John Curtice: Restoration of faith is the key, not ideology

The choice facing the party in the leadership contest has come to be characterised as simple and straightforward. David Miliband supposedly wishes to continue the broad thrust of the New Labour strategy, sticking to the centre ground with the aim of recovering the support of those aspirational voters who propelled the party to power in 1997 but have since lost faith in the party.

His brother, Ed, in contrast, rejects the New Labour 'comfort zone', wishes to tack back towards the left and thereby recover the support of traditional 'core' Labour supporters who have drifted off to the Liberal Democrats or simply opted to stay at home. In short, the key decision facing Labour is supposedly the ideological direction it should now take.

However, it is a debate that rather misses the point. Labour did not crash to defeat in May either because it stuck too rigidly to the New Labour line or (as Tony Blair has claimed) because it departed from it.

Labour lost for a more prosaic, yet perhaps also more profound reason. It was no longer thought to be up to the job of running Britain's battered economy. The key task facing the next Labour leader is not to set the right ideological course for the party, but rather to persuade the public that he (or she) leads a team that is capable and coherent.

True, the ideological climate amongst the electorate in May was not propitious for Labour. On the central issue of tax and spend, the public had lost much of its previous enthusiasm for spending more on services like health and schools. Labour had after all poured a lot of extra money into these, and even before the recession many people had concluded that it was time for the public sector gravy train to stop.

Shortly before the 2010 election, the British Election Study asked people to put themselves on a scale from 0 to 10, where 10 signified they felt that taxes and spending should be increased a lot while 0 meant both should both be cut back a lot. The average voter put themselves at 5.7.In contrast, when the same study undertook the same exercise back in 2005 the equivalent score had been 6.2 - rather closer to the more tax and spend end of the spectrum than they are now.

But this shift in the public mood had little to do with Labour's defeat. For voters reckoned that Labour had made the same journey as themselves on the issue. After all, although Labour might have been arguing in the 2010 election campaign for a more gradual programme of deficit reduction than that proposed by the Tories, the party was still proposing cuts. When respondents to the 2010 election study were asked where they thought Labour now stood on the tax and spend spectrum, on average they put Labour on 5.9. Five years previously they had reckoned the party was at 6.4.

Moreover, even if people still backed more tax and spend they did not necessarily remain faithful to Labour. In 2005 the party had the support of 45 per cent of those who gave themselves a score of six or more on the tax and spend spectrum. This time around that figure had dropped to 38 per cent. Evidently those who apparently backed 'Labour values' no longer necessarily backed Labour itself.

To understand why, we need to take a look at our chart. This shows for a wide variety of issues the proportion of people who in 2005 had reckoned that the incumbent Labour government had performed either 'very' or 'fairly well'. It then repeats the same information for 2010. It also shows for the same set of issues the proportion who thought the Conservatives would perform 'very' or 'fairly well' if they were in power.

In many respects Labour's reputation in 2010 for providing good government was just as strong as it had been five years previously. Indeed when it came to both terrorism and the health service the proportion who thought that Labour had done well was some ten points or so higher than it had been in 2005. Voters were still willing to give Labour credit where they felt it was due..

But there is one issue on which Labour's reputation had evidently been torn to shreds in the ensuing five years. In 2005 well over half (55 per cent) of all voters reckoned Labour had handled the economy well. Five years later that figure had more than halved to only just over a quarter (26 per cent).

The loss of its reputation for economic competence clearly cost the party dearly. In 2005 half of those who thought Labour had handled the economy well were backing the party, compared with just 15 per cent of those who thought the party had handled it badly. In 2010 the gap between the two groups in their willingness to back Labour was even wider. Those who no longer reckoned Labour were up to the economic job simply left the party in droves - even if they might still have some sympathy for Labour values.

Moreover, no group was more likely to have lost confidence in Labour's economic abilities than those in working class jobs, that is those who are often thought to provide Labour's 'core' vote.In 2005 those in working class jobs were slightly more likely that those in well-paid middle class ones to think that Labour had handled the economy well. By 2010 they were actually less likely to do so. Here, perhaps, lies the reason why, according to Ipsos-MORI, Labour's vote fell most among working class voters and why, in general Labour's vote dropped more heavily in constituencies with relatively large numbers of working class voters.

So the key task facing the next Labour leader is not to set one ideological path rather than another. Rather it is to re-establish the party's reputation for economic competence. Moreover, doing so will require rather more than critical attacks on the current government's own economic policy. For, as our chart also shows, the public's faith in Labour's abilities plummeted between 2005 and 2010 even though in May people were no more likely to think the Conservatives could do a good job on the economy (or indeed on much else) than they had been five years previously. Labour needs to restore the public's faith in itself rather than just undermine confidence in the government.

The new leader's first key economic decision will be to appoint a new shadow chancellor. The front-runner for the post is, of course, one of the also-rans in the leadership race, Ed Balls. Mr Balls may be disappointed on Saturday, but perhaps he will find he still has the most important job Labour has to offer after all. l John Curtice is Professor of Politics, Strathclyde University