Progress | Centre-left Labour politics

People, not structures

Before he decides how to implement it, Labour’s leader must choose between the grand vision of ‘Milibandism’ and its steady incrementalism, writes Steve Van Riel

In the early stage of this parliament, politics divided between those who prioritised the deficit and those who prioritised immediate growth. Today, there are more jobs and higher growth – not as much as we would want, not always in the places that we want but undeniably present nonetheless. In late 2013 Ed Miliband shifted the debate to the cost of living. This has been especially successful because the Conservatives have not had a counter-position in the way they had in the days of austerity versus fiscal stimulus.

But in calling the cost of living a ‘crisis’ Labour recognises that this too is a time-limited argument. Probably not enough, probably not for all the people and perhaps not before the election, but, at some point, wage rises and price increases will get closer. In January inflation dropped to two per cent for the first time in five years. One day, the cost of living slogans will have to be retired and replaced, just as the ‘march for jobs’ and ‘Plan B’ placards have been.

That might sound like bad news for Miliband: in fact, I suspect that the Labour leader would enjoy nothing more than a debate on the economy that left all the day-to-day issues to one side and focused solely on the long term. This is where the largest body of Milibandist writing exists and it is clearly an area that Miliband himself is fascinated by. In fact, Miliband has given so many speeches on this subject, it is not easy to précis them intelligently without just rehashing the soundbites.

One way of looking at it would be to divide Milibandism into three parts. First, it is explicitly moralistic about economics. Every political creed applies some morality to markets: no Tory would approve of fraud and New Labour made very low pay illegal. But Milibandism is ready to demand a far more detailed set of moral standards from companies: not just treating workers and customers reasonably, paying tax and obeying the law, but instead delving much more deeply into their ‘culture and practices’.

Second, Milibandism returns to a perennial Labour theme of the postwar period: making Britain’s economy more like Germany’s. German economic success, or, more specifically, manufacturing success, is seen as the product of interlocking institutions: national wage bargaining that helps ensure sound money, patient finance that allows bosses to invest for the future even when their firms are making a loss, and stable employment relations which offer workers the long-term incentives to develop company-specific vocational skills. While New Labour often tried to maximise Britain’s comparative advantage in areas like financial services, higher education and the creative industries, Milibandism seeks to turn the economy towards more Germanic specialisms.

Third, Milibandism seeks to achieve these two goals using what is termed ‘predistribution’, that is tools other than raising money in taxes and spending it directly on the public – for example, through tax credits. Predistribution could be through direct intervention in markets, such as in expanding and regionalising taxpayer funding for business investment. It could be through public procurement rules, where the taxpayer agrees to pay more for a contract if the contracting company agrees, for example, to include a set number of apprenticeships. Or it could be through other regulatory changes like giving trade unions more freedom to organise, or changes to corporate governance rules to make takeovers harder or put employee representatives on company boards.

So far the development of Milibandism has focused on putting particular topics and tactics on the agenda. That means a wide range of specific policies – from the incremental to the revolutionary – could fall under the heading of Milibandism. If Milibandism is a little more spending on apprenticeships and some extra state finance for small businesses with big growth potential – so far, so New Labour. But if temporary price controls or forcibly splitting up companies with a large market share were to become more normal policy tools, with applicability outside energy and banking, then we would be talking about something dramatically different.

This tension partly comes from how Miliband makes his major interventions and how they are reported. In day-to-day politics, speechwriters and pre-briefers always want to reach for the most radical phrasing and strongest interpretation of an agenda to ensure the biggest headlines. But in the TV and radio interviews after the big speech, politicians always want to go to the most easily defended proposition. The result is oscillation: sometimes implying this agenda is utterly different from anything New Labour or the coalition could contemplate, but sometimes pointing to the fact that Peter Mandelson began some of this work in his last ministerial posting or that many of the premises of this agenda are accepted by ministers.

One route out of this problem is to give the more radical interpretation an institutional home in a ‘Department for Milibandism’. This would take the existing Department for Business and add the Treasury’s regulatory powers, all under a committed Milibandite secretary of state. Both Clement Attlee and Harold Wilson tried a similar strategy, and on both occasions institutional change was not enough to achieve a political or economic transformation. Both instances can be interpreted as a lack of ambition: rather than win over a sceptical Treasury with force of argument, new departments were created to try and avoid the inevitable confrontation. But, while new departments can have more media impact, they do not change the fundamentals: the creation of the Department for Energy and Climate Change has not left Labour or anyone else thinking of rising energy costs in terms of an environmental victory.

A better example to follow might be the academy programme of the New Labour governments, and particularly the role played by Andrew Adonis in actually making sure that policy documents and legislative clauses turned, week by week, into observable changes outside Westminster. Rather than changing the seats around the cabinet table, Miliband could think of appointing a junior minister who is obsessed with this policy agenda and not very interested in promotion. Given the authority of No 10 and the timeframe of a whole parliament, such a person might be able to turn some of this diffuse agenda into a reality.

But this points to something wider: how hard-edged and political is the commitment to Milibandism? If Labour wins the next election, will the ideas of 2014 and 2015 be stuck to, whatever slings and arrows are thrown at the Miliband government, all the way to 2020?

The answer to that question is dependent on exactly when Labour chooses between the grand rhetorical version of Milibandism and the incremental one that tends to come out on the Today programme or the Daily Politics.

If this is a genuinely radical programme for office, Labour needs to start preparing the ground for the fact that not everyone will benefit, and not all of the people who lose will be the cartoonish fatcat villains identified so far. At the moment there is no public readiness for painful choices to be justified by the idea that they will ultimately deliver a more Milibandite economy. On the other hand, if this is a programme that will not ruffle too many feathers and instead make small but steady improvements in, for example, skills provision, then Labour has to urgently wean itself off its rhetorical highs, or else expect accusations of betrayal within months of entering office.

This choice will be forced on Labour if it wins the next election. Making the decision beforehand – whichever way Miliband decides to go – would do more than any new department to ensure his choice is turned into something real if Labour win.

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Steve Van Riel is a contributing editor to Progress

 

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Steve Van Riel

was the Labour party's director of policy and research at the 2010 general election

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