Miliband wants a Britain where the banks work for you – not the other way round

George Osborne may have stolen his thunder somewhat with a tactically timed non-pledge to possibly, maybe increase the Minimum Wage, but Ed Miliband still has a big speech to give today – and as suggested by leaks earlier this week, it’s on banking. The Labour leader will pledge that “under a Labour government, you will no longer be serving the banks. Instead, the banks will be serving you” – a noticeable ratcheting up of rhetoric against the big banks – indicating that they are to become Miliband’s latest “big bad” after all.

Ed Miliband wants to break up the banks, cutting them down to size, bring new competitors into the market to increase choice and value for consumers – and make loans easier to come by for small businesses. So far so good.

What we won’t see from Miliband though are any short-termist eye-catching gimmicks. This is a speech about the long term – a “state of the economy” speech – that predominantly serves as an indicator of Labour’s direction rather than offering pledges to the electorate. Whilst that might seem like a victory for those calling for Miliband to offer “transformational” changes rather than tinkering “transactional” promises, Miliband’s team have been clear that their intention is to offer both. Quite right, although the lack of a “transactional” offer to the electorate in this speech means it lacks a clear headline that can used on the doorstep this weekend. There’s no “energy price freeze” here, the changes proposed are real, functional, structural and significant.

This is a serious speech, short on short-term promises and long on long-term economic reforms.

The proposal – which the Guardian got a scoop on days in advance, and Newsnight got close to on Tuesday evening – is that Labour will seek to increase competition in the banking sector, breaking up high street chains and introducing two new “challenger banks”, both of which will have a significant market share. (Miliband won’t say what the “cap” should be on bank size though – he’ll leave that to the Competition and Markets Authority). This is all very worthy and tees up Labour for a wide range of future interventions on the size and shape of the UK economy – but there’s no “retail offer” for voters here.

That probably means it’ll be overlooked by the media and ignored by the public – even though the changes being proposed are pretty radical. [See update]

This speech seeks to make the big economic argument that will set up the election framing the party wants to adopt. Labour wants to make big changes to the economy, more competition, less market dominance, better wages and a less exploitative banking sector – that’s their “long term economic plan”. Meanwhile, the Labour leadership argue, the much-trumpteted Tory economic plan isn’t a plan for the economy at all, it’s a plan for the deficit.

You can expect Miliband to make much of the difference between the Westminster economic dialogue – focussed on figures and graphs – and the rest of the country, which is focussed on debt, wages and costs. It’s intended as a riposte to the Tory argument that the economy has recovered and prosperity is returning – but it could also serve as a rebuke to a press who are too in thrall to ONS charts, and too distant from the reality of keeping the lights on in Crewe, Altrincham or Glasgow.

Miliband will also seek to pull together many of the arguments he’s been making over the past few years – predistribution, Living Wage, predators and producers – to make a bigger argument. Whilst the Tories think the crisis was about the size of the state, Labour thinks the crisis is about how the economy works.

As they plan to reshape the British economy, Miliband and his team have taken inspiration from an usual source – the “American Progressives” at the turn of the last century. They sought to hit back at uncompetitive markets that “hurt the little guy”, now Miliband is seeking to show that a British centre-left party can do what an American centre-right party once did so successfully. Just don’t call him Teddy Miliband (or Eddy Roosevelt).

What concerns me though about this speech is how the debate kicks on afterwards. This is a “big speech”, but it also feels another exercise in intellectual heavy lifting of the kind Labour has been doing for a while now. Long-termism is good, but if you’re talking about a cost-of-living crisis people also want to know what will put pounds in their pockets. Breaking up the banks is important – but it needs to be followed by the kind of tangible changes that people feel will make them better off. The smart thing about the energy price freeze was that it was a short term “transactional” offer (keeping energy bills down for two years) backed up by a long-term “transformational” change (smashing up the energy market and ensuring genuine competition). This announcement is long-termist, smart, and good for consumers. The only question Miliband has yet to answer though, is how will this make me better off in the short-term?

When the framing is cost of living, that question matters.

Update: A key Milibandite points out that I’ve suggested Miliband’s speech may be overlooked by the media, when it’s already received attention for days in the media. Hands up – I’m bang to rights there. But I guess I am worried that the response from the media will be “what does this mean?” or perhaps “and…?”. Neither of which dilute the importance of this speech, but both of which mean this might not dominate the headlines of the papers in days to come – especially with Osborne’s media-cycle hijacking. We shall see.