Ed Miliband should seize the chance to call time on a failed consensus

http://www.guardian.co.uk/commentisfree/2012/may/02/ed-miliband-failed-consensus

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Ukip outpolling the Liberal Democrats, victory for Respect in Bradford West, the BNP in Strasbourg, Britain's first Green MP, an SNP government in Edinburgh, local elections that look set to point in several different directions at once. What's going on? Two things, actually. One is a long-term change in the political behaviour of voters; the other is specific to moments of deep crisis and strain in British society.

Support for the two main parties has been in secular decline for more than half a century; a trend punctuated by regular eruptions of protest voting – the Green party in the 1989 European elections, Jim Sillars at the Govan byelection, the Referendum party in 1997. But not since the mid-1970s have we seen this level of fragmentation at different points of the political spectrum simultaneously.

Fondly recounted by Dominic Sandbrook in his timely BBC series The 70s, this was the era of the Liberal party's first modern breakthrough, leaping from 7% to 19% of the vote and the brink of power in February 1974. More dramatic still was the rise of nationalism, with the SNP gaining 30% of the Scottish vote and 11 seats (plus another three for Plaid Cymru) in a second election eight months later.

The far right also made its post-war comeback, thanks to Powellism, with the National Front winning 16% of the vote in the 1973 West Bromwich byelection and averaging 1,400 votes in seats contested in October 1974. The era even marked the arrival of green politics in the shape of what was then called the Ecology party.

Liberals today are the main casualties rather than the main beneficiaries of political disillusionment, but in most other respects there are striking similarities with the circumstances of 1974. All the established parties are under pressure and voters are actively shopping around for alternatives.

The underlying reasons are also the same. In 1974, the country was just coming out of a painful recession that was about to turn into a double-dip. Moreover, the downturn was symptomatic of a deeper malaise to which conventional politics appeared to offer no remedy. This was the tail-end of the post-war "Butskellite" consensus that bound Labour and Conservative governments to a similar mix of Keynesianism and social spending. Prosperity and public welfare had been significantly enhanced, but a lack of economic modernisation and poor industrial relations ultimately led to stagflation and decline.

The significance of the UK's first double-dip recession since the mid-70s is that it marks the passing of the political order that replaced it – the "Blatcherite" consensus in favour of deregulation, the super-rich and markets as the answer to everything. This promised an ever expanding horizon of economic freedom and material progress, but instead lowered growth, depressed incomes, fuelled debt and redistributed wealth to the wealthy on an epic scale. It ended with an aspiration-crushing slump from which the country will take many more years to recover.

Just like Labour in the mid-70s, the government has spent the past two years trying to put Humpty Dumpty back together again, and it has failed. So where will the ideas come from to lead us out of this dire predicament? Certainly not from the thought collective of free market Conservatives, Orange Book Liberals and New Labourites who have set themselves up as arbiters of the possible. They embody the discredited assumptions of the new model consensus.

In the 70s, the call for an alternative to crisis and stagnation was eventually answered from within the political mainstream by Margaret Thatcher. She challenged the establishment of her party and openly mocked its attachment to the jaded consensus of the times. Her ideas may have led to our current malaise, but at the time they seemed like a breath of fresh air. Her reward was an election victory in which she beat Labour and saw off the third party challenge.

The only party leader with the outlook and resources to effect a similar transformation today is Ed Miliband. He alone seems willing to break with the orthodoxies of our age: that markets always know best, that inequality is inevitable and probably necessary, that economic recovery requires us to cut taxes for the wealthy and public services for everyone else. That is why he is so viciously assailed by the gatekeepers of consensus.

They advance various reasons for their hope that Miliband's challenge is doomed: he is too far from the centre-ground, he is less popular than the prime minister, his performances in parliament are not strong enough. It is worth recalling that all of these things were said about Thatcher in opposition. Party insiders regularly briefed journalists that she would be replaced before a general election.

Miliband has started cautiously, but then so did Thatcher. She calibrated her radicalism to the course of events, peaking with the Winter of Discontent. But her real genius was to recognise that in moments of profound crisis the centre-ground is an empty construct. She didn't move her party to the right so much as change our understanding of what it means to be right and left. At least part of her appeal tapped into the yearning for personal liberation and the revolt against the mass society that had animated the New Left.

Miliband has spotted a similar opportunity for Labour to connect with authentically conservative concerns about the corrosive impact of our morally degraded form of capitalism and its tendency to reward the wrong people for doing the wrong things. There is a winning coalition to be built around broad popular demands for greater economic security and social responsibility.

But converting that opportunity into a majority will require Miliband to keep two further lessons of the Thatcher era in mind. The first is that dismantling an entrenched consensus demands persistence and self-belief. As late as the autumn of 1978 it looked like Thatcher would fail. But by focussing on how to change the country instead of how to win the election, she reaped the reward. The second lesson is that you don't get anywhere as a leader by pandering to the voices of caution and desperation in your own party. Miliband needs to be more challenging to Labour to make his breakthrough with the electorate.

We are in the middle of a crisis that is still a long way from being resolved and voters are turning away from conventional politics in their droves. If Miliband is to succeed, he must do so as the only leader willing to call time on a failed consensus.

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