Miliband’s focus on ‘cost-of-living’ is more radical and broader than most realise

At an event on changing attitudes to poverty recently, a colleague remarked that the Labour Party had almost stopped talking about poverty and focused on the “soft” issue of cost of living. A friend last week was exasperated when I mentioned the phrase too, saying it drowned out other issues. “What about contribution? People’s relationship to the state?” she asked abruptly.

These kinds of criticisms aren’t unusual. I’ve frequently heard lefties lament that easing the cost of living ignored the broader structural issues of Britain’s political economy. In other words, as one said, “Miliband is missing the wood for the trees”.

But these criticisms miss the point, albeit partly because the Labour leader himself hasn’t spelled it out strongly enough.

‘Cost of living’ is Ed Miliband’s way of encapsulating and selling (on the door-step) a much broader set of reforms to the British economy.

In September 2012 Miliband popularised the idea of ‘predistribution’ in a speech, saying it was about creating an economy with higher-skills, higher-wages economy. In an interview with the New Statesman he added: “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.”

In other words, if traditional redistribution was about creating a more equal society after incomes and taxes were taken into account, predistribution is about creating an economy which is more equal before taxes and incomes are taken into account.

But predistribution was always a wonky, academic word unlikely to set the world alight. The phrase ‘cost-of-living’ is exactly the opposite: people instinctively know what it means and how it relates to them. Miliband has adopted the latter as a way to communicate the former.

This is why the phrase ‘cost of living’ refers to a ‘crisis’ that is broader and more radical than many realise: it can only be solved by changing how the British economy works. It neatly encapsulates ‘predistribution’ and its implications. Furthermore, even if Britons think the economy is improving, they will keep feeling that their own cost of living is going up rather than down.

Therefore it also sets a political trap for the Tories. If they deny it, most commonly by claiming that inflation is lower than average earnings or that GDP is growing, they lose. People rarely care about statistics and it makes the Tories look even more out of touch. If, instead, they join Miliband in talking up the cost of living crisis, then he has them on his turf and he can keep pushing further on the debate.

Dealing with the ‘cost of living crisis’ is about poverty, people’s relationship to the state, public ownership and much more. It also illustrates that the leader of the Labour party is very exercised about inequality and poverty, and those issues have not been brushed under the carpet.

This is the debate through which Miliband hopes to reshape the UK’s political economy. It isn’t a simplistic phrase but a potent weapon with far more potential than many realise.