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.

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Who will win in Copeland? The Labour heartland hangs in the balance

The knife-edge by-election could end 82 years of Labour rule on the West Cumbrian coast.

Fine, relentless drizzle shrouds Whitehaven, a harbour town exposed on the outer edge of Copeland, West Cumbria. It is the most populous part of the coastal north-western constituency, which takes in everything from this old fishing port to Sellafield nuclear power station to England’s tallest mountain Scafell Pike. Sprawling and remote, it protrudes from the heart of the Lake District out into the Irish Sea.

Billy, a 72-year-old Whitehaven resident, is out for a morning walk along the marina with two friends, his woolly-hatted head held high against the whipping rain. He worked down the pit at the Haig Colliery for 27 years until it closed, and now works at Sellafield on contract, where he’s been since the age of 42.

“Whatever happens, a change has got to happen,” he says, hands stuffed into the pockets of his thick fleece. “If I do vote, the Bootle lass talks well for the Tories. They’re the favourites. If me mam heard me saying this now, she’d have battered us!” he laughs. “We were a big Labour family. But their vote has gone. Jeremy Corbyn – what is he?”

The Conservatives have their sights on traditional Labour voters like Billy, who have been returning Labour MPs for 82 years, to make the first government gain in a by-election since 1982.

Copeland has become increasingly marginal, held with just 2,564 votes by former frontbencher Jamie Reed, who resigned from Parliament last December to take a job at the nuclear plant. He triggered a by-election now regarded by all sides as too close to call. “I wouldn’t put a penny on it,” is how one local activist sums up the mood.

There are 10,000 people employed at the Sellafield site, and 21,000 jobs are promised for nearby Moorside – a project to build Europe’s largest nuclear power station now thrown into doubt, with Japanese company Toshiba likely to pull out.

Tories believe Jeremy Corbyn’s stance on nuclear power (he limply conceded it could be part of the “energy mix” recently, but his long prevarication betrayed his scepticism) and opposition to Trident, which is hosted in the neighbouring constituency of Barrow-in-Furness, could put off local employees who usually stick to Labour.

But it’s not that simple. The constituency may rely on nuclear for jobs, but I found a notable lack of affection for the industry. While most see the employment benefits, there is less enthusiasm for Sellafield being part of their home’s identity – particularly in Whitehaven, which houses the majority of employees in the constituency. Also, unions representing Sellafield workers have been in a dispute for months with ministers over pension cut plans.

“I worked at Sellafield for 30 years, and I’m against it,” growls Fred, Billy’s friend, a retiree of the same age who also used to work at the colliery. “Can you see nuclear power as safer than coal?” he asks, wild wiry eyebrows raised. “I’m a pit man; there was just nowhere else to work [when the colliery closed]. The pension scheme used to be second-to-none, now they’re trying to cut it, changing the terms.”

Derek Bone, a 51-year-old who has been a storeman at the plant for 15 years, is equally unconvinced. I meet him walking his dog along the seafront. “This county, Cumbria, Copeland, has always been a nuclear area – whether we like it or don’t,” he says, over the impatient barks of his Yorkshire terrier Milo. “But people say it’s only to do with Copeland. It ain’t. It employs a lot of people in the UK, outside the county – then they’re spending the money back where they’re from, not here.”

Such views might be just enough of a buffer against the damage caused by Corbyn’s nuclear reluctance. But the problem for Labour is that neither Fred nor Derek are particularly bothered about the result. While awareness of the by-election is high, many tell me that they won’t be voting this time. “Jeremy Corbyn says he’s against it [nuclear], now he’s not, and he could change his mind – I don’t believe any of them,” says Malcolm Campbell, a 55-year-old lorry driver who is part of the nuclear supply chain.

Also worrying for Labour is the deprivation in Copeland. Everyone I speak to complains about poor infrastructure, shoddy roads, derelict buildings, and lack of investment. This could punish the party that has been in power locally for so long.

The Tory candidate Trudy Harrison, who grew up in the coastal village of Seascale and now lives in Bootle, at the southern end of the constituency, claims local Labour rule has been ineffective. “We’re isolated, we’re remote, we’ve been forgotten and ignored by Labour for far too long,” she says.

I meet her in the town of Millom, at the southern tip of the constituency – the opposite end to Whitehaven. It centres on a small market square dominated by a smart 19th-century town hall with a mint-green domed clock tower. This is good Tory door-knocking territory; Millom has a Conservative-led town council.

While Harrison’s Labour opponents are relying on their legacy vote to turn out, Harrison is hoping that the same people think it’s time for a change, and can be combined with the existing Tory vote in places like Millom. “After 82 years of Labour rule, this is a huge ask,” she admits.

Another challenge for Harrison is the threat to services at Whitehaven’s West Cumberland Hospital. It has been proposed for a downgrade, which would mean those seeking urgent care – including children, stroke sufferers, and those in need of major trauma treatment and maternity care beyond midwifery – would have to travel the 40-mile journey to Carlisle on the notoriously bad A595 road.

Labour is blaming this on Conservative cuts to health spending, and indeed, Theresa May dodged calls to rescue the hospital in her campaign visit last week. “The Lady’s Not For Talking,” was one local paper front page. It also helps that Labour’s candidate, Gillian Troughton, is a St John Ambulance driver, who has driven the dangerous journey on a blue light.

“Seeing the health service having services taken away in the name of centralisation and saving money is just heart-breaking,” she tells me. “People are genuinely frightened . . . If we have a Tory MP, that essentially gives them the green light to say ‘this is OK’.”

But Harrison believes she would be best-placed to reverse the hospital downgrade. “[I] will have the ear of government,” she insists. “I stand the very best chance of making sure we save those essential services.”

Voters are concerned about the hospital, but divided on the idea that a Tory MP would have more power to save it.

“What the Conservatives are doing with the hospitals is disgusting,” a 44-year-old carer from Copeland’s second most-populated town of Egremont tells me. Her partner, Shaun Grant, who works as a labourer, agrees. “You have to travel to Carlisle – it could take one hour 40 minutes; the road is unpredictable.” They will both vote Labour.

Ken, a Conservative voter, counters: “People will lose their lives over it – we need someone in the circle, who can influence the government, to change it. I think the government would reward us for voting Tory.”

Fog engulfs the jagged coastline and rolling hills of Copeland as the sun begins to set on Sunday evening. But for most voters and campaigners here, the dense grey horizon is far clearer than what the result will be after going to the polls on Thursday.

Anoosh Chakelian is senior writer at the New Statesman.