Leader: The Tories would be foolish to underestimate Ed Miliband

Miliband's decision to contrast his optimism with Cameron's pessimism is fertile territory for Labou

Ed Miliband's first major speech as the new Labour leader, delivered to the party conference in Manchester on Tuesday 28 September, was a powerful statement of progressive social democracy of a kind that led the New Statesman to endorse his candidacy in our issue of 30 August. Throughout the protracted leadership campaign, and in his conference speech, Mr Miliband spoke a different kind of language from that used so ritualistically by the New Labour establishment - hence the irritation of his brother, David, when he denounced the Iraq war as "wrong". More than this, in two short sentences, the younger Miliband spoke the simple truth to which neither Tony Blair nor Gordon Brown gave voice: "The gap between rich and poor does matter. It doesn't just harm the poor, it harms us all."

Mr Miliband vowed not to attack the coalition from the right on crime and civil liberties. As our legal blogger, David Allen Green, wrote on newstatesman.com: "The Labour Party after 2001 was the Illiberal Party . . . perhaps the worst of the modern age." Mr Miliband understands this.

In the speech, he reached out to centrist voters but avoided the crude rhetorical populism of his predecessor Gordon Brown: "British jobs for British workers", anyone? However, his decision to rebut those tedious tabloid epithets - "Red Ed", "Forrest Gump", "Wallace" - was misguided. Members of the public, many of whom would not have heard these charges before, will inevitably wonder: "Why was he called that in the first place? What is he hiding?"

Yet the speech was inevitably short on detail on the defining issue of this parliament: the economy. His position on the deficit and debt-financed public spending was an awkward hybrid of the pre-election Darling plan - to halve the deficit in four years through a 2:1 ratio of spending cuts to tax rises - and the Balls plan to be more flexible in adjusting the pace of consolidation. Mr Miliband failed to answer the critical question: at what point does deficit reduction become a threat to growth? He and his new shadow cabinet will need to have settled on a consistent and convincing position by the time of the Comprehensive Spending Review on 20 October.

In an interview with the New Statesman (23 August), Mr Miliband denounced Nick Clegg and said that he would never work with him. But that may have been electioneering. In his speech, he did not criticise the Liberal Democrats for going into coalition with the Conservatives, and he astutely praised some of the great liberal dead: Lloyd George, Keynes, Beveridge. And, yes, he would campaign in support of the Alternative Vote, which would take him closer to Mr Clegg and the Liberal Democrats. All of this is good.

Very soon this bold young leader will be tested by events. Which cuts will he support? Which will he oppose? Which strikes will he support? Which will he oppose? It is his judgement that will count in the end.

The Conservatives, as they gather for their conference in Birmingham, would do well not to underestimate Ed Miliband. He is shrewdly claiming that there is a generational difference between himself and David Cameron. That is fertile territory. Indeed, he contrasted his optimism with Mr Cameron's pessimism.

Of late, because of personal circumstances, Mr Cameron has been rather distant from the fray, as if he were somehow above the vulgarities of the daily grind of politics. The challenge now for him, as he returns to battle, is to show that he is the new-style compassionate Conservative he claims to be. However he positions himself, he has in Ed Miliband a dangerous, charismatic and ruthless opponent. He was the high-risk choice for Labour. The party will be hoping that, in time, he will bring it high rewards.

This article first appeared in the 04 October 2010 issue of the New Statesman, Licence to cut