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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UK election results: your guide to what's happened so far

Everything you need to know about the local and regional elections.

Scotland

  • To little surprise, the SNP will be staying in government at Holyrood as the largest party by an overwhelming margin.
  • Nicola Sturgeon’s party looks set to narrowly lose its majority, yet given that the electoral system intentionally militates against majority governments, that shouldn’t be an enormous shock.
  • It was a dreadful night for Scottish Labour. Despite winning Edinburgh Southern from the SNP, the party has almost certainly slipped into third place behind the Scottish Conservatives. Kezia Dugdale, the party’s sixth leader in 8 years, vowed to carry on as party leader.
  • The Conservatives, wiped out north of the border in 1997 and barely ever a force in Holyrood since 1999, are now the assembly’s main opposition. Ruth Davidson, the party’s leader, won a constituency seat in Edinburgh from the SNP. The party also took Eastwood, long a Labour stronghold – perhaps hinting at broader problems for the Labour party nationwide with Jewish voters.
  • The Liberal Democrats are not dead yet. Willie Rennie, whose campaign highlights included being interviewed in front of a pair of romping pigs and launching his manifesto in a soft play area, took the seat of North East Fife from the SNP, while his party also held seats in the Scottish islands comfortably.

 

Wales

  • Labour remains the largest party, albeit probably in a minority, and should govern alone fairly comfortably.
  • Leighton Andrews, a long-serving member of the Welsh government, was unexpectedly defeated by Plaid Cymru leader Leanne Wood in his Rhondda constituency.
  • The Conservatives failed to make significant gains, with party sources blaming the row over Port Talbot’s steel.
  • UKIP won its first seats in the assembly, picking up at least 4 assembly seats through the list, including former Kent MP Mark Reckless – with disgraced former Conservative MP Neil Hamilton also expected to win a seat later on.
  • Labour retained the Ogmore seat at Westminster in a by-election, with UKIP in seco nd place.

 

England

  • Labour have become the first opposition party to lose seats in midterm elections since 1985 – when Neil Kinnock’s Labour Party still lost fewer seats than the Conservative government.
  • That said, the party’s results were probably not quite as bad as some feared – the party retained control of Crawley and Southampton, though lost Dudley to no overall control.
  • The Conservatives gained some council seats, taking control of Peterborough council, but losing Worcester to no overall control.
  • UKIP became the joint-largest party on Thurrock council, drawing level with the Conservatives – and missed out on taking a further seat from the Conservatives by just 1 vote.
  • Labour won the Sheffield Brightside by-election, with UKIP in second place.
  • Joe Anderson won re-election as Mayor of Liverpool with more than 50 per cent of the vote.

 

London

  • The count for London Mayor and the Greater London Assembly began at 8am, with the result expected to be announced in the late afternoon.
  • Campaigners on all sides predicted record low turnout. 

Henry Zeffman writes about politics and is the winner of the Anthony Howard Award 2015.