Ed Miliband hasn’t just changed the key economic argument, he has set the Tories a trap

When Ed Miliband stands up to respond to George Osborne’s Budget today, he will broadly make an argument we are now familiar with. Britons have become financially worse off under this government, he will say. But more importantly they have no real solution for dealing with the longer term cost-of-living crisis facing millions of families, he will add.

It’s striking that even though the Conservatives know he will say it, they don’t know how to avoid the political trap that Miliband will set for them. If they dismiss the debate on the rising cost-of-living they look even more out of touch.

However, to accept the debate goes against their ideological position that governments should not interfere in markets, even to help consumers. But that makes them look ineffectual and, again, out of touch. The point of government is to work for voters, not tell them to like it or lump it.

Miliband has managed to change the central question around the economy in a way that now looks almost obvious and effortless. But to conclude that this is another temporary wheeze that was kicked off by the pledge to freeze energy bills is to miss the wood for the trees.

The brain trust behind the Labour leader have been shaping this argument from the minute he became leader, orchestrating it over years to build up an intellectual base that now supports his plan to reshape the British economy. You could see it coming when Lord Stewart Wood wrote about neo-liberalism as ‘the god that failed’ in 2011.

That they have tapped into popular sentiment should be beyond question. A poll by Survation this week found that 73% of British workers saw a fall in wages relative to the cost of living over the last two years; just 4% say they have seen their relative wages rise. Almost 60% of Britons believe those on high incomes are benefiting most from whatever economic recovery is taking place.

These findings were mirrored by YouGov this week, which found that only 16% of Britons feel better off about their finances compared to a year ago. Only 20% expect their finances to get better over the coming year.

And yet, most of Westminster cannot believe a bookish-looking ex-SpAd who made a bit of noise as Environment Secretary is now prospering as Labour leader, despite refusing to follow the Westminster consensus.

In a gently mocked blog-post written last year, Benedict Brogan of the Telegraph admitted he was “baffled” by the “head-scratching” popularity of the Labour party. “The Tories are certainly puzzled – and terrified – by it,” he wrote, adding that even many Labour people couldn’t quite believe things were going so well for them.

Yesterday morning, Brogan chided Ed Miliband for his article in the Guardian on Labour’s war on inequality, saying those in opposition like to think the centre-ground has shifted in their favour even if it hasn’t. I’d like to think it’s obvious why pundits who refuse to believe the centre ground of politics has shifted also cannot fathom why Labour is ahead in the polls.

The Conservatives and their allies in the press want the debate to be merely about economic growth, but Miliband has made it about whether the majority of Britons are participants or mere observers to it.

If most Britons don’t feel the economic recovery the Tories are touting, they may think Miliband is on to something.