Perhaps predictably as election fever hots up, keynote speeches by Party leaders are now commonplace. However, last month’s offering from Ed Miliband on reform of the banking system may yet herald a more radical restructuring.
Perhaps we should be thankful that little more has been heard of his grand theory of ‘pre-distribution’ since its first outing in 2011. Yet in fairness to the Leader of the Opposition he has started to tap into a deep sense of unease that there is a ‘broken economy’. Nowhere has this been more evident than amongst middle class Tory-inclined electors, who increasingly since the 2008 financial crisis have had cause to view capitalism as being increasingly skewed against their traditional values of thrift, industry and individual responsibility.
As a former small businessman instinctively supporting open, free markets, I watch these developments with deep foreboding. Nevertheless it is clear that Miliband has gradually been able to put flesh on the bones of his brand of neo-corporatism. We should not entirely rule out the possibility that he will be proved right – namely that the financial crisis will in time herald a new economic paradigm.
I suspect the key to this in the short term will be the extent to which he (or UKIP) proves able to incorporate the support of that potentially sizeable group of voters disillusioned by the breakdown in the decades-long historic bargain as understood by the British middle class.
Standing up for the ‘little man’ against Big Global Business could prove a fruitful vein for Labour in the months ahead. In tapping it, Miliband may be hoping to echo the success of US President, Theodore Roosevelt, at the outset of the twentieth century. I have described before how, in the era of Rockefeller, JP Morgan and US Steel, Roosevelt led an unflinching crusade against the powerful, vested interests of large corporations. As a centre-right President he instinctively understood that the construction of a populist, robust competition policy was the very best restraint on the type of unbridled capitalism that was generating for business titans monopolistic profits in virtually unlimited quantity. Britain’s own centre-right has been rather neglectful in failing to lasso the great Republican’s legacy, leaving this rich territory open for Miliband to conquer.
Even the much ridiculed announcement by the Shadow Chancellor that the top rate of income tax under a future Labour government would be raised to 50 per cent may resonate more strongly than we might like with a British public angry with the rich. ‘FTSE 100 chiefs slam 50% rate’ screamed the headlines – depressingly this was probably met with cheers by Labour’s high command. The economics may stink, but quiet political support for this move, however detrimental to the national interest, may work to Miliband’s favour.
I wonder whether the Labour leader’s next move may then be to follow in Harold Wilson’s footsteps on attaining office in 1964 by breaking up the all-powerful Treasury. Dividing the traditional Whitehall powerhouse once more into a Finance Ministry and an unabashed strategic, long-termist Ministry of Economic Affairs plays to Miliband’s spirit of revolutionary fervour and near Ivory Towers, academic approach to government.
At a more base political level such a plan also helps square the circle over the ‘Ed Balls problem’. It potentially allows voters to be pacified that ‘the man who crashed the car’ will not be given sole control of the economic keys going forward. Tantalisingly such a break-up also leaves open the option, in the event of a coalition, for a leading Liberal Democrat to take the helm in the frontline of strategic economic activity. Many on the centre-left might feel this is the proper role for Vince Cable. However, who would sensibly bet against current Chief Secretary, Danny Alexander, becoming the near-indispensable Hans-Dietrich Genscher of twenty-first century Britain if coalition politics is here to stay?