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Ed’s speech – A great start that now needs to be rammed home

January 10, 2012 2:27 pm

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Those who welcomed the publication of In The Black Labour just over a month ago will be cautiously relieved to hear the speech Ed Miliband delivered this morning. At last, this is a leader who is placing a commitment to deficit reduction at the heart of Labour’s message. This could be the point at which the party in opposition finally starts to face up not just to the reality of austerity but also to the over-riding reason why it lost both credibility and the election. As Ed said if Labour wins in 2015 it will be handed a deficit that will need to be addressed. That means we need a “changed Labour Party” that can prove to the voters it is a “party for all times, not only for the good times”.

The priority now surely has to be working out how that message can be rammed home so that voters are left in no doubt that Labour has woken up and is changing. That means doing far more of what Jim Murphy did last week by accepting many of the cuts the Government is now proposing. That doesn’t mean adopting them over precisely the same timescale or in the exactly the same form but it does mean, given the size of the UK’s structural deficit, acknowledging that Labour has a very similar mountain to climb on fiscal matters as the coalition.

It will also mean greater precision on how Labour will actually deal with the 2015 deficit. Ed mentioned that the party will soon be announcing “tough new rules” to get the public finances “back into balance”. This is precisely the detail and aspiration that is needed. Further ideas about how a Labour Government would be held to those rules by an independent body such as a strengthened Office for Budget Responsibility should also be part of this policy shift.

Most painfully though it will also mean greater clarity on the sorts of tough spending choices Ed admitted the Party now faces. As he said:

“.. in these times, with less money, spending more on one thing means finding the money from somewhere else. When someone wins, someone else loses.”

The examples he gave though – reversing the cut in corporation tax and keeping the 50p tax rate – come straight from Labour’s comfort zone. The reality is if Labour is serious about a major shift in spending priorities to promote jobs, growth and inherent fairness in the economy, then the party will almost certainly have to face up to the need to save money in the big spending areas of welfare, health, and pensions.

Importantly the speech also acknowledged that a state that actively promotes jobs and growth is not just a good in itself but is also the prime way Labour can stay true to its core goal of delivering a fairer economy when there is less cash to splash. This is the deepest intellectual shift Labour needs to make to adapt to tougher times and there is now a great deal of thinking to be done about what this means realistically and in practice. This should also now become the main point of difference between Labour and the coalition.

In particular, an active growth strategy is not just about the aspiration of creating a fairer, more balanced economy based on higher living standards. It is also about defending current living standards and jobs against the exceptionally challenging shifts now occurring in the global economy and in business practices. In short, the voters need to know that if the government won’t get British business fighting fit and ultra-competitive for this new ‘Asian Century’ then Labour will have to do the job.

Adam Lent is co-author of In The Black Labour. He was formerly Head of Economics at the TUC. He can be followed on Twitter @adamjlent

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  • http://politicalfretting.com Martin Coxall

    Yes, I “cautiously welcome” meaningless platitudes too.

    • Anonymous

      We will see.

  • Anonymous

    So Labour is no longer a Keynesian party Mr Lent?

    Fiscal conservatism is, as the name implies, a Tory policy.

    So more austerity is the answer because that’s going so well for Osborne isn’t it.

    • Anonymous

      ”
      So more austerity is the answer because that’s going so well for Osborne isn’t it.”

      It is inevitable. Even Ed recognises it although it has taken him a decade or so..

    • Plato

      “So Labour is no longer a Keynesian party”

      They aren’t now. Keynesians save during good times, so they can spend during bad times.

      Labour spent all our money when we were sloshing around in it, then borrowed a load, then when the sky fell in borrowed even more, then printed a shed load of it.

      That is the equivalent of spending your wages, then getting an advance, then maxing out your credit cards, then getting a second mortgage – any more and we’d have been cap in hand to the International Bank of Mum and Dad.

      Far too many Labour supporters want to spend endlessly to fix whatever problem they see, and kid themselves that this is somehow sustainable if you stick the name of a well respected economist on it.

      But its only half the model – the back end of the pantomime horse.

      Until that is accepted, EdM is on a hiding to nothing. On the credibility front, Labour have a near vertical mountain to climb. Recent polls had EdM and Balls on 17% trust with the economy – and the whole Party has spent almost two yrs saying they didn’t really need to cut much really and it was all too fast blah blah.

      That mantra doesn’t get unpicked over a few months or even a couple of years, nor are the voters likely to let Labour anywhere near the piggy bank again until the Coalition is seen to fail on it. 

      Major scraped back in because Labour still weren’t credible in 1992 after 13yr out of power. The ERM did for him, and that allowed Labour back into the economic fight.

      Voters have very long memories and today, EdM and Balls were STILL saying they hadn’t overspent – they need to get a grip and acknowledge what the voters already know. They did.

      • http://www.facebook.com/people/Mike-Homfray/510980099 Mike Homfray

        No, they didn’t. Sometimes the voters are wrong, and sometimes you just have to stick to your guns, not bend to populist sentiment.
        The question is whether this will be realised by the time of the next election. I think that most Tory voters are likely to stick with the Tories, but that those who optimistically think we will start to ‘turn the corner’ are likely to recognise that the outcome of Osborne’s mistakes will be the continuation of no-growth and the failure of the private sector to provide unemployment in places where the election will be won and lost (not the south-east!)

        In this situation, there is no reason why Labour could not win the next election, particularly given the likely demise of the LD’s, who appear to be maintaining a presence only in selected southern suburbs

        • Anonymous

          You know as well as I do when this happens voters tend to give the government in power more then one term. Yesterday Miliband stated  he apologised for the problems with  banks, as Brown did  before the election.

          But labour has to say how it will cut where it will cut and who will be the losers, Universal benefits sounds great, but Labour may well use this to cut big time, by saying all benefits should be JSA  as Brown hinted at.

          I do not know right now I would be willing to give the Tories another term, after all does not matter to me which party wins I will be getting it in the neck for  breathing.

  • Anonymous

    The problem is of course the Tories are better at it, and I think with the Millions who have left labour a black rose is hardly going to make them come back is it.

    Gosh little wonder labour dead.

  • http://twitter.com/peterjukes PeterJukes

    The reason I voted for Ed in 2010 was simple. He was the only candidate who addressed our over reliance on financial services as a nation, and who showed any inkling that 30 years of Reagan Thatcher Economics were dead.

    In the current political scenes, he remains the only major British politician still focused on widening inequality, economic injustice, and the need to ‘save capitalism’ by harnessing it to wider distribution of wealth, productivity and innovation.

    The Tories are still captured, both in terms of funding and ideological myopia, to the idea that appeasing the bond markets through austerity will solve our problems. He’s right, but he’s not particularly charismatic or telegenically reassuring. On the other hand, I’ve had enough of that stuff, and from Thatcher to Blair it has aggravated our problems rather than solving them.

    Ed won’t get elected through the traditional means. He may remain the opposition leader who prefigured someone else. But for the Tories who dominate this site these days, I remind them of this: they decried spin and charisma when it came to Blair, but even though they know Cameron has no solutions to our impasse, they now praise him for having spin and charisma. Power has corrupted them. 

    There are no easy solutions to the economic conundrum most the Western world now faces. To be out of tune with the times is actually to be ahead of them. For that reason, I still support Ed in his meandering, sometimes incoherent, search for a new set of policies and values for a new world.

    • Anonymous

      A middle class party with a middle class attitude, perhaps needing a middle class boot up the back side.

    • Bill Lockhart

      Meandering incoherence is admirable only in someone with no prospect of responsible office. That will be Ed Miliband then. The problem for him, Balls and Peter Jukes is that the money they would like to borrow in  order to return to the parallel universe of structural deficit during boom years is entirely subject to the compliance of the very bond market they would like to pretend doesn’t matter.  The reality, fortunately for our granchildren, is somewhat different. More realistic, in fact.

    • jaime taurosangastre candelas

      @ Peter Jukes,

      for different reasons, I also supported Ed Miliband in the leadership campaign.  In my case, 3 of the 5 candidates (Balls, Abbott and David M) were no-hopers, and of the 2 remaining, Ed M “slightly” outshone Andy Burnham despite Ed’s calamitous Copenhagen summit on environmental matters.  David M would have been my favourite based on policy, but his behaviour over the banana photograph and that odd interview in a paper attacking Gordon Brown obliquely convinced me he was a coward of no moral backbone and therefore unsuitable to be PM.  Balls and Abbott were clearly just making up the numbers and both deeply flawed in terms of judgement.

      I was quite impressed that Ed cut himself as a distinctly different figure in the leadership election.  It was believable, he seemed honest and earnest.  But what has happened since then?  it is as though the Labour Party machine are keeping him in some dark tower, and have banned him from saying anything either interesting or with passion and conviction. He appears to be an intellectual prisoner.

      I’m interested in your view that Ed M won’t get elected through the “traditional means”.  I don’t think he’ll ever be elected at all.  Do you mean that Ed’s ideas will live on in a different candidate, perhaps one with some personal charisma that will see success in 2020?  You may be right, but if so the doctrine of “Milibandism” will needs lots of definition and polish in the next 8 years, because at the moment I struggle to see what he now stands for, or whether he has any disciples.

      • Redshift

        I think to say Ed Balls was just making up numbers shows a complete misunderstanding of his arguments. 

        If you want to argue that his position was politically unacceptable that is one thing but to question the ability of Ed Balls at economics is ludicrous. Indeed, everything he said about the effect that coalition policy would have on growth, unemployment and borrowing itself has been vindicated. 

        • jaime taurosangastre candelas

          Ed Balls’ position was politically unacceptable, for the simple reason that the majority of the electorate associate him with the deficit spending.  He may be an economic genius (which I do not believe), but if so his genius was flawed for 8 years preceding the last election.  Personally, I’d categorise him as being more often wrong than right, and not right now.  His main flaw appears to be that he never considers the effects of his proposals on the broader markets and how the gearing of interest rates will do more to damage the economy than the positive effects he predicts of further deficit spending.

          It was transparently obvious to everyone who looked in the summer of 2010 during the leadership campaign that Ed Balls has forfeited permanently the trust of the British people.  As such, his candidacy was flawed and it is a very good thing for Labour that he was not backed for the Leadership.  Therefore he was always making up the numbers, along with Diana Abbott who for different reasons was never a credible candidate.  Both Milibands and Andy Burnham were not so tainted.  In my case, David Miliband was not a credible candidate either as in my view he is a coward, and therefore not suited to be Prime Minister.

          As long as Ed Balls remains Shadow Chancellor, Labour will not be able to re-establish trust with the electorate on economic matters.  Ed Miliband’s position is fatally undermined by his shocking performance as Leader of the Opposition.  What Labour wish to do about this electoral cliff before 2015 is up to the Party.  Either swap them out or be defeated in 2015, it’s a binary choice.

      • http://twitter.com/peterjukes PeterJukes

        Jaime

        To unpack what I meant when I said Ed might not be elected by ‘traditional means’: I was thinking that there could be a catastrophe ahead which derails the Coalition. In that scenario Ed could be leader of a minority or coalition government, with or without an election. In the current turbulent circumstances, anything is possible.

        As for Milibandism: I don’t think it exists. I’m not sure it needs to, and early simple solutions to our impasse, from right or left, will not help. Blairism, after all, was just Thatcherism with more deregulation of finance, and more spent on public services. My hunch is that we’re in a paradigm shift which will not be named after any one individual. 

    • Anonymous

      Wonderful post, thankyou Peter.

      Jo

  • http://www.futureeconomics.org Diarmid Weir

    ‘…if Labour is serious about a major shift in spending priorities to
    promote jobs, growth and inherent fairness in the economy, then the
    party will almost certainly have to face up to the need to save money in
    the big spending areas of welfare, health, and pensions.’

    Yet surely this circle is unsquareable? It’s just a zero sum result for all except the wealthy.

    ‘…if the government won’t get British business fighting fit and ultra-competitive….’

    That’s fine rhetoric, but it’s going to be an uphill battle for business to grow faster than the rate at which many see their share of its proceeds shrinking.

    National wealth is around £8 trillion, and the ratio held by the richest half to the poorest half of the population is around 10:1. No money? Give me a break!

  • Anonymous
    • http://www.facebook.com/people/Mike-Homfray/510980099 Mike Homfray

      Given that the Guardian’s leader-writer team was colonised by a motley crew of Tories and LibDems last time, under Cameron’s pet Julian Glover, it will take a while to return to normal – hasn’t done it yet but they are alienating their own readership at present.

      Seamus Milne, Polly Toynbee, Jackie Ashley etc are far more sympathetic and have remained labour, unlike the leader writer team who advocated a LibDem vote last time and seem reluctant to admit their error

  • Pingback: Miliband has no choice: he has to fight the Blairites in the interests of the people of this country » Tax Research UK

  • http://www.figurewizard.com Joe Jonkler

    “A Great Start” – Surely he started 16 months ago?

  • Pingback: Politics Live blog featuring Ed Miliband speech on the economy - Government Tenders, Government News and Information - Government Online

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