by Jonathan Todd
“The next election”, according to an answer that Ed Miliband gave on Friday, “will be a choice between a big reckoning and steady as she goes.” There wasn’t much that Mliband understated in setting out how Britain would change with him in charge. But this was one thing. There is no steady as she goes option.
George Osborne can only make his sums add up with a much reduced role for government outside of ringfenced areas and/or further cuts for the disabled, children and the working poor. That’s not so much steady as she goes as once more into the breach, as the ship heads towards the rapids. Osborne gave the impression in 2011 that the electorate had sacrificed all that he’d ask of them. Now he asks them to keep sacrificing till 2018/19.
His ‘baseline theory’ of politics encourages this strategy. This forces Labour to choose: Match my baseline and all the tough choices that entails or don’t and accept that the full force of HM Treasury will be thrown at undermining Labour’s credibility.
Miliband’s speech was his response to Osborne’s gaunlet. Which he picked up, tossed aside and dismissed as redundant. Deficit reduction alone can’t fix our economy, he told us. Nor alone can it make hard work pay or be a vision for the country, he continued.
Osborne tried to force Miliband to talk about the size of government but he insisted on telling business what to do. His refusal to play Osborne’s game may have had something of Jarvis Cocker’s snapping of a pencil about it (See two minutes in to this). There is, however, nothing scrawny about Miliband’s attitude to business. He is as muscular in articulating what he will require of them as Osborne is unrelenting in shrinking the state. It’s not a nudge – once a buzzword in David Cameron’s circle – that Miliband wants to give business but an unavoidable prod.
After last year’s spending review, Janan Ganesh, Osborne’s biographer, wrote in the FT under the headline ‘a Leviathan cowed – welcome to Britain in 2023′. In this future, “means-testing … will ensnare pensioner benefits and much else. As their stake in welfare diminishes, these voters will resent it even more than they already do … (There will also be) fewer large hospitals, a wider plurality of (health) providers and more user charges to (NHS) patients. There will be even more upheaval in education.”
You get the general idea. Ganesh’s Britain of 2023 is much changed from that of today. Whether or not, if he is in government beyond May 2015, Osborne will need to introduce precisely the changes envisaged by Ganesh to make his fiscal projections add up, it stretches credulity that Osborne can be a steady as she goes candidate.
Osborne’s fiscal trajectory to 2018/19 is a decisive step towards something akin to the Britain anticipated by Ganesh. “Go big or go home” is supposedly a rule in team Miliband. He did so on Friday. But, in a different way, Osborne had already.
As much as Osborne promises a much changed Britain, the government that Miliband would lead would be uncowed in asking more from business than any since 1979. Margaret Thatcher then came to power, amid the wreckage of 1970s corporatism, having convinced enough people that Britain can do better. A mantra to a brighter tomorrow that Miliband repeated on Friday.
For years, I have argued that Labour should lead on seeking to bring more competition to banking, so Miliband is right to claim that this is a respect in which Britain can do better. More recently and generally, I have felt it important that Labour be the economic optimists. That the tone of Friday’s speech was more positive than some of Labour’s cost of living campaigning is, therefore, welcome.
In looking ahead to this improved future, Miliband wants to be a watershed prime minister as Thatcher was. Neil Kinnock was unable to be such a prime minister, as he contravened Osborne’s baseline theory and was defeated by Conservative campaigning on his ‘tax bombshell’ in 1992. When the Conservatives attempted similar in 1997, with their portrayal of Tony ‘demon eyes’ Blair, it fell flat.
Not violating Osborne’s baseline theory was part of the reassurance that Blair offered the British people. When asking people to make a change, the request is more likely to succeed if the people are reassured that the change is deliverable, manageable and not a leap into the dark.
Given that Osborne is not a steady as she goes candidate, it may be that Miliband can provide sufficient reassurance while breaking his baseline. But to successfully seize the mantel of change, Miliband will need to reassure. It now seems unlikely that the current governor of the Bank of England could continue in post under him and we can expect lots of business people to be publicly angry with him.
Which increases the challenge of being reassuring while promising a reckoning. This is not an impossible balance to strike, not least in the absence of a steady as she goes option. However, it requires less focus on how radically different Miliband’s future will be and more on how achievable it is.
Jonathan Todd is Deputy Editor of Labour Uncut