Heir to Blair says Labour has not fallen out of love with business

WITH a week to go until MPs return from their summer break, Westminster is a ghost town. Its tearooms and canteens, normally buzzing with political gossip and intrigue, sit deserted. David Miliband cuts a lonely figure as he strides purposefully across the empty atrium of Portcullis House, the modern extension to the House of Commons. The Labour leadership election is the only show in town, but as it enters its fourth and final month it is struggling to attract an audience. If he is worn out by the interminable campaign, he doesn’t show it, bursting into his small office with enormous energy. Today the contest enters its last act, with ballot papers going out to party members ahead of 25 September, when the victor will be announced.

The party is at a crossroads. Some members think Gordon Brown lost the election because he abandoned the New Labour agenda pursued by Tony Blair. They say he frittered away the party’s hard-won support in the South of England, home to Britain’s aspirational middle classes. This group– which includes the majority of Labour MPs – will cast their vote for David Miliband. The other camp, made up of left wing MPs and most trade unions, thinks Labour lost its way over the last thirteen years – not the last three. It abandoned its working-class supporters for big business, they say, and replaced its CND banners with CCTV cameras and ID cards. These members will plump for Miliband’s younger brother Ed. The other candidates – Ed Balls, Diane Abbot and Andy Burnham – are no longer serious contenders in what is clearly a two-horse race.

Leaning back in a comfy chair with a bronze bust of JFK perched on the shelf behind his shoulder, David Miliband insists the party cannot afford to regain its reputation for being “profligate, not prudent”. That means being credible on the political issue du jour: the deficit. Other candidates, including brother Ed, have said they would wait for stronger growth before trying to close the £150bn chasm. But David Miliband is sticking with former chancellor Alistair Darling’s plan to halve it over four years, a plan that would mean “significant cuts” in the order of £40bn by 2014-15. “I think the only way we can take on the economic masochism of the government is if we are credible on the economy ourselves. It’s very important we don’t shift from a position that has credibility,” he says.

Although he makes a dig at the coalition for appointing Topshop tycoon Sir Philip Green to run a Whitehall review – “Monaco isn’t the obvious place to launch an efficiency drive for the British economy” – he is otherwise keen to repair links with the business community. “I think it’s important the Labour party stands up for private enterprise that really drives jobs, growth, wealth, coursing throughout the veins of the economy,” he says. Miliband says the coalition government is more anti-business than Labour was, reeling off a list of unpopular measures like a cap on non-EU immigration and tougher planning laws. But on taxation and red tape, he is less forthcoming, evasive even.

On a raft of issues, from the 50p rate to hedge fund regulation, Miliband refuses to take a firm position. He doesn’t “pretend that it’s only the most wealthy in society that have to pay tax”, but refuses to reveal whether he would scrap the 50p rate for high earners: “I’m not going to start saying whether things are permanent or not permanent – it’s a bit early to be writing tax policy.” Similarly, he keeps his counsel on capital gains tax, saying he wants to “hold fire”. He also sidesteps a question on European plans for a hedge fund directive, instead theorising on regulation of financial markets in general.

Miliband’s supporters like to style him as the heir to Blair, but he doesn’t appear to share the radical, reformist zeal that characterised the early years of New Labour. When I start to ask whether he agrees with Peter Mandelson’s infamous claim that the party is “intensely relaxed about people getting filthy rich”, he cuts me off before I can even repeat the quote. “I don’t think that was Peter’s finest hour. I think that it’s really important that we have a society…” he begins before tailing off, adding with a genuine look of distaste: “I mean ‘filthy’ anything is not a great place to be”. Still, of all the candidates, he is undoubtedly the most New Labour, the most pro-business, and the most ardent supporter of public sector reform.

As a standard bearer for the New Labour project, Miliband must find himself with increasingly few compatriots. He admits Alistair Darling’s decision to leave front-bench politics was a major blow, “because he’s got huge experience and… he’s always told it straight”. But Darling is the tip of the iceberg: Alan Johnson, the Labour leader that never was, is also likely to leave the shadow cabinet, while James Purnell – Miliband’s most natural ally – left parliament last year. Thanks to the vagaries of the Labour party, which elects its shadow cabinet in opposition, Miliband could struggle to assemble a team that suits his “third-way” style of social democrat politics.

However, he is adamant that if he wins the party must fall into line: “We have to come out of this strong and clear. I’m offering a clear direction for the party that tackles the attempt by the Tories to pigeonhole us as profligate not prudent, that tackles the allegation we’re statist not decentralist,” he says. His comments echo Tony Blair’s famous “we were elected as New Labour and we will govern as New Labour speech” victory speech in 1997, and send a clear signal to the party: if you elect the centrist candidate, we will fight the next election from the centre. There will be no lurch to the left under Miliband the elder.

Increasingly, Labour MPs are targeting their attacks on the Liberal Democrats – not the Tories. Many in the party find it great fun to hit the Lib Dems from the left, especially with the junior coalition partner performing so abysmally in the opinion polls. But Miliband says such sniping will stop if he wins. “The Tories would love for the Labour party to spend the next four years just attacking the Lib Dems and what you’ve got to worry about is if the Tories are sitting pretty, it’s not good for the Labour party,” he says. He makes a clear distinction between what he sees as the hypocrisy of Lib Dem “leaders”, who should be criticised, and rank and file supporters. “We need to recruit the Lib Dem voters to our cause, respecting the choices they’ve made at recent elections but trying to persuade them that we’re a home for them, as we should with Tory voters,” he says. He suggests the party should go easy on backbench Lib Dem MPs as well, probably because four years of sneering could make it hard to entice the party into a coalition.

In the course of our forty-five minute interview, it becomes clear that Miliband will reserve his own political firepower for George Osborne. He saves his most cutting barbs for the chancellor, accusing him of having a “guilty conscience” and of putting the British economy in a “strait-jacket”. Such insults might sound tame, and they are by Westminster standards, but they stand out in Miliband’s otherwise measured comments. The only other opposition politician Miliband mentions specifically is Ken Clarke, who he quotes approvingly: “good economics is good politics”. The Prime Minister doesn’t even get a name check.

The Tories don’t fear Miliband in the same way they did Blair, a politician they regarded as unbeatable. But they realise he represents the party’s best chance of regaining power at the next general election. Now Labour must decide whether it wants a long period of soul searching that could see it return to its routes, or a speedy return to government. David Miliband will be hoping they opt for the latter.


Age: 45

Education: Haverstock Comprehensive School; Politics, Philosophy and Economics at Corpus Christi College, Oxford.

In politics:
1994, Head of Policy for Tony Blair; 2001, becomes MP for South Shields; 2002, Junior Education Minister, Cabinet Office Minister; 2005, Communities Minister; 2006, Environment Secretary; 2007, Foreign Secretary.

Personal Life: Married to professional violinist Louise Shackleton. Has two adopted sons.