Andrew Grice: This political game-changer helps vindicate Labour

Economically, whether there is a plus or minus sign in front of a 0.2 per cent GDP figure does not make a vast difference. Politically, yesterday's depressing figures might be a game-changer.

Labour paid a heavy price because the first recession happened on its watch, though the financial crisis was global. George Osborne may be about to suffer the same fate. It will be hard for the Chancellor to argue that Britain is a "safe haven" and the economic problems are all Labour's fault. Now it is Labour that can speak about "a recession made in Downing Street". The Conservatives' opinion-poll lead over Labour on economic trust has started to narrow; the grim news is likely to accelerate the process. Slipping back into recession will cut through to the voters much more than the fog of allegations about the Government's relationship with Rupert Murdoch.

The charge that David Cameron and Mr Osborne fear most is that the Government is one of incompetence. A disastrously presented Budget was followed by panic at the petrol pumps. Now the danger is that recession adds the toxic charge of economic competence to the list. As one jittery Tory MP said: "Once a government loses its reputation for economic competence, it is very hard to win it back."

Labour can feel vindicated. It has consistently accused the Government of cutting "too far, too fast", and Mr Osborne's gamble on a private-sector recovery has not worked. The refusal by Ed Balls, the shadow Chancellor, to bow to pressure from some Labour colleagues to concede more ground to the Tories, apologise for Labour's record and back Mr Osborne's strategy looks wiser.

But Ed Miliband knows that loss of trust in one party does not necessarily persuade voters to trust the other. And Labour will need to convince people it is no longer addicted to higher public spending.

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