Ed Miliband is unusual in British politics, and it may be due to the influence of his academic father. He believes in the importance of theory and argument. It frustrates to hell those who demand a litany of policies, but the framework to him is as important as anything else. If the intellectual analysis is right then much else, including individual policies, will start to fall into place, and also be built to last. If it is just a collection of disparate policies with no overarching theory, it will fall apart.
So Miliband's speech on Thursday on the economy is likely to be seen as one of his more important since becoming opposition leader, and not just for the striking tax policies it will contain. The speech comes at a critical time. Labour's 12-point lead over the Conservatives in the latest Guardian/ICM poll represents a 12-year high. There are some creeping signs that voters are now less prone to blame Labour for the flattened state of the economy. George Osborne is preparing his March budget, probably the last that can truly effect the state of the British economy before the 2015 election.
Miliband is going to argue that after almost three decades of an on-off experiment with trickle-down economics, it is time for the squeezed middle, not ever more generous benefits for the wealthy, to become the true engine of economic growth. "Today we will be opening up a new front," the Labour leader told the Guardian. "Cameron has a direct responsibility for what is happening to living standards. Because we have not got the growth, it is feeding through into wages that are falling way behind prices. It is a massive issue for people. It is the biggest issue that people talk about."
He says something deep and profound has been going wrong with the economy that predates the crash of 2008. Here he draws on the work of the Resolution Foundation in the UK, and parallel US analysis by economists such as Heather Boushey at the Centre for American Progress. "The squeeze on working people started a long time ago. In the figures going back to 1979, the top 1% have got every 24p of every extra £1 that has been earned, and the bottom 50% have got just 15p that has been earned. Even if growth is rising in 2014 and 2015, for most people living standards will remain stuck, and is unlikely to recover for a decade.
"The next Labour government has got to go much further in dealing with the roots of this – that is about productivity and skills, vocational education for the bottom 50%, and the creation of high-wage, high-skill jobs. What I am doing is bringing together the arguments we have made, all of which remain right – cutting too far too fast, helping the squeezed middle and responsible capitalism. But behind this is a values question: do you believe an economy succeeds on the basis of a few people at the top of society, which is basically the Tory view, or do you create an economy on the basis of the many?"
Miliband has chosen Bedford to make his speech because it was here in 1957 that Harold Macmillan, the Tory prime minister, made his famous remark: "Let us be frank about it: most of our people have never had it so good." The choice is meant to send out the message: "You have never had it so bad." That may catch what is described as the "gloom mood". Ipsos/Mori polling for the Resolution Foundation shows more than a third of people do not think there will be growth by 2015, and 40% think they will be worse off than today.
"Far from feeling they have never had it so good, millions across Britain today fear they will never have it so good again. The question most people ask me is: how do we turn this around? The Resolution Foundation figures are chilling. People are thinking: 'Hang on – all I can see is year after year of this.' "
The answer, Miliband says, is not Osborne's "let wealth trickle down" as all available evidence shows wealth is actually being sucked upwards. The Republicans and Conservatives are in the grip of a failed economic theory, he argues. "It is a recent idea that a more and more unequal economy where a few people take the proceeds can be a successful economy. If we are frank about the roots of the financial crisis they in part date back to that idea."
The answer, he says, is in what Barack Obama described in his campaign as "growing the economy from the middle out". The Labour leader translates this to the UK. "We need a recovery made by the many, not just a few at the top. A recovery made by building, not squeezing, the middle. The government's economic strategy consists of squeezing the middle further, a race to the bottom and trickle down from the top."
Miliband says recoveries in Britain have been based on the middle. "Of course without the mills and the factories we would not have the industrial revolution, but it was the people in the factories – the forgotten wealth creators – who drove the economy forward. What did they require? Sanitation, proper working conditions and towns. This was the Disraeli argument. Similarly in the 40s and 50s, we had an economy built by the people in the middle. Henry Ford used to say: 'I have to pay my workers enough so they can buy the cars they are producing.' There was a British equivalent in relation to Macmillan: the houses were built, but people had the wages to buy or rent the houses."
This has contemporary relevance, Miliband says. "It means the many have to have security and confidence to consume goods and services. This means living standards matter not just as a measure of a successful economy, but as an engine of growth. Secondly, you have to have proper productivity and skills – the forgotten 50% that don't go to university. Thirdly, you have to create the middle-income jobs because there has been a hollowing out of these jobs. Finally, you need a supportive infrastructure, and I include in that not just roads and railways, but childcare.
"Do you judge a society and economy by the fate of the many or the fate of the few? That is the question for the future of Britain. It is the first, second, third question of the election. It is what the election will come down to – in whose interests do you govern in tough times?"
Miliband on …
"You have two choices in Eastleigh: you can vote Liberal Democrat or Conservative and have more of the same, or you can vote Labour. We will fight the election very hard. You can never tell with byelections … I want to send a message right across the south of England that Labour is a party for the south as much as the north, Scotland and Wales. That is what One Nation Labour is about."
"Is Iraq better off without Saddam Hussein? Yes. Were there other ways of achieving it? Yes. I think the UN weapons inspectors should have been given more time. It caused damage to the Labour party and it caused damage to trust. I respect the decision taken, but it was wrong."
"Justine [Thornton, his wife] and I shall be at home together, watching episode three of the second part of The Hour. It is brilliant and we will be having a Chinese takeaway. There may also be a surprise."
guardian.co.uk © Guardian News and Media Limited 2010
image: © Arbeiderpartiet