Miliband promises "big changes in our economy" in New Year message

The Labour leader emphasises his long-term plan to reform capitalism in an attempt to rebut the charge that he is too focused on short-term measures.

It is Ed Miliband's focus on living standards that has allowed him to define the political agenda for months, leaving the Tories in a strategic tailspin, so it's no surprise to see him put this theme at the centre of his New Year message. He says: "We are in the midst of the biggest cost-of-living crisis in a generation. Whether it’s people being unable to afford the weekly shop or worried about the gas and electric bill - or saying 'I have always thought of myself as reasonably well off but I’m really having trouble making ends meet'.

"Somebody said to me the other day 'I can't afford this government'; surely we can do better than this as a country. I think people are hurting, people are wanting us to do better. People are thinking 'look, I've made the sacrifices, where's the benefit? The government keeps telling me that everything is fixed, but it doesn't seem fixed for me.'"

To this, the Tories will reply that Miliband is only talking about living standards because he can't bear to talk about the economy; the rise in growth and the fall in unemployment. But as one senior Labour strategist told me, "For any normal voter, living standards are the economy." Conceding as much, George Osborne's advisers argue that wages are a 'lagging indicator' and that higher output will soon translate into higher salaries. But even if average wages do rise above inflation next year, the gains are likely to be concentrated among high-earners and, as the IFS recently stated, most voters will still be worse off in 2015 than they were in 2010.

But alive to the charge that Labour is too narrowly focused on short-measures, such as the energy price freeze, Miliband offers a preview of what will be one of his key messages in 2014: the need to make "big changes in our economy" in order to ensure that "we can earn and grow our way to a higher standard of living for people." The aim will be to show that Labour has a plan to deliver a permanent, rather than merely a temporary improvement in living standards.

Aware that one of the party's greatest challenges is convincing voters that it can be trusted to manage the public finances, Labour strategists are also keen to emphasise that this won't be achieved through greater borrowing or through endless spending pledges. Miliband says: "People do not want the earth. They would much prefer some very specific promises, specific things about what a government will do - whether it’s freezing energy bills, taking action on pay day lenders, or tackling issues around childcare which lots of working parents face. All of this is adding up to a programme for how we can change things. It’s clearly costed, it’s credible and it’s real."

One of the strengths of his pledge to freeze energy prices is that it does not involve a single pound of public money being spent. For the Tories, the unresolved dilemma remains whether to try and outbid Labour on living standards, or to continue to fight on their preferred terrain of the deficit and GDP.

Perhaps the most striking feature of Miliband's message is his attempt to manage expectations. He ends by stating that there are "no easy answers"  but that Labour would seek to "tip the balance towards hope and away from the struggles that you are facing." Some in Labour are concerned that a Miliband government, forced to make further cuts to public spending and introduce tax rises, could become rapidly unpopular (as Hollande's administration has in France). By emphasising that he won't be able to transform the British economy overnight, Miliband is rightly seeking to counter that danger.

As Jacob Hacker, the US theorist behind 'predistribution' told me earlier this year, "You’re not going to get a big bang of policy change. Instead, what progressives need to do is gain office, do some important things that improve the overall situation of the squeezed middle, and then get re-elected and repeat." With just 16 months to go until the election, Miliband is nudging Labour towards realism.

Ed Miliband speaks at the Labour conference in Brighton in September. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Ukip's Nigel Farage and Paul Nuttall. Photo: Getty
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Is the general election 2017 the end of Ukip?

Ukip led the way to Brexit, but now the party is on less than 10 per cent in the polls. 

Ukip could be finished. Ukip has only ever had two MPs, but it held an outside influence on politics: without it, we’d probably never have had the EU referendum. But Brexit has turned Ukip into a single-issue party without an issue. Ukip’s sole remaining MP, Douglas Carswell, left the party in March 2017, and told Sky News’ Adam Boulton that there was “no point” to the party anymore. 

Not everyone in Ukip has given up, though: Nigel Farage told Peston on Sunday that Ukip “will survive”, and current leader Paul Nuttall will be contesting a seat this year. But Ukip is standing in fewer constituencies than last time thanks to a shortage of both money and people. Who benefits if Ukip is finished? It’s likely to be the Tories. 

Is Ukip finished? 

What are Ukip's poll ratings?

Ukip’s poll ratings peaked in June 2016 at 16 per cent. Since the leave campaign’s success, that has steadily declined so that Ukip is going into the 2017 general election on 4 per cent, according to the latest polls. If the polls can be trusted, that’s a serious collapse.

Can Ukip get anymore MPs?

In the 2015 general election Ukip contested nearly every seat and got 13 per cent of the vote, making it the third biggest party (although is only returned one MP). Now Ukip is reportedly struggling to find candidates and could stand in as few as 100 seats. Ukip leader Paul Nuttall will stand in Boston and Skegness, but both ex-leader Nigel Farage and donor Arron Banks have ruled themselves out of running this time.

How many members does Ukip have?

Ukip’s membership declined from 45,994 at the 2015 general election to 39,000 in 2016. That’s a worrying sign for any political party, which relies on grassroots memberships to put in the campaigning legwork.

What does Ukip's decline mean for Labour and the Conservatives? 

The rise of Ukip took votes from both the Conservatives and Labour, with a nationalist message that appealed to disaffected voters from both right and left. But the decline of Ukip only seems to be helping the Conservatives. Stephen Bush has written about how in Wales voting Ukip seems to have been a gateway drug for traditional Labour voters who are now backing the mainstream right; so the voters Ukip took from the Conservatives are reverting to the Conservatives, and the ones they took from Labour are transferring to the Conservatives too.

Ukip might be finished as an electoral force, but its influence on the rest of British politics will be felt for many years yet. 

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