It’s not just Ed Miliband. Labour’s on the wrong side of history

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[/audioplayer]Ed Miliband is the least of Labour’s problems. Its troubles go far deeper than any individual. They are structural and, potentially, fatal. It is certainly easier for Labour MPs, and ultimately more comforting, to concentrate on Miliband’s deficiencies as a leader than the existential crisis facing the left. But until somebody comes up with an answer to the question of what the party is for — in an era of austerity and globalisation — it will be stuck in a death spiral.

The Labour party has always believed in spending money for the common good. Public spending was the glue that held together the traditional Labour coalition and the New Labour one. Tony Blair increased public spending from 41 per cent of GDP in 1997 to 44 per cent in 2007 — the second largest rise in the developed world in this period. By the time Labour lost power, 53 per cent of GDP was being spent by the state.

Miliband is far more left-wing than Blair, but he can’t promise increases anything like that. As he meant to say, but infamously forgot to, in his conference speech this autumn, ‘There won’t be money to spend after the next election.’

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An absence of public money makes it that much harder to promise people that if they vote Labour, their lives will improve. Miliband is having to try to keep the party’s electoral coalition together without the key binding ingredient. This opens up space on Labour’s left, which the SNP and the Greens are busily trying to occupy.

These difficulties are compounded by globalisation, which severely restricts governments’ freedom of action. If governments try to raise taxes too much, businesses and people simply move elsewhere.