What Ed Miliband Should Do Next

A light to lighten the Gentiles, and a glory of his people Israel, Maurice Glasman writes:

After the funeral of Margaret Thatcher the country faces a pressing question. What comes after Thatcherism? Thatcher redefined what it was reasonable to say in British politics. She set the Conservative party on the road to economic liberalism and state centralisation, an inheritance that was maintained by New Labour. The result was personal debt, public deficit and political demoralisation. The prevailing political paradigm is incapable of changing the dynamics of either our economic pathway or our increasing inequality. The state and the market are still in control; the City of London and Whitehall continue to rule.

Ed Miliband, in his elegant and thoughtful tribute to Thatcher, quoted her approvingly: "Consensus doesn't give you any direction. It is like mixing all the constituent ingredients together and not coming out with a cake." From the start of his leadership, he stated the need to challenge the prevailing orthodoxies and redefine the political consensus.

Tony Blair's recent call to Labour to return to the old centre ground does not acknowledge that the transformation of the centre is what is required. Peter Mandelson said this week that Labour had "over-inhaled" on Thatcherism, and while this is an improvement on Bill Clinton's assertion that he didn't inhale at all, it still raises the question of what such a statement could mean. But the uncritical assimilation of the Thatcherite political economy – the refusal to acknowledge the distinction between productive and speculative business, and the emphasis on transferable, not vocational, skills – was definitive of New Labour, and not a matter of degree.

Miliband has acted strategically in leading the changes required in the three areas over which he has control: party organisation, the policy review, and his own leadership.

In party terms, there is a far stronger emphasis on leadership development, and a greater role for organisers in strengthening and brokering the relationships necessary to re-establish Labour as a vital political force in people's daily lives. This is a neglected tradition, but the old bones are beginning to walk again. And it is not just an effective ground game: organising aligns campaigning with a better political position.

Jon Cruddas said in his "earning and belonging" speech that "simply opposing the cuts without a constructive alternative is no good". That alternative is being brokered. Cruddas argued that Labour's welfare reforms would be built around the concepts of "relationships, contribution and responsibility". The renewal of solidarity, subsidiarity and status within welfare is a transformational change that would complement the new economic position.

This involves a commitment to the endowment of regional banks that would lend only in their own areas, and opens up a possibility that is distinct from both neoliberal and Treasury-led Keynesian approaches. It offers the possibility of revitalising undernourished counties and cities, and an alternative to payday lenders – providing capital for local business while breaking the domination of the banking oligopoly on internal investment.

The creation of vocational colleges, meanwhile, addresses the lack of skills and marks a significant departure from the transferable skills agenda; while the representation of workers on remuneration committees is vital in engaging the workforce as partners in growth.

The paradox of the crash was that Germany – the country with the greatest degree both of constraint on capital markets in its banking system and of worker representation on boards, and the deepest interference of vocational institutions in regulating labour market entry – is the most competitive and successful economy in Europe. 

Labour's new position on immigration allows us to explicitly engage with the problem of wages and skills among our fellow citizens, and not rely on importing skills from abroad. The one nation idea allows an inclusive politics of the common good to be developed in which virtue, loyalty and honesty can be spoken of as necessary features of the move from debt to value in our economy.

A further paradox is that the renewal of democracy can be achieved only with effective leadership. By challenging prevailing orthodoxies, having the courage to defy the old consensus and define a new political position, and championing changes (party organisers; the living wage; the interest rate cap; the establishment of regional banks; a renewed vocational economy; a relational approach to welfare within a politics of renewed solidarity) Miliband has all the ingredients necessary to bake the cake.

I think it's time to put it in the oven and see if it rises.