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On morality Ed Miliband is way ahead of Cameron. Now for the economy | Polly Toynbee

Miliband has done well to force Cameron to fight on Labour territory. But he needs to change the economic conversation

David Cameron will try to stop £4m bonuses for RBS bankers. Whatever it takes – hints of preferment or threats – they may lose their booty. But token gestures don’t begin to match Cameron’s rhetorical flourishes on a “fairer economy”. Vince Cable may offer more pay transparency and stronger shareholder power. But with 41% of shares held abroad and only 17% by pension funds, unseen forces outvote concerned shareholders at AGMs. “Transparency” is a miasma: we already know boardroom pay rose by 49% despite wage freezes, but public embarrassment seems a price directors find well worth paying. Cameron knows the contrast between this year’s bonuses and benefit cuts for disabled people is toxic.

He summoned up that old chimera, co-operatives. But John Spedan Lewis gave the company to his workers. The Scott family gave the Guardian to a trust. Will Cameron get Philip Green to give Arcadia to his shopworkers, in lieu of tax? The fantastically successful Mondragón co-op in Spain is weary with daily visits from people wanting to do likewise, but few manage it. Co-ops are great, but a bogus answer to this rampaging crisis of capitalism. Cameron lavished praise on NHS social enterprises, but often staff are forced into them against their will. Recently he gave Central Surrey Health a Big Society award for nurses who set up their own mutual, but then they lost their first competitive contract to a private company: they could only put up a £3m bond against Assura‘s £10m. Cold comfort for others.

Before the election Cameron made one speech on “markets without morality”, one of his butterfly touch-downs, but has done nothing since – until Ed Miliband got “predatory capitalism” up and running. Focus groups tell Cameron he has to run to catch up: voters are angry at runaway excess in hard times. But where’s the beef? Praise for free markets and blame for regulation left no plan for correcting corrupted capitalism. Bank regulation has been kicked into 2019 – political neverland: in a trice the entire NHS is put up for tender to “any qualified provider”, but banks get seven years to “prepare” while they lobby against already weak reforms.

Labour’s adoption of all the High Pay Commission recommendations is more radical than the party’s been given credit for. Listen how loudly business protests at putting employees on remuneration committees. Why? Because that requires works councils to elect representatives, opening a new world of German-style collaboration, more productive and leading to fairer pay. Labour would oblige all companies to publish a pay ratio, showing pay scales. All fund managers would have to reveal how they voted on boardroom pay, shaming pension funds that rubber-stamp greed at shareholders’ expense. This week Miliband challenged predatory takeovers, such as Kraft eating up Cadbury.

So far not bad, and the Tories are trailing. Now Labour needs to jump ahead again with bolder plans. Take this week’s Fair Pay Network report on supermarkets’ poverty pay. To cut the benefit bill steeply, Labour should demand rich companies don’t leave taxpayers to subsidise starvation wages with tax credits. If the TaxPayers’ Alliance were not a Conservative party front, it would support a living wage.

However, making the weather on the dysfunctions of capitalism is not enough as long as Labour still scores abysmally in polls on being trusted with the economy. Nothing the Eds say can gain traction until they stand on a solid economic platform. They have lost the Keynesian argument (for now): the paradox of thrift is just too paradoxical for the public. Unfairly, people think Labour borrowed too much and would again. There’s no point beating their heads against the ballot box: instead, change the conversation.

The Eds are right to make 2015 year zero. Only when seeing how bad the economy is, and which cuts have done most damage, can they choose priorities. Even within George Osborne’s iron envelope, opposite choices can be made. With 3 million out of work, would raising public-sector pay come first? No: jobs and growth, an investment bank, work for the young, restoring worst cuts and building homes come first. Money washes around, from the Concorde-style HS2 to Boris’s airport, bibles in schools, a yacht for the Queen, bank bonuses, a free schools bonanza and £3bn on NHS turmoil. From Trident, wars and whims, there is money. While Goldman Sachs pays bonuses the size of Albania’s GDP, this rich country has phenomenal untaxed wealth in property accumulated by the top 5%: shedloads more is sequestered abroad. Public appetite for fair tax collection and sharing of the burdens grows. Why else is Cameron frit?

A firm baseline for the economy need not stop Labour opposing cuts. Costed promises can be made: why not earmark aircraft carriers for universal childcare, make a mansion tax build new homes, and super-tax companies who overpay directors for small business investment? There need be no contradiction between an economic policy voters trust, and an imaginative radicalism they would support. Labour has done well to pull Cameron on to its own agenda. But winning the election matters most.

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