A brave speech from Ed Miliband

By Anthony Painter / @anthonypainter

A Labour leader goes to Trades Union Congress, is heckled, lectures the brothers and sisters, and uses them to bounce into more politically neutral terrain. All the familiar actors play their roles impeccably. The politics of Ed Miliband’s speech today are not difficult to discern and, on that front, it fulfilled its purpose. But there is something else about this speech too. It made a very serious and very important argument about our economic future.

For all the political weakness of Labour’s position on the current economic challenges with its weak language of ‘too far, too fast’ and ‘you can’t simply cut your way out of a deficit’ (Note to Labour speech-writers: the ‘simply’ is never heard and Labour’s policy is to cut our way out of a deficit) there is a bigger argument that Miliband is making.

Success in the new global economy- with formidable growth and development in China, India and elsewhere- requires more than simply a tweak here, a nudge there. It requires state support and intervention. That requires institution building.

Miliband has a taste for the language of ‘values’, ‘fairness’, and ‘responsibility’- which will sound like empty moralising if he’s not careful, especially if Labour fails to articulate clearly what it takes responsibility for. It’s more basic than these loftier concepts articulate. People want a vision of an economic future that provides security and opportunity. The politics are quite simple. Labour was seduced by a Conservative vision of the economy as it seemed to be working. It wasn’t. It was extremely unstable. It has learnt the lessons; the Conservatives haven’t. It is Labour that will build a better economic future for all as a result.

We know how the Conservative story ends- human lives wasted, communities abandoned, casualisation, flexibilisation, and economic instability alongside grotesque wealth and accumulation at the top. The performer may change but the song remains the same. It says something of the state of modern Conservatism that the tax they prioritise is the one that only the very wealthy pay- those earning over £150,000. It says that it bears a striking resemblance to old Toryism.

Somehow Labour has to find a way to confront the fact that even as the economy has come to a shuddering halt, people still trust the Conservatives more on the economy than Labour. The differences are even more stark when Cameron is compared to Miliband on the economy. This is not just a political question. The fiscal and economic responses are more more constrained than Labour wants to admit- though not as constrained as George Osborne and the nodding yellow dogs claim.

Beyond that though, this morning’s speech marked out some important territory. It is worth quoting at length the crux of this argument:

“A new economy will mean rejecting outdated ideas.

Rejecting the old view that the best government is always less government.

The old view that short term shareholder interests are always in best for Britain’s companies.

And the old view from some on both sides of industry, that employee representation must mean confrontation not cooperation.

A new economy will mean the government, employers, and the workforce all shouldering new responsibilities.

Government must ensure the rules of the system favour the long term, the patient investment, the responsible business.

Because paying our way in the world is going to be tougher than it’s ever been.

The short-term, fast buck, low pay solution.”

Some of the language isn’t quite right- ‘industry’ is only one part of our economy, sometimes entrepreneurs can be quite short-term and so can business and that’s not always a bad thing. But the sentiment underpinning his argument is exactly right. The economy became unbalanced not just in terms of risk and a skew towards financial services but in terms of business focus also.

This is not mad leftism: look at business voices from Michael Porter of Harvard to Dominic Barton of McKinsey who say the same thing. We need an economy that is more focused on the long-term term, more aware of its environmental and social impact, and yes, more human also. This is not do-goodism. It’s sound business. And smart government, through building the right institutions, can help business get there. Miliband understands this terrain in a way the Coalition doesn’t; he now needs to find a way of making it stick politically.

He then went on to make another critical point: trade unions are a key component of this new economy. It is not a coincidence that capitalism enjoys its greatest legitimacy and growth when trade unions are partners in business. Business needs a strong, innovative, creative, and robust trade union movement. Why was Karl Marx so suspicious of trade unionism?

So while the politics were to differentiate himself from trade union strikes, there was a deeper point he was making that provides an enormous opportunity for trade unionists: let’s work out a way together to ensure that you can help the nation towards a stronger, more resilient economy where there is opportunity and security for all who play by the rules. Let’s get good trade unionism to expand throughout the private sector- workers and businesses will be winners.

So while Ed Miliband will get a hard time from some quarters for this speech, it was brave and takes Labour into terrain with a clearer vista. He needs to do more politically to get his voice heard on the economy. If he achieves that then he has the makings of a argument for the future and a clear alternative to Coalition pessimism. Good job but it’s only one step forward.

Anthony Painter is author of ‘This human business: why the new bottom line is social’ to be published with Bondy Consulting/The Foundation in October.