Isabel Hardman Isabel Hardman

Labour now thinks it is safe to reject the Tory narrative on the economy

Labour has returned to a bit more of an even keel in the past few wintry weeks after a torrid autumn. Plotters are resigned to letting Ed Miliband fight the General Election on his terms, and given the closeness of the two parties in the opinion polls, most are concluding that a disorganised Labour party could still throw the General Election away. Of course, everyone’s still anxious, but that’s not limited to Labour. When all MPs in both parties are anxiously looking at the opinion polls every day, it’s clear that no-one’s very confident.

Miliband’s team have been trying to reassure nervy MPs by pointing out, quite obviously, that this election isn’t like the others. Naturally it’s not like 1997 where one party has the Big Mo and even a theme song. But aides have also been trying to convince MPs that the reason they are nervous is that this doesn’t feel like 2010 even though there is plenty of action still going on. For a good number of Labour MPs, this is their first defensive election where they are trying to hold their seats rather than win them for the first time. But because the party has gone from trying to stay in government to trying to get into government, things feel different too. One member of the Miliband cam explains:

‘This isn’t even 2010 when the Parliamentary Labour Party had loads of internal briefings and so on. This is an election where the action is out there with the PPCs.’

A combination of resignation to reality and that reassuring work being done by Miliband loyalists seems to have brought the Labour leader at least to a stage where he can give speeches about things rather than about his suitability for the leadership. So today he is giving a big speech on the economy where he will pledge to cut unprotected government departments every year until the books are balanced. To underline that, Ed Balls has written to Shadow Cabinet colleagues warning them of the need to find cuts in their policy areas, though he told the Today programme that Miliband would not articulate Labour’s ringfencing plans in this particular speech.

This will go down well with a number of the nervous MPs, who recognise that no matter what else Labour says, if it doesn’t convince voters that it is the party that can be distrusted the least with their money (that’s how upbeat this election will be), then it won’t find itself in government. Some don’t think Miliband has devoted enough speeches to talking about the economy, and think he needs to confront it as a weakness rather than somehow hoping that the Conservatives don’t use voters’ suspicions about Labour’s fiscal discipline as the basis for their risk messages in the election campaign. Balls wouldn’t commit to a date for eliminating the deficit, though, and dodged questions on whether Labour would support the Conservative fiscal mandate. It’s clear that when Labour says it wants to set out a ‘plan’, it means more of a sketch than a blueprint.

But what’s really interesting is that Labour has decided that while the party needs to talk about fiscal discipline, there is also now a space for Miliband to say he wouldn’t go as far as the Tories. The Labour leader will say:

‘These are the principles of deficit reduction a Labour government will follow: balancing the current budget, not destroying productive investment; an economic strategy to bring the deficit down, not drive it up; sensible reductions in spending, not slash and burn of our public services; the wealthiest bearing the biggest burden, not everyday people; and fully funded commitments, without additional borrowing, not unfunded tax cuts that put our NHS at risk.

‘This is the central contrast between our approach and the Conservatives. We will deal with the deficit but we will never return to the 1930s. We won’t take risks with our public finances. And we won’t take risks either with our public services, our National Health Service.’

Balls called the Conservative spending plans ‘extreme’ on the Today programme and said ‘there are going to be spending cuts but not on the scale of the Conservatives because those are extreme’. The party thinks that the Tories will at some point leave the British public behind with these ‘extreme’ cuts and that it doesn’t need to continue saying it would keep up. The challenge for Labour is to really convince voters that these cuts would be so extreme that they are more terrifying a prospect than a party that trails in the polls on the economy.

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