Tony Benn arrives to lay a wreath at the Cenotaph at a ceremony on August 17, 2009. Photograph: Getty Images.
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Thanks to Ed Miliband, Tony Benn died at peace with Labour

With Miliband as leader, Benn finally felt at home again in the party he served for so long.

In his ninth and final volume of diaries A Blaze of Autumn Sunshine (2013), Tony Benn predicted that he would not live to see the election of another Labour government. Sadly, this great democrat, socialist and internationalist has been proved right today. 

It was Labour that Benn, the son and grandson of Liberal MPs, devoted his political life to. He was elected as the MP for Bristol South East in a by-election in 1950 (becoming the "Baby of the House") and served almost continuously until 2001 (becoming the "Father of the House"). Despite his friendships with Communists and Trotskyists, he never abandoned his belief in Labour as the indispensable vehicle for socialism. 

At several points in history, there were many in the party who wished he had. Many never forgave him for his decision to challenge Denis Healey for the deputy leadership in 1981 (losing by just 0.8 per cent), in defiance of Michael Foot's appeal to unity, and for his refusal to "compromise with the electorate". By far the harshest words said about Benn today will be from his foes on the left, not those on the right. 

That Benn, unlike many of his comrades, chose to remain in the party throughout the New Labour era was partly because he refused to recognise Tony Blair as its leader. As he said many times, he regarded New Labour as a "new political party" - a quasi-Thatcherite sect that led Britain into illegal wars (he most commonly described Blair as a "war criminal"), demonised asylum seekers and privatised parts of the public realm that even the Conservatives dared not touch. Benn never left Labour - but he felt as if Labour had left him. 

He said of Blair last year: "We as a party had suffered greatly from the influence of Mr Blair. He was a man who became leader because he was a successful campaigner, but I don’t think he was ever truly a Labour man. The war in Iraq was a crime and now he has been put in charge of achieving peace in the Middle East, which obviously lacks any credibility. Labour had to get beyond Blair in order to ever have credibility with the electorate again. That’s what I think we are achieving now."

But with the election of Ed Miliband, who interned in his basement office at 16 and whose father he knew well, he finally felt at home again in the party. Unlike Blair and other New Labour figures, who treated him as an embarrassing uncle or simply ignored him all together, Miliband was prepared to embrace him as a fellow friend of democracy and socialism. I remember a touching moment at the Compass conference in 2009 when Miliband, speaking brilliantly without notes (the first time I witnessed that now-famous feat), referred with pride to Benn's presence in the front row and the hall erupted in applause. 

After his preferred leadership candidate John McDonnell failed to make the ballot in 2010, Benn happily endorsed Miliband as "the best candidate", one who cleansed the stains left by Blair. Following his first speech as leader he wrote: "It was a remarkable speech: it was based on his own experiences, and those of his parents during the war, and it will have an appeal well beyond the Labour party. His words on optimism were also important because the media concentrate on spreading pessimism about everything, claiming that new ideas won't work – so, instead of working to improve their lives, people can be dissuaded from making the effort. This speech will help to build up people's confidence in him. I've known him since he was a teenager – he came and worked for a month with me after his O-levels. I supported him for leader and he's justified every hope I had."

More recently, he praised Miliband's pledge to scrap the bedroom tax and his "vigorous" defence of his father. Asked last year whether he believed he could be the next prime minister he replied: "Of course. And he would be a very good one. I’m not in the business of predicting election results as that is always a very foolish thing to do. Whether or not he is left wing is not the point. The point is that he is a trustworthy and capable man that people respond to."

There could be no greater tribute to Benn than for Miliband to now fufil those hopes - and lead Labour to victory next year. 

George Eaton is political editor of the New Statesman.

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The industrial strategy acknowledges a fundamental truth about growth

It's time for the government to recognise that private businesses need help to thrive. 

When Theresa May created a new Department of Business, Energy and Industrial Strategy after taking office last summer, plenty of eyebrows were raised. Industrial strategy, it was widely remarked, was something attempted by the Labour governments of the 1960s and 70s – and it had dismally failed. British Leyland, Concorde and Delorean were the dead proof that governments were useless at "picking winners" and shouldn’t attempt to. What was the new Prime Minister thinking? 

A few commentators did observe that the concept of industrial strategy had in fact been revived at the end of the Labour government and in the early years of the Coalition. Gordon Brown and Peter Mandelson had successfully revived the motor industry in 2009-10 and initiated a new offshore wind manufacturing sector; Vince Cable and David Willetts had identified key manufacturing growth sectors and established new support systems for innovation. But they also pointed out that this had been largely abandoned by the next Business Minister, Sajid Javid, and was never embraced by David Cameron or George Osborne. 

So what did May mean? We are about to find out, when the government publishes its green paper on industrial strategy today. 

Among economic and business commentators, it has been widely assumed that this will again largely be about government support to manufacturing industry, particularly in the field of research and development. This is after all where the orthodox theory of "market failure" acknowledges that government intervention may be warranted. 

But this expectation is wrong. Under Business secretary Greg Clark, the government is taking a much wider approach. In fact the green paper will start from two far-reaching observations about the British economy.

First, take the UK’s low rate of productivity. This is not primarily a problem of the major firms in our remaining manufacturing industries. It is instead rooted in the small and medium-sized businesses in the service sectors, which employ 84 per cent of the British workforce. These are characterised by systematic under-investment in new technologies. 

Second, this is compounded by the huge disparity in productivity across the UK’s nations and regions. While London has the highest output per head of any region in Western Europe, more than a quarter of the UK’s regions rank among the lowest. Only if productivity is raised everywhere can it be raised in the UK as a whole. And only if productivity is raised, can wages be increased. So this is crucial to any attempt to help those "left behind" or "just about managing". 

The green paper will therefore make it clear, as IPPR has argued, that industrial strategy is not just about galvanising R&D and brand new innovation – though this is certainly important. It is about stimulating the much more widespread adoption of new technologies in all businesses - the service sector too. And it is not just about high-tech companies in the UK’s golden triangle between London, Cambridge and Oxford. It must happen in every region and nation of the country

In other words, the government looks likely to accept a vital truth - that industrial strategy is not a single strand of policy, but an approach to economic policy in general. It involves a fundamental recognition that firms and markets left to their own devices do not necessarily generate the optimum results for society as a whole.

Firms under-invest; they do not always adopt the most efficient technologies; they cannot on their own achieve the benefits of clustering together in regional centres; their investors’ horizons may be too short termist; they need infrastructure, skills, planning and other public policies to be aligned; they need to be encouraged to locate outside the existing growth centres. 

In other words, industrial strategy acknowledges that wealth is co-produced by the private and public sectors working together, and successful economies need both.

The chief theoretician of this understanding in recent years has been the economist Mariana Mazzucato, who has argued that the best way of driving investment in innovation is for government to set "missions" to address major social challenges. Just as the US moonshot programme generated innovation in a wide range of sectors, so modern missions such as decarbonisation, meeting the health and social care needs of an ageing population and the housing shortage can galvanise a new wave today. The government can use both "demand-side" policies (such as energy policy and procurement) and "supply-side" policies (such as in infrastructure and skills) to promote private sector investment.

In Britain industrial strategy has always been thought to be a left of centre economic idea, because it requires an active role for government. The Telegraph and Mail will no doubt tell Mrs May this week that it is all very misguided. But this is not how the rest of the world sees it. The most successful economies – Germany, Japan, South Korea, the Scandinavians – all work on the basis of public-private partnership to maximise productivity and achieve better distributed growth. All of them have higher productivity, and lower regional disparities, than the UK.

Yet there remain real question marks hanging over the government’s approach. Will the Chancellor cough up? A strategy with no money will be stillborn at birth. In particular, will sufficient resources and powers be given to regional institutions to support long-term economic growth outside London? Shifting the geographic pattern of investment will ultimately be the key test of the strategy’s success. 

The Business secretary is known to favour "deals" with industry to deliver the strategy, in the manner of the "devolution deals" with local government he developed in his previous Cabinet role. But will these be properly transparent, as the agreement which kept Nissan in Britain in the autumn was not? Will they simply favour the best business lobbyists, or can they represent a real compact of mutual obligations between public and private sectors?

The government has already acknowledged that it needs to recruit overseas negotiators to do new trade deals. It could usefully employ some outside experts to help with industrial strategy too. A good test of its commitment to strengthening public sector capacity is whether the government continue with its crazy sell-off of the Green Investment Bank

Ultimately, the key question may be whether the strategy will outlast Clark, who is probably the only Heseltinian member of the Cabinet beyond Mrs May who really believes in it. Labour’s Shadow Minister Clive Lewis, who has been talking intelligently about industrial strategy and has recently launched his own consultation, is no doubt already sharpening his critique. 

For the Prime Minister, the rationale for industrial strategy is clear. As it goes through the trauma of Brexit, the British economy will need to be seriously strengthened. We are about to see whether she can deliver it. 

Michael Jacobs is the Director of the IPPR Commission on Economic Justice and co-editor of Rethinking Capitalism: Economics and Policy for Sustainable and Inclusive Growth (Wiley Blackwell 2016).