Ed Miliband and Ed Balls have been forced to acknowledge their tricky position on the wrong side of public opinion on two vital questions. On the economy, there is suspicion that excessive spending by the last government is the cause of current misery. On welfare, many voters think that Labour presided over a system that rewarded idleness.
The challenge for the party leadership is to recognise the public mood without accepting so much blame as to do the Tories’ work for them. In co-ordinated speeches, the two Eds have set about that task. Mr Balls has clarified his approach to the public finances in the light of bleak forecasts. He does not envisage a future Labour government spending more in its early years than the coalition plans to do. Meanwhile, Mr Miliband has set out new ideas about social security that emphasise the link between contributions paid in and benefits paid out. This is to address the charge that the system doles out “something for nothing”. Labour has also accepted that the total welfare spend will have to be capped and that certain coalition cuts – say, to child benefit – would not be reversed.
One concern is that making benefits more conditional than universal is an intellectual surrender to enemies of the welfare state. There is also anxiety that oaths of fiscal discipline are a conversion to Conservative economics.
Those concerns can be assuaged. The principle of universal welfare does not dissolve in targeted cuts. The greater threat is a decline in the perceived legitimacy of taxpayer-funded benefits, a process that is accelerated if Labour cannot articulate voters’ concerns. Likewise, Labour cannot credibly offer an alternative to the coalition without acknowledging fiscal constraints.
The challenge is to build, within those constraints, a project that is distinct from the coalition’s offer of slow immiseration for the many and impunity for the few.
Labour’s new realism about spending limits is a necessary step towards winning over sceptical voters – but if it represents the limits of its imagination as it attempts to create a new political consensus, then the party is in trouble.