Mary Ann Sieghart: Miliband's threat to the Coalition

Gordon Brown's successor isn't some crazy firebrand who is bound to scare off middle England. In fact, it's those very voters he has in his sights

So it's all over, is it? Labour has lurched to the Left, handing the next election to David Cameron. The selection of "Red Ed" Miliband will doubtless have been toasted in illicit champagne by Conservatives on Saturday night. For the Tories, brother Ed is an easier opponent than David, and his victory by machine politics – Charlie Whelan having persuaded six union-backed MPs to switch their second preferences – supports the idea that Ed owes his position to the bruisers. But, in the sober light of Monday morning, the Conservatives should file away their excitement under C for Complacency. For it would be a big mistake to underestimate the new Labour leader.

For a start, he is no fool. Like his brother, Ed is intelligent and politically astute. He is hardly going to join a picket line against Coalition cuts. If anything, he knows that he now has to sound tougher on the unions than David would have done.

Focus groups show that the public knows nothing about him yet. Voters were dimly aware that there were two Miliband brothers in the race, but they hadn't distinguished between them. Ed now has a few months to define himself in the public mind and he the first thing he will do is try to peel off the "Red Ed" label.

Just because he was prepared to tickle Labour's tummy during the leadership campaign doesn't mean that he will now be a Bennite. David Cameron, after all, played to the Right during his leadership campaign, particularly over Europe, but that hasn't stopped him governing from the centre.

The ideological differences between David and Ed were always exaggerated. David was wrongly caricatured as a Blairite despite having disagreed with his former boss, particularly on education. His support for a mansion tax and the withdrawal of charitable status for private schools would have caused apoplexy at No 10 while he was there. Ed, meanwhile, wants to tax the banks more – well, so does Vince Cable. He wants a High Pay Commission – well, David Cameron has set up an inquiry into top public-sector pay and Cable has asked company boards to do more about top private-sector pay.

That's not to say that Miliband is not to the left of the Coalition. Of course he is. But he isn't some crazy firebrand who is bound to scare off middle England. In fact, it's those very voters he has in his sights.

As I wrote a few weeks ago, it is the middle third of income earners – the real middle class, not the well-off professional class – who will be hardest hit by government cuts and could be ripe for conversion to Labour. If universal benefits, such as child benefit, the winter fuel allowance or bus passes, are cut, it is they who will suffer. They rely on public services too. They won't be protected by means-tested benefits, and they will think it unfair that they have worked hard, played by the rules and are now being punished.

Politicians talk about fairness a lot but it means different things to different people. Well-meaning liberals, like Nick Clegg, think it means ensuring that the poor are protected from the worst of the cuts. But the "squeezed middle" see fairness quite differently. They think it is unfair that the poor are protected while they, who have done often thankless jobs to provide for themselves and their families, are not.

This is the subject of some fascinating new research for Policy Network by the former Labour MP Giles Radice and the former No 10 adviser Patrick Diamond. Their report, Southern Discomfort Again?, looks at why Labour won only 10 out of 212 seats in southern England outside London. They commissioned polling and focus groups with these voters, which found that southerners no longer regard Labour as the party of fairness.

These people, quintessential middle Englanders, see Labour as close to benefit claimants, trade unions and immigrants and the Conservatives as the party of homeowners, the middle class and people who live in the south. They are voters who flocked to Labour in 1997 but deserted it in 2005 and 2010. Now they think, by a margin of about three to one, that the Tories are more competent on running the economy, reducing the deficit, and getting better value for money for taxpayers. The Conservatives even lead Labour on cutting spending fairly and achieving greater equality and social mobility.

So Miliband will have a lot to do before his message is heard again by the voters he wants to win back. He has accepted that Labour needs to display humility – expect bucket loads in his speech tomorrow. But it won't be enough for him to acknowledge that Labour didn't listen to the voters enough on immigration and housing. He will also have to take his share of the blame for the deficit.

He can't say it's all the fault of the banking crisis. Britain's deficit was way too large before 2008. Gordon Brown had spent too much in the good times, during some of which Miliband was chairman of the Treasury's Council of Economic Advisers.

Another new opinion survey, this time by Lord Ashcroft, finds that 74 per cent of swing voters believe Labour is largely to blame for Britain's economic problems. And these people say that an apology would make them more likely to consider returning to the party.

Miliband has done the right thing by backing Alistair Darling's plan to cut the deficit by half. That's more than Ed Balls has done. And he has also said he won't oppose every Coalition cut. But he won't be seen as economically credible unless he acknowledges why we got into this mess. He claims he wants to make a break with the past; well, an apology is the best way to do it.

How else can the new leader shake off the "Red Ed" tag? He could promise to reform the discredited voting system that squeaked him into power. If one-member-one-vote is good enough for the Tories and the Lib Dems, it should be good enough for Labour. He could also bring in open primaries for the selection of parliamentary candidates.

He needs to be tough on welfare reform – again, a stance that will go down well with the squeezed middle. Interestingly, he praised James Purnell's reforms yesterday, which Gordon Brown opposed. Now he should back Iain Duncan Smith in his fight with the Treasury and support the tightening of incapacity and housing benefit.

The next step is to appoint his brother to be Shadow Chancellor. Balls, although he is better steeped in economics, has derided the Darling deficit plan. He won't give Labour economic credibility.

Finally, Miliband should admit that there is still plenty of wasteful public spending and that public-sector workers are going to have to accept the same pay freezes and efficiencies that have afflicted private-sector employees. He needs to be bold on public-sector pensions. He should criticise any strikes that inconvenience the public and he certainly shouldn't join protest marches against the cuts.

The new Leader of the Opposition has the advantage that he is the only opposition leader. He no longer has to compete with the Lib Dems in criticising the Tories. That means that protest votes will naturally come his way. It also means that he can afford not to be strident. Miliband is intelligent enough to understand that a moderate, sane Labour leader who sympathises with the embattled middle classes will be a serious threat to the Tories. They can put their bubbly away now.

m.sieghart@independent.co.uk/ www.twitter.com/MASieghart