The Staggers

The New Statesman’s rolling politics blog

Why "predistribution" could be a winning agenda for Miliband

How the state can act to prevent inequalities arising in the first place.

By George Eaton Published 06 September 2012 0:01

Labour leader Ed Miliband. Photograph: Getty Images.

In his speech at the Policy Network conference, Miliband will say that redistribution is "necessary" but "not sufficient". Photograph: Getty Images.

"Predistribution", a concept that Ed Miliband discusses in his interview in this week's New Statesman, is one that is easily mocked. But it represents an idea that is central to the challenge of building a fairer economy - that the state, rather than merely ameliorating inequalities through the tax and benefits system, should act to ensure that they do not arise in the first place. (See this recent piece by Yale professor Jacob Hacker, the man who coined the term). To this end, it should legislate for policies such as a living wage and introduce curbs on predatory energy and rail companies, pursuing what Miliband's consigliere, Stewart Wood, has called a "supply-side revolution from the left". As he wrote in a piece earlier this year:

We will need different kinds of banks and stronger competition in the banking industry; corporate governance reforms to incentivise good ownership models and longer-term business strategies; ensuring that companies see the continuing upskilling of their workers as an obligation and not simply a luxury; and the courage to challenge vested interests in the economy that charge excessive prices for energy or train fares and squeeze families' living standards.

In his speech to today's Policy Network conference, Miliband will elaborate on this theme, stating that while redistribution will remain a "key aim of the next Labour government", a greater focus on predistribution is needed. He will advance two main arguments for this claim. Firstly, that the failure of the last Labour government to reduce inequality proves that while redistribution is "necessary" it is "not sufficient", and secondly, that the fiscal constraints a Labour administration will face (based on current forecasts, it would inherit a deficit of £96.1bn or 5.8% of GDP) mean that it will be not able to increase tax credits (the last Labour government's primary redistributive instrument) in the manner that Tony Blair and Gordon Brown did.

The great strength of predistribution is that it does not cost the state a penny to pursue. Rather than relying on taxation to narrow the gap between the rich and the poor, Miliband will harness the instruments of legislation and regulation. Rail companies, for instance, would be barred from raising fares by more than 1% above inflation. As he will say in his speech:

As with much of Miliband's "responsible capitalism" agenda, more detail is required (which, given that we're still not even halfway through this parliament, is hardly surprising) but the ambition is admirable. Under the rubric of predistribution, Labour can finally adopt the kind of policies that will have a transformative effect on the living standards of working people.

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Tags: Labour Ed Miliband

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18 comments

Thu, 2012-09-06 22:40 — Quattro Man (not verified)

The 2 Ed's, what a a fantastic pair. Thank you Labour, thank you so much.

I really thought it would be impossible for the Conservatives to win at at the next election....given the mess the Coalition were left with.

Now I have hope. Thank you Labour, thank you so much.

Sun, 2012-09-30 22:24 — DNA Cowboy (not verified)

You read my mind, what better way to ensure the Conservatives take the next election than by Milliband's 'pre-distribution' policy [rolls about on the floor] .

This is entirely a policy from the mind of Nicola Murray MP lol.

Thu, 2012-09-06 23:11 — Steven m (not verified)

I think you are a bit rattled. The Tories don't have a new plan, their main aim is to get back to how it was before. It won't work and the longer it goes on the more people will demand a complete change as they did in the late 70s.

Thu, 2012-09-06 16:33 — New New Man (not verified)

Two Ed's together are worse than one!

Thu, 2012-09-06 13:28 — squack (not verified)

there's room in this country for nationalisation and private industry and let the best of both sides act as a balance to the extremes of the other. I sincererly hope Ed can get his message through - he's been doing a sterling job and moved beyond the scepticism he deserves.

Thu, 2012-09-06 13:11 — Stuart Eels (not verified)

and another thing, cuts what cuts? met a friend of mine on an Industrial Estate at 7.00am waiting for the County Council depot's gates to open. His services had been hired out by his boss to the Council to cover for staff let go, poor soul, his first experience of Council workers, started Monday, told off for being on time and has been given one and a half hours work to do since. He's just not used to "Council time" and totally fed up sat in his van all day!

Thu, 2012-09-06 13:03 — Stuart Eels (not verified)

You make some fair points Tory Troll, especially the Winter of Dicontent, however lets' not pretend that Union Power abuse was all down to Sunny Jim, Ted Heath was just as ineffective and he gave us the three day week and lied to us about EEC membership.

Then Thatcher came along and took on the Unions, unfortunately not just the nutters like Scragill and Red Robbo but every union and effectively exported our Industrial base to the far east, whilst buddying up to the big Bankers and Multi-nationals and we all know how that ended don't we?

As Benjamin Rae points out it's nice sounding talk with substance offering nothing just like the Tories "big Society."

When call me Dave goes off to a nice job in the city after the next election, Ed Miliband will come and do exactly the same as Cameron only calling it Labour reforms.

Fri, 2012-09-07 19:53 — tory troll (not verified)

"Ted Heath was just as ineffective."
True. No argument.

"He lied about EU membership. True.

Maggie did not "export our industrial base" Our industrial base collapsed because its products were not good enough. The ship industry went down the toilet because the Japs and Koreans and Swedes made better, cheaper, higher quality ships: bike industry went down the toilet because the Japanese made better motorcycles. Car industry went down the toilet because every model made by Britsh Leyland fell to pieces the moment you got it out the showroom door, and the Volkswagens and Audis and Datsuns didn't.
A combination of weak: I could go on. ineffectual management, strike happy unions, lousy design and engineering and a bone idle workforce did for the British industrial base: blaming Maggie is like blaming the nurse who pulled the plug on the life support machine. There was mass unemployment in the UK in the seventies - the unemployed were all on the payroll at British Leyland and British Steel.

And anyway, why does the Left never mention the remarkable industrial renaissance which has occurred since then? Formula 1, huge success of UK Phama, British Aerospace, rebirth of Jaguar, the technical skills needed to extract North Sea oil, Silicon Fen, the huge Japanese investment in the North East and in Wales etc etc

Thu, 2012-09-06 12:16 — treborc

Miliband and Balls on TV now , mickey mouse show, even the two Ronnie's would have a better idea on society then these two, and now they are ready to have sexual pleasure with Cable and Cleggie

Thu, 2012-09-06 23:12 — Steven m (not verified)

Get real please.

Thu, 2012-09-06 08:16 — Bel Webb (not verified)

Sounds good to me although I'll wait until he elaborates further - and lets face it, nothing can be mocked more than the 'big society'!

Thu, 2012-09-06 08:16 — Bel Webb (not verified)

Sounds good to me although I'll wait until he elaborates further - and lets face it, nothing can be mocked more than the 'big society'!

Thu, 2012-09-06 07:11 — DK (not verified)

Doesn't "predistribution" imply nationalisation? Let's just say it: capital is too big and government is too small. Health, education, energy, and transport need to be structured to serve the people, not the investors, otherwise they will always be too expensive for large sectors of the population. They should belong to the people. Nothing can change until a leftwing party is happy to proclaim this.

Thu, 2012-09-06 07:06 — skylight

Labour's complete inability to articulate a credible alternative economic strategy to austerity has left Labour looking untrustworthy. Labour simply does not have a coherent economic policy. Again no mention of industry but it is now clear that the decline in manufacturing was the real sickness at the heart of our economy. No government can carry on willfully neglecting our manufacturing industries and neither can we keep borrowing that will only provide temporary relief while sinking deeper into debt and mass-unemployment. Labour needs to be looking at more imaginative and creative ways to stimulate our sluggish economy after all prosperity is created it’s never borrowed.

Thu, 2012-09-06 01:14 — tory troll (not verified)

"Predistribution", a concept that Ed Miliband discusses in his interview in this week's New Statesman, is one that is easily mocked."

Er, well yes that is because it is easy for anyone with O Level economics to mock it.

Look, I dunno if any of the hacks at the New Statesman these days are old enough to remember the seventies, but, er we have done this already.
Tony Benn's Workers co operatives (which all went swiftly bust) effective syndicalism - ie the unions were running the country - prices and incomes policy which meant small businesses were being taken to court for raising their employees' pay more than the govt thought they could, or raising their factory gate prices, Michael Foot settling strikes by the simple expedient of giving the strikers 30% pay rises, hyper inflation, the madman Benn trying to impose equality (ie equal poverty) except for himself and his idiot family, exchange controls meaning you couldnt go to Boulogne with more than £10 in yer pocket:

Three day week, power cuts, dead going unburied, rubbish piling up in the streets, six months to get a phone installed. God bless Maggie.

Thu, 2012-09-06 15:57 — Ludus57 (not verified)

Er, let me get my head round this one. Was,nt it Ted Heath and anthony Barber who presided over the three-day week? While we are at it, all the economic problems that Labour endured in the seventies were a consequence of the shenanigans created by Barber's "dash for growth". It is very interesting to examine the facts because we then see that labour governments come unstuck because they cannot escape inherited problems bequethed by the tories. We must also remember that when the coalition assumed power in 2010 the economy was growing. How can Labour be blamed for the current mess that derives entirely from coalition policies?

Thu, 2012-09-06 03:23 — Benjamin Rae (not verified)

Er well we've done this neo liberal thing also. Didn't work out too well. One thing we do agree on is that Labour party aren't the answer to the countries problems. However the demented Tory party aren't either

Thu, 2012-09-06 00:24 — Benjamin Rae (not verified)

Sounds to like nice sounding talk but without real substance. Nothing to suggest so far that Milliband offers nothing more than a slightly less nasty Tory party