Inside Miliband's "one nation" project

The Labour leader's chief strategist Stewart Wood on the inspiration he takes from Thatcher and the five principles behind "one nation".

I've just returned from Queen Mary, University of London, where some of Labour's brightest minds, including Jon Cruddas, Jonathan Rutherford and Maurice Glasman, are meeting for a one day conference on "The Politics of One Nation Labour" (the event is being live blogged by Labour List). 

Stewart Wood, Ed Miliband's consigliere, who sits in the shadow cabinet as minister without portfolio, opened proceedings and drew laughter when he revealed that he'd just bought a copy of Hayek's The Road to Serfdom (a favourite text of Margaret Thatcher's). One of the main reasons he entered politics, he said, was Thatcher and her belief that "ideas could be transformational". As Miliband has hinted in his statements since her death, he and his allies take inspiration from how she broke with the political and economic consensus of the time and established a new governing philosophy (although one might pause to note the irony of a Thatcher-esque project that describes itself as "one nation"). 

Wood remarked that Thatcher's achievement lay in spotting "the exhaustion of an old settlement", adding that the public would reward those who did the same today. Miliband's one nation approach, he said, was a "profound challenge" to the consensus that took root in 1979. 

He went on to outline the five main principles behind "one nation" Labour:

1. A different kind of economy

2. A determination to tackle inequality

3. An emphasis on responsibility (at the top and the bottom)

4. Protecting the elements of our common life

5. Challenging the ethics of neoliberalism

What does all this mean for policy? Today, Wood emphasised what he calls a "supply side revolution from the left": reforming the banking system so that it supports, rather than hinders, long-term growth and an active industrial policy; working with employers to build technical education and "filling out the middle" of our "hourglass economy" by expanding use of the living wage. Without uttering the dread word "predistribution", he spoke of building an economy in which greater equality is "baked in", not "bolted on afterwards". Rather than merely ameliorating inequalities through the tax and benefits system (although Wood emphasised that redistribution would remain an important part of the social democratic arsenal), the state should act to ensure that they do not arise in the first place.

On social security, he spoke, as other Labour figures have done, of strengthening the contributory principle, so that there is a clearer relationship between what people put in and what they get out. The hope is that this would revive public confidence in the welfare state and Wood also pointed out that contributory and universal systems had proved less vulnerable to cuts than those based on means-testing. As I noted in my recent piece on why Labour must defend universal pensioner benefits, history shows that a narrower welfare state soon becomes a shallower one as the politically powerful middle classes lose any stake in the system and the poor are stigmatised as "dependent". The "paradox of redistribution", as social scientists call it, is that provision for some depends on provision for all.

Wood concluded by discussing the three main challenges facing one nation Labour: the fiscal constraints imposed by a lack of growth; building new institutions and restoring faith in politics. The biggest obstacle to change, he said, was not hostility to Labour but the belief that politicians were "all the same" and that "none of you can change anything". He observed that while the right "thrives on the pessimism that nothing can change", the left is "starved of oxygen". The greatest challenge for Labour, then, is to attack the coalition's failures while simultaneously persuading voters that they were far from inevitable. 

Ed Miliband addresses workers at Islington Town Hall on November 5, 2012 in London. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty Images
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How can Britain become a nation of homeowners?

David Cameron must unlock the spirit of his postwar predecessors to get the housing market back on track. 

In the 1955 election, Anthony Eden described turning Britain into a “property-owning democracy” as his – and by extension, the Conservative Party’s – overarching mission.

60 years later, what’s changed? Then, as now, an Old Etonian sits in Downing Street. Then, as now, Labour are badly riven between left and right, with their last stay in government widely believed – by their activists at least – to have been a disappointment. Then as now, few commentators seriously believe the Tories will be out of power any time soon.

But as for a property-owning democracy? That’s going less well.

When Eden won in 1955, around a third of people owned their own homes. By the time the Conservative government gave way to Harold Wilson in 1964, 42 per cent of households were owner-occupiers.

That kicked off a long period – from the mid-50s right until the fall of the Berlin Wall – in which home ownership increased, before staying roughly flat at 70 per cent of the population from 1991 to 2001.

But over the course of the next decade, for the first time in over a hundred years, the proportion of owner-occupiers went to into reverse. Just 64 percent of households were owner-occupier in 2011. No-one seriously believes that number will have gone anywhere other than down by the time of the next census in 2021. Most troublingly, in London – which, for the most part, gives us a fairly accurate idea of what the demographics of Britain as a whole will be in 30 years’ time – more than half of households are now renters.

What’s gone wrong?

In short, property prices have shot out of reach of increasing numbers of people. The British housing market increasingly gets a failing grade at “Social Contract 101”: could someone, without a backstop of parental or family capital, entering the workforce today, working full-time, seriously hope to retire in 50 years in their own home with their mortgage paid off?

It’s useful to compare and contrast the policy levers of those two Old Etonians, Eden and Cameron. Cameron, so far, has favoured demand-side solutions: Help to Buy and the new Help to Buy ISA.

To take the second, newer of those two policy innovations first: the Help to Buy ISA. Does it work?

Well, if you are a pre-existing saver – you can’t use the Help to Buy ISA for another tax year. And you have to stop putting money into any existing ISAs. So anyone putting a little aside at the moment – not going to feel the benefit of a Help to Buy ISA.

And anyone solely reliant on a Help to Buy ISA – the most you can benefit from, if you are single, it is an extra three grand from the government. This is not going to shift any houses any time soon.

What it is is a bung for the only working-age demographic to have done well out of the Coalition: dual-earner couples with no children earning above average income.

What about Help to Buy itself? At the margins, Help to Buy is helping some people achieve completions – while driving up the big disincentive to home ownership in the shape of prices – and creating sub-prime style risks for the taxpayer in future.

Eden, in contrast, preferred supply-side policies: his government, like every peacetime government from Baldwin until Thatcher’s it was a housebuilding government.

Why are house prices so high? Because there aren’t enough of them. The sector is over-regulated, underprovided, there isn’t enough housing either for social lets or for buyers. And until today’s Conservatives rediscover the spirit of Eden, that is unlikely to change.

I was at a Conservative party fringe (I was on the far left, both in terms of seating and politics).This is what I said, minus the ums, the ahs, and the moment my screensaver kicked in.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.