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Leader: Miliband’s Thatcheresque challenge – to change the soul of the nation

Like the former Conservative prime minister, Miliband aspires to be a genuinely transformative leader. Will he succeed?

Economics are the method; the object is to change the soul.
Margaret Thatcher

Those words remain the clearest distillation of the former Conservative leader’s philosophy. Thatcherism was not only an economic crusade to smash the postwar consensus but an ethical project founded on the belief that socialism was inherently morally corrupting. By expanding home ownership, taming inflation, privatising nationalised utilities, weakening the unions and reducing marginal tax rates in an effort to create an “enterprise economy”, Mrs Thatcher sought to promote what the political philosopher Shirley Letwin called “vigorous virtues” – self-reliance, industriousness, fidelity and thrift – and in the process remade the nation through harsh conflict.

Today, the Labour Party has a leader who similarly views politics as a moral challenge, but from the centre left. New Labour, Ed Miliband has said, was “better at rebuilding the fabric of our country than the ethic”. He has declared that Labour must seek not just to return to power in 2015 but to make its values and ideas the “common sense of our age”. Just as Mrs Thatcher rejected the decades-long postwar consensus, so Mr Miliband has rejected the consensus established by her government and faithfully adhered to by every prime minister since. The financial crisis and years of declining living standards (11 million people have had no rise in their real incomes since 2003) are, for him, symptoms of an economic model that is not merely defective, but broken.

So, too, is the steep rise in inequality. Confronted by the widening gap between rich and poor, Tony Blair would glibly remark that he didn’t go into politics “to make sure that David Beckham earns less money”. Gordon Brown was less intensely relaxed about the “filthy rich” but doubted whether it was possible significantly to reduce inequality in a country that he continued to view as conservative.

In his speech to this year’s Labour conference in Manchester, Mr Miliband declared: “I will never accept an economy where the gap between rich and poor just grows wider and wider. In one nation, in my faith, inequality matters.”

“My faith”: here, too, the parallels with Mrs Thatcher are striking. “The Old Testament prophets did not say, ‘Brothers, I want a consensus,’” she once remarked. “They said, ‘This is my faith. This is what I passionately believe. If you believe it, too, then come with me.’”

Like Mrs Thatcher, Mr Miliband aspires to be a genuinely transformative leader. Is he deluded? Or can he win power and build a counter-hegemonic project comparable with Thatcherism?

The year did not begin well for him. In January, Maurice Glasman, the maverick “Blue Labour” intellectual ennobled by Mr Miliband, wrote of his patron’s leadership in the New Statesman: “There seems to be no strategy, no narrative and little energy.” His words reflected and reinforced the concerns of many and there was, in the weeks after the intervention, much chatter about a possible leadership challenge. Exacerbating anxiety was Mr Miliband’s 2011 conference speech, with its sharp distinction between “predatory” and “productive” capitalism. It was poorly delivered and explained, and an incoherent policy review, subdivided into 29 groups, produced little of note under the guidance of Liam Byrne.

Much has changed since then. Mr Miliband has unified the party behind him. His theme of “one nation” has given him a powerful frame for his arguments and Labour’s standing in the polls has improved noticeably. Having received just 29 per cent of the vote in the 2010 general election, its second-worst result since 1918, Labour now regularly polls between 40 and 45 per cent, with a double-digit lead over the Conservatives. In the 1980s, it was the formation of the Social Democratic Party and the consequent split in the centre-left vote that allowed Mrs Thatcher to win successive landslide victories. In 2015, the collapse in support for the Liberal Democrats and the reunification of the left around Labour could bring Mr Miliband to power, with a slender majority.

Labour’s policy review is now being led by Jon Cruddas, the MP for Dagenham and Rainham. It is con­centrating on three areas: a new economy, a good society and a new politics. Like the early Thatcherites, Mr Cruddas has sought to “pull together ideas from a wide international orbit”. Thinkers such as the Harvard philo­sopher Michael Sandel, the Australian writer Tim Soutphommasane and the American academic Danielle Allen are among those whose ideas are informing Labour and helping it find a new language in which to address welfare reform and immigration.

Mr Cruddas represents an impoverished constituency in the borderland between Essex and east London. He understands the anxieties of those voters who believe, wrongly or otherwise, that mass immigration has depressed wages. Labour remains distrusted not only on immigration but also on the economy: on its watch, asset bubbles were allowed to inflate dangerously and not enough houses were built and the party did not have a credible industrial policy until too late.

Labour was chastened by defeat. Can it now offer more than what David Miliband, writing in these pages in July, called “defensive social democracy”? Can it create a novel kind of “responsible capitalism” that delivers sustainable growth and realigns contribution with reward? Labour has in the past viewed public spending and state intervention as the engines of progress but, because of the fiscal constraints it would face in office (the Office for Budget Responsibility forecasts that the deficit will be £99bn in 2015), it can no longer do so. Instead, Mr Miliband and his advisers speak correctly of “predistribution” – the allocation of income and opportunities before taxes and cash transfers – and, in another Thatcheresque flourish, “a supply-side revolution from the left”. In the new economy they envisage, workers’ representatives will sit on company boards, firms will be encouraged to pay the living wage and the banks will become the servants of the people, not the masters. All of this is commendable, if utopian. And Mr Miliband lacks the kind of emblematic policies, such as the “right to buy” council houses, that built popular grass-roots support for Thatcherism in Labour strongholds.

Outside of Mr Miliband’s inner circle, there remain too few willing to speak for his project. He has no intellectual outrider comparable to Keith Joseph and few unshakeable allies in the shadow cabinet. Ed Balls, the shadow chancellor, has spoken little of the notion of “responsible capitalism”. His Keynesian critique of the government’s austerity programme has proved robust but it is entirely defensive. The party will not win the election simply by trying to convince voters that the economy would have performed better under its stewardship.

David Cameron has been a disappointment as Prime Minister, even to many of those who once believed in his promise of a more compassionate Conservatism. He is a fluent and plausible leader and performs well in a crisis but what does this patrician believe in and what does he want, beyond the pleasures and privileges of power? The government he leads too often seems incompetent and directionless, with the exception of his chief cabinet ideologue, the ardent Michael Gove. The Conservatives will no doubt insist that voters should trust them to “finish the job” of deficit reduction and economic recovery. It could yet prove an attractive message to an electorate resigned to sustained austerity.

It remains for Mr Miliband to convince the public that it should share his “faith” and follow him in his pursuit of social and economic transformation.

This article first appeared in the 24 December 2012 issue of the New Statesman, Brian Cox and Robin Ince guest edit