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Ed Miliband is re-aligning Labour towards its true role

Ed Miliband’s speech yesterday was arguably the best speech a Labour Leader has ever delivered to Conference – certainly in my lengthy political lifetime. Not only delivered with a Leader’s assurance about himself and his goals, what shone through was his obvious empathy with ordinary people and their plight and his telling use of his own human encounters to make his political points.

But of course what was equally impressive was that the speech was packed with radical commitments, like no other Leader before has ever done. He is slowly but relentlessly reversing the ideological tide which has flowed to the right for almost the last 40 years. The financial crash of 2008-9 was a turning point equivalent to 1945 and 1979, but unlike those two previous pivotal events the cataclysmic crash of 2008-9 was never followed through by those who should have used it to leverage in a new era. That challenge is now being taken up avidly by Miliband.

Building 200,000 homes a year by 2020 plus charging developers escalating fees for sitting on land but not building on it, freezing gas and electricity prices, giving a £800m tax break for small businesses at the expense of large ones, and bringing together health and social care in a restored and fully integrated NHS are all big and ambitious commitments. They all have a common theme – taking the side of the disadvantaged against the vested interests.

It’s not that the Labour Party under Blair and Brown tried to do such things but failed; it’s rather that they never even tried because they sided with the vested interests. In the last analysis politics is all about whether you’re on the side of the powerful or the powerless, and for Blair and Brown there was never any question but that that meant shamelessly placating the rich and powerful with only the minimalist concessions to the victims and only what the neoliberal capitalist market system could happily live with.

However, despite Miliband’s powerful and impressive speech yesterday, some big questions remain. One is: how is Labour going to deal with austerity in 2015? Trying to reduce the deficit by cutting government expenditure is counter-productive because it shrinks the economy. Will Labour finally adopt the right way, which is expanding the economy through public investment and job creation?

Another big question is: if Miliband is determined to raise living standards for everyone (‘for all the boats on a rising tide, not just the yachts’), that can only be done when our balance of payments is stabilised. At present we are consuming vastly more than we are earning – last year our imports of goods exceeded exports by over £100bn a year, and the gap is still rising. That means making fundamental reforms of the institutions and structures which are so badly letting down Britain – the banks, manufacturing capability, changing the balance between the markets and the State, and the obscene level of inequality.

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