Leader's Speech - Special Report:

The dawn of Generation Ed

This speech distanced him from his predecessors. His brother could not have made it

In a modest, understated and sometimes awkward manner Ed Miliband delivered a leader's speech that was far more significant than it seemed. There were no great game-changing announcements such as when Tony Blair signalled the abolition of the party's Clause Four. There were no breathtaking oratorical flourishes. But in an hour- long address Labour's new leader guided his party away from the traumas and contorted positioning of the recent past and pointed it in a new direction.

As such it was the most daring speech from a Labour leader delivered for a long time. In his conference addresses Tony Blair used to proclaim his boldness while advancing views that had been common orthodoxy since the early 1980s. Ed Miliband did not repeatedly express his boldness. He opted to be genuinely courageous by challenging some of those orthodoxies. He did so partly by repudiating parts of his party's past in terms that were explicit and cathartic: New Labour had become trapped by its old certainties. Iraq was wrong. New Labour had been too tolerant of light regulation and too dependent on the financial markets for revenue. New Labour had been too casual about civil liberties. The list of misjudgements was carefully balanced with many references to the achievements of 13 years of rule.

The criticisms were more revealing. They were made not only to establish distance from an approach to politics that had lost millions of votes since 1997 but to hint at new directions. Obviously this is not a speech Blair could have made. In some respects it is not a speech his elder brother could have delivered either, as he inadvertently made clear when he was caught on camera expressing implicit disapproval.

The persistent themes of the younger brother's speech were "optimism" and a "new generation". The devices are familiar, hinting at change by using a convenient chronological divide rather than anything too specific. In 1994 Labour became new rather than old. Now a new generation replaces the old one. Similarly optimism in itself does not lead very far, other than provide a tonal framework for some tough decisions to come.

There was a third device applied throughout the speech. Miliband prefaced most sections with the declaration "Let us be honest...", a technique that suggests he was having a conversation with his party and, for the first time, with the wider electorate. As Labour's election post mortem suggested that the party had suffered above all from a deep sense of mistrust after Iraq and the MPs' expenses, this was more than a technique to suggest an informal exchange but another attempt to suggest that lessons had been learnt.

Before the speech Miliband had faced an ominously high number of challenges for someone who has been in the job for less than a week. Most specifically he needed to tackle the label of Red Ed and he did so with a message delivered with one of the few moments of real passion. "Let's start to have a grown-up debate!" he declared to applause in the hall and I suspect in the rest of the country. Whatever other crises that might whirl around his leadership the label will not stick.

That is partly because he addressed a question posed of him this week, almost as if internal and external opponents were willing him back to the 1980s. What would he do with the trade unions? The answer he gave was to defend their broader role and to insist he would oppose irresponsible strikes.

Much more demanding will be shaping a detailed economic policy. He made clear that he would not oppose all the cuts and might support the Coalition's plans for welfare reform, but very quickly he will need a thought-through strategy on the economy. Miliband argued that Labour had earned its reputation for fiscal responsibility in 1997. He was determined to get it back again and that economic credibility was pivotal. These are all the correct assertions, but it is going to take titanic work in the coming years to turn easy generalisations into vote-winning policies.

Another short-term challenge that Miliband faced was to purge the growing feeling in the media and parts of Labour that the party had chosen the wrong brother. After David's well-delivered speech on Monday there was a potentially dangerous dynamic in place for the younger brother. If his speech had flopped comparisons would have been made with a new mischievous intensity. This will not happen now, even if the narrative of the two brothers continues to dwarf all else.

Today the psychodrama will reach a resolution of sorts as David decides whether to stand for the Shadow Cabinet. Either way his decision will be greeted by a frenzy that will undermine the impact of yesterday's speech. That is politics. Very quickly life moves on.

But this speech moved a party on too, from an era formed defensively after four election defeats. Turning words into detail will be a much bigger test, but as an opening the generalised arguments chimed with a modern era no longer in awe of unfettered markets, where parties work together in areas of genuine agreement and where there is appetite for political debate that goes beyond stereotyping. His speech will have reassured some of his internal critics and been of more than passing interest to anxious Liberal Democrats. Ed Miliband leads a nervy party but he has made a striking start.

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