The Staggers

The New Statesman’s rolling politics blog

Miliband needs to change the subject

To be heard on the economy again, the Labour leader should talk more about public services.

By Rafael Behr Published 24 November 2011 18:57

So Ed Miliband has made another speech on the economy. This time the focus was an attack on the government's fiscal strategy. (My colleague George Eaton looks at the arguments in more detail here) This time there was a bit less of the broader, moralising language about the need for more responsible, non-predatory capitalism that has been the main feature of the Labour leader's rhetoric recently. The idea, it seems, was to set up next week's autumn statement as a test for the Chancellor. Can he show that his deficit reduction and debt containment plan is working? (Ed wouldn't be asking unless he was fairly sure the answer is "no".)

As I wrote in my column this week, Labour is still struggling to win the big macroeconomic argument about how best to balance the need to stimulate growth and show responsibility with public money. Ed Balls feels vindicated in his judgement that cutting hard and fast would choke off the recovery, making it harder to generate the revenue needed to shrink the deficit. But voters were persuaded by George Osborne's simpler analogies of household finance - we are in debt, so we must not spend. (No-one has found a way to turn Keynes's paradox of thrift into a nifty slogan, although Miliband's line about not being able to pay off the credit card without a job is a decent attempt.)

My suspicion is that people are simply not yet ready to listen to Labour at all on the economy. One shadow cabinet minister described the problem to me recently in psychological terms. The electorate's view of who is to blame for the mess we are in is affected by "cognitive dissonance" - the phenomenon that leads people to ignore evidence and arguments that challenge a position in which a prior emotional investment has been made. In other words, having been persuaded that Labour should not be trusted to run the economy and accepted that someone else should have a go, voters do not want to feel rebuked for choosing poorly.

That will change over time, since people will also always end up blaming the current administration for their pain. But no-one can say how quickly that will happen. Whatever the two Eds say about what should have happened, austerity is now the fixed backdrop to the economic debate. They need to find a way to move the conversation forwards to a discussion about who has the better ideas for treating people fairly and looking after them when there is no money to spend. That means no longer postponing difficult choices around public sector reform. The party needs an account of how it would get the right outcomes when simply spending more isn't on the agenda, thereby tackling also the tricky issue of how much money was "wasted" between 1997-2010 and how much "invested." In that respect, Labour has a certain advantage in that voters trust the party to care about services.

I am told that Miliband intends to tackle this question in the new year. That would probably coincide with a difficult period for the government as an inevitable winter crisis stirs up popular anger about bungled NHS reforms. If Miliband can come up with a compelling story about how it would get "more for less" in public services, the Tories would be vulnerable to the charge of being reckless and heartless cutters and Labour would be more credible on the deficit. It isn't yet remotely clear what that story might be though.

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Tags: Ed Miliband

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23 comments

Thu, 2011-11-24 22:49 — Stu (not verified)

ic Luddite... so when theres another downgrading of growth the Tories can say we lost £500m last month. Then Ed will be blamed for not condemning them... catch 22...

Thu, 2011-11-24 23:05 — Eddy S (not verified)

the problem is that politicians can't be trusted to run our economy and manage our money effectively, it was interesting to watch "your money and how they spend it" on bbc this week. the problem is that all govts think that good times will last forever and therefore find it very difficult to run a budget surplus when an economy grows at trend rate, golden rules go out the window, balancing budgets over the economic cycle goes out the window as there's no votes in cutting spending programmes and therefore tough decisions can't be made (even now we are really still overspending by huge amounts), which leads to an utter mess which we have now.

the future trend is moving east with the economies of china and india becoming much richer and more dominant in markets that we want to be in - we need to be leaner and meaner thats the bottom line.

Thu, 2011-11-24 23:28 — Fraziel1

@Stu, the point is the government are not negotiating.They said this is what we are doing and we will discuss some points but a lot of it is off limits.In other words we will not budge no matter what and the unions have tried to negotiate for months. The lies in the press are astonishing, i am civil servant and am told i have a great paying job and a great pension yet i get paid under 21k a year and have not had a pay rise for 5 years! That's 2 yrs pay freeze and 3 yrs prior as the government said there was no maoney. Enough for 200 billion in benefits mind you!

As for this " In other words, having been persuaded that Labour should not be trusted to run the economy and accepted that someone else should have a go, voters do not want to feel rebuked for choosing poorly"

If anyone actually beleives that shite then they don't deserve to be listened to or in government.what Milliband needs to do is either up his game massively or resign and let Yvette Cooper have a go.

Thu, 2011-11-24 23:36 — Scotty

there seem to be two themes being put forward above - the government aren't negotiating , which I read as the unions are saying the government is not giving them what they want, for the parasitic unions negotiation is getting what they demand regardless of the reasonableness or practicality of the demand.
and the other argument even more spurious is that the government are taking £500 million from the public sector, rubbish of course and showing no recognition that the public sector are paid by the tax payers in the private sector, so the government is in fact trying its best to let the tax payer to keep more of their hard earned money - it is not the governments money to give, it is the productive private sectors tax payers money.

Thu, 2011-11-24 23:39 — C Baker

'more for less' is very much like a Tory slogan, when they go on about Labour wastage. It was part of the Tory election campaign. I'm not sure this would work, or telling voters they have "cognitive dissonance". It all seems too much political science and not voter friendly.

Ed needs to do something about banker bonuses and executive pay. However, even TUC General Secretary Brendan Barber in his concurrent post as Non-Executive Director of the Court of the Bank of England has not sorted this issue out. I think this is what voters feel strongly about. The poorer workers paying for the debts disproportionately.

Fri, 2011-11-25 00:37 — REPAY

Good idea! We can either have public services or we can pay circa 30% of all money to people who used to provide services. That is why pension reform is critical. This magazine needs to address the maths of unfunded pensions.

Fri, 2011-11-25 05:43 — Fergus Pickering (not verified)

I think the idea of free markets started rather earlier than the 1980s. But perhaps you are a young person who thnks history tated about then.

Fri, 2011-11-25 05:44 — Fergus Pickering (not verified)

Sorry, that should read 'started'.

Fri, 2011-11-25 07:37 — Luddite (not verified)

Fraziel1: "21k a year and have not had a pay rise for 5 years.. Many in Industry are paid" £16.000 a year and less, many have also seen pay-cuts. So what are you whinging about!! The Government are offering you a good deal given the appalling economic legacy they inherited.

Fri, 2011-11-25 12:58 — Stu (not verified)

@fraziel1,

You're telling us about your financial situation but I can guarantee there are people in the private sector that are either much worse than you or a tad better and still our pension schemes are far worse. Even with the new govt proposals public sector is still much better.

Now private sector workers are bound to see red... the news and media play to them and therefore we see a bias in information.

Looking at it from the top level...
1) much less than 50% of union members voted to strike... I think avg was 30%? - is that fair? shouldn't a vote be a majority ie 51%
2)negotiations are apparently ongoing, the unions are striking before they have ended - is that fair?
3) millions of people have kids and will have to find alternative means - is that fair?
4) apparently the govt will lose out on £500m - in this climate does it make financial sense?

So even though Ed has his paymasters shouldn't he at the very least tell them to hold back until for definite the talks have broken down? are we being unfair to him to ask for that little bit of 'leadership'? it would seem to many that it is Ed who is out of touch...

It's not a dig at the employed whether in private or public... but from the top level it's waht we see in the media...

Fri, 2011-11-25 20:46 — Fraziel1

@luddite and Stu, i find it embarrassing when people come out with the mince you just have. My wages are crap and i have not had a decent pay rise in ten years but i am really lucky as other people are worse off than me. What utter f*cking bollocks and just the sort of crap that big business and right wingers want us to think.My wages are poor and the fact that someone is worse off than me is utterly irrelevant

As for striking, you are not forced to. Anyone in the union can go into work if they like. In my place some people always go in an there is no come back. I also find it amusing that you also swallow the government figures of 500 million being lost to the economy. Explain to me how they arrived at that figure? oh, you can't because its bollocks and amyone who belives a single thing that Francis Maude comes out with really needs his/her head examined.

Fri, 2011-11-25 20:50 — Fraziel1

oh, and one other thing, were i doing my job in the private sector i would be on approx 5k a year more than I am on. The government can have my pension and i will have the 5k thanks.

Thu, 2011-11-24 19:58 — Adam (not verified)

But Labour is to blame for the state of the economy, there's no cognitive dissonance required. Labour applied non-counter-cyclical Keynesianism during a boom, encouraged assets to be overvalued and irreversibly raised public sector wages to now unsustainable levels. Their ludicrous PFIs alone make the task of bringing down the deficit nearly impossible.

Of course, the Tories' monetarism is going predictably badly, but does it follow that Keynesianism-in-one-country would make a massive difference to the economy? And, if so, at what cost? Attempts at Keynesianism haven't exactly fared well in the US (and Krugman's "we haven't gone far enough" logic smacks of the same pseudo-science that the Tories are rightfully accused of on these pages) and unbridled spending and debt is being punished harshly by the markets in Europe. Must we turn to the vague moralism of MiliE and the NuLab spending of Balls?

Thu, 2011-11-24 20:55 — Luddite (not verified)

"To be heard on the economy again, the Labour leader should talk more about public services" Mmmm...... Who wrote that... Some public sector union official...

Thu, 2011-11-24 21:16 — swatantra nandanwar

Lets not play the blame game because we could go back to the 80's when the idea of free markets all started.
What we need is a better understanding between employers and employees and some loyalty to the business they are in, and if its the public sector the public they are serving.
Times are tough people are living longer and there simply isn't the cash to pay out on pensions and welfare as there used to be. At the same time employees are right to expect some kind of security in their jobs so that they can plan for the future.
Labour may well have to change its narrative on the economy. We need some serious thinking instead of repeating the samae mantra, and that is what the public have stopped listening to.

Thu, 2011-11-24 21:50 — Benjamin Rae (not verified)

It could hardly be more straightforward. The crisis was global. It screwed every western economy and will do plenty damage to the east in time. Labour could have been better prepared no doubt but the willingness of the Tories and their friends to misrepresent the facts to justify disgusting policies is a disgrace.
They can't have it both ways. Either they would have matched Labour's spending prior to the crash and would have left us in the same position. Or more likely they were telling lies and the deficit would be a bit better but still bad.

Thu, 2011-11-24 22:02 — Stu (not verified)

A good start would be to condemn the strikes coming next week if he really wants to show thats he's got a pair.

The unions are holding the government to ransom at a tune of £500m, can the UK afford it?... no. If he was responsible he needs to defy his paymasters and show us that a Labour party in government can make the hard decisions.

Thu, 2011-11-24 22:14 — Homo Sapiens

Think about it, Stu - the government are holding their employees to ransom to the tune of £500m, and more!

Thu, 2011-11-24 22:17 — Briar (not verified)

"austerity is now the fixed backdrop to the economic debate"

And that is what needs to change. As long as Labour sings from that singsheet, it confirms it has learned nothing and still supports the same free market policies which caused this disaster.

Thu, 2011-11-24 22:21 — Stu (not verified)

The negoiations are ongoing how can the unions warrant a strike? If less than 50% of union members voted for action isn't it irresponsible for the union to strike,(although it's perfectly legal.. for now).

I can perfectly accept that if the neg. broke down and the govt actually tried to bum the unions then strike action it will be! but please don't strike like this... it's pure irresponsibility!

Thu, 2011-11-24 22:22 — Luddite (not verified)

Stu: Let them go on strike it will give the government someone to blame. Government workers aren't viewed with much sympathy these days...

Thu, 2011-11-24 22:43 — Awake!

I wish milliband would start looking at the UK ta code- one of the most complex in the world- frre points there, but Labour are faring worse that Torres- they cost a LOT more and miss open goals weekly...
Why is that? cos it was effing brown who complicated it so much. No matter- water under the bridge- he needs to stick the knife in brown's back, sack balls, and attack all the crazy stuff labour brought it- free goals, distancing himself from the clowns, a new party blah blah blah...