Leader: Ed Miliband must lead Labour’s debate about reforming the state

He has the opportunity to navigate between the different views but only if he asserts his authority and puts a stop to factional sniping.

Ed Miliband. Photograph: Getty Images

There is a sensible and an absurd aspect to the debate about whether Ed Miliband and Ed Balls should set out in greater detail their plans for managing the public finances. The absurd part is the call to match the coalition’s spending framework when the government’s plans are not yet finalised. Many economists, examining the dismal outlook for growth, question whether the scale of spending restraint envisaged by the Chancellor is even possible. They expect tax rises and borrowing to take the fiscal strain. When the coalition might not be able to match its own spending plans, why should Labour offer to do so?

To wait and see is the only rational response. That isn’t to deny that serious political challenges await the Labour leadership as soon as the Comprehensive Spending Review is announced in June. George Osborne will do everything within his power to turn the event into a moment of interrogation for the opposition. Do Mr Miliband and Mr Balls agree that cuts are required? If so, will they have the courage to say where? Labour consistently struggles to take control of the terms of economic debate. This failure cannot be attributed simply to the insufficient passage of time, although some opposition MPs seem content to wait for the government to take a greater portion of public blame. The reality is that many people think that irresponsible spending by Gordon Brown is a principal cause of their current woes. They want reassurance that Labour sees government as something other than an opportunity to disburse other people’s money.

It is also true that many Labour supporters expect the party to erect barricades against austerity – a reasonable urge when the cuts are not restoring growth while gouging holes in the social fabric. If Mr Miliband wants to mount a broad “one-nation” challenge to the coalition, he must find a way to speak to both of those constituencies.

That is difficult but not impossible. Agreeing to spend as little as the Conservatives is not the answer; nor is implying that Labour would turn on the money taps again. The shrewd path between those extremes is to signal what the priorities for a Labour government would be and to license internal debate about how to spend more productively in those areas. Wavering voters do not want to hear a Labour leader boast that he can cut as brutally as the Tories but they will listen to his message more closely if it is founded on recognition of finite resources.

Labour is making progress in that respect. There is Andy Burnham’s plan for a “whole-person-care” revolution in the health service that accepts how demographic changes put long-term pressure on the NHS. In welfare, Liam Byrne has made the argument that investment in housing and job guarantees can save money by reducing the need for out-of work benefits.

Part of what Labour needs to achieve is a rehabilitation of the very idea of government intervention at a time when the Tories are committed to shrinking the state. This can only be done when coupled with an approach that values interventions according to how smart they are, not how generous.

There is a tendency in some parts of the left to resist that discussion as a relic of “Blairism”. In the Politics Interview on page 19, Unite’s general secretary, Len McCluskey, uses that term to denounce shadow cabinet ministers accused of leading Mr Miliband to electoral ruin.

This is an escalation of a rhetoric that, following Tony Blair’s recent New Statesman contribution to the debate about what Labour must do to win, risks presenting the party as irreconcilably divided.

There are inevitably strong differences of opinion about how Labour might govern in straitened times. Yet there is no challenge to Mr Miliband’s leadership. He has the opportunity to navigate between the different views but only if he asserts his authority and puts a stop to factional sniping. Attempts to paint Blairism as a toxin to be purged from the party are profoundly damaging and could stifle any talk of reforming the state. That discussion does not require accepting the Conservative terms of debate. It means having the confidence to fight the Tories, not just with pledges to preserve public services but with ideas to improve them. There is a tendency in the Labour Party to see statements of Budget priority as limiting the room for manoeuvre. Yet there is a way for Mr Miliband to develop a credible fiscal strategy that, by permitting a conversation about innovation and reform, he may find liberating.