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Ed Miliband has articulated his political philosophy clearly, but not the policies that will define it

September 28, 2012 9:05 am

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Reflecting on Ed Miliband’s second anniversary as Labour Party leader, LabourList Editor Mark Ferguson awarded Ed Miliband a ‘C ‘ grade for vision and policy.

In some ways, this marking is almost Michael Gove-ish in its harshness. ‘Vision’ has arguably been one of the main characteristics of the Miliband leadership.

He had the foresight to adopt a forceful and critical position on the News International scandal.

Inelegant terms like ‘pre-distribution’ and ‘the squeezed middle’ have little resonance with the general public. But they do represent an innovative approach to tackling inequality, and identify a key constituency for Labour at the next election and beyond.

Perspectives on his 2011 conference speech have been revised to such an extent that it has become a bit of a cliché to suggest that time has proved him right. All that’s worth adding is that not everybody thought it was such a bad speech in the first place.

So Miliband hasn’t been wanting for long-term vision (and the original LabourList piece does acknowledge this). It’s how to convey that vision, and more importantly, the policies to realise it, that remain the problem.

For the High Pay Centre, it’s the rather nebulous notions of responsible capitalism and producers and predators in business (although Miliband, of course, did not actually suggest that all businesses fell into one camp or another) that are of most interest. We are currently undertaking a research project on alternative measures of business performance, and are hosting a debate at Labour
Conference (no pass necessary) on Monday at 12:30 with Rachel Reeves, Will Hutton and TUC General Secretary Frances O’Grady on how we can restore trust in capitalism.

Excessive executive pay is the most obvious example of a breakdown in trust, and strong measures to tackle the problem ought to be uncontroversial.

The public is onside – research for the High Pay Centre suggests that just 7% of people think that business leaders merit a salary of more than £1 million. Intervention would not represent some kind of return to 70s style statism. There has been a clear market failure on high pay with many pay packages being completely out of proportion to their recipient’s talent, hard work and contribution to the economy relative to the ordinary workers.

While the coalition have made some progress on this issue, by moving to offer shareholders a binding vote on pay, there is still scope to do more. Labour have suggested an employee representative on remuneration committees. Why not on full company boards, as is the case in Germany? Equally, businesses could be required to publish the pay differential between their highest pay package and the median salary within the company. Stronger guidelines on performance-related pay, limiting business leaders to one additional performance-related element on top of their salary, would reduce the complexity of executive pay.

Given that soldiers, surgeons and NGO leaders all get by on their basic salary, this ought to be feasible.

Of course responsible or ethical business is about more than just pay. Again, Labour has an interest in making this issue central to the policy debate around the response to the stagnant economy. The idea that the economy should work for the benefit of society as a whole, and that some policy measures maybe necessary to enable this, is almost tediously sensible. But many Conservatives are
dogmatically opposed to any intervention in the ‘free’ market, regardless of the consequences.

The Kay Review of Equity Markets commissioned by Vince Cable identifies improved shareholder stewardship of businesses as a key means of tackling short-termism and what Elizabeth Murdoch described a ‘profit without purpose’ mentality. Its recommendations are likely to form the basis of the coalition parties forthcoming business policies. But do the majority of shareholders have the best interests of society at heart? And hasn’t shareholder value maximisation as a business objective been somewhat discredited? Labour’s review of short-termism in business under Sir George Cox must identify policies that will integrate other stakeholder interests, such as employees or the local community, into business strategies.

Our event in Manchester will debate ideas of what these policies might be, and how they would enhance the economic recovery effort. Miliband needs to articulate a similarly concrete path to ‘responsible capitalism’ if he is to achieve a more favourable grade for both his next LabourList ebacc, and his electoral examination in 2015.

Luke Hildyard is Head of Research at the High Pay Centre

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  • Jeremy_Preece

    You rightly say
    “But many Conservatives are  dogmatically opposed to any intervention in the ‘free’ market, regardless of the consequences.” Perhaps at this point it is worth reflecting that the Tories and Cameon and Osborne in particular, were totally against any controls of the banks whatsoever until of the course the crash came, and then they decided that Labour had implemented controls that lacked the necessary teeth. It is a point well worth repeating until it sinks into the minds of the electorate who have been drip fed the notion that the whole world wide banking crisis was Labour’s fault.
    It is not a dead issue as it is still the mantra that the LibDems were chanting only this week.

    • MonkeyBot5000

      It is a point well worth repeating until it sinks into the minds of the electorate…

      Although, you have to be careful how you do that. It can easily come across as “everyone else was doing it, blame them as well”.

      Like it or not, if you’re in power when everything goes tits up, you have to carry the can and saying that the Tories agreed with you at the time does not diminish your responsibility. In fact, some might say that having the Tories agree with your policy should have been a warning sign.

      • robertcp

        The problem with New Labour is that they thought the Tories were right.  As usual, they were wrong!

  • Chilbaldi

    The C grade is fair.

    A for vision, F for policy. It evens out.

  • AlanGiles

    A good article, Luke. A few comments, only:

    Regarding Ed’s stance against News International – though true, he was hardly going out on a limb. The Milly Dowler revelations had revolted the public regardless of party affiliations. Attacking the vulgar and mouthy Rebekka Wade and Rupert & James Murdoch for their attempt to bring back “Steptoe and Son” at the Select Committe hearing was hardly likely to end anybodies career. Many of us were digusted by “The Sun” and “News of the World” YEARS before, while New Labour were busy ingratiating itself with the Murdoch empire.

    “The squeezed middle” is a totally useless phrase. Like the cliche “we are all middle class now”  inasmuch  that whether “the middle” are squeezed or not, there are still a large number of people living in poverty, who  have too much month left at the end of their money. People who have to go the extra mile (literally) to the Lidl or Aldi store out of town. The squeezed middle are still going to Waitrose, but perhaps buying one less bottle of wine each week, and in a moment of despair and self-sacrifice have cancelled their subscription to “Homes and  Gardens”

    The squeezed middle is as vague as “affordable” housing – there will always be a large section of people to whom nothing is affordable.

    As regard’s Mark’s score of  “C” for policy – I think that is fair, considering there is little policy to speak of, and it’s more a question of being against other peoples ideas rather than proposing some. Waiting For Crudas, and waiting the best part of three years, merits nothing better than a C

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