by Atul Hatwal
And so it begins. Last night’s doubts about the leader’s speech, widely expressed in the bars and receptions of Labour conference, are crystallising into a genuine fear on what happens next for Labour. The newspaper headlines were appalling, the party is on the defensive and the Tories are jubilant.
In his address to Labour party conference, Ed Miliband answered the widespread pleas for policy substance with two eye catching announcements – a two year price freeze on energy prices from 2015 and a target to build 200,000 homes. Both were well received in the hall, but are unravelling at an alarming pace.
The urge to act in a clear and unequivocal way on energy prices is understandable. It hardly bears repetition that soaring energy bills are an enormous problem for households. But at the moment the public don’t believe that either the Tories or Labour will do anything to help.
Polling conducted for Labour Uncut by YouGov shows that voters narrowly place greater trust in Ed Miliband and Labour over David Cameron and the Tories, to keep gas and electricity prices down, by 21% to 15%. However, the majority – 51% – trust neither to help with these bills.
In this context, a firm pledge to freeze prices will likely persuade sceptical voters that Labour will take effective action.
But, it is a big step to impose price controls even for a limited period. Such a move is redolent of the prices policies of the 1970s Labour government and has sparked another argument with business.
The public might be supportive of a price freeze that punishes unpopular energy companies, yet equally wary of a party that is happy to intervene so heavily in the market and fearful of the threats of blackouts.
In the 2005 election, the Tories found that although voters liked their punitive rhetoric on immigration, it validated Labour’s broader charges that the Tories were a hard-right party who would merrily privatise the NHS and cut benefits for pensioners.
The danger for Labour is that the battle on energy prices might be won at the cost of losing the war on economic credibility. The Tory charges of Labour as a hard-left, anti-business party that cannot be trusted to manage the economy, are already filling the airwaves.
The problems with Labour’s new energy policy were echoed in the commitment to build 200,000 new homes each year of the new parliament.
Once again the problem to be solved was corporate malpractice, the target on this occasion being property development companies that hoard land rather than building on it. “Use it or lose it” was the rallying cry.
Although there is an issue with this type of behaviour, it is in no way the biggest barrier to building more homes. In the passages of Ed Miliband’s speech on housing, the big missing topic was money.
Research by Shelter has highlighted that there are 146,000 homes per year being delivered by the private sector and current government measures. To boost building by over 50,000 would require a direct capital investment from central government of £12bn.
This type of rhetorical sleight of hand, focusing on the failings of business while avoiding any talk of the enormous funding shortfall, is why the public are sceptical about either of the major parties’ ability to build more homes.
Polling conducted for Labour Uncut by YouGov shows that although Ed Miliband and Labour are just about more trusted than David Cameron and the Tories to build more homes (26% to 21%), the majority – 52% don’t trust either. 34% say neither will build more homes and 18% say they don’t know who they would trust.
Without a concrete pledge on funding, it is difficult to see how the 200,000 home target can be met and public scepticism countered.
Earlier this week, Labour Uncut launched a book, “Labour’s manifesto uncut: how to win in 2015 and why” which charts a different route for Labour.
One where the route to lower household energy bills involves a fully funded pledge for £1000 of energy efficiency improvements to over 3m homes. Where a target of 200,000 new homes each year is backed by £12bn funding commitment replete with the detail of how the money will be found.
Rather than take the difficult choices to liberate funds for these important goals, Ed Miliband has chosen the path of least resistance in targeting big bad business. It’s a message that plays well to the party faithful, but the next election will be decided by an audience far larger than a conference hall in Brighton.
An audience that will have read their morning papers and had many of their fears about Labour confirmed.
Atul Hatwal is editor of Labour Uncut
Tags: Atul Hatwal, Ed Miliband, Labour conference 2013, Labour's manifesto uncut, leader's speech
So you would let big business get away with their profiteering and huge bonuses then?
So where does that leave moderates/centrists in your Party ? What is the point in staying when you admit that you have lost?
Paul, always to fight the next election.
Allan, the fact that a labour blogger thinks the Tories feel they’ll win, doesn’t mean we say we. Should agree with them,
While I’m sympathetic to the arguments expressed here unfortunately Atul Hatwal lost me when complaining about this morning’s press coverage. When I occasionally pop into the cafe round the corner from my office in Essex I can only see rightwing tabloids being read by the sort of people Labour needs to appeal to. So I am aware of the danger but these newspapers will never give a centre-left leader a fair hearing. Only the Sun tentatively backed Blair, mainly because it looked like he was going to win. All the others came out for the Tories like they always do. Gordon Brown courted the Daily Mail because he thought Paul Dacre would do him a favour. As if. I don’t think Blair was wrong to meet Murdoch like some of my comrades have suggested – there’s nothing wrong with meeting people and listening to what they have to say. But we can’t be dictated to by rightwing newspaper proprietors or what’s the point? Ed Miliband’s strategy (if that was the strategy) of appealing to the public direct wasn’t wrong. I’m just not sure it was delivered by the right messenger but that’s a different problem altogether.
This was half measures, half the story, at best semi-skimmed milk, not the full fat.
On the economy they are sticking to the Tory economic model and envelope including deficit reduction.
The full measures, Nationalise the energy companies etc, and demonstrate how a different economic model facilities and enables a more radical policy program and more equal outcomes.
But the two Ed’s can’t imagine a different economic future.
It’s good to see some push back on this from the moderates in the party. Slagging off business in a way that completely ignores economic reality is dangerous from a supposedly responsible party of government. A return on capital employed of 5% is no profiteering scam. Does miliband want to junk the investment in new plant and renewable generating technologies? Because this sounds dangerously like trying to have his cake and eat it. The thing about populism is that people can like the red meat whilst not respecting you because they know they’re being pandered to. People are complex like that. More complex than a jubilant hall of leftist activists with a reflexive anti-business mindset give them credit for…
‘freezing’ or ‘holidays’ do b****r all except defer the problem. Lets tackle the real underlying isses. EdM failed to do that, well Labour has failed to do that to be more precise. EdM should do the decent thing and stand aside for someone else, more imaginative and more dynamic, who might actually win us the Election., otherwise we are staring defeat in the face. We actually have 2 years to fight this Election.
Prfit is not a dirty word as long as Corportations have CSR. WThey need a bit reminding about giving back to the Community.
You stay with the Party in the expectation that you can change that Party for the good, of all.
You might enjoy this on Miliband’s speech (funny) http://theoccasionalpigeon.blogspot.co.uk/2013/09/tories-warn-britain-on-verge-of.html
“Ed Miliband has chosen the path of least resistance in targeting big bad business.”
That’s wide off the mark. Standing up to vested interests is the most difficult path. If more of our politicians had the guts to do it our country would be in much less of a mess – if only New Labour hadn’t pandered to narrow big business interests over PFI and the lack of regulation in the financial sector.
Ed did what no other leader of a political party had dared to do when he stood up to Murdoch. That was the right thing to do. As is standing up to corporations when they operate against the national interest and take advantage of a dependent population – that’s what governments are for.
@ Ben
Some companies make big profits with small margins – but they are (usually) in highly competitive markets. Tesco is a good example. A 5 per cent return on a virtual monopoly with virtually no risk is a different matter.
@Aragon
Nationalize the energy companies? Really? I see the ideological attractions but where’s the financial rationale?
Given all the other demands on Labour’s budget at a time when the country’s debt remains unreduced and the deficit large, how can we afford to commit something like £30bn to buy the equity off the shareholders of several very large companies (bearing in mind that even Attlee compensated the owners of nationalized industries: this country isn’t Venezuela or the Soviet Union)? And how to we also find even more tens of billions to fund the massive costs for infratructural investment (independent estimates currently run to £150-200bn) which would then directly fall onto the taxpayer’s tab as the new owner of the energy sector?
There isn’t even a pro-nationalization financial argument that makes sense in relation to retail energy costs. With UK electricity prices very much around the European average and our gas prices well below the European average and net profit margins for the UK energy firms typically in line with the practice of normal commercial companies in other sectors the claims that they are “profiteering” and that prices are “too high” simply don’t stack up.
But then, as Ed has shown, this really isn’t about hard-headed economics at all, is it? It’s pure politics.
Ed Miliband is a moderately left of centre leader who is trying to appeal to voters on the left and centre. This gives Labour a good chance of being the biggest party in a hung Parliament, which is probably Labour’s best possible result.
It seems to have escaped the attention of some people that the Lib Dems will be the centre party at the next General Election, so there is space for a party to their left. Of course, Nick Clegg is probably too left-wing for Atul, Marchant etc!
@John Jones
What happened to the money raised when we sold all these public assets ?
I can find the money but Governments do not operate like a family budget…
“This gives Labour a good chance of being the biggest party in a hung Parliament, which is probably Labour’s best possible result.”
And that is the true measure of how inspiring the British people find our political elite.
aragon:
“What happened to the money raised when we sold all these public assets?”.
First, the aggregate performance of those “assets” was loss-making (to the tune of £3bn in the seminal year of 1979, for example, which the long-suffering taxpayer then needed to find). As a result the sale price was always going to be unusually low, as loss-making entities in need of major restructuring before they generate consistent profits are not the most attractive of buys for rational investors, especially when the main opposition party, as was the case through the 1980s, is also loudly hostile and talking openly about re-nationalization if elected. From the government’s point of view the low sale prices were acceptable because, after all, as Nicholas Ridley admitted, privatization was never about making much money from the disposal but rather, given the loss-making performance of the nationalized sector, about the government “getting rid of the running costs” (ie. the taxpayer bailouts, subsidies and write-offs).
Second, I’m not clear why the money that was made from the privatizations is a relevant consideration when I ask simply how you propose to fund the vast sums required for re-nationalization if the shareholders were to be properly compensated for their equity and the huge infrastructure investment the energy system needs going forward is to be adequately funded by the public purse. Even if the proceeds from thirty years ago had been put in a high interest bank account they wouldn’t even begin to amount to the kind of sums your proposal would entail. So where else is the money coming from, apart from yet more tax rises?