Miliband to make major speech on the economy this week

Labour leader will deliver speech on the economy on Thursday as new ICM poll shows his party continues to trail the Tories in this area.

One of the reasons why many Labour MPs remain pessimistic about their party's chances of winning of a majority in 2015 is that, even after a double-dip recession, Labour continues to trail the Conservatives on the economy. While the latest Guardian/ICM poll gives Labour a 12-point lead (its highest since May 2003), it also shows that more voters (29 per cent) blame the "unsustainable spending" of the last government for the slowdown than the Tories' cuts (23 per cent).

For Labour, the concern is that such ratings are often a better long-term indicator of the election result than voting intentions. History shows that at general election time, when the opposition comes under greater scrutiny, voters usually side with the party that they view as the most economically competent. With the economy likely to return to sustained growth in 2014, the danger is that the coalition will increase its advantage in advance of 2015. 

If Ed Miliband is to firmly establish himself as a prime-minister-in-waiting, he will need to improve his party's standing in this area. I'm told that the Labour leader will make a major speech on the economy this Thursday, outlining his party's priorities ahead of the Budget on 20 March. On the same day, Jon Cruddas, the head of Labour's policy review, will deliver a speech on "the condition of Britain" (an echo of the book of the same name by G.D.H. Coleto coincide with the launch of a major new IPPR project on living standards, described to me as the think-tank's most ambitious programme since its famous Commission on Social Justice, which helped shape Labour's 1997 manifesto. 

After Cruddas warned in his Resolution Foundation speech last week that "simply opposing the cuts without an alternative is no good" (interpreted by some as a coded critique of Ed Balls), expect Miliband to say more about his vision of a remade capitalism. 

Ed Miliband speaks at the CBI's annual conference last year. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty Images
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Why are boundary changes bad for Labour?

New boundaries, a smaller House of Commons and the shift to individual electoral registration all tilt the electoral battlefield further towards the Conservatives. Why?

The government has confirmed it will push ahead with plans to reduce the House of Commons to 600 seats from 650.  Why is that such bad news for the Labour Party? 

The damage is twofold. The switch to individual electoral registration will hurt Labour more than its rivals. . Constituency boundaries in Britain are drawn on registered electors, not by population - the average seat has around 70,000 voters but a population of 90,000, although there are significant variations within that. On the whole, at present, Labour MPs tend to have seats with fewer voters than their Conservative counterparts. These changes were halted by the Liberal Democrats in the coalition years but are now back on course.

The new, 600-member constituencies will all but eliminate those variations on mainland Britain, although the Isle of Wight, and the Scottish island constituencies will remain special cases. The net effect will be to reduce the number of Labour seats - and to make the remaining seats more marginal. (Of the 50 seats that would have been eradicated had the 2013 review taken place, 35 were held by Labour, including deputy leader Tom Watson's seat of West Bromwich East.)

Why will Labour seats become more marginal? For the most part, as seats expand, they will take on increasing numbers of suburban and rural voters, who tend to vote Conservative. The city of Leicester is a good example: currently the city sends three Labour MPs to Westminster, each with large majorities. Under boundary changes, all three could become more marginal as they take on more wards from the surrounding county. Liz Kendall's Leicester West seat is likely to have a particularly large influx of Tory voters, turning the seat - a Labour stronghold since 1945 - into a marginal. 

The pattern is fairly consistent throughout the United Kingdom - Labour safe seats either vanishing or becoming marginal or even Tory seats. On Merseyside, three seats - Frank Field's Birkenhead, a Labour seat since 1950, and two marginal Labour held seats, Wirral South and Wirral West - will become two: a safe Labour seat, and a safe Conservative seat on the Wirral. Lillian Greenwood, the Shadow Transport Secretary, would see her Nottingham seat take more of the Nottinghamshire countryside, becoming a Conservative-held marginal. 

The traffic - at least in the 2013 review - was not entirely one-way. Jane Ellison, the Tory MP for Battersea, would find herself fighting a seat with a notional Labour majority of just under 3,000, as opposed to her current majority of close to 8,000. 

But the net effect of the boundary review and the shrinking of the size of the House of Commons would be to the advantage of the Conservatives. If the 2015 election had been held using the 2013 boundaries, the Tories would have a majority of 22 – and Labour would have just 216 seats against 232 now.

It may be, however, that Labour dodges a bullet – because while the boundary changes would have given the Conservatives a bigger majority, they would have significantly fewer MPs – down to 311 from 330, a loss of 19 members of Parliament. Although the whips are attempting to steady the nerves of backbenchers about the potential loss of their seats, that the number of Conservative MPs who face involuntary retirement due to boundary changes is bigger than the party’s parliamentary majority may force a U-Turn.

That said, Labour’s relatively weak electoral showing may calm jittery Tory MPs. Two months into Ed Miliband’s leadership, Labour averaged 39 per cent in the polls. They got 31 per cent of the vote in 2015. Two months into Tony Blair’s leadership, Labour were on 53 per cent of the vote. They got 43 per cent of the vote. A month and a half into Jeremy Corbyn’s leadership, Labour is on 31 per cent of the vote.  A Blair-style drop of ten points would see the Tories net 388 seats under the new boundaries, with Labour on 131. A smaller Miliband-style drop would give the Conservatives 364, and leave Labour with 153 MPs.  

On Labour’s current trajectory, Tory MPs who lose out due to boundary changes may feel comfortable in their chances of picking up a seat elsewhere. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog. He usually writes about politics.