by Jonathan Todd
The energy companies are giving Ed Miliband the fight he wanted. Scottish and Southern Energy’s 8% price hike plays right into his narrative.
The Daily Mail created another one: a battle which made Labour’s leader the defender of family and veterans. And coincidentally sucked media oxygen out of a Tory conference where Cameron and his ministers were already struggling to respond to Labour’s energy price freeze.
Recent weeks have added ballast to the Labour strategy of making Miliband a speaker of truth to power. The claim to have “stopped the rush to war,” however, over does it. This argument founders on the rocks of Labour’s conditional support for strikes on Syria.
The moulding of Miliband as justice champion finds a better fit when he references standing up to Rupert Murdoch. Whether, however, deliberations on the Leveson report will reach the outcome that Miliband initially insisted seems doubtful. And whether voters are still paying attention is as uncertain.
The energy firms and the Daily Mail have, therefore, been important contributors to the muscular Miliband that he is building. It might be thought lucky that the energy firms provided the angry response that he sought. And while no one would wish to see relatives pilloried, the Daily Mail brought about a situation in which Miliband was the voice of the mainstream, as everyone would defend their dad.
We make our own luck, though. It was Miliband who was bold enough to provoke the energy firms and not prepared to let the attacks of the Daily Mail slide. He is acting with the confidence of someone who believes he is in circumstances of his own making.
His reshuffle put more clear, red water between his party and that of Tony Blair. Which Peter Mandelson, inadvertently assisting, had already added to by criticising his price freeze. As Mandelson criticised, Neil Kinnock called it a return to prices and incomes policy.
Yet such policy wasn’t dropped by Margaret Thacher because she was supposedly the devil incarnate. This happened because it was a disaster. Even the mild modernisation of Kinnock didn’t dare revive it. And the full blooded modernisation of Mandelson certainly didn’t.
There are, however, those who see the price freeze as today’s equivalent of the windfall tax that Labour committed to before the 1997 election. But the windfall tax came years into the “prawn cocktail offensive“. Notwithstanding the support that Miliband has offered to small businesses, he hasn’t done as much to win over business. The windfall tax also had a solid rationale, while the price freeze seems motivated by the arbitrary rationale of populism.
Such a rationale never arrives at a full stop. The door is always open to going further. If that is what the people want. Which – as the more nervous Tories sense – is difficult to argue with. But which is unlikely to form the optimal investment environment.
Already – in another sign of Miliband’s confidence – he has spoken of extending the approach that he wishes to apply to energy to banks and railways. As the Tories struggle to respond to his energy policy – or fail to secure Liberal Democrat support for their preferred approach – Miliband is further advancing his attack.
Premier League ticket prices are not popular. Nor are private housing rents. Or beer prices. The owners of Premier League clubs, private landlords and brewers may look at Miliband and wonder where his attack will go next.
Few tears will be shed for them but Miliband’s luck will run out if the attack rolls on. The popularity of Miliband’s hard-edged market interventions may carry him to Downing Street. Yet a vibrant, investment-rich private sector is a precondition of him being a success there.
Whether Miliband has been lucky or made his own luck can be debated. He’s certainly fortunate that multi-party government bequeathed him a chunk of Liberal Democrat support, that UKIP are splitting the vote on the right, and that 35 per cent of the vote would probably get him, unlike David Cameron, to Downing Street.
Both luck and the ability to make it are valuable leadership qualities. But wise leadership doesn’t push it. It would be a barrier to Miliband winning if his pronouncements make him an enemy of swathes of the private sector and a constraint upon his capacity to govern well if he does win in such circumstances.
The Leveson process seems unlikely to end up where Miliband first insisted. His trade union reforms may be moving in a similarly compromised direction. He can’t allow a pattern to develop in which he takes a big stand that is gradually chipped away at. He’d risk this if he, say, calls for Paul Dacre’s resignation or over reaches himself in his market interventions.
Through luck or judgment, Miliband has formed a hammer in his hand. But not everything is a nail. And some reassurance is required, as well as force.
Jonathan Todd is Labour Uncut’s economic columnist
Tags: Daily Mail, Ed Miliband, energy price freeze, Jonathan Todd, leadership
Ed is now an upstart who mustn’t get above his station, eh?
You sound like the Tories who’ve been completely snookered by their complacency over Ed Miliband’s abilities.
This article is missing the pretty obvious point that most privatised companies are not operating in a market and are providing services that are vital to most people. Private rents are in a market that is lacking supply, so we might need controls if prices do not start coming down soon. Football and beer are clearly in a market and most people can cope without them.
Yet again economic illiteracy raises it’s head. Prices change due to supply and demand. While it is a market force government action does affect how this manifests itself,
In gas we are no longer energy independent, and we increasingly rely on imports. If we start saying no, we are not going to pay those prices, nobody has to sell the gas or electricity to us. If the price of energy soars a price fix could bankrupt the energy companies and then the power would start going out unless the government started paying for gas out of direct taxation.
With housing rent, increasing prices are due to low supply of new housing compared to growth in population.
The two things government can do is slow the rate of immigration, if it wants to and the other is to build more houses. Money is a bit tight so there is not going to be a big council house building boom.
But if government lifted all restrictions on building on greenfield sites, you;d soon see a building boom as the price of land plummeted.
The problem is of course is that people want things that directly contradict each other.
Introduce price controls and you will soon see supply decline. There are plenty of small landlords that borrowed too much or paid too much for the property and then rent they get does not really cover costs. If their costs rise but their rents do not then will simply sell up.
It’s simple really, supply will fall if rents are controlled. But it will all take time for big shifts to occur. so as far a politician is concerned that’s a success as it might be as long as five to ten years away and thats an election or two away.
Ed must push on or rather his team must; the Royal Mail sell off to the rich and many foreigners and the tax payers massive mortgage subsidy to fairly well off house purchasers and the banks – these are yet more examples of a crazy government. You do not let off the accelerator when you are in the race; Why? 1) The anti-Labour hysteria in the big 5 right wing papers is increasing 2) the public’s consciousness of how bad this government is could reach a ‘tipping point’ . Which famous billionaire said there is a class struggle going on but most of the force, agitation and ideology comes from the rich & dominant. Generally Labour is too soft and gentle in its attacks on the injustices and dysfunctions of our society.