Miliband announces deficit reduction as first election pledge

In a recent interview, Alan Johnson said he’d like to see Ed Miliband make a couple of big speeches on the economy. Today, he got his wish.

Policy-wise, Miliband’s speech this morning may not have been the biggest intervention – there wasn’t really anything here that he hasn’t already said. In terms of focus, however, it signalled a huge shift. This was not only a speech about reducing the deficit; this was the starting pistol for the general election.

By announcing plans to reduce the deficit as Labour’s first election pledge, Miliband has acknowledged that there are still misgivings about Labour’s ability to handle the economy, and in particular their intention to bring the deficit down. This pledge seems pitched to address those concerns head on:

“So I can announce our first pledge of the general election campaign: We will build a strong economic foundation and balance the books.

We will cut the deficit every year while securing the future of the NHS. And none of our manifesto commitments will require additional borrowing.

These are my clear commitments to the British people.”

It appears Labour will go into the election with a 1997-style pledge card, with five priority pledges that will form the basis of Labour’s campaign.The promise to cut the deficit will be number one on this list, an attempt to prove that this will be a priority for a Miliband government.

The positioning here is difficult but important, and Miliband will be aware that his speech has the potential to upset people to both his left and right. Those to his left will likely make clear their concern at prioritising cutting public spending and the ruling out of extra borrowing, while those who have been championing a greater emphasis on dealing with the deficit may worry that the pledge comes too late, and with too little detail attached.

Yet those close to the leader obviously feel that this difficulty can be successfully navigated in a pitch for the centre ground on the economy. Over the next five months, Labour will seek to highlight both the Tories’ broken promise to eliminate the deficit, and the unfair way in which cuts have been carried out. On the unfairness of the Coalition’s cuts, Miliband said the Government “have asked families with children to contribute five times more to deficit reduction than the banks.” Miliband claims that Labour will be able to clear the deficit while ensuring “that those with the broadest shoulders bear the greatest burden”.

Specifically, Miliband announced that the zer0-based spending review has found £500 million worth of savings to make in the local government budget – the only new policy outlined today. He also reaffirmed his commitment to several other cost-cutting policies:

– An end to the winter fuel allowance for the wealthiest pensioners.

– Capping child benefit rises at 1 per cent a year in 2016/17 as part of meeting a welfare cap.

– Abolishing police commissioner elections and merging police procurement services to save money.

– Selling off unwanted government assets.

Last night, Shadow Chancellor Ed Balls wrote to his Shadow Cabinet colleagues to warn them that they must plan for year-on-year cuts to their departments until the deficit has been cleared. You can read Ed Miliband’s full speech here.