Miliband Paints Himself as Champion of Weak Against Big Business

U.K. opposition Labour Party leader Ed Miliband positioned himself as the champion of voters who feel exploited by business, setting out a policy platform that included price controls on energy.

In an hour-long speech without notes today to Labour’s annual conference in the southern English seaside resort of Brighton, Miliband repeatedly warned against a “race to the bottom” on wages and consumer protection. He placed blame for the increasing cost of living at David Cameron’s door, saying the Conservative prime minister has little interest in the lives of ordinary voters.

“Here’s the thing about David Cameron: he may be strong at standing up to the weak, but he’s always weak when it comes to standing up to the strong,” Miliband told delegates.

The speech took Labour a step away from the free-market economics it supported under Tony Blair and Gordon Brown during 13 years in government to 2010. Instead, Miliband said that if Labour wins the 2015 election, energy companies will be forced to cap prices and offer only a single tariff, and developers will have land taken away from them if they don’t build on it.

Corporation tax for big companies would also go up by 1 percent, and employers bringing in workers from outside the European Union would have to take on a similar number of apprentices. Miliband said 200,000 homes a year would be built under a Labour government. The party announced earlier in the week it wants to increase a levy on banks in order to fund more free child care.

Business View

“Businesses will view the proposals on tax and energy as a setback for Labour’s pro-enterprise credentials,” Confederation of British Industry Director-General John Cridland said in an e-mailed statement. Simon Walker, Cridland’s counterpart at another business lobby group, the Institute of Directors, said Miliband’s proposals are “not the answer.”

The speech received a series of standing ovations in the hall in Brighton.

“It was an incredibly good speech,” Paul Kenny, the general secretary of the GMB union, said in an interview. “He’s not afraid to talk about workers’ rights, which is a breath of fresh air, and he’s willing to challenge the ‘market’s right’ ideology. Unregulated markets have led to consumers being fleeced.”

Miliband toured Scandinavia earlier this year as he searched for political inspiration to help return Labour to power. At the time, he acknowledged the difficulty of delivering Swedish public services with U.K. tax rates.

‘Gilded Elite’

“It was a populist speech, in the sense of portraying your opponents as a gilded elite and yourself as a tribune of the people who will clean house,” Tim Bale, professor of politics at Queen Mary University of London, said in a telephone interview. “I don’t think it necessarily means they’re moving towards socialism red in tooth and claw.”

Labour’s poll lead over Cameron’s Conservative Party has narrowed to single digits over the past year, disappearing altogether in one YouGov Plc poll last week. Even so, the uneven distribution of votes across parliamentary districts gives Labour an electoral advantage, meaning Miliband could still win from such a position.

Attempting to frame the election as one about what he called “the cost-of-living crisis,” Miliband echoed the words of Ronald Reagan in the 1980 U.S. presidential debate with Jimmy Carter. “In 2015 you’ll be asking: Am I better off now than five years ago?”

Income Erosion

Inflation (UKRPCJYR) is running at 2.7 percent and wages are growing by 1 percent. The Institute for Fiscal Studies estimates the erosion of real incomes since 2008 has been unprecedented as workers accepted pay cuts as the price of keeping their jobs. The pressure on living standards is forecast to continue as Chancellor of the Exchequer George Osborne takes the ax to welfare to narrow the budget deficit.

The price households pay for gas has risen 33 percent since the 2010 election and electricity costs have gained 22 percent, according to Office for National Statistics data. Consumer prices overall have risen 11 percent.

“Philosophically the ideas may be left-wing,” Bale said of Miliband’s policy announcements. “But I suspect that voters will see both use-it-or-lose-it and the utility price freeze simply as common sense rather than old-style socialism.”

To contact the reporter on this story: Robert Hutton in Brighton, England, at rhutton1@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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