Miliband must get tough on inequality, housing and Europeby Clare Short / August 21, 2013 / Leave a comment
Does the improving UK economy mean that Ed Miliband’s chances of winning power have lessened? In fact improvements in output exist alongside declining incomes. Those with high mortgages benefit from low interest rates but this will change. Currently lower income households and the young suffer most. We have heard about the squeezed middle and One Nation Labour, but it isn’t clear what that means. For a time, Labour’s economic policy seemed to be, “cut a little less.” Now it is, “stick with government targets.” There is little reason to think much would change with a Miliband government, and that is his major problem.
Yet there is a deep unease with politics and foreboding about the future. Why can’t Labour capitalise on this? It is partly the memory of New Labour, but also the use of polling, focus groups and soundbites, that make long-term policy thinking impossible. Thus the political elite herd onto the same, safety-first space and disconnect more and more from the rest of us.
Miliband is a thoughtful and radical politician, if rather young and untried, trapped in a system that prevents him from being distinctive and speaking about the big, longer-term questions. It would frighten too many (not least the Blairites) to set out a radical new agenda. But, he must challenge the narrative on Labour spending. This should perhaps be led from the backbenches, calling for a more grown-up debate and admission that any responsible government had to save the banks and therefore increase debt. Then Miliband should put together emblematic commitments that can be implemented quickly, complemented by longer-term strategies.
The issue causing most damage is inequality. Changes to the benefits systems cannot be the answer. Brown brought in working family tax credits and subsidies for escalating rents, but this drives up the welfare budget and does not reduce underlying inequality. Britain has become one of the most unequal countries in the OECD. This creates an unhappy society and a huge welfare bill. Miliband should rally support for the living wage, call for more technical training for working-class jobs and then establish a Royal Commission on reducing inequality
On Europe, Labour is saying nothing distinctive. There is a problem with the European Commission’s instinct to regulate everything and ignore the principle of subsidiarity. But the new issue is the relationship of non-euro members to the EU. Miliband should promise to work with this group to thrash out a new relationship with the eurozone. We need to retain the benefits of the single market but allow real subsidiarity.
New Labour managerialism and creeping commercialisation of the public sector has damaged pride in public service. The school system, for example, is now a test and exam passing system that delivers poor quality education. In the health service, targets and financial incentives prioritise too much activity that is unrelated to providing care or preventing ill health. Miliband should promise collaborative reviews to minimise targets and build long-term consensus, rather than endless Secretary of State initiatives.
On foreign policy, acting as a constant echo of the US humiliates Britain and means we contribute little to the future stability of the world. The UK needs to sometimes act independently, for example looking for a coalition of the willing on Israel/Palestine, based on respect for international law. On asylum, there needs to be a renegotiation of the 1951 Convention: being able to pay people smugglers should not determine who can get here, but the policy should not be cruelty to those who arrive.
We must also review of the Bank of England’s quantitative easing programme. I believe it is propping up an overinflated financial sector that has lost all sense of investing in real things. I would cancel QE; there are doubts about it among financial commentators, but Labour cannot afford to spook the markets. Miliband should announce a big effort on insulation, renewables and fuel poverty as part of the growing investment in infrastructure and set up a review of QE when in power.
Housing is another mess. Successive governments have encouraged house price inflation—too much capital is tied up in housing. Britain has shortages and outrageous rents. Miliband should commit to tax relief on low cost rental accommodation and promise to build more social housing. In office, he should create incentives to release much more of the under-occupied housing.
There is a radical social democratic agenda that would be popular, and that would work for Miliband—but the big problem is the impossibility of long-term thinking in the current political system. Coalitions should make this easier, but parties are mesmerised by polling and the newspapers that fewer and fewer people read. This is, funnily enough, Blair’s true legacy.
MORE ON LABOUR UNDER MILIBAND:
Lost in thought? Ed needs to tell Britain what he’s really thinking—if he knows. Jonathan Derbyshire goes in search of the meaning of Milibandism
Bad news, Ed: Exclusive new polls reveal that voters don’t think he is tough enough, clear enough or competent enough to lead Britain