Ed Miliband's speech on the economy: five key points

The Labour leader adapts Obama's "growing from the middle out" and calls for a "recovery made by the many, not just a few".

Ed Miliband will head to Bedford today to deliver the major speech on the economy that I first reported on The Staggers earlier this week, followed by a joint Q&A with Ed Balls at a training centre. 

It's unclear whether the speech will contain any new tax or spending commitments (although Jon Cruddas promised Newsnight last night that it would feature "a major, substantive piece of economic policy"), it will, according to pre-released extracts from Labour, offer "a choice between two different visions of our economy". 

"The Conservative vision of a race to the bottom in wages and skills, rewarding those at the very top but leaving everyone else squeezed as never before. Or the One Nation Labour vision." In an interview in today's Guardian, Miliband elaborates on this theme.

So, ahead of the speech at 10:45, here are five of the key points from the pre-released extracts and the interview. 

1. You've never had it so bad

Miliband's decision to make the speech in Bedford is an allusion to Harold Macmillan's famous 1957 address in the same town in which the Conservative prime minister declared: "you've never had it so good". 

Today, the Labour leader will say, millions across Britain fear "they will never have it so good again". 

Small businesses are working harder than ever before. People are working harder than ever before. But for far too many, wages are falling and prices are rising.

"Far from feeling they have never had it so good, millions across Britain today fear 'they will never have it so good again'. The question that people ask me the most is 'how do we turn this round?'"

It this bleak outlook - the Resolution Foundation reported yesterday that living standards will not return to pre-recession levels until at least 2023 - that will shape Miliband's policy priorities. 

2. Policy without a price tag

With less money around to spend and Labour wisely holding back its tax and spending commitments until the state of the public finances is clear, Miliband will outline alternative means of building a fairer economy and society. Returning to the territory of "predistribution" (although probably without using that word), he will say that a Labour government would take action to:

- "break the stranglehold of the big six energy suppliers

- stop the train company price rip-offs on the most popular routes

- introduce new rules to stop unfair bank charges

- cap interest on payday loans."

3. Miliband channels Obama: "growing from the middle out"

At yesterday's PMQs, Miliband channelled Ronald Reagan, asking David Cameron his own version of the US President's famous question to Jimmy Carter in the 1980 presidential debate: "Are you better off now than you were four years ago?" 

"At the end of the parliament, will living standards be higher or lower than they were at the beginning?", Miliband asked the PM.

In his Guardian interview, Miliband borrows from another US President, Barack Obama, and offers his account of what Obama calls "growing the economy from the middle out". He says: 

"We need a recovery made by the many, not just a few at the top. A recovery made by building, not squeezing, the middle. The government's economic strategy consists of squeezing the middle further, a race to the bottom and trickle down from the top."

Miliband notes that past recoveries have been driven by the middle class. 

"Henry Ford used to say: 'I have to pay my workers enough so they can buy the cars they are producing.' There was a British equivalent in relation to Macmillan: the houses were built, but people had the wages to buy or rent the houses."

4. Mansion tax: we're looking into it

Asked by the Guardian whether he will adopt a version of Vince Cable's "mansion tax", Miliband replies: "We have said we will look at the idea of mansion tax. Ed Balls was right to say that and we have said we would work with the government to make it happen."

The confirmation that Labour is exploring a mansion tax as part of its policy review is encouraging. Here at the NSwe've long argued that the burden of taxation should be shifted from income towards wealth and assets (see NS editor Jason Cowley's 2010 cover story on the subject). Wealth taxes are harder to avoid than those on income (even the most determined tax avoider cannot move his or her mansion to Geneva), are progressive (wealth is even more unequally distributed than income), and benefit the economy by shifting investment away from unproductive assets and towards wealth-creating industries. For the psephologically minded, it's also worth noting that they're popular. A Sunday Times/YouGov poll found that 63 per cent of the public (including 56 per cent of Tories) support a mansion tax, with just 27 per cent opposed.

5. Cameron's "global race" is a "race to the bottom"

Ever since his address at last year's Conservative conference, no David Cameron speech or interview has been complete without a reference to "the global race" facing Britain. But Miliband will denounce the Prime Minister's vision as one defined by a "race to the bottom". 

"David Cameron talks about a global race. And it is essential that we can compete with China and India and others. But I have to tell you, Britain won't win a race to the bottom by competing in the world as a low skill, low wage economy.

"We were promised that we could have growth and a lower deficit. In fact, we've had almost no growth and the deficit is rising again. But David Cameron's failure is not simply a failure of economic management or judgement. It is a failure to understand how wealth is created and an economy succeeds.

"We cannot go on with an approach that simply promises more of the same: year after year of squeezed living standards for the majority of working people. Because it's wrong for them and because it's wrong for our economy."

Ed Miliband will call for "a recovery made by the many, not just a few" in his speech on the economy in Bedford. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

GARY WATERS
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In defence of expertise: it’s time to take the heart out of “passionate” politics

What we need is cool logic.

We are living through a bonfire of the experts. During the EU referendum campaign, Michael Gove explained that people had had enough of them. A few weeks later, his fellow Tory MPs took him at his word and chose a relative ingénue to run against Theresa May.

After declaring for Andrea Leadsom in the Tory leadership race, Michael Howard was asked whether it might be a problem that she had never held a position higher than junior minister. Howard, whose long career includes stints as home secretary and opposition leader, demurred: “I don’t think experience is hugely important.”

Even in this jaw-dropping season, that comment caused significant mandibular dislocation. I thought: the next Tory leader will become prime minister at a time of national crisis, faced with some of the UK’s most complex problems since the Second World War. If experience doesn’t matter now, it never does. What does that imply about the job?

Leadsom’s supporters contended that her 25 years in the City were just as valuable as years spent at Westminster. Let’s leave aside the disputed question of whether Leadsom was ever a senior decision-maker (rather than a glorified marketing manager) and ask if success in one field makes it more likely that a person will succeed in another.

Consider Ben Carson, who, despite never having held elected office, contested the Republican presidential nomination. He declared that Obamacare was the worst thing to happen to the United States since slavery and that Hitler may have been stopped if the German public had been armed. Yet Carson is not stupid. He is an admired neurosurgeon who pioneered a method of separating conjoined twins.

Carson is a lesson in the first rule of expertise: it does not transfer from one field to another. This is why, outside their domain, the most brilliant people can be complete dolts. Nevertheless, we – and they – often assume otherwise. People are all too ready to believe that successful generals or entrepreneurs will be good at governing, even though, more often than not, they turn out to be painfully inept.

The psychologist Ellen Langer had her subjects play a betting game. Cards were drawn at random and the players had to bet on whose card was higher. Each played against a well-dressed, self-assured “dapper” and a shabby, awkward “schnook”. The participants knew that it was a game of chance but they took more risks against the schnook. High confidence in one area (“I’m more socially adept than the schnook”) irrationally spilled over into another (“I’ll draw better cards”).

The experiment points us to another reason why we make poor judgements about competence. We place too much faith in social cues – in what we can see. As voters, we assume that because someone is good at giving a speech or taking part in a debate, they will be good at governing. But public performance is an unreliable indicator of how they would cope with running meetings, reading policy briefs and taking decisions in private. Call it the Boris principle.

This overrating of the visible extends beyond politics. Decades of evidence show that the job interview is a poor predictor of how someone will do in the job. Organisations make better decisions when they rely on objective data such as qualifications, track record and test scores. Interviewers are often swayed by qualities that can be performed.

MPs on the Commons education select committee rejected Amanda Spielman, the government’s choice for the next head of Ofsted, after her appearance before them. The committee didn’t reject her because she was deficient in accomplishments or her grasp of education policy, but because she lacked “passion”. Her answers to the committee were thoughtful and evidence-based. Yet a Labour MP told her she wasn’t sufficiently “evangelical” about school improvement; a Tory asked her to stop using the word “data” so often. Apparently, there is little point in being an expert if you cannot emote.

England’s football team is perennially berated in the media for not being passionate enough. But what it lacks is technique. Shortly before Wales played England in the European Championship, the Welsh striker Gareth Bale suggested that England’s players lacked passion. He knew exactly what he was doing. In the tunnel before kick-off, TV cameras caught the English goalkeeper Joe Hart in a vessel-busting frenzy. On the pitch, Hart allowed Bale to score from an absurdly long range because he was incapable of thinking straight.

I wish there were less passion in politics and more cool logic; less evangelism and more data. Unthinking passion has brought the Labour Party to its knees and threatens to do the same to the country. I find myself hungering for dry analyses and thirsting for bloodless lucidity. I admire, more than ever, those with obscure technical knowledge and the hard-won skills needed to make progress, rather than merely promise it.

Political leadership is not brain surgery but it is a rich and deep domain. An effective political leader needs to be an expert in policy, diplomacy, legislative process and how not to screw up an interview. That is why it’s so hard to do the job well when you have spent most of your time in boardrooms or at anti-war rallies.

If democratic politicians display contempt for expertise, including their own, they can hardly complain if those they aspire to govern decide to do without the lot of them. 

Ian Leslie is a writer, author of CURIOUS: The Desire to Know and Why Your Future Depends On It, and writer/presenter of BBC R4's Before They Were Famous.

This article first appeared in the 21 July 2016 issue of the New Statesman, The English Revolt