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Ed's Speech Was Ballsy

Deborah Mattinson thinks Ed Balls has started out on the long road to economic credibility.

By Deborah Mattinson

14 Jan 2012, 19:38

Ed Balls should take the shrieking outrage of the Tory blogosphere and Labour left alike as a huge compliment. His hard-hitting speech at the Fabian Society today has hit home. Setting out Labour’s commitment to deficit reduction even if it risks unpopularity is the right thing to do. In fact, it’s the only thing to do if Labour ever wants to win an election again.

In recent focus groups, I asked people to jot down how they felt about the economy in the context of their own families. Middle England voters were gloomy and pessimistic. The most popular words were: struggling, suffering, hopeless and desperate. It was hard to get them to talk about anything else.

Surely, you might think, if the Government’s strategy for recovery is in this much trouble, people will turn to Labour? Complacency would have been the easy route for Balls to adopt, but it would be fatally wrong.

Back in 1991, as the economy was plummeting downwards MORI’s scores for ‘best party for managing the economy’ were Lib Dems 4%, Labour 23% and Conservative 47%. Labour lost the election. Even post Black Wednesday Labour’s ratings for economic management hardly improved, and Labour’s lead on voting intention was slight - an average of about 38% against the Conservatives’ 36%. Sound familiar?

What did Labour need to do? First, it had to recognise that electoral success goes hand in hand with perceptions of economic competency. To achieve this, the beast that Labour had to slay was the beast of being the party of high taxation. In focus groups at the time, all spontaneous references to Labour were about hitting you with taxes. Labour was, in the words of Giles Radice writing the Fabian pamphlet, Southern Discomfort, ‘the party that clobbered you’.

The first focus group project that I did for Gordon Brown was after he contacted me to say that Philip Gould, now working with Tony Blair, was reporting that putting taxes up at all – even for the richest earning over £100k – was detrimental to Labour’s economic reputation. My work was expected to challenge this, but Philip was right. The note I wrote at the time said...

While none of these voters remotely aspires to a salary at this level they trust Labour so little that they are worried that any move is the thin end of the wedge. They struggle to find rational explanations (like brain drain) for what is essentially a very emotional response. Putting up income tax will indicate that Labour is ‘reverting to form’ at a time when we nee to be signaling change

What is Labour’s beast to slay now? I think it’s as clear as it was then. Focus group’s reaction to any Labour initiative is the same: fine, but how would they pay for it? The unpalatable truth is that if Labour is known for anything it is as the party that sloshes your money around. This must be urgently addressed and absolute clarity is the only thing that will work. Labour must reassure on its fiscal prudence again and again without obfuscation, fudge or nuance.

Ed Balls’ bold speech today took a big step on the long road to winning back economic credibility and maybe, just maybe, voters will start to listen again.