Ed Miliband has been continually attacked by the Conservatives for forgetting to mention the deficit in his 2014 Labour conference speech, but they’ll find it harder to accuse him of ignoring it now.
The first page of Labour’s general election manifesto, which will be launched in Manchester tomorrow, is entirely devoted to the subject.
It outlines a “Budget Responsibility Lock” guaranteeing that every policy is paid for, and does not require additional borrowing, that a Labour government will cut the deficit every year, and that it will reduce the national debt (as share of GDP) and achieve a surplus on the current budget “as soon as possible in the next parliament.”
The first line of the manifesto states: “Our manifesto begins with the Budget Responsibility Lock we offer the British people. It is the basis for all our plans in this manifesto because it is by securing our national finances that we are able to secure the family finances of the working people of Britain.”
A Labour aide told me that the aim was to show that “we can be the party of responsibility as well as the party of change”, reassuring sceptical voters that all of its promises “can be paid for”. The austere pledge is designed to contrast with previous manifestos, which were dominated by spending commitments.
The decision to focus so heavily on the deficit will be questioned by some on the left, who fear that it aids the Tories’ narrative, but Labour strategists argue that the key to election victory is to “accentuate the positives and neutralise the negatives”. By stating its commitment to fiscal responsibility in unambiguous terms, the party is seeking to ensure it achieves the latter.
One aide told me that, by contrast, the Conservatives had “accentuated their negatives and neutralised their positives”. David Cameron’s refusal to agree to a head-to-head debate with Miliband and his rash promise not to serve a third term had weakened their promise of “strong leadership”, while a string of unfunded spending pledges had eroded their claim to be the party of fiscal responsibility.
Meanwhile, the Tories’ opposition to Labour’s pledge to abolish non-dom tax status had reinforced their reputation as “the party of the rich” and Michael Fallon’s crude “backstabbing” attack on Miliband had shown that they remain “the nasty party”.
In response to Labour’s focus on the public finances, we can expect the Tories to attack them for refusing to pledge to achieve an overall surplus (allowing borrowing for capital investment) and for refusing to give a date for their aim of eliminating the current deficit.
But Miliband and Ed Balls believe it would be too risky to specify a year for this ambition as progress will largely depend on the state of the economy. As George Osborne learned to his cost, deficit reduction timetables can be easily blown off course.
While Labour’s manifesto does not include any new policies funded by borrowing, the party would continue to borrow for infrastructure projects, as the coalition has in this parliament. One party source recently told me that the Tories’ refusal to continue this approach meant they were “robbing little Peter’s Sure Start centre to pay for big Paul’s construction”.
Labour has started its manifesto launch by seeking to neutralise negatives but Miliband will also look to accentuate positives tomorrow. Having shown how he would “protect our nation’s finances”, aides say he will show how he would “improve family finances”. That suggests a new policy or pledge designed to raise living standards.
Finally, as we get the first details of Labour’s manifesto, who, you might ask, has written it? Unlike in 2010, when Miliband took on the job, there was no official designated author. But much of the text has been written by Marc Stears, the Labour leader’s chief speechwriter and university friend, and Jonathan Rutherford, an aide to Jon Cruddas, the head of the party’s policy review.
The other key figures involved were Cruddas himself, Torsten Henricson Bell, Labour’s director of policy and rebuttal, Angela Eagle, who led engagement with internal ‘stakeholders’, and fellow shadow cabinet member Jon Trickett, who led external consultation. The aim, one Miliband adviser told me, was to “tell a story”, rather than merely produce “a list”. We will see whether they have fulfilled that mission when the full document emerges tomorrow.
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