Ed Miliband will give the following “Future That Works” speech to repeat his ‘one nation’ theme. The speech does not cover faults in the political process, which is an aim of Labour’s reformulation of policy, neatly epitomised by #plebgate and George Osborne’s train ticket fiasco yesterday. That is for another time perhaps. The speech however emphasises two particular strands of the ‘one nation’ theme, corresponding to the policy review underway by Jon Cruddas: the economy, and society.

Despite the BBC aiming for ‘balanced coverage’, which appears to give prominence to the austerity alliance and the views of the Taxpayers’ Alliance in showcasing their policy for low income tax, the case made for the economy is a good one. It is possible that more people are in employment, but the consensus is that this is supported by flexible, part-time work with little job security. The productivity of the UK has actually flatlined, and seasoned experts have now agreed that a financial stimulus should have started a few years ago. As it was there was no Keynesian stimulus, economy, and the main material fact is that the economy is now in recession, whereas it was recovering albeit in a fragile way in 2010. Borrowing is up, because growth in the overall economy is so poor; this is money which cannot be spent on supporting the disabled in their living, or the living wages of teaches or nurses. There is very weak evidence for ‘trickle down economics’ – there is virtually no evidence that individuals who are paid excessively are not passing this down to employees and workers. In fact, they have actually benefited from a lower rate of income tax (50p band), which Labour failed to implement throughout its last entire period of government. The second version of Beecroft, dubbed ‘shares-for-rights’, has been a direct attack on employment rights; if a new startup is failing, shares in it will be worthless, and one wonders what the limit might be for trading basic rights in the workplace? Could such a policy one day culminate in staff being offered money for basic health and safety rights in future? While the government is able engineer domestic law, watering down the rights of workers, they will not be able to get out of European law so easily.

Ed Miliband refers to cutting ‘too far too fast’, and this indeed is entirely consistent with his previous message. It is impossible for Miliband to specify what cuts will be necessary in 2015, given that the economy is in a much poorer state than the one inherited in 2010. Labour has previously stated that it would not have cut so many frontline staff in the police, for example, but it is frustrating for Labour that it is not able to give reassurances to those in the public sector. However, Miliband has thus far set out an argument that ‘vested interests’ will not have a dominant rôle in policy, and he has been at pains to establish that members of trade unions do not provide more than about 40% of overall Labour Party funding.

A society where no sector has extreme dominance is the second thrust of the reformulated Labour policy. However, Ed Miliband knows that it is going to be extremely hard for the society to be rebalanced without the economy being rebalanced, and it may be difficult to achieve all of Ed Miliband’s political aims through a single economic strategy. Such a strategy might be predistribution, but Ed Miliband will find it hard to introduce a fairer, redistributive tax system, without loud claims that he is ‘punishing’ wealth creators. It is, actually, however extremely unlikely that CEOs with very high incomes will simply leave and go abroad, as they have ongoing commitments here in London and the rest of the country (such as mortgages, free from ‘mansion tax’). Such CEOs are often placed by multi-national companies, and if a multi-national company wishes to maintain a presence in the UK, which still represents a formidable market (whether for Starbucks, Coca Cola or Vodafone), a multinational company will have no difficult in finding replacement for such CEOs who wish to emigrate.

 

The full text of this speech is as follows:

“People have come here from all walks of life, from all parts of our country.

Young people looking for work, construction workers, nurses worried about the NHS and off duty police officers worried about cuts to frontline services. People from every corner of Britain.

So many people have the will to work, the ambition to work, but cannot find a job. They do not think that Britain owes them a living. They are not asking for the earth. They just have a simple request. They want a future that works for them.

And what did the Government say? They told us austerity would help our economy grow. But our economy has not grown. It has flatlined.

They told us ‘we’re all in this together’. But now they are cutting taxes for millionaires, as they raise taxes on everybody else, including our pensioners.

They told us the gain would be worth the pain. But even after the cuts, the pain, the tax rises, borrowing is not falling – it’s rising. They are even failing the one test they set themselves.

And the reason they are failing is that they’ve got old answers. The old answers that just don’t work. They really believe that trickle-down economics and a sink or swim society is the way to get Britain working.

They really believe that everybody else has got too many rights at work and if we make it easier to fire them, our economy will succeed.

Of course, there will still be hard choices.

“With borrowing rising not falling today, I have said that whoever was in government now would have to make some cuts.

I do not promise easy times. But I do promise a different and fairer approach.

This Government has shown us self-defeating austerity, by cutting too far and too fast, is not the answer.

And let me tell you one cut I would never make: I would never cut taxes for millionaires while raising taxes for everybody else.

You don’t build a successful country with sink or swim.

You do it by building One Nation.

One Nation is a country where we give hope to our young people again.

One Nation is a country where those with the broadest shoulders always bear the greatest burden.

And One Nation is a country where we defend our great institutions, like our National Health Service.”