Putting words into action
Ed Miliband is right that Britain wants a more responsible capitalism – but public service reform must not be an afterthought
It is rare for the words of a leader of the opposition to change policy; generating headlines is their normal intention. Ed Miliband’s speech to Labour party conference, however, managed both.
Miliband’s attack on the ‘rigged market’ operated by the big six energy companies led Scottish and Southern Energy to agree to sell all of its electricity on the open market, thus introducing much-needed transparency. The company’s chief executive acknowledged that his decision had been ‘triggered’ by Miliband’s harsh words.
If Labour’s leader has achieved far more than he could possibly have hoped for in terms of changing policy, he may have been less pleased with the headlines he generated, which focused on a supposed lurch to the anti-business left and the booing of Tony Blair’s name.
On the latter, there is no excuse for the small minority of delegates who disparaged Labour’s most electorally successful leader in this way. They were not only unrepresentative of the feelings of most Labour members, they also demonstrated themselves to be woefully out of touch with the public and Labour voters. A YouGov poll carried out after the conference found Blair topping the public’s choice as Labour’s best-ever leader, leading the second-placed John Smith by 20 points among Labour voters.
But what of the political positioning that Miliband staked out? Labour’s leader told the party what he believes and the direction he wishes to take. Those who have questioned his ability to do so thus far now have their answer.
That overall direction is the correct one, but we have four caveats.
First, we have questioned before the manner in which Miliband appears – as he did in his speech with references to ‘the last 30 years’ – to suggest more continuity between the governments of Margaret Thatcher and John Major and those of Tony Blair and Gordon Brown than is either accurate or in Labour’s best interests to imply.
We fully support Miliband’s insistence that it is vital that the party has a proper reckoning and honest debate about what it got right and wrong during its time in power. But to suggest that New Labour’s attitude towards the market and political economy was akin to that of Thatcher and Major does not help that debate. From the Competition Act – the most robust competition framework in the world – to policies such as the national minimum wage and the rights of trade unions to organise in the workplace, Labour’s approach was measurably different to that which came before it.
Second, economic competence has to be demonstrated, not simply asserted. Ed Balls’ long-term fiscal targets are a valuable start but the announcement on the eve of conference that Labour will seek to lower the cap on tuition fees to £6,000 will not have helped further that agenda. Besides the fact that this appears to have muddled Labour’s commitment to a graduate tax, we question whether this is the right priority for a Labour government, especially when we are yet to see the impact of the new £9,000 cap and associated reforms. Instead, we believe that – in the interests of helping families squeezed by rising costs, cutting child poverty, furthering social mobility, and boosting women’s participation in the workforce – Labour’s priority should be the expansion of universal affordable childcare. Showing that it is willing to make tough choices is key to restoring the party’s credibility, and too few have yet been made.
Third, the distinction between firms that are ‘producers’ and ‘predators’ made better prose than policy. Attempting to define the difference between the two – as demonstrated by the inability of some members of the shadow cabinet to answer media questions about the ownership of the likes of Boots by private equity companies – has already proved fiendishly difficult.
But while we may question the language Miliband adopted to define his vision of a more responsible capitalism, it is nonetheless the right one: one that echoes the arguments set forth in The Purple Book and one that will strike a chord with many voters. The argument was no more an ‘anti-business’ one than those who call for reform of our public services are ‘anti-public services’.
Indeed, the policies that Miliband set out in his speech – more apprenticeships, and seats for workers on remuneration boards – are concrete examples of the shift from ‘redistribution’ (taxing and spending to compensate for the market’s skewed outcomes) to ‘predistribution’ (trying to redistribute power in the market to prevent malign outcomes arising) that The Purple Book calls for.
Finally, Miliband was right to commit Labour to making ‘government work better for people’. But while his direction of travel on reforming the market is clear, that is not yet the case on public service reform. Indeed, this occupied only a handful of lines in his speech. Miliband’s commitment to ‘give power to the public’ is, again, one shared with The Purple Book and indicates his instincts are the right ones. Nonetheless, this cannot be an afterthought. Reforming the state and reforming the market are intertwined. Only by demonstrating that it will do the former will Labour be trusted to do the latter.
business, childcare, Ed Balls, Ed Miliband, energy, Gordon Brown, graduate tax, John Major, John Smith, Labour Party Annual Conference 2011, Margaret Thatcher, minimum wage, New Labour, public service reform, Purple Book, social mobility, Tony Blair, YouGov