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Has Ed Miliband's luck finally run out?

The Budget made clear how much stands between him and No. 10

29 March 2014

9:00 AM

29 March 2014

9:00 AM

Ask anyone in Westminster about the obstacles to a Tory victory in next year’s election and you’ll hear a well-rehearsed answer. The constituency boundaries are so ancient that Labour can win on a far lower share of vote; Ukip is eating into the Tories’ base while the coalition has united the left behind Labour; being beaten by Ukip in the European elections will send Tory MPs into a regicidal frenzy. By contrast, Labour appears to be holding itself together; its problems are hidden well below the waterline.

But that’s changing. The Budget has brought the political tide out, revealing some of the rocks on which Ed Miliband’s hopes of office could be dashed.

The first of these is the increasingly tense debate inside the Labour party about the nature of the party’s manifesto. In May 2012, Miliband took control of Labour’s policy review away from the former management consultant Liam Byrne and gave it to Jon Cruddas, a former academic. This, one of his boldest moves, guaranteed that the policy review would offer more than just technocratic solutions.

Cruddas promptly set about thinking how to reinvent the relationship between the state, society and the individual for the 21st century. But there are those in the Labour party who worry that he is thinking too big. They fear that the policies he will propose will be too radical, that they will provide targets for the Tories and the press to attack. They would like his review to be kicked into the long grass as soon as it lands.

This explains why 19 influential Labour thinkers sent a letter to the Guardian warning that the party must not try and play it safe at the next election. The letter-writers’ message is that there will be consequences if Cruddas’s policy review is ignored, or watered down beyond recognition. The fact that Cruddas’s close ally, Maurice Glassman, has signed the letter is a sign that Cruddas himself is concerned about how the leadership will respond to this work.

Those close to Miliband dismiss the letter as a ‘bonfire of straw men’. They argue that Miliband doesn’t want a cautious manifesto and so the authors’ concerns are misplaced. I’m told that there was nothing in the letter that Miliband himself couldn’t have signed up to. But the danger he faces is ending up with the worst of all worlds, with the establishment and businesses convinced that he’s a dangerous radical who must be stopped, but his own supporters unenthused.

The Labour leader’s next worry should be the wiring of the party machinery. Miliband’s Budget response was poor. But he had an excuse: he had to respond to it as soon as it had happened — it is an almost impossible task, one at which few opposition leaders have excelled. But what should concern him is how little of the Budget was unpicked by Labour in the hours and days after it was delivered. Considering that both Balls and Miliband are former Treasury special advisers, and ought to know every trick in the book, one would have expected Labour to excel at such forensic work. But for some reason, they did not. The sum of the three teams — in the leader’s office, the shadow chancellor’s office and party headquarters — is far less than that of its parts.

This problem was compounded when Ed Balls let in too much daylight upon the magic, revealing things about the leader’s operation that would have been better kept secret. He told journalists how Miliband had prepared chunks of his speech based on what had been speculated about on Twitter that morning, and that these sections had then had to be junked when these educated guesses turned out to be wrong. This is quite credible. But it is foolish to admit it. By contrast, when George Osborne was shadow chancellor, his team always used to hint that he and Cameron had sources inside the Treasury, tipping them off as to what the government was going to do next. This, at the very least, had the effect of increasing Labour paranoia.

Which leads on to the broader question of what Labour’s election strategy should be. If you talk to those close to Miliband and ask them how Labour can win, you’ll hear several distinct approaches. All might be capable of producing a Labour majority. But they can’t work in tandem. As the Tories demonstrated in 2010, a party can’t run more than one general election campaign at the same time.

Perhaps the biggest threat to Labour is the recovering economy. Miliband himself has said that he expects wages to rise faster than prices this year, easing the ‘cost of living crisis’ that he speaks about. There is a real danger that his whole political argument could seem out of date in a year’s time. Indeed, with Labour’s lead in the polls already down as low as one point, Miliband can’t afford to see the political potency of his pitch reduced any further.

Those around Miliband dismiss this argument. They say that, while the coalition parties might get the benefit of the doubt about the recovery this year, it will be clear by next year that the benefits are going to the few, not the many. It is on this judgment that the election will turn.

It is far too early to count Miliband out. The electoral arithmetic is still heavily in Labour’s favour. Also, a strong Ukip performance in the European elections would undo all of the work that the Tory leadership has done recently to rebuild party discipline and morale.

But in the waters around Westminster something has changed. Osborne’s Budget has given the Tories a purpose again; they are the party of freedom allowing individuals to choose how to spend their pension pots. It has shown them a way to win back those elderly voters who had shifted to Ukip. Tory MPs are already enthusing about how well Osborne’s proposed pensioner bonds, offering 4 per cent interest rates, go down on the doorstep.

The next few weeks promise to be difficult for the Labour leader. Criticisms of his approach, currently expressed in whispers, will get louder should Labour’s poll lead disappear entirely. Miliband now finds himself needing a good set of results in May to calm his party’s nerves. If he can’t deliver that, or if the Tories avoid coming third in the European elections, then he’ll have to clamber over some very jagged rocks to make it to No. 10.

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