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Labour's left and right are growing restive

The right want Ed Miliband to be more "pro-business". The left want him to abandon austerity. His challenge is to hold the centre. 

The right want Ed Miliband to be more "pro-business". The left want him to abandon austerity.
Ed Miliband speaks at the Scottish Labour conference on March 21, 2014 in Perth, Scotland. Photograph: Getty Images.

In the opening years of the parliament, when growth was stagnant and unemployment was rising, Labour could reliably score points at the government's expense. But the strength of the belated economic recovery means it is now much harder to do so. After abandoning its attack on the coalition for cutting "too far, too fast", Labour has profited in the last year from its relentless focus on living standards. But the return of wage rises means that the potency of this attack is likely to diminish between now and the election (even if, for many, the squeeze goes on). With the Tories ahead in the polls on leadership and managing the economy, two reliable long-term indicators of the general election result, and Labour's headline lead far slimmer than a year ago, MPs are growing increasingly uneasy about the party's message. One former shadow cabinet minister told me: "People still don't have a clear idea of what we would do differently in government. We're not generating the enthusiasm we need a year before an election." 

In the last day, two other former shadow ministers have broken cover. From the party's right, former business minister Pat McFadden told Newsnight: "I want to see a Labour Party that takes wealth creation every bit as seriously as its fair distribution. I’m all for justice and fairness in the work place. But you have got to create wealth too." This echoed what Alan Milburn wrote in the FT on Monday when he called for "Labour to embrace a more avowedly pro-business agenda and match it with a more overtly pro-business tone. The Eds need to say it and look like they really mean it." Their fear is that while empathising with the public's anger over extortionate prices and stagnant wages, Labour will look as if it doesn't have the answers required for the hard work of government. 

From the party's left comes a different message. In an article for the Guardian yesterday, Diane Abbott took aim at Ed Balls over his decision to match the coalition's spending levels in 2015-16 and to embrace policies such as a cap for welfare spending. She wrote: "Party members might well ask, in between knocking on doors trying to persuade people to come out and vote in the May elections, what is the Labour leadership's plan to restore confidence in our economic leadership? Balls has a plan. He just does not feel able to spell it out to party members. It is called embracing Tory austerity...And the problem with restoring Labour's reputation for economic management is that we have allowed the coalition to frame the debate."

And concluded: "If we accept the coalition cuts agenda, there will be another £25bn worth of public spending cuts needed after the 2015 election. They will be the deepest since 1948. It is difficult to see how a Labour government that implemented cuts on that scale could last more than one term. So the urgency of framing an alternative to coalition austerity is not just about one month's polls. It is about the long-term survival of an incoming Labour government." For Abbott and the left, the danger is that Labour's fails to represent a genuine alternative to Conservative austerity, leaving voters with little incentive to turn out next May. 

But for others, the danger is not that Labour appears too committed to austerity but that it still appears too profligate. One self-described shadow cabinet "hawk" recently told me that the party needed to "shout much more loudly" about its pledges to eliminate the current deficit and reduce the national debt (as a share of GDP) by the end of the parliament. "We've got tough targets but no one knows about them," he lamented.

For Ed Miliband, the challenge is to hold the centre. His mantra remains that Labour must offer both "credibility" and "radicalism". Unless it commits to tough policies in areas such as public spending, voters won't trust it with the reins of government. But unless it also offers a distinctive alternative to the coalition, they won't believe that it can make a difference - and will stick with the devil that they know.

To this end, while promising to continue public spending cuts, Labour has pledged to freeze energy prices, to build 200,000 homes a year by 2020, to abolish the bedroom tax, to reintroduce the 50p tax rate and to guarantee work for all young people unemployed for more than a year and all adults unemployed for more than two. Similarly radical policies on childcare, social care, tuition fees and transport are likely to follow. But as concern over the nature of Labour's offer grows, the party will find it harder than ever to keep its nerve.