Labour has a grave problem with the economy and the election is at stake

James Frayne

THE next election looks certain to be decided on the economy. As people consider how to vote, two big questions come into focus. Who has constructed economic policy with the right motives in mind? And who has the competence to deliver? Who do you like, who do you trust? Both matter.

Polls show Labour has long enjoyed a lead on motives – with 28 per cent currently agreeing that its heart is in the right place, compared to 24 per cent saying the same of the Tories. But Ed Miliband’s party is being killed on competence.

In fact, the polling on competence is staggering. In a survey conducted by YouGov late last month, by 52 per cent to 25 per cent people think George Osborne is doing a bad job as chancellor. But by 32 per cent to 23 per cent, people would sooner have Osborne as chancellor than Labour’s Ed Balls. By 33 per cent to 25 per cent, people trust the coalition more than Labour to make the right decisions on the economy.

Labour’s competence problem on the economy is longstanding and comes down to two issues. First, the party has been unable to explain its economic policy to the public. At a time when people endlessly hear the idea that debt is bad, Labour has relied on press releases and interviews to combat it. They need to take the debate up a level, using set piece events to explain from first principles why they are right and the Tories wrong.

Secondly, Labour looks incompetent on the economy because Ed Balls’s media performances are so appalling. The lessons for him are no more complicated than this: if you behave in an aggressive and unpleasant manner on TV, people will not trust you to exercise good judgment in office.

Labour’s competence problem could get more serious as the economy starts growing. But things are not always so simple. The public does not vote based purely on data. Labour did, after all, win in 1997 against a backdrop of recovery, and the Tories failed to win outright in 2010. Parties are always competitive in elections if they are perceived to have the right motives – specifically, if they appear to be driven by fairness.

But this is why Labour strategists need to worry. Until recently, Labour’s approach has been sensible. The party successfully hammered the Tories on the 50p tax rate cut, arguing it was designed to benefit the Conservatives’ rich friends, and their general narrative that the cuts were being done in an unfair way both reflected and influenced opinion. Polls still show the public thinks cuts are being done unfairly.

And yet in the last couple of months, you can see Labour’s lead on motives being challenged seriously for the first time, as they find themselves on the wrong side of two crucial policy conversations: on welfare reform and on public sector reform. On both, the Tories have positioned themselves as being on the side of hardworking people, and Labour on the side of vested interests.

Just as the Tories will never win a public argument on 50p tax, Labour will never win an argument on whether the welfare state rewards too many people that make little effort to help themselves. People can see Labour has been dragged kicking and screaming to a public accommodation on welfare reform.

Similarly, the public can see that, while the Tories have had a clear plan to reform the public sector and to bring working practices into line with the private sector, the Labour party has dragged its feet. In practically every row the Tories have over reforming public pay and conditions and reducing the size of the state, Labour seems to have tried to have it both ways – grudgingly backing reform while moaning about it. This is not lost on people.

In his recent spending review, Osborne made it clear that the Tories were going to define their economic policy agenda heavily around fairness in the coming months. If they do so, and particularly if they drop the ill-conceived “global race” narrative to bring greater sharpness to it, Labour has a very serious problem on its hands.

When it comes to it, will people vote for motives over competence? Within reason, they might. If they are persuaded the recovery has been too slow and has primarily benefited the wealthy, they might well conclude supposed competence never seems to benefit people like them.

But they will never vote for a party whose competence they doubt and who they believe looks after the undeserving. Lose on motives and it is all over for Labour.

James Frayne is a communications consultant and former director of communications in government.