labour's lawyers have told the party that he would not, forcing him to win 50 MP/MEP nominations to stand again (a hurdle he would struggle to clear). But Corbyn's allies counter that their own legal advice suggests the reverse. "It could get very messy and end up in the courts," one senior rebel lamented.

Some take the view that natural justice demands Corbyn is included on the ballot, the view expressed by Tony Blair to MPs. In a new leadership contest, Watson and/or Angela Eagle are regarded as the likeliest challengers, though there is still no agreed alternative. Many argue that the party needs a "Michael Howard figure" to achieve party unity and limit the damge at an early election. He or she would then by succeeded by a younger figure (a "Cameron") such as Chuka Umunna, Dan Jarvis or Lisa Nandy.

But a Labour source told me of the potential contest: "Don't rule out Yvette. The only grown-up candidate and I believe she wants it". He emphasised the need to look beyond the task of "unifying the party" and towards the forthcoming Brexit negotiations. Cooper, an experienced economist, was best-qualified to lead at a moment of "national crisis", the source suggested. Watson, he added, wanted "the leadership handed to him on a plate" with backing from grandees across the party. John McTernan, Blair's former political director, said that he would be "very happy" to have the Brownite as leader. Despite Watson's leading role in the coup against Blair in 2006, many from Labour's right believe that he is best placed to defeat Corbyn and unite the party. Some point to Eagle's fourth-place finish in Labour's deputy leadership election as evidence of her limited appeal. 

McDonnell, Corbyn's closest ally, who MPs have long believed retains leadership ambitions, insisted on Sunday that he would "never stand". Most believe that the shadow chancellor, a more abrasive character than Corbyn, would struggle to achieve the requisite 37 MP/MEP nominations. 

The Labour leader's allies remain confident that he would win majority support from members if challenged. Rebels speak of an "unmistakable shift" in opinion since Brexit but concede that this may prove insufficient. They are prepared to mount repeated challenges to Corbyn if necessary in order to "wear him down". But an early general election, which Boris Johnson is expected to trigger if elected Conservative leader, could deny them the chance. 

As the PLP assembles in Committee Room 14 at 6pm, the activist group Momentum will assemble in Parliament Square for a #KeepCorbyn protest. It is a fitting symbol of a party fatally torn between its members and its MPs. Unless the two can somehow be aligned, Labour will remain united in name only. 

George Eaton is political editor of the New Statesman.