Steve Richards: It's time for Miliband to tell us where Labour is heading

Miliband and Balls are being urged to apologise for leaving Britain in a mess, to acquire greater credibility. 'Sorry we caused this economic nightmare' is unlikely to get them very far

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Ed Miliband needs to make a very big speech. In it, he must outline Labour's broad alternative to the Coalition's economic policies and its related view of the state. He needs to make the speech, or series of big speeches, by this summer or else become trapped in a caricature defined by his various and many opponents.

The reason why such a speech, or speeches, is necessary from his perspective is obvious. In interviews, both Miliband and his shadow Chancellor, Ed Balls, dance around increasingly familiar, tedious and irrelevant circles. We have said we would cut, but not as much. So what would you cut? We have given a list. But isn't it your fault that we are in this mess? No. Will you apologise? All of this is going nowhere; by the time of the next election the context will be entirely different. It is possible that by then there will be no deficit. That is the Coalition's declared objective. Miliband and Balls need to escape quickly from this exclusive focus on what they would do now when they are in no position to do anything at all.

If either of them were to make such a speech about their new economic course, there are several pieces of advice they should ignore. In particular, they must not fall into the trap of apologising for the level of spending under the last Labour government. David Cameron, some of the Shadow Cabinet and my esteemed colleague, John Rentoul – an informal coalition that should arouse a degree of wariness in any leader – insist that such an apology is essential.

Their demand reminds me of a similar call on Tony Blair to apologise for Iraq while he was still Prime Minister. What could Blair have said? "I am sorry I sent British soldiers needlessly to their deaths and did so by lying about non-existent weapons." This was not a sentence Blair could have uttered without adding: "I resign immediately". But he was being advised to say something along these lines to retain power.

Similarly, Miliband and Balls are being urged to apologise for leaving Britain in a mess, as a means of acquiring greater credibility. "Sorry we caused this economic nightmare" is unlikely to get them very far and would be an even more perverse declaration, given that they genuinely believe that this is not the case. Their apology would be on every Tory slogan at the next election.

While they cannot ignore the past or the present, Miliband and Balls need to look ahead. There are mumblings among Labour MPs about credibility and the importance of a broader appeal. Such statements of the obvious are the easy bit. The policy implications are far more challenging.

If he makes a big speech, Miliband has no obligation to outline his precise tax-and-spend plans so far from an election. But he needs to talk a little about this thorny policy area as he casts his eyes beyond the immediate to what we know will be the situation in a few years' time.

The state will be smaller and yet, the demands on it will be greater. We are living longer and expensive medical technology will reinforce the trend towards longevity. The combination is expensive. Elsewhere, transport is better than it used to be but is nowhere near as good as it should be. More widely, we need to be better trained as a country and that, too, is expensive in the short term. These are three examples of many. In each case, support for the propositions is wide. The Daily Mail will be the first to complain if the elderly are deprived of new drugs on the grounds of cost. The Confederation of British Industry urgently demands more investment in transport. Both want a country that is more highly trained and yet both want tax cuts, too – the familiar British conundrum.

As the media and perhaps voters seem to like apologies these days, Miliband should make a partial one. Labour increased public spending and services improved, but not by as much as they should have done. Why do services with a guaranteed income perform less efficiently than they should? The Coalition's answer is to expand the role of the private sector and to cut public spending but, in doing so, it will employ more bureaucrats in the form of accountants, lawyers, administrators and regulators. In their post-bureaucratic age there will be a mountain of bureaucrats. But Miliband must also have arguments about making public services more efficient and innovative. He must be seen to be on the side of public-service users who happen to form most of the electorate.

As part of a big speech, the financial crisis must be placed in its appropriate context as an epoch-changing event as significant as the collapse of corporatism in the late 1970s. "Tax and spend" must be addressed with the recognition that targeted cuts will be necessary after so many rises. Balls has sought to address the argument that Labour was to blame and has exposed weaknesses in the Coalition's plans, in his response to the Budget and indeed, since his Bloomberg speech during the leadership election – an example of a speech that enhanced the reputation of the speaker even among those who disagreed.

Miliband has seized on two potentially potent themes. One is about the "squeezed middle", the other is to make the defence of public institutions seem like an act of traditionalist nurturing against the prevailing arguments about "statism". But his arguments need fleshing out and made to seem of overwhelming relevance – the art of opposition. The speech is an old-fashioned instrument but still the most powerful way to accomplish the art, to convey an impression of significance. Blair's early speeches were crucial staging posts. So were David Cameron's.

Miliband should make his big speech or speeches this summer because he will have had the authority-enhancing boost of successful local election results. For a time, there will be interest in what he has to say. He must use it. Both Balls and Miliband were involved in re-framing economic policy in opposition during the mid-1990s. It is a titanic task to have to do it all over again, but that is what they must do quickly if Labour is to have a chance next time.

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