The wheels turn slowly in the Labour Party.
As Ed Miliband and his team agonised over whether to make what they called “an intervention” on the economy before Christmas or wait until January, manna from heaven landed.
It came in a few words in the 228-page report published by the Office for Budget Responsibility (OBR), the tax and spending watchdog, alongside George Osborne’s Autumn Statement 10 days ago. His planned cuts would mean that by 2020, day-to-day spending on public services would be at its lowest level since the late 1930s as a share of Gross Domestic Product.
A furious Chancellor knew it was toxic. That is why he attacked the BBC for daring to refer in its coverage to George Orwell’s The Road to Wigan Pier about deprivation and unemployment among the northern working class in the 1930s.
The OBR’s warning tipped the balance in favour of Miliband making the long-overdue speech on the economy on Thursday rather than in the new year. Labour strategists, including David Axelrod, the party’s highly-paid former Obama adviser who made a rare two-day visit to London for talks this week, realised that the parallel with the Thirties was too good to miss. It was easy to knit it into what Axelrod constantly tells Labour it must focus on – its “big economic offer”.
Miliband advisers revised their list of dividing lines: the Thirties fitted neatly with “the future” (Labour) or “the past” (Tories) on public services and the “many” (Labour) versus “the few” (Tories) on the economy.
If Miliband had made a speech warning that Osborne’s £55bn of cuts would take Britain back to the Thirties, he would have been ridiculed. But all he was doing was quoting the independent fiscal watchdog set up by the Chancellor. The economics of it might be a bit dodgy: GDP is 10 times bigger today, so public spending will be too. But the politics was explosive.
Osborne knew it. He prefers the OBR’s “real terms” figure showing that state spending will fall to 2002 levels. But the damage has been done. Labour will hammer home the parallel with the Thirties until the May election. It dovetails nicely with the party’s other attack: the Conservatives’ cuts are now driven by an ideological desire to shrink the state because Osborne wants to run a £23bn budget surplus by 2020 – and hand out £7.2bn in income tax cuts rather than spend the money on preserving services.
In pictures: Ed Miliband trying to look normal
In pictures: Ed Miliband trying to look normal
1/17 The beggar
Ed Miliband casually gives money to a homeless woman in Manchester, surrounded by press photographers.
2/17 The Bacon Sandwich
Ed Miliband buys a bacon sandwich from cafe owner Antonios Foufas at New Covent Garden Market in London as he kicks off a day of campaigning on the eve of the local and European elections
3/17 The Bacon Sandwich
Ed Miliband chats with a cafe owner Antonios Foufas at New Covent Garden Market in London
4/17 The Bacon Sandwich
Ed Miliband embarked on a whirlwind campaign tour of England - but struggled at the first hurdle (a bacon sandwich). Aides intervened after just a few less-than-elegant bites
5/17 Flower Shopping
Ed Miliband talks with a couple of traders at New Covent Garden Market in London
6/17 Flower Shopping
Ed Miliband purchases some red roses for his wife at New Covent Garden Market in London
7/17 Talking Business
Ed Miliband talks with a trader at New Covent Garden Market in London
8/17 Good Morning Britain
Miliband on ITV's Good Morning Britain show on 20 May 2014, a day of gaffes in which he was also caught out by BBC Wiltshire for not knowing who the local Labour leader was
9/17 '£70 Weekly Shop'
Ed was accused of being 'out of touch with reality' after he seemed not to know what he - or the average British family - spends on a weekly food shop
10/17 Drop in Polls
Ed Miliband paid a visit to Leighton Hospital in Crewe to speak with the staff about the NHS, but faced difficult questions about polls showing his personal ratings falling well behind those David Cameron and George Osborne
11/17 On the Sofa with Farage
Ed Miliband appeared on the Andrew Marr Show to debate with Nigel Farage - but has all but conceded defeat in the Newark by-election, allowing Ukip a free run at the Tories
12/17 Wollies in Wellies
Miliband was among a number of politicians to come under fire for 'touring' the floods in the South and South West earlier this year
13/17 Wollies in Wellies
The Labour leader admitted it was 'a difficult decision for politicians whether to visit areas like this'
14/17 Missed Opportunity
Miliband's performance at the Labour conference last year failed to make much of an impression on voters, polls suggested
15/17 Sharing the Moment
Miliband, Nick Clegg, David Cameron and Angus Robinson enjoy their moment with Andy Murray, after the tennis player's Wimbledon win
16/17 Casual Husband
Miliband and his wife Justine are pictured in their hotel room in Brighton as he prepares to give his keynote speech to the annual Labour Party Conference
17/17 The Milibands
Just your average family of four?
The Tories won’t admit it, but they have got a touch of the jitters. They know the public understands the need to balance the nation’s books. But they also know that voters would not support an axe being taken to public services for the sake of it. Tory MPs expect the Chancellor to refine his message on the £23bn surplus. “He has over-egged the pudding,” one said.
The Cameron-Osborne pitch has been based on “sound public finances and decent public services”. This week Labour moved on to the same turf. Miliband’s message was that Labour would balance the books and protect public services. It may sound too good to be true, an unlikely land of milk and honey.
“We’re the ‘nice cuts’ party now,” a sceptical Labour MP quipped. But if the public thinks the Tories are still the “nasty party,” Labour might just be back in business.
Labour strategists sense a turning of the tide. It is too soon to be sure about that but it is not a mad hope. At last, Labour now has a story to tell on the deficit.
It portrays the Tories as “one-dimensional”, because Osborne implausibly says he will not raise taxes and will make all his savings through cuts. The Liberal Democrats are “two-dimensional”, according to Labour, as they would opt for a mix of cuts and tax rises. You guessed it, Labour is the only “three-dimensional party” with a combination of cuts, tax rises and higher growth in a reformed economy.
The latter point may sound like motherhood and apple pie but lower than expected tax revenues – because so many of the new jobs created since 2010 are low paid or part-time – give credence to Miliband’s argument that the cost of living crisis must be tackled to clear the deficit.
On Monday, Labour will tackle the other strategic weakness which has dogged it in recent years – immigration. “We are clearing away the undergrowth to have a clear path into the new year,” said one insider. In January, Labour will focus on the cost of living and its favourite theme – the NHS.
If Miliband thinks he has ticked the deficit box with one speech, he is still in denial. I suspect he knows that much more needs to be done. His speech should have been made when he became Labour leader in 2010. To convince the voters, he will have to repeat his message many times before next May. So will his shadow Cabinet.
Labour will also need to announce some big-ticket cuts before the election. Miliband argued that it would be better to wait until the party took office. That won’t wash as the election approaches: an incoming Labour government would have nine months to find £9bn of cuts, as it has accepted the Coalition’s spending limit for the 2015-16 financial year. I doubt the public would take Labour on trust without seeing more than the peanuts it has offered so far.
However, Labour is finally back in the game that will decide who wins power next May. “We are on the pitch now,” one Miliband aide admitted. “We weren’t before.”Reuse content