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Miliband's intervention is a victory for the Occupy Movement

The protesters are helping to shape the terms of the political debate.

Let's be clear. It is impossible to imagine a Labour Party led by Tony Blair or Gordon Brown -- in opposition or in government -- having a single positive thing to say about the protesters huddled around St Paul's Cathedral. But Ed Miliband has penned a piece for today's Observer that, with a few predictable caveats, argues he is coming from the same place as the Occupy movement. The protests "reflect a crisis of concern for millions of people about the biggest issue of our time: the gap between their values and the way our country is run," he argues.

Firstly, it's a victory for Occupy. The left is so accustomed to defeat that it is often incapable of acknowledging a step forward, however limited or modest in scale. For some, Miliband is to be damned whatever he does: to be rightly condemned if he denounces the protests, and to be accused of attempting to co-opt them if he welcomes them. But the fact that a Labour leader is at all upbeat about the Occupy movement in the Sunday papers shows that pressure from below pays off. The movement is helping to shape the terms of the political debate.

After all, Miliband would not have written this piece if Occupy was the object of widespread hostility, or if it had failed to strike a chord. A poll for ICM two weeks ago revealed that, while 38 per cent felt the protests were "naive" and that "there is no practical alternative to capitalism", 51 per cent believed that "the protesters are right to want to call time on a system that puts profit before people".

Though some have argued that Occupy has been derailed by the stand-off with the Church, the presence of those tents has prompted a discussion about issues the media would otherwise choose to ignore. Last week, I took part in a 5 Live debate about the future of capitalism; I pointed out that we were only talking about it because of the hundreds of activists outside St Paul's.

But Miliband's piece is further evidence that there has been a shift at the top of the Labour leadership. He slams "many of those who earn the most, exercise great power, enjoy enormous privilege" for having "values that are out of kilter with almost everyone else". He attacks "a system of irresponsible, predatory capitalism"; energy companies and banks come under fire, too. And he openly taps into the signature slogan of the Occupy movement: "People feel let down by aspects of business, finance and politics which seem in touch with the richest 1 per cent -- but badly out of touch with the reality facing the other 99 per cent." Can anyone seriously imagine either Blair or Brown making such a case?

I'm no Labour leadership sycophant: while his analysis is broadly correct, his proposed solutions (such as they exist) are timid, to say the least. Talk of cutting student fees from £9,000 to £6,000 will excite nobody and simply helps reinforce a consensus around education. He remains committed to "measured spending cuts" that would be anything but that -- while they would not be as fast or as deep as the Tories', they would remain the most devastating since the 1920s. A coherent alternative to the cuts agenda has yet to emerge.

Last week, the Labour leadership refused to oppose the government's criminalisation of squatting at a time when millions are languishing on housing waiting lists; and its rhetoric and policies around welfare have conceded much ground to "scrounger-bashing".

And, of course, it is a damning indictment of just how far to the right New Labour had drifted that Miliband's rhetoric is worth commenting on at all. But that the Labour leadership feels obliged to develop a trenchant critique of modern capitalism shows that the old neo-liberal consensus is crumbling. What's more, it opens up space for far more radical demands.

During last year's Labour leadership contest, I argued that David Miliband had to be defeated at all costs. If he won, he would have capitulated to Cameron's "small state" agenda; indeed, his lauding of R A B Butler -- the postwar Tory politician who argued that the Conservatives must accept the key policies introduced by Clement Attlee's postwar Labour government -- suggested he would do just that. Ed Miliband is no left-winger but I believed that -- in contrast to his brother -- he could be shifted by pressure from below. Today's article is evidence that this is true after all.

Privately, I suspect Ed Miliband is committed to some kind of revival of old-style social democracy. He refers to the two previous governments that established new political consensus: Attlee in 1945 and Thatcher in 1979 (though, mistakenly in my view, he includes Blair in 1997 -- but he would have provoked an almighty internal party row if he had not). If the Labour leadership is to genuinely break from the neo-liberal consensus established by Thatcher, there needs to be far more pressure from below: both to create political space to make it possible, but also to drag the Labour leadership -- kicking and screaming if needs be -- to give a real alternative to Tory cuts.

No, I don't expect or want the Occupy protesters to mock up posters of Miliband as Che Guevara. The Labour leadership must come under fire when it gives ground to the Tories. But today's Observer piece suggests that the political winds are starting to blow in a different direction. It's an opportunity that desperately needs to be exploited.