Balls is lost in the past but Miliband is thinking ahead

TONY BENN used to say that politics should be about issues not personalities. Nobody ever paid much attention to that, of course, any more than they did to most of the other things he said, especially within the Labour Party.

Today, the party of which Benn was an ornament for so many years is often portrayed as the story of the two Eds: the party leader, Ed Miliband, and his shadow chancellor, Ed Balls. The general view seems to be that the affable Miliband is not much good, whereas the pugnacious Balls commands a certain wary respect.
 
Watching the two of them in action over the past few days, I find myself wondering – not for the first time – if the conventional wisdom has not got it the wrong way round.

Balls, as he showed in his speech to the Labour conference yesterday, remains trapped firmly in the past. Despite a grudging and strictly limited admission that all had not gone entirely as hoped during the last government, he still believes that there is nothing a little more borrowing and spending could not cure.

So excited is he by George Osborne's problems with the deficit, he hardly seems to register that the public blame the current economic mess far more on Labour than they do on the coalition.

Ed Miliband, on the other hand, shows signs of developing an altogether more nuanced approach. Instead of rehearsing the past, he has been talking about the ethics of the system, about dubious practices and excessive rewards at the top, and how to help the so-called "squeezed middle" with specific problems like utility prices, train fares and university tuition fees.

Approaching the issue in this oblique way could be a clever move, and not just because it has the potential to hit the government where it is vulnerable. Beyond the plight of the "squeezed middle" lies a bigger question which none of the parties has yet really begun to think about; how can capitalism be made to work for the majority again, and not just a minority?

Politicians, officials and economists are all focused on trying to get growth restarted. The unspoken assumption is that, once it returns, life will gradually get back to how it was in happier times. But what if it does not?
 
The pressure on the middle classes did not start with the credit crunch. Middle-income living standards have been stagnant in the US for a quarter of a century. In this country, job insecurity, collapsing pensions, rising housing costs and an explosion in borrowing long predated 2007. So did the huge rise in inequality, which has seen incomes at the top far outpace those of everyone else.

For the Conservatives, closely identified as they are with vested interests like the City, all this could become very tricky. Osborne’s deficit reduction programme is not exactly popular, but so far it has commanded public support. Even if he pulls it off, however, these other issues will not melt away.
 
It is not as if capitalism has not had to be rebooted before. The last time, in Britain, was after the Second World War when, in reaction to what had happened in the Thirties, Labour set up the welfare state. Handled right, it’s a parallel that today's Labour party could use to good effect if it can come up with policies to match.

None of this is to say that Miliband is a shoo-in for Downing Street. Such ideas as he has are still half-formed, and his party clearly has a way to go before it will be ready for government again. Its performance in May's local and Scottish elections was dire, despite leading in the national opinion polls. Miliband, himself, still does not look or sound like a prime minister in waiting.
 
But just as Ed Balls is a man whom it is easy to over-rate, so it is tempting to under-rate Ed Miliband. He showed his steel when he knifed his brother to become party leader. He has been skilful in his dealings with the party's over-mighty barons, both in the unions and on the front bench.
 
Most important of all, he has begun to carve out a distinctive approach to the economy which, unlike the Balls version, could work for him even if the coalition does not fall flat on its face. Of the two Eds, Miliband is the one to watch. ·