Labour’s Manifesto: The battle for fiscal credibility

This morning’s Labour manifesto launch contained all of the predictable pledges: a raise in the national minimum wage to £8 per hour, abolishing zero hour contracts, clamping down on tax dodgers and a mansion tax.

All of this is designed to play to Labour’s core vote – the ‘retail offer’ as Nick Robinson calls it. Then there are much trailed pledges to cut tuition fees to £6,000 per year and the freeze on energy bills and building 200,000 homes.

And while these pledges remain important for shoring up Labour’s core vote, the single most important key message delivered by Ed Miliband today was designed to win over those all-important swing voters in the 80 marginal seats in which Labour and the Conservatives will fight out this next election. That message was: ‘Vote Labour if you want a fiscally responsible Government’.

“It is a manifesto which shows Labour is not only the party of change but the party of responsibility too”, began Ed Miliband as he set out the party’s Budget Responsibility Commitment – a triple lock of responsibility:

  • Lock one: No manifesto commitments requiring additional borrowing
  • Lock two: The Budget cuts the deficit every year. And this will be signed off by the Office of Budget Responsibility
  • Lock three: The next Labour government will meet its fiscal rules: with the national debt falling and a surplus on the current budget

By promising a fully funded manifesto and to eliminate the budget deficit by 2020 Labour is looking to steal a march on the Conservatives and take their mantle as the party of fiscal caution. And they have been rather helpfully aided by George Osborne, who yesterday promised £8 billion per year of additional funding for the NHS seemingly without knowing where he would find the money. Asked no less than 15 times by Andrew Marr for an answer, Mr Osborne painfully obfuscated.

Of course this manifesto launch hasn’t all been plain sailing for the Labour Party. Only this morning, on Radio 4’s Today Programme, Ed Balls stated that Scotland wouldn’t be protected from any cuts. In doing so he has demonstrated that he and Scottish Labour Leader Jim Murphy are not singing from the same election hymn sheet. Such an announcement will play into the SNP’s hands, supporting their critique of Labour as a pro-austerity, establishment party. With the SNP signalling a commitment to 0.5% spending increases the battle lines in Scotland will become further entrenched, and are not set to favour Labour.

Party manifestos do not necessarily tell us all that we need to know about what an incoming Government will do, only what they hope to do. This is particularly true in the era of coalition politics. With the polls predicting another hung Parliament, it is the outcome of post-election horse trading and haggling that will matter most and steer the direction of the economy – and the country. The question for Labour is, will any of the other parties support them on their fully funded manifesto?

While Labour’s aim for a fairer society which supports working people comes through strongly, there will no doubt be a contingent of the party faithful for whom this manifesto lacks radical vision. But did it successfully deliver the message that Labour has a fiscally responsible plan for the UK economy? I believe so. The question is, will this be heard beyond the so-called ‘Westminster Bubble’?

Its success in convincing voters – especially in those all-important marginal seats – remains to be seen.

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