Osborne's comparison of Miliband to Marx shows how wrong-footed the Tories have been

If the Labour leader is a Marxist, so are most of the public. They recognise that the market isn't working for the majority.

After initially portraying Ed Miliband as a "weak" leader with no policies, the Tories have taken to casting him as a dangerous socialist. In his speech to the Conservative conference, George Osborne compared him to Karl Marx, who similarly warned of a "race to the bottom" in Das Kapital. The Chancellor said:

I share none of the pessimism I saw from the Leader of the Opposition last week.

For him the global free market equates to a race to the bottom with the gains being shared among a smaller and smaller group of people.

That is essentially the argument Karl Marx made in Das Kapital.

It is what socialists have always believed.

But the irony is this:

It is socialism that always brings it about.

And it is the historic work of this Party to put that right.

Osborne's argument might be appreciated in a seminar room but it's hard to see it winning over the voters. After being told that he's a Marxist, they're likely to be pleasantly surprised at Miliband's moderation. As I noted last week, if the Labour leader is a socialist, so are most of the public. Around two-thirds of voters support a 50p tax rate, a mansion tax, stronger workers’ rights, a living wage and the renationalisation of the railways and the privatised utilities (putting them to the left of Miliband).

The other main problem with Osborne's riposte is that, unlike in previous decades, capitalism isn't working for the majority - and one doesn't need to be a Marxist to recognise as much. The link between higher growth and higher wages has been severed. Since 2003, 11 million earners have seen no rise in their real incomes. Growth may now have returned (with output expected to reach around 1% this quarter) but real wages are not forecast to increase until 2015 at the earliest and will not return to their pre-crash levels until 2023. The minimum wage is now worth no more than it was in 2004 and 4.8 million workers are paid less than the living wage.

But in his speech Osborne disregarded all of this and in doing so revealed his failure to grasp the extent of the crisis. He derided Miliband for suggesting that "the cost of living was somehow detached from the performance of the economy". But while the problem is partly cyclical (although the Chancellor, who has presided over the biggest fall in living standards on record, is hardly fit to lecture others), it is also structural. Wages did not rise with growth before the crisis and they will not rise with growth after it. In response, the government could introduce above-inflation increases in the minimum wage, or spread use of the living wage by making its payment a condition of public sector contracts, or creating living wage zones. But Osborne had nothing to say about any of this.

"We understand that there can be no recovery for all – if there is no recovery at all", he said, setting the bar as low as possible after three years of stagnation. But to Miliband's question of how to create a recovery for the many, rather than few, he offered only a shrug.

George Osborne delivers his speech to the Conservative conference in Manchester. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

How Jim Murphy's mistake cost Labour - and helped make Ruth Davidson

Scottish Labour's former leader's great mistake was to run away from Labour's Scottish referendum, not on it.

The strange revival of Conservative Scotland? Another poll from north of the border, this time from the Times and YouGov, shows the Tories experiencing a revival in Scotland, up to 28 per cent of the vote, enough to net seven extra seats from the SNP.

Adding to the Nationalists’ misery, according to the same poll, they would lose East Dunbartonshire to the Liberal Democrats, reducing their strength in the Commons to a still-formidable 47 seats.

It could be worse than the polls suggest, however. In the elections to the Scottish Parliament last year, parties which backed a No vote in the referendum did better in the first-past-the-post seats than the polls would have suggested – thanks to tactical voting by No voters, who backed whichever party had the best chance of beating the SNP.

The strategic insight of Ruth Davidson, the Conservative leader in Scotland, was to to recast her party as the loudest defender of the Union between Scotland and the rest of the United Kingdom. She has absorbed large chunks of that vote from the Liberal Democrats and Labour, but, paradoxically, at the Holyrood elections at least, the “Unionist coalition” she assembled helped those parties even though it cost the vote share.

The big thing to watch is not just where the parties of the Union make gains, but where they successfully form strong second-places against whoever the strongest pro-Union party is.

Davidson’s popularity and eye for a good photo opportunity – which came first is an interesting question – mean that the natural benefactor in most places will likely be the Tories.

But it could have been very different. The first politician to hit successfully upon the “last defender of the Union” routine was Ian Murray, the last Labour MP in Scotland, who squeezed both the  Liberal Democrat and Conservative vote in his seat of Edinburgh South.

His then-leader in Scotland, Jim Murphy, had a different idea. He fought the election in 2015 to the SNP’s left, with the slogan of “Whether you’re Yes, or No, the Tories have got to go”.  There were a couple of problems with that approach, as one  former staffer put it: “Firstly, the SNP weren’t going to put the Tories in, and everyone knew it. Secondly, no-one but us wanted to move on [from the referendum]”.

Then again under different leadership, this time under Kezia Dugdale, Scottish Labour once again fought a campaign explicitly to the left of the SNP, promising to increase taxation to blunt cuts devolved from Westminster, and an agnostic position on the referendum. Dugdale said she’d be open to voting to leave the United Kingdom if Britain left the European Union. Senior Scottish Labour figures flirted with the idea that the party might be neutral in a forthcoming election. Once again, the party tried to move on – but no-one else wanted to move on.

How different things might be if instead of running away from their referendum campaign, Jim Murphy had run towards it in 2015. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.

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