Time to talk human, Ed

Abstraction hides Labour leader’s message

What is the “squeezed middle”? Is it:

(a) a socio-economic phenomenon characterised by median wage stagnation combined with real terms rises in the cost of living affecting middle and lower income deciles.

Or is it:

(b) Getting to the supermarket checkout and having to take items out of the basket; paying for school meals a week at a time when you used to pay up front for the whole term; dreading the arrival of the postman each day because you know he’s bringing more bills?

What is “responsible capitalism”? Is it:

(a) A paradigm shift in the balance of economic power recognising the dysfunctionality of an obsolescent neo-liberal model that has embedded structural inequalities.

Or

(b) Having someone in the bank who actually listens to you and wants to help you develop your idea for a new business; a gas company that is as quick to cut bills when the oil price falls as it is to hike them when the price rises; a rail company that doesn’t make you sit on hold on a premium rate number to book a ticket.

What is “predistribution”?

(a) A conceptual framework for the pursuit of social democratic ambitions for social change at a time when conventional models of tax-ands-spend redistribution are rendered inaccessible by enduring fiscal constraints.

(b) A decent wage for a decent day’s work; a place in a brilliant nursery that doesn’t cost the earth so you can go to work, knowing that your kids are getting the best possible start in life.

Trick questions, obviously. In each case, it is both. They are all Ed Miliband buzz phrases – although it would be a grotesque misreading of national preoccupations to say any of them has generated a buzz outside the Labour party. The reason for playing that little linguistic game of parallel definitions is to illustrate a problem that Miliband badly needs to overcome if he is to advance his ambitions to run the country. There is the abstract, wonkish, analytical idiom – answer (a) – and then there are real people who cast real votes – answer (b). Until Miliband finds a way to transfer his ideas from one to the other, he will not persuade people that the Labour party is ready for government. It is hard to win a campaign when no-one has the faintest idea what you are on about.

Miliband’s allies and the people who help draft his speeches will respond that he does, in fact, anchor his ideas in the real world. This is just about true at a rhetorical level. The speech he gave on 6 September on the subject of “predistribution” contained studious references to ordinary human experience: there were “struggling small businesses [that] they have fewer people coming through the door” and “young people scouring the Jobcentre for work [who] know that there aren’t enough vacancies.”

That is an advance on his now famous (in rarefied political circles) party conference speech last year, when he introduced the idea of “predatory” and “productive” businesses without apparently having prepared for the inevitable subsequent demand that he identify concrete examples of each.

To be fair, the most recent speech was delivered at an economic conference hosted by a think tank. It wasn’t an election rally or a rehearsal for this year’s annual conference. But it was part of a concerted campaign of autumn re-entry into the political game; a setting out of the stall and a bid to demonstrate that there is more to Labour’s offer than simply waiting for the coalition to fall apart. Part of that campaign included an interview with the New Statesman in which Miliband explicitly and vigorously rejected the charge that he was quietly hoping to resume where Labour left off in 2010.

That much should be obvious. The budget situation that a Labour government would inherit – brutal spending constraints lasting for a decade or longer – mean the old model of ever-expanding social intervention, mediated by the Treasury and bankrolled out of general taxation, is not an option. That may be substantially George Osborne’s fault if, as Labour alleges, it  is his policies that have suffocated growth. But it is still Ed Miliband’s problem. It is good that he says as much.

The charge that the Tories hope to bring at the next election is that the country cannot afford another Labour government and that Miliband doesn’t know how to deliver any of the social benefits he promises without confiscating money from you and me or borrowing it. Debt aversion is a powerful driver of conservative impulses. (Yes, I know the macroeconomic arguments that distinguish the national finances sheet from a household budget, but until someone finds a way to express Keynes’s paradox of thrift in a pithy soundbite, Labour look like the party of wild national sprees on the never-never.)

Miliband recognises that he needs a convincing account of how Labour can realise its traditional aims of social regeneration in recognition of limited government means. Inevitably that will require some account of budget priorities, which in turn will demand some reconciliation with harsh decisions made by the coalition. The Labour leader and the shadow chancellor have so far tiptoed up to that conversation but not, in any meaningful sense, joined it. One justification for that caution – as I have written before – is that premature professions of fiscal rigour could easily be twisted by the Conservatives to look like confessions of responsibility for the deficit. Explicitly promising to spend less in the future risks polluting Ed Balls’s argument (supported by a regiment of non-partisan economists) that cutting “too far, too fast” is the very reason we are in a double dip recession. The question that many in the shadow cabinet ask with increasing urgency is when, exactly, the Labour leadership  intends to make the transition from short-term macroeconomic prescription (the Five-Point Plan) and abstract ambitions for socio-economic revolution (Responsible Capitalism) to actual policies that campaigners can deploy on the doorstep. The answer I get when I pose this question to people at the top of the Labour high command is “not yet.”

This is a straightforward gamble. It assumes that the coalition has more unravelling to do and the Tory party has some way further to go in its perverse journey of brand recontamination, obviating the need for Labour to surrender detailed policy hostages to fortune. Jon Cruddas’s policy review is meant to be looking at ways to translate the Miliband agenda into real world messages that resonate around kitchen tables and its work has only just begun. The next election is, in all probability, still more than two years away. There is time.

The risk is that the pace of coalition meltdown brings Miliband’s offer under sustained interrogation long before he is ready to answer difficult questions about his intended stewardship of the nation’s finances. At the moment the appetite for rigorous thinking and the exercise of tough choices is strongest among people broadly sympathetic to Miliband’s programme. Policy minds of the left and centre left are engaging constructively with the challenge that they see stretching out before the Labour party.

There is, for example, an important essay coming up in the forthcoming edition of Juncture, a journal produced by the Institute for Public Policy Research, co-authored by Nick Pearce, IPPR director, and Gavin Kelly of the Resolution Foundation (writing in a personal capacity). They were two of the most senior figures in the Downing Street policy unit under Labour and are highly respected in Whitehall and across party lines in Westminster. The article explores in new detail the options available to a government of the centre-left that is both realistic about the fiscal situation and ambitious in effecting radical structural reforms to the economy. It deserves and will no doubt get close attention from the Labour leadership.

Unless embraced and acted upon, that spirit of helpful engagement could quickly be overshadowed by more hostile interventions. The derision initially heaped on Miliband’s conference speech last year was checked by a dawning recognition among critics that the Labour leader, for all the flaws of his presentation, might actually have been on to something. There was even a moment earlier this year when it looked as if Miliband had started something of an intellectual arms race for ownership of the “moral/responsible capitalism” agenda. Conservative engagement on that front withered in the radioactive fall out from George Osborne’s disastrous budget.

Yet the reprieve for Miliband is temporary. He might have persuaded a few people that he has an interesting analysis of what is wrong with the British economy, but if he can’t then turn that into a credible prescription for fixing it, the scorn will return with renewed force. Instead of attacking him for having no ideas, the Tories can attack him for having unworkable ideas, at best, or – more likely – just talking high fallutin’ gibberish that doesn’t contain a credible promise to bring home the national bacon. It is a law of politics that when a candidate fails to give his agenda definition, his enemies will gladly define it for him in the worst possible terms. That, broadly speaking, is what happened to Cameron’s Big Society. (I wrote more about the lessons for Miliband from that project here.)

Which brings us back to Answers (a) and (b) to those questions at the start. Miliband is immensely comfortable with the language of ideas and theory. He knows he has to express himself also through experience of the real world, which is where politics has to operate to be in any way effective. But it is hard to escape the impression from his speeches and media performances that he finds the gear change awkward. It is as if he is running a constant process of simultaneous translation in his head from the (a) answer to the (b) one … or relying on aides to do the translation for him.

The problem is not insurmountable. It helps that Cameron has his own very different problems indicating that he understands the pain and insecurity that a stagnant economy inflicts on people who have not benefited from a charmed cruise up to the highest office in the land. But when he performs at his best, Cameron is fluent in answers (b). His difficulty, as some more thoughtful Tories recognise, is that he didn’t bother even thinking through answers (a) in opposition.

And yes, I recognise that this long, rambling blog post has hardly been a lesson in accessible prose, for which apologies to anyone who has read this far. The point is that Miliband has launched himself into the new political season invigorated and confident with what he sees as a bold new message. He believes it is exciting, challenging and disruptive to conventional thinking and stale orthodoxy. All of which might be true. But there is a kind of radicalism, especially on the left, that, when neatly encapsulated in abstract theories, is also a place of retreat, a kind of shying away from the grim, hand-dirtying business of making political choices and rough compromises that affect people’s lives. So, a question for the Labour party conference this year - is Ed Miliband:

(a) The leader who took the first steps to set Labour on a course of recovery from the divisions of the Blair/Brown era and established an interesting intellectual framework for his successors to build a credible platform for 21st Century social democracy in an age of austerity?

Or can he be:

(b) Britain’s next Prime Minister?

Ed Miliband - "immensely comfortable with the language of ideas and theory." Photograph: Getty Images.

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

Getty Images.
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Scotland's huge deficit is an obstacle to independence

The country's borrowing level (9.5 per cent) is now double that of the UK. 

Ever since Brexit, and indeed before it, the possibility of a second Scottish independence referendum has loomed. But today's public spending figures are one reason why the SNP will proceed with caution. They show that Scotland's deficit has risen to £14.8bn (9.5 per cent of GDP) even when a geographic share of North Sea revenue is included. That is more than double the UK's borrowing level, which last year fell from 5 per cent of GDP to 4 per cent. 

The "oil bonus" that nationalists once boasted of has become almost non-existent. North Sea revenue last year fell from £1.8bn to a mere £60m. Total public sector revenue was £400 per person lower than for the UK, while expenditure was £1,200 higher.  

Nicola Sturgeon pre-empted the figures by warning of the cost to the Scottish economy of Brexit (which her government estimated at between £1.7bn and £11.2.bn a year by 2030). 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 considerable austerity. 

Nor would EU membership provide a panacea. Scotland would likely be forced to wait years to join owing to the scepticism of Spain and others facing their own secessionist movements. At present, two-thirds of the country's exports go to the UK, compared to just 15 per cent to other EU states.

The SNP will only demand a second referendum when it is convinced it can win. At present, that is far from certain. Though support for independence rose following the Brexit vote, a recent YouGov survey last month gave the No side a four-point lead (45-40). Until the nationalists enjoy sustained poll leads (as they have never done before), the SNP will avoid rejoining battle. Today's figures are a considerable obstacle to doing so. 

George Eaton is political editor of the New Statesman.