Ed Balls’ position on spending is a vote winner but we must be ready for the inevitable Tory attacks

Labour was right to warn that this Budget went “too far, too fast”

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The Independent Online

Much has happened since early June when both Ed Balls and Ed Miliband made speeches intended to show they can be trusted with the publics' hard-earned money. Miliband has launched a far-reaching party reform, upsetting some, and disappointed others in his handling of Syria.

As Damian McBride's memoirs revisit old battles, Miliband does not lack for contemporary ones but in the fog of political war he must remain focused on the economy because this is where the result of the next election will be decided.

There will be many at Labour Party conference who wouldn't welcome a belt tightening message. They've heard Nick Clegg deliver free school meals. They'll want promises of goodies from Miliband too.

Miliband should tune out these appeals and tune in Don Draper. "If you don't like what is being said, change the conversation". The economic debate has been stuck on the deficit throughout this parliament. The cost of living is more fertile terrain for Labour. But the Conservatives retort that Labour, with its profligate ways will drive the economy into the debt ditch, squeezing households in years more of recession and austerity.

The conversation won't be changed till this Conservative claim is rendered absurd. This means the June speeches must not be the end of Labour attempts to build fiscal credibility but staging posts. Promises of largesse to please the faithful in the hall are not what’s required, we need reassurance for those at home who will be paying a little more attention to Labour this week than usual.

These voters want Labour to demonstrate that the long, hard road of the past half-decade can end with something different and better. Miliband should focus on such a future, not refighting past confrontations. Not only with McBride but also the 2010 general election and the "emergency"  Budget that followed.

Labour was right to warn that this Budget went “too far, too fast” but so entrenched was the perception of the party's profligacy that nearly half of voters, according to YouGov, then blamed the previous government for these cuts. Nine  per cent more still do so than blame the incumbent Government.

If Labour were to promise, as seems likely, to keep most of the present Government’s spending plans, but to borrow more specifically for public works such as building more homes, polling for Labour Uncut by YouGov reveals that those who say this would make them more likely to vote Labour outnumber those who say it would make them less likely by 4 per cent (17% more likely versus 13% less likely). 

In contrast, a net 4% of voters say they would be less likely to vote Labour (12% more likely versus 16% less likely) if the party rejected any public spending cuts and instead allowed borrowing to rise.

This could be pivotal at the election. Although 55% say it would not change their vote (either for or against Labour), a 4% rise or fall in Labour’s vote could be worth up to 52 seats in 2015 (source: UK Polling Report Swingometer with a 4% increase in Labour’s 2010 vote share) and be the difference between Labour becoming the government or remaining in opposition

We know what the Tories response will be to Labour’s position. George Osborne will claim that Labour’s extra public investment is built on the sand of extra borrowing. This challenge is less likely to stick if Labour can show economies elsewhere.

This requires moving beyond the crumbling relic of a politics of inputs, not outcomes, which sustains the NHS ringfence, while cutting deeply into social care and driving up A&E visits. More balanced cuts across departments than the ringfences allow would achieve better outcomes and would be the kind of tough decision many presume Miliband is incapable of. 

Support for dropping the ringfences came in the YouGov polling for Labour Uncut. 12 per cent more voters agree than disagree with doing so. This margin of support widens to 16 per cent among voters in the south outside of London and 45 per cent with those who voted Conservative in 2010, which are both demographics that Miliband has struggled to reach but are crucial to his chances of becoming prime minister. 

At Labour party conference, Labour Uncut is launching a new pamphlet, titled Labour's manifesto uncut: How to win in 2015 and why, that articulates a different and better Britain, as well as a roadmap for getting there. The first steps are the bold decisions needed to bring a full stop to our deficit focused economic debate.

Jonathan Todd is the economic columnist for Labour Uncut. ‘Labour’s manifesto uncut: How to win in 2015 and why’ will be launched at Labour conference at the PragRad fringe today (Monday).