Ed Miliband’s successful duel with Tory donor Lord Fink has overshadowed one of Labour’s biggest spending commitments to date. In his speech at Haverstock School (his old comprehensive) earlier today, Miliband pledged to “protect the overall education budget” in “real-terms”. This contrasts with the Conservatives, who would cut schools funding by 10 per cent in the next parliament and fail to ring-fence other budgets. Labour is now promising to outspend the Tories in the two politically defining areas of health (pledging £2.5bn more) and education.
The danger for the opposition is that this reinforces its profligate reputation. The Tories are seeking to sow doubt over Labour’s fiscal credibility by warning that high-quality public services ultimately depend on a “strong economy” (the area in which they enjoy their largest poll lead). The problem with the party, they suggest, is that it always runs out of other people’s money.
But Labour is confident that its commitment to spend more on public services better reflects the public’s priorities. It recalls the experience of past elections (2001, 2005) in which fear of Conservative cuts handed it victory. It was awareness of this failure that led David Cameron and George Osborne to pledge in 2007 to match Labour’s spending plans in the next parliament (thus denying their opponents’ “baseline” advantage). But the financial crisis and the resultant surge in the deficit led the Tories to abandon their commitment, instead promising an “age of austerity”. Their subsequent failure to win a majority was partly blamed by Osborne on voters’ fear of the cuts to come. Labour was able to warn (accurately, as it proved) that child benefit, tax credits, Sure Start and the Education Maintenance Allowance were all under threat.
By vowing to continue cutting even after the deficit has been eliminated, the Chancellor has provided the opposition with a new opportunity to depict him as a dangerous ideologue. Ed Balls’s recent claim that his party now owns the “centre ground” was supported by a recent ComRes/Independent survey showing that 66 per cent do not believe that cuts should continue until the deficit has been eradicated with just 30 per cent in favour.
There will, of course, be cuts under Labour, as Balls has long warned. Indeed, the pledge to ring-fence education spending means the axe will fall harder elsewhere. But by promising to do so, Labour has further sharpened the fiscal choice between the two parties at this election.
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