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.

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Why Theresa May won't exclude students from the net migration target

The Prime Minister believes the public would view the move as "a fix". 

In a letter to David Cameron shortly after the last general election, Philip Hammond demanded that students be excluded from the net migration target. The then foreign secretary, who was backed by George Osborne and Sajid Javid, wrote: "From a foreign policy point of view, Britain's role as a world class destination for international students is a highly significant element of our soft power offer. It's an issue that's consistently raised with me by our foreign counterparts." Universities and businesses have long argued that it is economically harmful to limit student numbers. But David Cameron, supported by Theresa May, refused to relent. 

Appearing before the Treasury select committee yesterday, Hammond reignited the issue. "As we approach the challenge of getting net migration figures down, it is in my view essential that we look at how we do this in a way that protects the vital interests of our economy," he said. He added that "It's not whether politicians think one thing or another, it's what the public believe and I think it would be useful to explore that quesrtion." A YouGov poll published earlier this year found that 57 per cent of the public support excluding students from the "tens of thousands" target.

Amber Rudd, the Home Secretary, has also pressured May to do so. But the Prime Minister not only rejected the proposal - she demanded a stricter regime. Rudd later announced in her conference speech that there would be "tougher rules for students on lower quality courses". 

The economic case for reform is that students aid growth. The political case is that it would make the net migration target (which has been missed for six years) easier to meet (long-term immigration for study was 164,000 in the most recent period). But in May's view, excluding students from the target would be regarded by the public as a "fix" and would harm the drive to reduce numbers. If an exemption is made for one group, others will inevitably demand similar treatment. 

Universities complain that their lobbying power has been reduced by the decision to transfer ministerial responsibility from the business department to education. Bill Rammell, the former higher education minister and the vice-chancellor of Bedfordshire, said in July: “We shouldn’t assume that Theresa May as prime minister will have the same restrictive view on overseas students that Theresa May the home secretary had”. Some Tory MPs hoped that the net migration target would be abolished altogether in a "Nixon goes to China" moment.

But rather than retreating, May has doubled-down. The Prime Minister regards permanently reduced migration as essential to her vision of a more ordered society. She believes the economic benefits of high immigration are both too negligible and too narrow. 

Her ambition is a forbidding one. Net migration has not been in the "tens of thousands" since 1997: when the EU had just 15 member states and the term "BRICS" had not even been coined. But as prime minister, May is determined to achieve what she could not as home secretary. 

George Eaton is political editor of the New Statesman.