The reasonable compromises of Ed Miliband

Social Democracy has to compromise with capitalism and its markets if it is to gain and exercise power the question is what kind of compromises it makes. The omens of Labour's new leader are not bad.
Mike Rustin
28 September 2010

Stuart Hall's  (2003) article New Labour's Double Shuffle, one of the most influential critiques of the last government.  Its argument was that New Labour was essentially pursuing policies oriented to the furtherance of the agenda of capitalism, while provided seeking to justify these to constituencies, including the working class, whose real interests were significantly opposed to these.  Labour's obsessions with representation, control of 'the message' and ‘spin’ sprang essentially, Hall argued, from this contradiction.

But while this critique retained its force throughout the life of the Blair-Brown government, one must recognise that some kind of 'double shuffle' of this kind is unavoidable for any social democratic government operating in modern conditions. The reason is that such governments are obliged to accept powerful constraints on their actions, from corporate and global market forces, as well as encountering the deadweight resistance of the governmental system, to anything they may wish to do.  The forces of opposition, which they encounter, represented in pervasive corporate lobbying and a thousand arguments from civil servants saying why something cannot be done (the two sometimes in alliance with one another) are largely invisible to the larger public. (Chris Mullin's 2010 Diaries, A View from the Foothills, engagingly describes these pressures observed and suffered as a junior minister.)  Governments find that they have to strike compromises, often undermining and weakening what they set out to achieve while they were in opposition, when they were under greater influence from their allies and supporters.  This is unavoidable. Which is not at all to defend the specific choices that were made by New Labour as having been either inevitable or necessary.

After 1997, the New Labour government did not need to accept the constraints of the Tories' public expenditure programme in its first three years, it could have legislated for a reform to the electoral system in its first term, did not need to keep Chris Woodhead, Chief Inspector of Education, in office for three years, could have introduced a 50% tax on high incomes much earlier than it did, etc.. Even though compromises are inevitable, it is crucial to recognise that they were made too fearfull by the last government, and that more forceful positions need to be taken up for the future.    

The extent of pressures from the market system on governments has never of course been clearer than during the current financial crisis, when enormous cuts in government spending are being legitimised by the alleged (and probably false claim) that the global bond markets will precipitate a default on Britain's debt if this huge cuts programme is not introduced. However when one reads (Will Hutton, The Observer, 26 September) that in 2007 27% of corporation tax and 17% of PAYE was paid by the financial sector, one can see how large were the constraints on the previous government in its dealings with the banks.

The essential difference between the positions of the Milibands, and Ed Balls, in the leadership election was in their response to this situation, David's position was the most compliant with the imperatives imposed by the market, Ed Balls' the most forthright in his willingness to challenge these and to insist on an alternative 'growth first' strategy.  Ed's position lay somewhere between the two, though probably in reality closer to David's than to Ed Balls'.  Ed’s Conference speech today indicated this is indeed the case, so far as the deficit is concerned.

These differences will have to be negotiated and resolved by Labour in opposition. Journalists are demanding that a position be taken up right now - ‘stand and deliver, are you for Darling’s or Balls’ deficit reduction plan?’  - they ask all leading Labour figures.  But this is a fast-moving situation, and no one can reasonably decide at this point what the budget plan should be.  First must come the Coalition’s public expenditure review on October 20, and the various reactions to it, then a more informed judgement will be possible. A new assessment should be made, whose outcome one predicts will come somewhere between the more fiscally conservative Darling’s approach and Ed Balls’ more expansionary view. 

Although speculation after Ed Miliband’s speech was that David was about withdraw from front-bench politics, my view is that it would best if he did take the post of Shadow Chancellor, which his brother is reported to have asked him to do. Ed Balls should then be Business Secretary, the other key economic post, with a remit to continue his effective attacks on Coalition economic policy. (Paradoxically, had David won, Ed Balls might have had a better chance of becoming Shadow Chancellor, such are the imperatives of political balance.)  The economy, the deficit, and the cuts, will be the main political issue for the next period, and Labour’s most effective politicians need to be in these key economic positions.

This role would enable David to maintain a major political role - he would after all be taking the position of Gordon Brown in the Blair government, hardly one that was without power.  The modern cult that says that only winning matters, as if Prime Minister or party leader is the only role in politics worth having is a very damaging one, in many spheres of life.  Ed spoke quite movingly about the history of his family, and their lifelong commitment to progressive politics. There is more than one place from which one can make a great difference, and there may now be the opportunity for these two brothers to contribute to changing British society in fundamental ways, after what may prove to be an aberrant conservative interval.

Of course there is a strong argument that Labour should take a much more radical economic position, as Ed Balls set out persuasively in the campaign, but it seems doubtful that there is sufficient support inside or outside of the Labour Party to make this feasible. 

My assumption is that the political and economic differences between these three leading leadership candidates are capable of constructive resolution, disagreements during the campaign notwithstanding.  Labour has been greatly damaged by bitter antagonisms over two generations - ideological in the early eighties, apparently more personal but still bearing some of the ideological legacy of the eighties in the hatreds between the Blair and Brown camps. It would make a real difference if this new generation could work together in a different way, containing the conflicts between factions and followings which will inevitably emerge, and which are always enthusiastically fanned when they do by media and political opponents alike.

Ed Miliband speech was less assertive and macho than one is accustomed to from party leaders.  Here is someone who does not deny that matters are complex, that there are a lot of different interests and people who will have to be listened to, that problems cannot be conjured away by vacuous enthusiasm, that errors will be made and need to be admitted when they do. This was neither Blair nor Brown, for sure, nor Cameron or Clegg either.  Will its its lack of swagger impose itself as embodying a different kind of strength? 

The need for a new approach 

 Crucial as the deficit battle is going to be, resistance to the cuts is not a political programme in itself.  The most disappointing feature of the leadership campaign was how little new thinking about programmes and policy that it produced. These should be among the main elements of this necessary re-think:

  •  Democratisation, not privatisation, should be the approach to public sector reform.
  • Devolution of powers to local and mayoral authorities, reversing the compulsive centralisation of New Labour reformism.
  •  A more radical 'proportional' reform of the electoral system than the weak AV version it adopted at the General Election should be proposed.  AV offers to benefit only the Liberal Democrats, not the Greens and other parties.  
  • A 'Green New Deal’ as a response not only to the climate change issues, but also as a step towards reversing de-industrialisation.
  •  While the contribution of the financial sector to Britain's economy is valuable, its strong regulation and taxation, in the cause of greater equality, should be a cornerstone of economic policy.
  •  Economic growth is not everything  - broader measures of well-being are needed, in each phase of the life-cycle.  This includes the balance of family and working responsibilities for families with children, the quality of working life, measures of public health, adapting to an ageing population.  Workforces in the public sector should feel enabled, not bullied, by governments, with forms of audit and inspection that encourage public participation and involvement.
  • The problems of housing and land values (usefully introduced by Andy Burnham in the campaign), and the disparities between regions, need to be addressed, as one of the largest sources of inequality and unfairness in contemporary Britain.
  •  There needs to be a serious re-think of criminal justice policy, in particular stopping the prisons being used as dumping grounds for the mentally ill.

Several of these issues figured in Ed Miliband’s speech. How refreshing it was to hear that he would not be attacking Ken Clarke’s reforming approach to imprisonment from the right. 

The promise is of a mature and generous social democracy, committed to greater equality and social justice, diverse in its culture, striking sensible balances between the public and the private, and encouraging active involvement by its citizens in every field of life.

One cannot forecast at this stage whether the Coalition will last its intended five years.  Its unpopularity could become such that it will break up before its full-term, and Labour should encourage this development. Ed Miliband’s speech indicated several areas of agreement with Lib Dems, perhaps with this in mind. 

Labour's record was not, all in all, one of failure, especially by comparison with that of the other defeated governments (Callaghan's in 1979, Major's in 1997) of recent years.  As well as its own great misjudgements and errors, it also suffered some critical misfortunes. Labour is right to say that the collapse of the banking system had its primary source in the USA, and British failures (such as that of Northern Rock and RBS) would not have been lethal without this much broader system-failure. 

Labour did much in office that was of value and benefit to the majority of citizens, as Ed Miliband was right to insist. While some argued that there seemed little distance between himself and the Coalition deep differences will emerge soon enough, once the new government’s expenditure plans are announced.  To take up some of the more progressive positions which the electorate voted for, when they elected Cameron and Clegg, may be quite skilful politics, should it becomes clear that the actual Cameron and Clegg are something else entirely.   Labour therefore now has a reasonable base from which to prepare its renewal and return to government. 


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