Labour 'can't win election' unless it spells out plan to cut deficit, Ed Miliband warned

Former adviser warns ‘negative’ message about cost of living puts off wealthy voters

Patrick Diamond

Ed Miliband has been warned that Labour will not win next May’s general election unless he spells out detailed spending cuts to win the trust of voters on the economy.

The move comes amid tension in the Shadow Cabinet over Labour’s policy on the deficit, during what one senior frontbencher said yesterday was “squeaky bum time” for the party.

There are said to be differences between Mr Miliband and Ed Balls, the shadow Chancellor, over how much detail Labour should provide before the election about the cuts it would make if it wins power.

Writing for The Independent’s website, Patrick Diamond, a former policy adviser to Tony Blair and Gordon Brown, said: “The party must address its perceived lack of economic credibility.”

He warned there was “greater urgency” for Labour to win more support in the south of England to counterbalance its 41 seats in Scotland under threat from the Scottish National Party.

Mr Diamond warned that Mr Miliband’s flagship campaign on the “cost of living crisis” could appear negative to voters in prosperous areas.

“A narrative of unremitting economic gloom will produce limited gains for Labour,” he said. “Labour cannot construct an electoral majority only by appealing to those hardest hit since the crisis.”

He said Labour faced an “existential” task to show it could create a more equal society without higher public spending.

It should “switch spending” from family benefits to childcare and redraw the boundaries of the state, he added.

Some Shadow Cabinet members believe Labour’s stance on the deficit gives it “the worst of all worlds”.

Although the party has pledged to balance the nation’s books by 2020, internal critics say it gets little credit for this from the voters because it has not spelt out how it would be achieved – and is still open to the Tory charge that it would increase borrowing.

At the same time, Labour has left itself room to spend an estimated £28bn more than the Conservatives by eliminating the deficit more slowly than they would. But critics say it has not reaped any political benefit because it has not said how it would use the money.

Some shadow ministers were disappointed that Mr Miliband made only a passing reference to the deficit in his “fightback speech” last Thursday after he saw off an attempt to oust him by some backbenchers.

Yesterday, a ComRes survey for The Independent on Sunday brought Labour some relief, showing the party on 34 per cent, four points ahead of the Tories (30 per cent).

Allies of Mr Miliband and Mr Balls blame each other for the lack of clarity over how Labour would reduce the deficit. But yesterday Labour officials insisted there was “no disagreement” between the two men and that the party’s spending plans would be spelt out before the election.

In the next few months, the shadow Chancellor will publish some findings from his “zero-based” review of public spending, which will say how the Home Office, the Ministry of Justice and the Communities Department would cope with post-election cuts. The aim is to show Labour is thinking seriously about how to make savings.

Meanwhile Sadiq Khan, shadow minister for London, yesterday drew on a football analogy to describe the tight election race. “There’s a great Alex Ferguson saying… where in a season when Man United and Newcastle were neck and neck, he said it’s squeaky bum time. And I think it’s squeaky bum time for Labour,” he told The Guardian.