Miliband has surfed a wave of popular anger over the cuts programme championed by the Con-Dem government, but he remains vague about Labour's plans.
The Liberal Democrats are delighted not to have been annihilated in the wake of their betrayal of manifesto promises on tuition fees and tough action against the banks.
In any other circumstances, they would have expected to romp home in a seat where Labour incumbent Phil Woolas was turfed out of Parliament for lying about the Liberal Democrats' supposed collaboration with extreme Islamists.
Lib Dem candidate Elwyn Watkins had achieved national prominence as a campaigner for electoral honesty and decency, successfully pursuing Woolas through the legal process.
Yet his prominence counted for nothing against a decent Labour candidate, Debbie Abrahams, whose majority surpasses even that of the 1997 general election Labour landslide.
And despite Tory denials of having soft-pedalled their campaign to assist their Lib Dem coalition partner, the figures tell their own story, with 7,000 Tory votes going missing, many transferring to the best-placed anti-Labour candidate.
The failure of the British National Party to make an impact was another positive outcome.
In the circumstances, Labour and its new leader should be riding high, but doubts remain over their political direction.
New Labour was finally brought low by a combination of its subservience to the banks and hostility to the trade unions. Where does Labour stand in relation to these forces today?
Gordon Brown made a habit, particularly as chancellor, of regular white-tie attendances at City of London bashes where the sweet smell of excess was toasted.
He lauded the entrepreneurial spirit of bankers who were ready to gamble recklessly on worldwide property booms with the assets built up by steady domestic banking activity and defended the huge salaries and even huger bonus pools set up to reward the banking buccaneers.
In contrast, despite attending TUC general council dinners and giving a nod and a wink that, in contrast to Tony Blair, he was of the labour movement, Brown uttered precisely the same political line to trade union audiences as he did to City slickers.
Many union leaders had difficulty explaining to their members their hunch, based on off-the-record personal conversations, that Brown would be more sympathetic to unionised Labour when he took over from Blair.
Their difficulty was well-placed because his refusal to relax the legal straitjacket on trade unionists was as ironclad as Blair's ever was and his determination, alongside his chancellor Alistair Darling, to make working people and the poor pay the price of Labour's banking bailout no less steely.
The key difference between new Labour's approach and that of the Con-Dem coalition was that new Labour would have made its public-service cuts and job losses agenda more gradual and protracted.
New leader Miliband has sought to distance himself from some of the most unpopular policies associated with Brown and Darling, but he continues to sup with a new Labour spoon, accepting that cuts in jobs and services were - and remain - the way to tackle the deficit caused by the bailout.
Miliband accepts now that the Labour government was wrong to rely on City self-regulation and that finance-sector adventurism was the cause of the current crisis rather than spending on public services such as education and health.
But these are unremarkable judgements for a Labour leader. To have drawn any other conclusion in light of all the contradictory evidence would have been politically perverse.
Yet what substantive proposals has Miliband offered as an alternative to the Year Zero slash-and-burn policies carried through by coalition radicals?
He has opposed the VAT increase from 17.5 per cent to 20 per cent as "the wrong tax at the wrong time" and suggested an extension of the bankers' bonus tax, which raised £3.5 billion last year, rather than the coalition's fig-leaf banking levy which has brought in just £1.3bn and might reach £2.5bn annually "once it is fully up and running," according to David Cameron.
In jousting over these figures, Miliband accepts the restriction of outrage to boardroom bonuses rather than the scale of extortion represented by banking profits as a whole.
In so doing, he does not challenge the concept that the role of the government is to take failed banks into temporary state stewardship, stuff them with cheap cash to restore their balance sheets and then return them fully charged to the private sector to resume where they left off.
Trade unions have a duty to their members and the communities in which they live to demand a bolder and more principled approach from Labour that does not accept private profit as the highest human aspiration.
The unions have already backed such an alternative overwhelmingly in the People's Charter.
It is time that they insisted on its core issues finding their place in Labour's political outlook and recognised that higher taxation of big business and the rich is a more just alternative than making the working class finance a crisis that it had no part in creating.
This article was written by John Haylett, political editor of the Morning Star, and appeared in Saturday's (15th January) issue of the paper
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