Out of every great crisis comes some recognition that the old order has failed. As a result there is an opportunity to create an entirely new way of doing things. For most people alive in Britain today the two prime ministers who radically altered British society were Clement Attlee and Margaret Thatcher. One remade Britain for the better, the other transformed it for the worse.
The current Tory-led government is doomed to fail in 2015 partly because it is trying to breathe life into an economic system that has already expired, a form of political necrophilia. Ed Miliband has the opportunity to become a political leader who radically changes the British economy and society by replacing the failed Thatcherite model.
The opportunity arises because of the depth of the current crisis. This is the worst depression since the 1930s and the longest fall in British living standards for nearly 150 years. It is combined with both ecological and climate crises which all have potentially disastrous consequences. As a result it is impossible to make do and mend.
A debt-fuelled rise in consumption is not a sustainable recovery and three-quarters of the population continue to see their living standards fall. That is why Ed Miliband’s message on the cost of living crisis is so powerful. It resonates with the experience of the overwhelming majority of voters.
Miliband has set the political agenda, which obliges all other politicians and commentators to respond to it. He is also one of the most powerful leaders of the opposition in living memory. Cameron is so weak and discredited, a fact assiduously avoided by the Tory press, that Ed determines policy on Syria, on Leveson and now on HS2.
Labour will win by continuing to set the agenda. Everything else, from being tough on social security or bending to the vile anti-immigration agenda of Ukip and the Tories, is at best a pointless distraction from the economic crisis. It also allows the right to set the agenda and so undermines Labour’s support.
Unfortunately, all Labour leaders in or out of office face pressures that Tory leaders never do. The extreme and ill-judged attacks on Miliband from the CBI show that those who are responsible for the crisis will not abandon the old, failed economic model without a fight. At the root of our economic crisis is the slump in investment, that is a refusal by firms to invest their profits. Big businesses are sitting on a cash mountain that could be used to finance recovery. Many react with fury at every modest and reasonable step to alter that.
That opposition always finds its echo within the Labour party. A series of tightly organised rightwing groups exist to represent business interests and are generously funded by them. In the name of appealing to the centre ground the politics of those groups lost Labour lost 4.5 million votes between 1997 and 2010. Crucially, the Thatcherite settlement was also left unaltered and led directly to the crash of 2008 and the subsequent depression.
Miliband will need support to resist these and other pressures. That is why I am happy to support the establishment of Labour Assembly Against Austerity and its initial conference this weekend. Thanks to Miliband the cost of living crisis is now the terrain on which the next general election will be fought. That crisis is a direct product of austerity policies which amount to a transfer of incomes from labour and the poor to capital and the rich.
Labour Assembly Against Austerity aims to bring to together all those across the party who reject the failed austerity agenda of the Tory-led government. Miliband’s focus on the policies of sustainability, rising living standards and redistribution will win Labour the next election. Increased investment will deliver them. Labour can end austerity.