by Atul Hatwal

Sixteen percent. According to the latest YouGov poll, this is the lead that David Cameron and George Osborne hold over Ed Miliband and Ed Balls on who the public trust to best manage the economy.

This is after George Osborne has missed every single deficit target, has had to admit the worst of the cuts are yet to come, has downgraded future growth forecasts and has done his best to trash the Conservative’s brand for sound finance by promising £7bn of unfunded tax cuts.

In politics at the moment, the Tories can do anything on the economy, bodge any target, make any ludicrous promise and still Labour will lag far behind.

Why?

This should be the question animating debate within the Labour party. No opposition has won an election while trailing on the economy and leadership. In the past few weeks there has been plentiful if inconclusive discussion over Ed Miliband’s leadership deficit, but comparative silence on the party’s economy deficit.

In place of discussion, there are just tropes about the Tories. Words that have demonstrably failed to have any impact on the public over the past few years.

Understanding the causes for this silence shines a light on the divisions that blight Labour and that will have to be bridged if it is to regain power.

There are broadly four groups within Labour today: what used to be called the Blairite, New Labour right, the traditional right clustered around Ed Balls, the soft left which is Ed Miliband’s core constituency and the hard left which is organised around Unite.

On economics, there is a good deal of unanimity between Blairites and traditional right. Both back a fiscally centrist position, with clear action on the deficit and honesty on the level of cuts that will be required.

Policy differences between these two groups tend to be concentrated on social issues, such as immigration and LGBT rights, and foreign policy, particularly over military intervention – the modern heirs of New Labour being more progressive and internationalist than their socially conservative and cautious traditionalist colleagues.

Both groups have been silent on Labour’s dreadful economic standing, but for different reasons.

For the Blairites, while Ed Balls is right about much of the economics, he has been hopeless on the politics.

Refusing to acknowledge any mistakes on spending by the last government meant the Tories were able to pillory Labour as unrepentant as well as profligate.

Only moving to commit to match future government spending plans two years into opposition meant the Tories were able to use that time to define Labour’s plans in the public’s perception.

And by portraying all of the country’s economic woes as the fault of the government, Balls allowed them to claim responsibility when the economy started to grow, as was always likely.

There is little love for Ed Balls among the Blairites but even less appetite to be seen as the source of dissent in the party.

One of the defining internal political events of the past three years has been the left’s attempt to expel Progress from the Labour party. Not because of the importance of Progress per se but what the episode signified.

The leadership’s singular lack of activity to stop the ASLEF expulsion motion as it progressed through Labour’s internal processes was the political equivalent of a punishment beating for the Blairite right.

The message was clear: if you cause trouble and stand up for your views, you will pay a public price. The message was understood.

If the Blairites attacked Balls that would also destabilise Ed Miliband and unite the old right, soft left and far left against them in a damaging dispute.

So the Blairites remain silent.

The traditional right is closely aligned with Ed Balls. A mix of personal politics and future opportunity – Ed Balls’ wife, Yvette Cooper, is one of the favourites for the leadership if Ed Miliband stumbles before or at the next election –bind them to him.

Any discussion of Labour’s economic predicament would be loaded with implicit criticism of Balls. He might be one of Labour’s biggest beasts, but has been weakened by repeated clashes with the leader’s office and the party’s poor polling on the economy.

Dissent from his own allies, some of whom privately bemoan aspects of his political strategy, would be damaging for his career and potentially fatal for Yvette Cooper’s leadership aspirations.

So the old right remain silent about the economy even while many of them are privately and publicly voluble about the problems with Ed Miliband’s leadership.

The position of the soft left is is akin to total bafflement on both the policies or political positioning that could reduce the economic trust deficit.

I was at a breakfast briefing earlier this week where a high profile media supporter of Ed Miliband’s summarised the common soft left lament.

She understood the polling that showed how reluctant the public were to back the higher taxes and borrowing needed to avoid deeper cuts. She could see the scale by which Labour lagged the Tories on economic competence; but had no idea of how to close the gap.

At root, she couldn’t understand why the public did not comprehend the damage being done to the welfare state and public services by the Tories. If they did then they’d surely turn to Labour; but they didn’t and nothing seemed to be working in enlightening them.

For the soft left there is no answer other than to keep on pushing the same lines as before in the hope something changes. Almost a case study in Einstein’s purported definition of insanity.

To discuss Labour’s economic deficit would not only loosen Ed Miliband’s uncertain grip on the leadership but pose problems for which they can offer no solution.

So the soft left remain silent.

Unlike the other three factions, the hard left are less constrained by personal politics, have the union muscle to ignore political threats and have a clear, alternate prospectus on the economy.

It’s a plan that is radioactive in terms of public support: big tax hikes, increases in borrowing and a massive expansion of state intervention in the economy are as electorally attractive in 2014 as they were in 1983. But it is a plan, and of all the factions, the hard left are the ones starting to make their case.

Neil Findlay’s campaign for the Scottish leadership is a dry run for what many see as the left position in the next national Labour leadership campaign, if and when Labour are defeated at the general election.

So far, the criticism on the economy has been muted, but it will become more and more pointed if, as the election draws near, Labour’s position does not improve.

There will need to be sufficient red water between the hard left position and Ed Miliband’s soft left leadership if the Unite candidate at the next leadership election is to be able to campaign on a platform sufficiently different to the economic policy with which Labour fought the 2015 election.

The result of these various divisions and pressures within Labour is that most politicians and commentators do not talk about the party’s problem on the economy, despite its clear impact on electability.

Those that do venture into this territory, speak from the perspective of the far left, calling for more nationalisation, taxes and borrowing which makes the party seem even less centrist to the electorate.

It is probably too late to shift public perceptions of Labour on the economy, but if the party is defeated next May, and the questions are then finally asked about how Labour drifted into an election trailing on the economy by almost twenty points, this inadvertent conspiracy of silence between most of Labour’s factions will provide a large part of the answer.

Atul Hatwal is editor of Uncut

Tags: Atul Hatwal, Autumn statement 2014, economy, Ed Balls, Ed Miliband

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