Ed Miliband. Photo: Getty
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While the Tories claim that growth is back, Ed Miliband will seize the Inequality Moment

Discussion of the gap between rich and poor has gone mainstream.

In autumn 2003, a new class called “What’s Left? The Politics of Social Justice” began at Harvard University. The visiting lecturer played a video of a Newsnight interview with Tony Blair in the run-up to the 2001 election. In the clip, Jeremy Paxman asked the then prime minister six times whether the gap between rich and poor mattered – and six times he dodged the question. “It’s not a burning ambition for me to make sure that David Beckham earns less money,” was one response.

The lecturer was Ed Miliband, then a 33-year-old special adviser in Blair’s government, on a sabbatical in the US. Inequality bothered Miliband much more than his boss. In June 2013, the Institute for Fiscal Studies concluded that between 1997 and 2010, “Those right at the top saw their incomes increase very substantially with the result that… overall inequality nudged up slightly.” A friend of Miliband’s from his Harvard days told me that the failure to tackle the gap between the rich and the rest was “a key source of his dissatisfaction with Blair and New Labour” during this period.

More than a decade later, the leader of the Labour Party believes that “tackling inequality is the new centre ground of politics”, to quote from his Hugo Young Lecture on 10 February. His closest adviser, the academic and peer Stewart Wood, leads the charge on inequality inside Miliband’s office. “Ed’s concern to stop Britain continuing down the path of growing inequality, to the detriment of social justice and our economic health, will be central to any government that he leads,” Wood tells me.

But aren’t all Labour leaders – with the exception of Blair and maybe Gordon Brown – concerned with the gap between rich and poor? Perhaps. However, the difference is that inequality is no longer a niche issue.

Forget Occupy Wall Street – how about the new mayor of New York, Bill de Blasio, elected on a populist pledge to tackle the Big Apple’s “tale of two cities”? Or the new darling of the US Democratic Party, Senator Elizabeth Warren of Massachusetts, who has called for a minimum wage hike to “stop income inequality in America”? Or even the US president? In a speech in December, Barack Obama called the income gap “the defining challenge of our time”.

Listen also to the words of the Pope. “While the earnings of a minority are growing exponentially, so, too, is the gap separating the majority from the prosperity enjoyed by the happy few,” the pontiff wrote in November. Then there’s the IMF, which said in February that inequality hinders growth.

Miliband invoked both de Blasio and the Pope in his Hugo Young Lecture; he often cites their names and Warren’s in private as well. “Whose recovery is this?” has replaced “Too far, too fast” as the economic mantra of choice in his office. Miliband believes the paradigm has shifted. The public is fed up with the rise and rise of the super-rich – the 1 percenters – at the expense of everyone else. Consider the polling: 74 per cent of voters believe the gap between rich and poor is widening (ComRes); 60 per cent say the Autumn Statement was good for “rich people”, compared to just 21 per cent who say it was good for “people like me” (Ipsos MORI); and a majority of voters (64 per cent) think company bosses shouldn’t be paid in excess of ten times more than their lowest-paid employees (Survation).

Yet, between 1985 and 2008, the top 10 per cent went from receiving incomes that were eight times higher than the bottom 10 per cent to incomes that were 12 times higher. According to the High Pay Centre, the chief executives of Britain’s biggest companies earned more money in the first three days of the year than the average worker will make over 12 months.

On 10 March, Capital in the 21st Century, by the French economist Thomas Piketty, is published in English. Described as “one of the watershed books in economic thinking” by the World Bank’s Branko Milanovic, it argues that the main driver of soaring inequality – the tendency of returns on capital to exceed the rate of economic growth – is hard-wired into modern capitalism and threatens to undermine modern democracy. The author’s solution? A global wealth tax.

Such utopian thinking won’t help Miliband but to pretend that Labour policies – such as a levy on bankers’ bonuses, a 50p top rate of tax, a mansion tax and a living wage – won’t make a dent in income inequality is disingenuous. Wood, a fan of the book, says: “We must respond to [Piketty’s] challenge with ambition and imagination, not with pessimism.” Labour, he tells me, “needs to set itself the task of reforming the way our economies work so that higher productivity and lower inequality go together”.

This isn’t just about economics. The politics matter, too. Pledging to tackle inequality – within the rubric of “Whose recovery is this?” – helps Labour neutralise the positive Tory narrative of “Growth is back”. Crucially, it offers Miliband his own brand of progressive populism to challenge the right-wing, anti-welfare populism of the Conservatives. This is the Inequality Moment. Yet the Tories, with their historic aversion to any mention of the “I” word, will struggle to answer the question: “Whose recovery is this?” Miliband’s calculation is that voters won’t. 

Mehdi Hasan is a contributing writer for the New Statesman and the political director of the Huffington Post UK, where this column is crossposted

Mehdi Hasan is a contributing writer for the New Statesman and the co-author of Ed: The Milibands and the Making of a Labour Leader. He was the New Statesman's senior editor (politics) from 2009-12.

This article first appeared in the 05 March 2014 issue of the New Statesman, Putin's power game

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Is Yvette Cooper surging?

The bookmakers and Westminster are in a flurry. Is Yvette Cooper going to win after all? I'm not convinced. 

Is Yvette Cooper surging? The bookmakers have cut her odds, making her the second favourite after Jeremy Corbyn, and Westminster – and Labour more generally – is abuzz with chatter that it will be her, not Corbyn, who becomes leader on September 12. Are they right? A couple of thoughts:

I wouldn’t trust the bookmakers’ odds as far as I could throw them

When Jeremy Corbyn first entered the race his odds were at 100 to 1. When he secured the endorsement of Unite, Britain’s trade union, his odds were tied with Liz Kendall, who nobody – not even her closest allies – now believes will win the Labour leadership. When I first tipped the Islington North MP for the top job, his odds were still at 3 to 1.

Remember bookmakers aren’t trying to predict the future, they’re trying to turn a profit. (As are experienced betters – when Cooper’s odds were long, it was good sense to chuck some money on there, just to secure a win-win scenario. I wouldn’t be surprised if Burnham’s odds improve a bit as some people hedge for a surprise win for the shadow health secretary, too.)

I still don’t think that there is a plausible path to victory for Yvette Cooper

There is a lively debate playing out – much of it in on The Staggers – about which one of Cooper or Burnham is best-placed to stop Corbyn. Team Cooper say that their data shows that their candidate is the one to stop Corbyn. Team Burnham, unsurprisingly, say the reverse. But Team Kendall, the mayoral campaigns, and the Corbyn team also believe that it is Burnham, not Cooper, who can stop Corbyn.

They think that the shadow health secretary is a “bad bank”: full of second preferences for Corbyn. One senior Blairite, who loathes Burnham with a passion, told me that “only Andy can stop Corbyn, it’s as simple as that”.

I haven’t seen a complete breakdown of every CLP nomination – but I have seen around 40, and they support that argument. Luke Akehurst, a cheerleader for Cooper, published figures that support the “bad bank” theory as well.   Both YouGov polls show a larger pool of Corbyn second preferences among Burnham’s votes than Cooper’s.

But it doesn’t matter, because Andy Burnham can’t make the final round anyway

The “bad bank” row, while souring relations between Burnhamettes and Cooperinos even further, is interesting but academic.  Either Jeremy Corbyn will win outright or he will face Cooper in the final round. If Liz Kendall is eliminated, her second preferences will go to Cooper by an overwhelming margin.

Yes, large numbers of Kendall-supporting MPs are throwing their weight behind Burnham. But Kendall’s supporters are overwhelmingly giving their second preferences to Cooper regardless. My estimate, from both looking at CLP nominations and speaking to party members, is that around 80 to 90 per cent of Kendall’s second preferences will go to Cooper. Burnham’s gaffes – his “when it’s time” remark about Labour having a woman leader, that he appears to have a clapometer instead of a moral compass – have discredited him in him the eyes of many. While Burnham has shrunk, Cooper has grown. And for others, who can’t distinguish between Burnham and Cooper, they’d prefer to have “a crap woman rather than another crap man” in the words of one.

This holds even for Kendall backers who believe that Burnham is a bad bank. A repeated refrain from her supporters is that they simply couldn’t bring themselves to give Burnham their 2nd preference over Cooper. One senior insider, who has been telling his friends that they have to opt for Burnham over Cooper, told me that “faced with my own paper, I can’t vote for that man”.

Interventions from past leaders fall on deaf ears

A lot has happened to change the Labour party in recent years, but one often neglected aspect is this: the Labour right has lost two elections on the bounce. Yes, Ed Miliband may have rejected most of New Labour’s legacy and approach, but he was still a protégé of Gordon Brown and included figures like Rachel Reeves, Ed Balls and Jim Murphy in his shadow cabinet.  Yvette Cooper and Andy Burnham were senior figures during both defeats. And the same MPs who are now warning that Corbyn will doom the Labour Party to defeat were, just months ago, saying that Miliband was destined for Downing Street and only five years ago were saying that Gordon Brown was going to stay there.

Labour members don’t trust the press

A sizeable number of Labour party activists believe that the media is against them and will always have it in for them. They are not listening to articles about Jeremy Corbyn’s past associations or reading analyses of why Labour lost. Those big, gamechanging moments in the last month? Didn’t change anything.

100,000 people didn’t join the Labour party on deadline day to vote against Jeremy Corbyn

On the last day of registration, so many people tried to register to vote in the Labour leadership election that they broke the website. They weren’t doing so on the off-chance that the day after, Yvette Cooper would deliver the speech of her life. Yes, some of those sign-ups were duplicates, and 3,000 of them have been “purged”.  That still leaves an overwhelmingly large number of sign-ups who are going to go for Corbyn.

It doesn’t look as if anyone is turning off Corbyn

Yes, Sky News’ self-selecting poll is not representative of anything other than enthusiasm. But, equally, if Yvette Cooper is really going to beat Jeremy Corbyn, surely, surely, she wouldn’t be in third place behind Liz Kendall according to Sky’s post-debate poll. Surely she wouldn’t have been the winner according to just 6.1 per cent of viewers against Corbyn’s 80.7 per cent. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.