Consumer Socialism? Ed might be onto something here

The Labour leader is right to make defending consumers a mission of the left. But that means tackling failed state services too.

People rarely lurch outside Westminster, unless they are drunk. By contrast, party leaders do it all the time, and quite sober, although in their case it has a specific meaning. (Lurch v. intrans - the movement of a politician in a direction simultaneously craved by his party and deemed by conventional wisdom to be where elections are lost.) Using that definition, Ed Miliband has lurched to the left because his party conference speech proposed big, heavy-handed interventions in the private sector. A vigorous debate followed about how lurchy the lurch really was given that governments intervene in all kinds of markets all the time. There is also an ancillary debate about whether these specific interventions, particularly the proposal to freeze fuel bills, will work.

Less attention has been paid to what I think is a central political ambition of the speech – the attempt to change the way people talk about Miliband’s leadership. His obvious deficiency in opinion polls is the perception that he is weak and will never comfortably fill Prime Ministerial shoes. Already he is being discussed differently: as a danger rather than a joke, which is a short-term win for Labour because a weakling is not a threat. If Miliband is now a menace, he must be less weak.

But there was more to the leadership argument in the speech than simply firing off deliberately controversial policies so that everyone runs around dizzily talking about how bold – or Bolshevik – and decisive Miliband can be. His point is that David Cameron is strong because he has mighty friends in the media, in big business, in finance. By contrast, the Labour leader wants to be strong on behalf of the defenceless. In a traditional left taxonomy of power that means the downtrodden masses, who have thus far in the parliament been effectively cordoned off from public sympathy as undeserving benefit claimants.

Now Miliband has identified a new and much larger group of people who feel put upon, ignored and oppressed – consumers. The Labour leader is definitely onto something if he can put himself on the side of the people who pay the bills, buy the rail tickets, wait on hold to speak to an advisor, while a mechanical voice reassures them that the company considers their call important when plainly it doesn’t. And he is onto something even stronger if he can trap the Tories into being the mechanical voice on the end of the line.

The reason it doesn’t make sense to compare Miliband’s moves to 1970s-style Socialism is that much of the infrastructure of our lives is run by the private sector and will be for the foreseeable future. The challenge for politics is how to meet the demands of citizens who feel the provision of those essential private services is inadequate. If electricity or broadband or transport or whatever are deemed too expensive and the market isn’t working to bring down prices, what is government going to do about it? The menu of options contains variations on control, regulation and liberalisation. You either stamp on the market, limit the market or create more market.

A little-noticed feature of Miliband’s energy agenda is that it uses bits of all three. The freeze is a temporary measure to be imposed while reforms are introduced to make the consumer electricity and gas market more competitive. Labour people aren’t exactly boasting about that because the party faithful prefer the bit about bashing corporate giants to the bit about efficient markets, new entrants and competition being the best way to serve customers in the long term – and the reform side is also the least developed part of the policy. There are some Labour front-benchers who are keen to get that latter part of the argument out there but loyalty to the tone of the leader’s speech is the key this week.

If some balance is restored – if it is made clear that Miliband is actually pursuing a new kind of consumer-focused, market-literate social democracy – he will have carved out a genuinely exciting space for Labour to talk about reforming the economy so it works for the majority. The problem is that consumers don’t just consume in the private sector. They also rely on the state and that too is a huge source of frustration, rip-off, neglect and computer-says-no demoralisation. If Miliband wants to be a crusader for the oppressed masses of consumer-citizens he also needs a story to tell about state reform. He knows this and indeed made the point to me in an interview earlier this year, saying that the “unresponsive state” was as much a matter for political grievance as failed markets. The question that naturally follows is how he will define himself in relation to failures of state power in the way he is currently defining himself as a scourge of failed markets.

Whether he likes it or not, part of that story will be told through the parable of his relationship with trade unions. Labour cannot reform the state without either getting the consent of or winning confrontation with the representatives of organised public sector workers. Miliband wants to present himself as the man who stands up to vested interests as opposed to Cameron - the man who is in the pocket of Big Money. To pull that off, he needs a satisfactory resolution to the confrontation he is already in with the “vested interests” on his own side.

Two years ago, when I asked senior Labour strategists whether this was a problem, they dismissed the analogy. The feeling then was that unions were not hugely unpopular and that if the Tories tried to paint some equivalence between Unite and the City, they would just look ridiculous. Over time that view changed and since the Falkirk row it has been clear that people very close to Miliband see his party reforms as a prominent emblem of his willingness to tackle obstacles to change – “ripping up the rules” - on his own side too. It comes back to that ambition to re-cast Ed as the man of deep, intellectual courage and strength in contrast to Cameron’s insubstantial swagger. The forthcoming battle with the unions has thus acquired even greater significance in the light of Miliband’s conference speech. It is the symbolic counterpoint to his assault on failed markets; it is the chapter in the story that is meant to demonstrate that he has not lurched left after all, nor triangulated right as the old New Labour playbook dictated he should, but instead represents something quite new.

As far as the detail of any settlement with the unions is concerned, there is sure to be a slightly messy compromise. Miliband cannot afford to bankrupt his party by provoking a great schism. Union leaders will not want to damage the Labour leader so much in the haggling that they end up sabotaging the party’s election prospects. What matters most in broader political terms is that Miliband comes out of it with something that can plausibly be held aloft as a victory. No less important, since the Tories will denounce any deal as a capitulation to union paymasters and proof of reversion to the 1970s, it matters that the union leaders look defeated, even if in practice they are not. 

Miliband’s political fortunes over the next few months depend substantially on whether he can embed in the public mind the idea that he is stronger than he looks. For that to work, he needs his enemies to look threatened. So far the Tories are playing along by sounding hysterical about the lights going out, as if insisting on lower bills is a threat to civilisation. The next test is whether the Labour leader’s adversaries on the left will be equally obliging.

Miliband at the Labour conference in Brighton. Source: Getty

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

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The Brexit effect: The fall in EU migration spells trouble for the UK

The 84,000 fall in net migration to 248,000 will harm an economy that is dependent on immigration.

The UK may not have left the EU yet but Europeans are already leaving it. New figures from the ONS show that 117,000 EU citizens emigrated in 2016 (up 31,000 from 2015) - the highest level for six years. The exodus was most marked among eastern Europeans, with a fall in immigration from the EU8 countries to 48,000 (down 25,000) and a rise in emigration to 43,000 (up 16,000).

As a result, net migration has fallen to 248,000 (down 84,000), the lowest level since 2014. That's still nearly more than double the Conservatives' target of "tens of thousands a year" (reaffirmed in their election manifesto) but the trend is unmistakable. The number of international students, who Theresa May has refused to exclude from the target (despite cabinet pleas), fell by 32,000 to 136,000. And all this before the government has imposed new controls on free movement.

The causes of the UK's unattractiveness are not hard to discern. The pound’s depreciation (which makes British wages less competitive), the spectre of Brexit (May has refused to guarantee EU citizens the right to remain) and a rise in hate crimes and xenophobia are likely to be the main deterrents. Ministers may publicly welcome the figures but many privately acknowledge that they come at a price. The OBR recently forecast that lower migration would cost £6bn a year by 2020-21. As well as reflecting weaker growth, reduced immigration is likely to reinforce it. Migrants pay far more in tax than they claim in benefits, with a net contribution of £7bn a year. An OBR study found that with zero net migration, public sector debt would rise to 145 per cent of GDP by 2062-63, while with high net migration it would fall to 73 per cent.

Brexit has in fact forced ministers to increasingly acknowledge an uncomfortable truth: Britain needs immigrants. Those who boasted during the referendum of their desire to reduce the number of newcomers have been forced to qualify their remarks. Brexit secretary David Davis, for instance, recently conceded that immigration woud not invariably fall after the UK leaves the EU. "I cannot imagine that the policy will be anything other than that which is in the national interest, which means that from time to time we’ll need more, from time to time we’ll need less migrants."

Though Davis insisted that the government would eventually meet its "tens of thousands" target (a level not seen since 1997), he added: "The simple truth is that we have to manage this problem. You’ve got industry dependent on migrants. You’ve got social welfare, the national health service. You have to make sure they continue to work."

As my colleague Julia Rampen has charted, Davis's colleagues have inserted similar caveats. Andrea Leadsom, the Environment Secretary, who warned during the referendum that EU immigration could “overwhelm” Britain, has told farmers that she recognises “how important seasonal labour from the EU is to the everyday running of your businesses”. Others, such as the Health Secretary, Jeremy Hunt, the Business Secretary, Greg Clark, and the Communities Secretary, Sajid Javid, have issued similar guarantees to employers. Brexit is fuelling immigration nimbyism: “Fewer migrants, please, but not in my sector.”

Alongside the new immigration figures, GDP growth in the first quarter of 2017 was revised down to 0.2 per cent - the weakest performance since Q4 2012. In recent history, there has only been one reliable means of reducing net migration: a recession. Newcomers from the EU halved after the 2008 crash. Should the UK suffer the downturn that historic trends predict, it will need immigrants more than ever. Both the government and voters may only miss migrants when they're gone.

George Eaton is political editor of the New Statesman.

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