David Maddox: Labour lacking credibility at moment

And last week it appeared that Labour leader Ed Miliband and his shadow chancellor Ed Balls finally heeded Clinton’s most famous advice on winning elections: “It’s the economy stupid!”

It was a painful week for the party and its trades union backers. But first Mr Balls then Mr Miliband laid out how they would stick to “Tory” spending limits on welfare, cap it for three years and even attack the state pension.

Policies they had criticised the Coalition for, such as ending universal child benefit were accepted.

What’s more, to the delight of the SNP, they said they might set an even lower cap on benefits per household than the current £25,000 for areas outside London. Why did they do that?

The answer is credibility. At the moment Labour lacks credibility particularly on the economy where they still poll below the Tories and without that they could lose the next election.

The constant attack from David Cameron that not only were Mr Balls and Mr Miliband in the Treasury when it went wrong but were architects of the catastrophe has been hurting, as has the follow-up that they opposed all austerity measures without explaining how they would control spending.

Now, we are beginning to get an idea that Labour has accepted the days of plenty are over. But the solutions proposed over the last week have infuriated many Labour backbenchers and trade unions, who see it as a betrayal of the poor.

But, to a certain extent Labour is in a good position to be hard on welfare, at least in England where voters have nowhere else to go because the Lib Dems have also become a party of austerity. However, in Scotland and Wales both the SNP and Plaid are trying to provide a left-wing alternative, promising the land of milk and honey.

Yet, to a certain extent Mr Miliband and Mr Balls are following where Scottish Labour leader Johann Lamont led last year with a brave speech saying that tough choices have to be made.

Lamont’s calculation was that in a time of austerity voters will not believe a party is credible unless it can say how it can control spending and Mr Miliband now seems to accept this.

But there is still a credibility issue – Mr Balls and Mr Miliband appear to be saying different things. The pensions debacle highlights this with Mr Miliband completely taken off guard by Mr Balls’ suggestion that state pension protection could be dropped.

Things may look bad for David Cameron, with his own party rebelling against him. But until Labour can present a credible economic and spending strategy the election is not lost yet.