Ten policies announced in Ed Miliband’s speech today


12:34 pm - January 10th 2012

by Éoin Clarke    


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Today Ed Miliband gave a speech on the economy. Here are ten policy proposals he put forward.

1. A Living Wage – The speech that preceded Ed’s focused upon the living wage and Ed made it an early theme of his own speech. Ed went much further than before in lending his support.

2. Tuition Fee reduction of 33-40%. It looks unlikely that Ed will go further but he did firm up his idea that he raised at the last conference.

3. Price Regulation of Energy Companies – Ed said he would force energy companies to place pensioners on the lowest tariff. Failure to do so would lead to legislation.

4. 50p rate of tax – Ed Miliband made very clear that this would be made permanent under Labour.

5. A state-owned investment bank – This nationalised bank would be used to fund the re-industrialisation of Britain. It copies a German model of Landesbanken

6. Scrap quarterly reporting of Corporations – This would have the effect of reducing pressure on chief executives to chase profits through excessive risk.

7. Rail Price increases would be capped – Currently it is legal for rail companies to raise fares 3% above inflation. Ed Miliband is proposing that right is cut by 66%.

8. Curbs on executive pay – By placing the lower paid worker on a remuneration committee so that workers can make the case to reduce the pay gap.

9. Compulsory apprenticeship schemes – Ed Miliband said he would encourage big business to adopt apprenticeship schemes or face punitive taxation.

10. Labour would halt Corporation Tax cuts – Ed Miliband pledged to halt the year on year 1% cuts in Corporation Tax.

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Eoin is an occasional contributor. He is a founder of the Labour-Left think-tank and writes regularly at the Green Benches blog.
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Reader comments


That should rebalance the economy.

Trying to shake off the #RedEd tag, I see?

Ed ‘Stalin’ Milibland?

2. Tuition Fee reduction of 33-40%. It looks unlikely that Ed will go further but he did firm up his idea that he raised at the last conference.

The other nine are okay to good, but this one has basically no effect.

£9k fees: to repay in full, assuming standard £4.5k maintenance loan and a 3-year course, would require – using the model at http://www.moneysavingexpert.com/students/student-finance-calculator which seems pretty accurate – a starting salary of around £38k (in today’s money), or a career average salary of £36k (in real terms).

£6k fees from a 33% reduction, to repay in full, same assumptions: starting salary of £31k (today’s money), or career average salary of £33k (real terms)

So the policy only makes a difference at all to those earning top-quartile incomes (for whom the tuition fee repayments will be negligible as a proportion of disposable income) – everyone poorer than that makes the same repayments as before … but the money to fund the change either comes from general taxation which everyone pays or comes from universities’ already stretched budgets.

5. Anon E Mouse

Éoin Clarke – For goodness sake man do not keep associating yourself with this hapless buffoon – it is demeaning.

Did you not hear the Today Program this morning?

You run a good blog Éoin which has some great contributors – please do not throw it all away supporting this professional politician who represents nobody in this country…

Anon E Mouse

” please do not throw it all away”

Thanks sincerely for your concern. A friend in need is a friend indeed…..

“Did you not hear the Today Program this morning”

I did. Not having a TV I’ve not had much exposure to him, so I couldn’t believe my ears. He sounded what can only be described as deficient.

John Naughtie and Ed Miliband – Planet Jedward.

“10. Labour would halt Corporation Tax cuts – Ed Miliband pledged to halt the year on year 1% cuts in Corporation Tax.”

Er… no he didn’t. He doesn’t say that anywhere in the speech. It is Labour’s policy to stop that part of the Corporation Tax cut which goes specifically to the banks, to fund a cut in tuition fees to a maximum of £6,000 – is that what has confused you?

To me, this list looks like mostly shallow, populist headline chasing. 1, a living wage, sounds genuinely substantial, as does 5, a state-owned investment bank, but the rest sound more like pandering to popular demands, rather than real, substantial policies.

11. Eoin Clarke

Mark –

Follow the link to the Labour party website where the speech is available in full –

(here) http://www.labour.org.uk/labour-will-deliver-fairness

Then press Ctrl + f at the same time.

Then type in corporation + press enter

You will see Ed said ” that means not giving the banks the corporation tax cut this Government has planned”

I in my piece above called that a ‘halt’ to corporation tax reductions. I was being conservative since one could read that as a reversal of corporation tax reductions, or if you like a raising of corporation tax for bankers’.

But halt sufficed for me.

12. ex-Labour voter

He needs to come out against any replacement at all for the Trident nuclear status symbol.

13. Luis Enrique

those who yearn for the “re-industrialization” of Britian have not, I’m guessing, thought too hard about how many jobs that will create, or about what would have to happen to the exchange rate and hence prices for us to be able to sell the output.

here’s an FT column worth reading:

http://www.ft.com/cms/s/0/bd30c094-0151-11e1-b177-00144feabdc0.html#axzz1ixosvAaq

excerpt:

“Chinese labour productivity is still very low by western standards. World Bank figures show that the average American industrial worker produces as much as 12 Chinese industrial workers …. The Chinese electronics sector currently employs 3m people. If the US won back a 10th of Chinese output, China would lose 300,000 jobs, but the US would gain fewer than 40,000 new jobs. America would not even notice… Western manufacturing plants produce large amounts of output and contribute hugely to the balance of payments. But productivity is so high that they sustain very few jobs.”

14. Luis Enrique

policy 6 strikes me as utter rubbish. I’m not sure pressure to hit quarterly earnings expectations causes “excessive risk” and I’m not clear, in the non-financial sector, what “excessive risk” means or whether it’s a problem.

15. Luis Enrique

… if I was running a company where I had to give earnings guidance and then hit those numbers, I’d run a low risk strategy, not a high risk one.

16. Chaise Guevara

8 sounds like hot air (and I’m not sure I agree with its aims) and 9 sounds like it’d be exploitable, but generally this seems a good list.

You do know that the Landesbanks are in deep deep trouble, don’t you?

http://www.nytimes.com/2011/02/17/business/global/17westlb.html

CJCJC @ 17

And the rest of Europe, Britain included.

It’s one BIG diabolical mess everywhere !

19. Luis Enrique

here is some (limited) empirical support for fans of active industrial policy, based on UK data

http://cep.lse.ac.uk/pubs/download/dp1113.pdf

“policy 6 strikes me as utter rubbish. I’m not sure pressure to hit quarterly earnings expectations causes “excessive risk” ”

Agreed, even if you removed the public reporting requirements (and this improves the accountability of management how?) you are still going to get internal targets being set, appraisal meetings and workforce monitoring etc.

Excessive risk comes from senior managers knowing the worst that will happen if you make huge losses is a sizeable pay-off and 6 months gardening leave if you fuck it up.

21. domestic extremist

Ed said he would force energy companies to place pensioners on the lowest tariff, but a much better idea would be to compel energy companies to transfer customers OF ANY AGE to a RIVAL SUPPLIER immediately it introduced a better tariff for them.

That’s my idea of the race to the bottom.

Why did you miss out this one?

“those on the waiting list for council accommodation should move up that list if they are contributing to their communities, being good neighbours, and seeking work.”

Too Right-wing? Or did you want a round number?

23. domestic extremist

Placing lower paid workers on a remuneration committee to make the case for reducing the pay gap is a self-evidently vacuous idea. Who is going to volunteer to be (1) outvoted by the asssembled fat cats, and (2) victimised for daring to suggest that the boss, or the boss’ mates, take a big pay cut?

24. Luis Enrique

planeshift

yep …. if there are large rewards for delivering earnings growth then CEOs might make risky moves, but that doesn’t have anything to do with the frequency with which earnings are reported.

But it’s not obvious what “excessive risk” means in the non-financial world – Greggs the bakers launching a range of untested donor kebab pasties? – my best guess is that it means risky mergers and acquisitions (something, again, not linked to reporting frequency)

To be honest, I am extremely unlikely to vote for these corporate loving, disabled people hating bastards, ever. Just too much bland gestures and silly gimmicks for my liking. If this is Labour’s re-launch then I sincerely hope that we get a referendum on Scottish Independence, sooner rather than later.

I really hope we can swing it once and for all, because if the choices on offer at Westminster are anything to go by, then I really think we need out of the Union. My dear old father would be spinning in his grave at me saying that, but too be honest, twenty years ago, I would have described myself as staunchly British first and mildly Scottish second, now I feel less British, but not more Scottish, if that makes sense.

I have always been a floating voter. Voting since 1983 elections of every size SDP, Liberal/SDP-alliance, Lib Dem and for the last three general elections and local and European elections I have voted consistently SNP. Mainly out of pragmatic interests than some kind of Nationalism;

I have no interest in the ‘anti Englishness’ that blights my Country and nor do the SNP, to be fair. I could never vote for any Party that displays the kind of Jingoism that is prevalent in other Nationalist movements, the SNP have got on with the job of running Scotland in a quietly efficient way.

I work with one of our clients whose work means he has to deal with Scottish Government officials from a weekly or monthly basis. Since the SNP took over they have steadily introduced reforms that have transformed how Scotland’s government works.

Not ‘political’ reforms where you attach a list of job losses to the end of your bell end to wave at your opponents and then job that should be getting done are simply left aside, but actual real reforms so that what needs done, gets done faster.

Labour have no answer because they are tied to focus groups and the Opinion Writers of the Daily Mail. The SNP are busy getting on with the job to worry about that.

Don’t get me wrong, the SNP have produced some whoppers of policy errors, in my view, they are not plaster Saints by any means, but if this is how they mean to carry on then Labour can go and fuck off as far as I am concerned.

26. domestic extremist

Not a word in Ed’s speech about closing down tax havens, or making the rich pay all the tax they currently avoid. So it’s same old class-complicity and social-democratic betrayal: let the poorest suffer the most and the obscenely wealthy pay the least for the latest crisis of capitalism.

Eoin,

Thanks, I know how to use CTRL+F. I’d already used it when I posted my comment. The relevant passage is here:

“That’s why when we say invest money in our young people to make university more affordable, we also have to be clear that means not giving the banks the corporation tax cut this Government has planned.
“Bringing the cap on university fees down to £6,000 would make a real dent in the awful levels of student debt this Government is going to impose on families.”

He specifically says that this is about cancelling the corporation tax for the banks (a small part of the total cut in corporation tax), not cancelling the corporation tax cut in general, let alone halting a year-on-year cut. He also specifically attaches this to the tuition fee policy.

Honestly, that’s Labour’s policy. Your paraphrase of Labour’s policy is incorrect.

“But it’s not obvious what “excessive risk” means in the non-financial world”

I was about to suggest taking the company profits to Vegas, and putting them on black. But those odds would actually be better than some of the decisions I’ve seen made ;-)

Eoin,

Thanks for this. Interesting to see what can be picked out of the speech.

1. A Living Wage – The speech that preceded Ed’s focused upon the living wage and Ed made it an early theme of his own speech. Ed went much further than before in lending his support.

A fair enough idea – but only makes sense if taxation is pegged so that it only starts above the living wage – otherwise this is a mockery (the minimum level you need to live is apparently still taxable…). Anyone know if this is also policy?

2. Tuition Fee reduction of 33-40%. It looks unlikely that Ed will go further but he did firm up his idea that he raised at the last conference.

Hmm. I think the universities might want to know where they were going to get the money from the make up that rather alarming shortfall – my guess is by cutting programmes and reducing recruitment (as Mr Milliband admits, he will not have money to throw at problems).

3. Price Regulation of Energy Companies – Ed said he would force energy companies to place pensioners on the lowest tariff. Failure to do so would lead to legislation.

Eh? Surely government can only force people to do something by legislation in the first place. Mind you, the energy companies will have fun asking the government to calculate the appropriate tariff for each individual pensioner (you do know that tariffs differ to reflect different patterns of consumption don’t you? Mr Milliband appears not to have noticed this).

4. 50p rate of tax – Ed Miliband made very clear that this would be made permanent under Labour.

Nice to know that Mr Miliband feels the state is entitled to getting on for half your earnings after a certain point. Just the message he was trying to send out I believe…

5. A state-owned investment bank – This nationalised bank would be used to fund the re-industrialisation of Britain. It copies a German model of Landesbanken

Ah yes, the government backing winners. Although the idea of backing the last century’s (if not the century before’s) dominant trend over whatever the future brings seems to me to be a backwards step. Perhaps you (or Mr Milliband) means manufacturing, but if you want to cover the country with satanic mills (or just windmills), so be it. Seems a bloody stupid policy to me though – especially since it opens up huge opportunities for crony capitalism of the sort Mr Milliband apparently dislikes.

6. Scrap quarterly reporting of Corporations – This would have the effect of reducing pressure on chief executives to chase profits through excessive risk.

Really. Has anyone shown any evidence for this, or is this some wonk in the Labour party’s own conclusion? You want chief executives to stop chasing excessively risky profits by ensuring that they do not have to report what they are doing to the owners of the company any more than one time per year? Seems unlikely to me – if the chief executive is not giving information, how the hell are the shareholders going to hold them to account. This is just idiotic.

7. Rail Price increases would be capped – Currently it is legal for rail companies to raise fares 3% above inflation. Ed Miliband is proposing that right is cut by 66%.

So 1% above inflation then? Fine (and good for me who prefers train travel), but what if a major investment is needed – will government have to provide this?.

8. Curbs on executive pay – By placing the lower paid worker on a remuneration committee so that workers can make the case to reduce the pay gap.

This should be fun to see, since government would have to legislate extensively to achieve this (effectively ending corporate independence). Also, a key question would be who these lower-paid workers would be – union representatives perchance, which would be a politically poor policy to push (Mr Milliband being seen as in the pockets of unions is something he tries to avoid).

9. Compulsory apprenticeship schemes – Ed Miliband said he would encourage big business to adopt apprenticeship schemes or face punitive taxation.

Interesting. So rather than tax breaks, Mr Miliband proposes to try and introduce differentiated tax rates. I cannot think of anything worse for the purpose of trying to collect taxes than the rate being dependent on something outside of the immediate purview of the tax office. Unless all apprentices have to be registered with government of course, when this would be easy, apart from the setting up and running of the government scheme…

Also punitive taxation is not an incentive to invest in the country, so this rather suggests that Mr Miliband has not done any joined-up thinking on his industrialisation/manufacturing policy.

10. Labour would halt Corporation Tax cuts – Ed Miliband pledged to halt the year on year 1% cuts in Corporation Tax.

Again, joined-up thinking not working here. How does not encouraging businesses to invest (you do realise that apart from anything else any money paid in tax cannot be reinvested) help develop the hellish nineteenth-century economy you believe Mr Miliband wants?

Thanks again for picking these points out. I think you have done us a major favour – you have certainly shown how poor Mr Miliband’s grasp of ideas and policy seems to be. What we have proposed here seems to be a centrally-controlled, centrally-planned state using tax not to pay for things but to impose policy, and with very little clear understanding of how business or the economy works. There is the odd glimmer of a good idea, but little evidence of these being thought through (at least as presented here). To be charitable to Mr Miliband, I doubt these ten policies are his key ideas, but if this post is meant to show he has substance, I think the piece fails; hopefully Mr Miliband has something more to offer.

” A state-owned investment bank – This nationalised bank would be used to fund the re-industrialisation of Britain. It copies a German model of Landesbanken ”

Hopefully not with the same horrendous Landesbanken losses. We would need to see more details to know if the state-owned investment bank ” re-industrialisation of Britain ” was legal. You do know that the EC is very strict with EU state aid regulations for industry? State aid regulations now considerably constrain the ability of the German government to support the Landesbanken and is why the credit rating agencies downgraded them all last year. Your state-owned investment bank would need to raise funds from the capital markets as the government entirely funding it would contravene EU law. The same constraints on support would also apply in the UK. Therefore, the SIB would have to impose losses on creditors for bad loans. Investors would know that and charge more for funding. Although the SIB would be state-owned it would not be able to borrow capital as cheaply as the government.

” Scrap quarterly reporting of Corporations – This would have the effect of reducing pressure on chief executives to chase profits through excessive risk. ”

As Luis says that is waffle. Quarterly reporting is a U.S. import and we would probably be better off without quarterly reporting. However, the downside has nothing to with excessive risk taking. Quarterly reporting to meet analysts expectations could be a factor in reducing long-term investment i.e. not risk taking. We want firms to take risks as that means they are trying to expand which usually means greater employment opportunities for workers. We do not want them to be solely concentrating on boosting the bottom line by cutting investment.

” if you want to cover the country with satanic mills ”

As a heavy metal fan, that is a policy I wholehartedly support.

32. Eoin Clarke

For those querying the regional bank options open to Labour, we in Labour Left called for the policy in September 1 2011.

You read about it here – http://www.labourleft.co.uk/?p=391

6. Scrap quarterly reporting of Corporations – This would have the effect of reducing pressure on chief executives to chase profits through excessive risk.

So no UK company could have a listing on the New York Stock Exchange or NASDAQ where quarterly reporting is pretty much required? Either we cut off UK companies from sources of funding to expand or they might reloate if their US business looks promising. Not helping us grow out of the recession.

“1. A Living Wage…
A fair enough idea – but only makes sense if taxation is pegged so that it only starts above the living wage – otherwise this is a mockery (the minimum level you need to live is apparently still taxable…).”

What makes sense is that someone who earns just enough to live on (and support any dependents) should make no net contribution to the tax and benefits system.

Raising the tax threshold to the minimum level a single person with no dependents needs to live on – around £14,000, maybe? – would indeed be one way of ensuring that happened in the case of low-paid single people with no dependents. But even after you’d spent £30 billion on raising that threshold (with most of that money going to relatively well-off households), you *still* wouldn’t have ensured that was happening in the case of people *with* dependents. (A single parent on £18,000 with two children still wouldn’t have enough to live on, for instance).

If you want to cut taxes across the board, raising the personal allowance is a good way to do that. But if you want to reduce the net tax burden on people who earn just enough to live on (or less), it’s far cheaper to target your spending at those people by giving them tax credits.

This is somewhat counterintuitive, but not rocket science. Obviously it costs far more to give a £1,500 tax cut to 100% of workers than to pay a £1,500 tax credit to the poorest 25%. Maybe you could mess around with tax codes so that people with lower household incomes and more dependents had higher personal allowances, but you’d still need some system in place to top up the incomes of people earning less than they need to live on. Why complicate things when the tax credits system can do both jobs – providing income top-ups for the lowest earners and tax rebates for those who are somewhat better off, with a smooth transition between the two?

Are Ed Milliband’s current travails a result of poor media management or a failure of policy combined with fundamental weaknesses in his ability to lead?
Follow the link and have your say:
http://www.allthatsleft.co.uk/2012/01/labours-latest-worst-week-miliband-baldwin-glasman-murphy-and-abbott/

3. ho hum,
1 i take that was said with A sense of irony.


Reactions: Twitter, blogs
  1. Liberal Conspiracy

    Ten policies announced in Ed Miliband's speech today http://t.co/Ef94p02Z

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    [...] Miliband set out some new policy proposals in his speech on Tuesday, but he still gives an overall impression of being vague and unclear in [...]

  3. Politics Live blog featuring Ed Miliband speech on the economy - World Bad News : World Bad News

    [...] • But Éoin Clarke during Liberal Conspiracy says there were 10 policies in a speech. [...]

  4. Cyrus Wyett

    govpol lot: http://t.co/VtMjNAyb for those of you who dont know what miliband wants

  5. Michael Ramsey

    @PaulWorrall2 http://t.co/tY3i49ad

    This is good for saying that Ed Miliband is taking party to the left again.

  6. Hall Cross Politics

    @PaulWorrall2 http://t.co/tY3i49ad

    This is good for saying that Ed Miliband is taking party to the left again.

  7. Elwyn Sharps

    @andy_s_64 policies like these http://t.co/MKTForod would be far better than Blair, Cameron etc. If you tweet me please don't be rude





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