The Tories’ defining election message, as readers will be wearily aware, is that only they have a “long-term economic plan”. Only a Conservative government, they suggest, is able to guarantee the prosperity upon which living standards and public services depend. The irony, as I noted in my column last week, is that in areas such as apprenticeships, infrastructure, banking and the EU it is Labour that has the most pro-growth policies. The opposition, however, has struggled to get this message across. Polls give the Tories a substantial lead on economic management and show that they are regarded as by far the most business-friendly party.
Ed Miliband’s speech tomorrow at Jaguar Land Rover in Birmingham is aimed at overturning this perception. Accompanied by the shadow cabinet’s key economic representatives – Ed Balls, Chuka Umunna and Caroline Flint – he will present a 79-page document entitled “A Better Plan for Britain’s Prosperity”. As the titular “plan” suggests, Miliband is fighting to claim the territory of growth from the Conservatives.
The assertion at the heart of his speech is that Britain’s economy will only succeed if “working families” do. Responsible capitalism, in this account, is not just essential for social justice but for prosperity, too. It is an approach strongly influenced by Barack Obama’s emphasis on “growing the economy from the middle out“: the belief rather than trickling down from the top, wealth depends on a thriving middle class. Miliband will declare in his speech: “It is only our plan that recognises that every person in every sector of the economy is a wealth creator”. It is a potent political message but also one, crucially, that has been endorsed by multiple academic studies. As the OECD, the IMF, the Bank of England and the World Economic Forum have all recently recognised, excessive inequality is one of the biggest obstacles to growth.
Fusing his message with the political issue of the moment – tax avoidance – Miliband will say: “Nothing more symbolises their failing plan than seeing tax gap – between what should be paid and the revenue received – widening while the number of apprenticeships available for young people is falling . We need a better plan to replace an economy where tens of billions are lost in tax avoidance with an economy where tens of thousands more of our young people are doing apprenticeships and we help more businesses grow, succeed and create wealth.”
The speech contains no new policy but the accompanying document collects the many existing Labour proposals, including the establishment of a National Investment Bank, employee representation on remuneration committees (a measure some on the left feared had been dropped), an increase in the minimum wage to £8 by 2020, the introduction of tax breaks for firms that pay the living wage, reformed takeover laws to promote long-termism, a reduction in business rates (funded by reversing the Conservatives’ planned cut in corporation tax from 21 per cent to 20 per cent), the creation of a National Infrastructure Commission, the devolution of £30bn of employment, transport, housing, skills and business funding to local authorities and the guaranteed maintenance of EU membership.
The strategic aim of the speech is to present Miliband’s focus on the “cost of living” as one that is central to future prosperity: “The vital link that used to connect the wealth of the country as a whole and family finances has broken. Playing by the rules and putting in the hard work often means you are left out of the recovery in Britain today. All of this isn’t just bad for working families now, it is bad for Britain’s future too because when working people are held back, the country doesn’t prosper as it should. When families don’t have money to spend, it holds back our economy. When there is so much insecurity in the economy, businesses can’t plan for the long term. When people don’t have the chance to develop their skills and pursue a promotion, our companies become less productive and less competitive in the world.”
The political test of the speech will be whether it succeeds in winning Labour the business support that has recently seemed lacking. Will those have dismissed Miliband as hostile to wealth creation be prompted to take another look? In his speech, the Labour leader will emphasise his commitment to helping “every sector, every firm” to “make bigger profits”. If he repeats the message that he has “a better plan” for growth often enough, he may just start to be heard.
Content from our partners
Related
