Economy 5 September 2012 Ed Miliband: It would be "politically crackers" to spend like the last Labour government The comeback interview. Print HTML 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." › Rise of the machines to blame for the lacklustre US recovery Ed Miliband, pictured in the garden of his north London home. Photograph: Kate Peters / Institute Subscribe More Related articles Investors are panicked - why should we care? Live blog: Jeremy Corbyn hit by shadow cabinet revolt Who is in Jeremy Corbyn's new shadow cabinet?