A good day for Ed Miliband but the elephant is still in the room

by Atul Hatwal

The roll-out of the 10p tax rate pledge was a reminder of how things should be done. Expectations were expertly managed in the run-up to the speech, the announcement was genuinely striking, and the government was caught on the hop. There was no abstract talk of responsible capitalism, no uncosted black holes opening up and the distinction with Gordon Brown’s tarnished brand was clear.

This was good economics and even better politics.

Yes, it might be better if the coverage 10p tax rate band was broader but it needs to be affordable and importantly this is a powerful signal of where the party stands.

The headlines tomorrow will be pleasing and the pressure is now on George Osborne to produce an equivalent rabbit out of his hat for next month’s budget. It’s the type of bold move by Labour that could force the chancellor into a rushed response that then unravels: “Pasty tax” redux.

But, and there is big but, as good as the delivery and content of today’s policy launch was, it doesn’t address the fundamental fear the British public have about Labour.

Earlier this week the Guardian’s ICM poll gave Labour a 12 point lead over the Tories, the biggest since May 2003. Yet, below the topline, was evidence of Labour’s lack of progress on the central issue of economic competence.

Asked to identify the main reason for our current economic problems, 29% opted for Labour’s “debts … racked up to finance unsustainable spending.” This is same as last May. In comparison 23% blamed government cuts and 21% bankers for failing to lend to business.

Labour’s problem with voter perceptions on the economy is often described in terms of the deficit, but this isn’t quite right. As far as the public are concerned, the deficit is the symptom, Labour’s spending is the problem.

Over the past two and a half years, as a party we have said next to nothing about spending restraint. In January 2012, there was a brief dalliance when the two Eds backed a tight public sector pay settlement of 1% annual rises for the rest of this parliament. But since then little has passed the lips of either the leader or shadow chancellor except warm words. Whether the party still supports this pay settlement is anyone’s guess.

The nearest Ed Miliband did get to outlining  Labour’s policy on spending in his speech today wasn’t heartening. He framed the problem as one of growth, talking about the need to grow the economy to tackle the deficit. Which is fine, but that’s not the question voters are asking of Labour.

Many probably think Labour would be better for growth but worry that our spending would tip us back into the mire, no matter how much growth we generate.

Until the party can convince voters that a Labour government would not be profligate spenders, polished and professional policy roll-outs such as today’s will be of ultimately marginal significance. Without tackling the central reason that voters turfed out the last Labour government, spending, the electorate will continue to withhold their permission for the party to be heard on the economy.

The elephant is still in the room, and it isn’t going anywhere.

Atul Hatwal is editor at Uncut

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7 Responses to “A good day for Ed Miliband but the elephant is still in the room”

  1. DonGately says:

    I think the problem is that when you look at public views on key economic issues, the tories lead on economic competence and welfare reform we’re only really building up a lead with the public on the issue of “fairness” – now that’s not nothing but it’s not enough either. My gut feeling is that the little that gets through to the public on this will be the redistributive impact which may just add to the fairness pile without necessarily changing views on economic competence – especially since the coalition will now spend 2 years unpicking this.

    Still at least the coalition are incompetent.

  2. Ex-Labour says:

    You are correct about spending restraint. Labour have yet to outline any real policies on the economy and where they will cut (as we do have to) and where there is flexibility to invest for growth.

    The 1% cap on public sector pay is fine, but they advocate handing over the full inflationary increase to benefit claimants and who will pay for that ? The Conservatives were already commited last year and handed over 5% whilst most private employees had no pay increase for years.

    It has been a deliberate political ploy by Labour not to outline any policy whatsoever over the last 2 years, probably thinking that if they say nothing then the public will forget about Labour over indulgence in the years in office. Perhaps also its easier to hit the Tories when they have nothing to hit back against. This is fine for a while, but I’m sure the government is just waiting for Balls to open his mouth and….well…..talk a load of Balls.

  3. aragon says:

    It’s pathetic as Andrew Neil pointed out on the Daily Politics it’s £2 per week, what will people do with this new wealth ? Buy an Ice Cream ?

    The poverty of aspiration Obama has raised the minimum wage by nearly $2 per hour that is for a 40 hour week (40 * 1.75) that is $70 per week or £40 per week.

    A Mansion Tax is Lib Dem policy, extra tiers of Council Tax would be easier.

    A major economic announcement, it not even a minor announcement. It a damp squib.

  4. paul barker says:

    Of course its good news when Labour adopt 2 Libdem policies on the same day. Perhaps you could wait until we publish our manifesto & copy the lot ? It would certainly make any coalition negotiations a lot easier.
    Excellent article, by the way but it will be dismissed as more Blairite whinging in the wider party.

  5. e says:

    Great speech! Labour once again talking of, and to, everyone! “Working people” no differentiation tactics, no “hard working” brilliant….

    On economic competence, I think you’re quite wrong to place credence on snapshots of current opinion polls. Damaging economic realities are chipping away at the current framework, and at last the positive narratives, the credible alternatives are emerging to add to the pressure. Right on time Labour is articulating an offer, a possibility of something new.

    I’m confident the public are very ready to recognise what’s true and fair and can move all elephants on.

  6. swatantra says:

    We could adopt yet another Lib Dem policy ie scrap Council Tax and bring in Local Income Tax. There’s no shame in picking up policies from whoever and wherever, if they make sense, and reduce bureacracy.
    But no policies on Crime and Punishment please. The Lib Dems are still too soft in that area and don’t live in the real world.

  7. Robert says:

    Labour will not have much money to spend after 2015, so it is good that the announcements today will not cost extra money. Labour should wait until closer to the election before making clear what it will spend and cut.

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