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Ed Miliband’s New Statesman interview – the key points

September 5, 2012 2:47 pm

Author:

Mark Ferguson

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Ed Miliband has a major interview in the New Statesman with their Editor Jason Cowley this week. I’ll be writing more about the interview (and what it means) later, but here are the key points:

On Balls

Miliband describes reports on tension between him and Balls as “nonsense” and their relationship as “good”. When asked why he didn’t appoint Balls as shadow chancellor sooner, he says:

“Look, you make the decisions you make. We’ve been working together now for 18 months. Everybody said at the time that it would be a repeat of Blair and Brown and all that. But it’s total nonsense, honestly. He’s been proved right about austerity.”

But he admits Balls is physically and intellectually intimidating:

“To the Tory opponents he is, yes, and that’s a jolly good thing.”

“Predistribution” not redistribution:

Miliband seems to be suggesting that the aim of the next Labour government will be to make redistribution less neccessary because work will pay better, he says:

“The Government’s economic failure means that whoever wins the next election will still face a deficit that needs to be reduced. The redistribution of the last Labour government relied on revenue which the next Labour government will not enjoy. The option of simply increasing tax credits in the way we did before will not be open to us.

“We need to care more about predistribution. Centre-left governments of the past tried to make work pay better by spending more on transfer payments. Centre-left governments of the future will have to make work pay better by doing more to make work itself pay. That is how we are going to build growth based not just on credit, but on real demand.”

Miliband is giving a speech to Policy Network tomorrow – expect more on this then.

Why the “Brown Model” won’t be repeated by Miliband:

He might be caricatured as a “Son of Brown” but he has no intention of returning to “The Brown Model”:

“There’s one way that says you just set lots of targets centrally and that’s the way you make public services work. That’s the Brown model, slightly caricatured. The second model is – if it doesn’t work, tender it out. Outsource it. That has its problems of fragmentation…People are out of love with an uncontrolled market but they’re certainly not in love with a remote state.”

Why Miliband feels the Lib Dems made a “terrible,tragic mistake”

Those who like to read the runes on Ed Miliband’s feelings towards the Lib Dems might find this an interesting turn of phrase from Miliband:

“What’s happened to them is very bad for the country. I feel they made a terrible, tragic mistake [in entering the coalition]. I remember sitting in the coalition negotiations, the unsuccessful ones, and saying to them: ‘Do you realise what supporting the Tory deficit plan would mean? They all looked at me slightly blank. They hadn’t really thought it through.”

And why the Olympics mattered:

“for the first time in my life, I got a sense of what my dad [the Marxist academic Ralph Miliband] used to talk to me about, about the wartime spirit, his time in the navy. You can’t have a permanent Olympic Games, but I think there’s something about what kind of country do we feel like. Do we feel a sense of obligation to each other? Do people feel the benefits and burdens of life are fairly distributed? Those things are partly economic but they go deeper than that.”

http://twitter.com/waterwards dave stone

“make work pay better”

Ed’s going to have one almighty battle on his hands. The austerity drive, which is all about privileging profit over employee, will have to be put into reverse.

I can’t imagine Labour’s ‘business friendly’ (ahem) contingent will be too happy. Expect the negative briefing to restart if Ed follows through.
- http://twitter.com/redrenie24 Renie Anjeh
  
  What do you mean. I’m not sure if people on your side of the party will be happy about this in all fairness: “We need to care more about predistribution. Centre-left governments of the past tried to make work pay better by spending more on transfer payments. Centre-left governments of the future will have to make work pay better by doing more to make work itself pay. That is how we are going to build growth based not just on credit, but on real demand.”That does not mean reverse the cuts, Dave.
  - rekrab
    
    Err! what do you mean? you seem to have written a homograph here and implied personal related earnings? for all it’s worth higher production must be met by higher demand just stocking up the warehouses would be under pined by added tax.Seems to me that demand is greater when wages are better.
    - PeterBarnard
      
      Exactly, Derek* (” … demand is greater when wages are better.”)
      
      * I only figured out the other day after the Forth bridges comments that rekrab is your surname written backwards … my apologies – I’m as dim as a NAAFI candle at times.
      - rekrab
        
        Thank you @Peter, when the site changed to “Discus” mode, I entered that reverse user name.Awful ain’t it. By the by, your as bright as sunlight and I always learn from your posts, that’s good for me. May your “white heat” remain a burning beacon for all.
  - http://twitter.com/waterwards dave stone
    
    Well, what I’m trying to get at is that austerity isn’t working and everyone knows it isn’t working but it is still being implemented. And, as in Greece, the less it works the more vigourous its implementation becomes (now Eurozone creditors – i.e. banks – are demanding the implementation of a six day working week) . Some Tories are already calling for more austerity and for more deregulation in response to the failure of already implemented austerity. The connection between austerity and recession has become obvious – if growth was the priority austerity would be halted.
    
    As the crisis deepens, as it will next year when the cuts begin to bite, then these calls will become more insistent. And as Stephen Bush warns over on the Progress website: “ Public anger with the government will only increase, and, if Labour isn’t careful, the beneficiaries won’t be the centre-left, but parties of the radical extreme.”
    
    Ed sums up the predicament well and obviously there are difficult choices to be made and I wish him the best of luck as a leader of the opposition in the most difficult of times. He’ll need all the support he can get.
    - http://twitter.com/redrenie24 Renie Anjeh
      
      And you are right but don’t think that means we reverse all the cuts, it means we need a growth strategy for growth. It means we have to spend what we can effectively. Just because the Tories’ have had their failed austerity that does not lessen the need for deficit reduction in fact it makes it even more essential. I don’t think your side of the party understand that or Ed.
      - Alexwilliamz
        
        Yep but deficit reduction can happen in three ways; spending cuts, growth, increase taxation. Ideally a combination of all 3. However if one is affecting one of the other there is a problem. The right kind of cuts and the right kind of taxation is needed. For example the tories cut the politically ‘easy’ capital spending, however that will have a negative effect upon growth and also it is the kind of spending that can be sustained anyway as you generally hold an asset at the end of it. Similarly taxing goods (VAT) is hardly going to encourage goods. Instead taxation on unproductive wealth/assets would seem to be the most sensible things to target as it will bring in money while encouraging the money to be spent on or invested in productive assets.
      - http://twitter.com/redrenie24 Renie Anjeh
        
        I absolutely agree but the point I was making is that some on the left fail to recognise that and think being anti-austerity means being anti-cuts and anti-deficit reduction. This is not really about Tory being for cuts and Labour being for invetsment (we should not succumb to that characterisation), this is about the deficit and the rate and pace in which you cut it.
      - Daniel Speight
        
        …this is about the deficit and the rate and pace in which you cut it.
        
        And perhaps Renie more importantly ‘how’ you cut the deficit.
        
        This involves the mix ratio of tax to spending cuts, and on what state projects you do cut the spending.
        
        You see Labour shouldn’t be just another party jostling around the edges of the neo-liberal economic quackery center like the Liberals and the Tories, we should have clear blue water between Labour and the others.
      - http://twitter.com/redrenie24 Renie Anjeh
        
        Well that goes without saying, Daniel that how you cut it matters. I think a 60:40 cuts to tax rise ratio is about right, maybe a little bit less. It is not neoliberal quackery to accept the strong need for deficit reduction, it is a fact of life and will be for the upcoming years and we need to be honest about that not avoid it. We would cut at a lower rate with a slower pace to allow for some fiscal laxitude (gosh, I’m enjoying AS Economics, probably because my teacher is a Labour supporter).
      - http://twitter.com/waterwards dave stone
        
        “fiscal laxitude”
        
        Way to go, Renie!
      - robertcp
        
        Renie, I agree that some people on the left do not seem to realise that deficit reduction after 2015. Ed Miliband is also right that agreeing to the Tories’ deficit reduction plan in 2010 was the Lib Dems’ big mistake. Balls was right to say it was too far, too fast.
      - Daniel Speight
        
        …it means we need a growth strategy for growth.
        
        As opposed Renie to those other growth strategies for…
    - Alexwilliamz
      
      I think it amusing that the tories blame the Euro problems for the failure of the austerity programme to succeed, when it seems that many of the problems in Euro are also linked to an even more aggressive austerity programme. The plan would only ever have worked if everyone else in the world were applying a stimulus plan and we stuck with austerity (export led recovery anyone). Just as Brown predicted when he rallied world leaders not to retrench and cut to stem the credit crisis we have seen what happens when everyone attempts austerity at once. In reality the actual act of austerity and cuts may not have transpired in quite the draconian way being postured over. However the rhetoric has wiped out confidence and thus investment and growth.
- PeterBarnard
  
  You are correct about an “almighty battle”, Dave S.
  
  Work will only “pay better” either, (i) when the demand for labour increases to the point where there is, effectively, a shortage of labour compared to the potential output, or (ii) “living wage” legislation is introduced.
  
  Neither of these will be kindly received by the business community with its “low wage/flexible labour” mentality.
  
  Such is the state to which neo-liberal economics has brought us.
  - AlanGiles
    
    It is a sobering thought, that, as this country faces an unprecedented economic crisis, all that is seriously on offer is George Osborne and Ed Balls, two arrogant if verbose men, who are both too proud to admit what the rest of us know – neither of them have a clue. By persisting with the status quo, the failed policies of yesterday, we will go round in circles.
    - PeterBarnard
      
      Alan G,
      
      I think that Ed Balls is well aware that the Osborne deficit reduction programme is indeed too fast, but the actual size of the deficit has become established in the public mind as priority #1, rather than the bigger picture, ie net debt relative to GDP, and the Conservatives (and their friends in the media) have established the politics surrounding the deficit with deliberately manufactured hysteria.
      
      Well, that’s coming round to bite them in the backside as confidence (both business and consumer) remains stubbornly non-existent, and until confidence returns, no amount of technical and mechanical measures will be productive.
      
      We are indeed, to paraphrase FDR, “fearing fear itself.”
    - aracataca
      
      Completely wrong of course. GO and EB have been advocating diametrically opposite economic strategies and policies for years. EB is clearly opposed to the status quo and has been saying that we must change course.
      - AlanGiles
        
        Essentially, Balls thinks it is a matter of presentation (“cutting slower”), but still cutting. There are very few differences in actual policy
        
        I wouldn’t want either Balls or Osborne as my bank manager
- John_Dore
  
  You’re being very presumptive here. Better wait and see what he says before jumping to any conclusions.
MrHarryLime

Having criticised Ed M many times in the early days of his leadership, it’s only fair to say that he has almost entirely won me round. He is diagnosing problems correctly, prescribing the right cure and communicating with more confidence and authority than he used to. He’s getting almost envy thing right these days. Bravo.
http://twitter.com/redrenie24 Renie Anjeh

We need more policies from Ed on the reshuffle. He talked about responsibility last year and rightly so, now he needs to add policy flavour to that and build on it. The Tories are taking their blue-collar conservative turn in a way, and we should not let them get away with it. We need to have policies now on childcare, social care, welfare and education which are radical but fully costed too. We need to get clear ideas (which won’t need to cost a penny) on how we will create responsible capitalism. This Conference has got to be the ‘fightback’ Conference where we start winning back people that we lost and build up our support ahead of the looming election.
aracataca

‘Reagan showed that deficits don’t matter’ Dick Cheney VP to G Bush
(2002) .

IMHO the purpose of deficit reduction is to lower living standards in the western world. Lower living standards usually mean lower wages. Lower wages mean bigger profit margins.In order to compete with the new kids on the block in the world economy, namely China, India and Brazil the labour and production costs of the western world must fall. EM is therefore quite right to try to circumvent this via predistribution. The taxing of assets rather than income and the subsequent redistribution of those taxes is a way around the issues that we currently face. You can’t really spend assets (at least not in the short term) and our economy needs spending to happen straight away.
- jaime taurosangastre candelas
  
  Case A: Chancellor: “I’m going to reduce the deficit in order to lower living standards for most people in the country”.
  
  Case B:: Chancellor: ”I’m going to reduce the deficit so that everyone’s children will have a better future without paying off this generation’s over-indulgence, and if there is pain to be felt, morally better to inflict it upon the generation who voted in the binge-spenders than on a generation unborn when the binge spending was taking place“.
  
  What do you think is really going on, seriously, without disappearing off into wild fruit-loop conspiracy theories of evil swivel-eyed tories and some mad plan to permanently make the country into a nation of serfs?
http://twitter.com/shibleylondon Shibs

That description of ‘pre-distribution’ still makes no sense to me. Will look at the other version in his speech.
http://twitter.com/redrenie24 Renie Anjeh

Absolutely. But I want to see more Shadow Cabinet ministers say where they would cut and pay for spending promises, so we can still do those radical things. “Predistribution” and reforming the economy would be very important and will eventually lead to a lower deficit.
- robertcp
  
  I am not sure if there will be enough money to do anything radical to be honest.
natcom

Bernard Trevallion. I have doubts about invented terms of which “predistribution” is a new example. One remembers “new” Labour’s “people power” and “community in charge” which were followed by a further erosion of the public domain and constraints to democracy. New terminology is unlikely to ensure election of a Labour government. We surely need to sddress the problems created by the political continuum represented by the Thatcher, Major, Blair, Brown and Cameron administrations all of which followed and continue to follow disasterous neo-liberal policies and a belief in myths and fantasies such as “market forces” as the driving mechanism for susainable economic growth with relative equity and the greater efficiency of the private sector over the public sector etc. In my view the Labour party should make it completely clear that it is departing from these views and will base its policies when in government on the principles which originally informed the labour movement and which should have endured. Principles which drove forward the outstanding and inspired Attlee administration. Agreed that lack of demand represents the major cause of a “flat” economy. The fact of the matter is that wages and salaries have been squeezed for over thirty years, including during the Blair / Brown years to the shame of the Labour party. The proportion of the national income invested in wages and salaries fell below the proportion to ensure effective demand for goods and services. An excessive amount of the national income has been devoted to “super” salaries, investment overseas, tax havens, bank liquidity, “casino” investments and other deposits in areas with a low marginal propensity to consume, (as the jargon has it). The need is for jobs is clear. Further cuts must be stopped. Large scale investment is required now in infrastructure, in support of industry and small and medium sized businesses a la Rooseveldt. The 1950′s and 60′s saw stable growth with relative equity. It was a period when strict regulations were applied to banking, investment and the movement of currency internationally and in the employment of labour. The lesson is clear. Let us hear the Labour leadership speak out for the principles required of a social democrtic government and the intention that these will be manifested in policies appropriate for the creation of social and economic sustainability with relative equity.

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