It’s not a case of will they, won’t they when it comes to whether Labour would borrow more, but will they admit it and try to sell this plan to voters? In the past few days, we’ve seen the party trying to work this out in public. Ed Miliband, in his awkward World at One interview, knew that saying ‘yes, we’d borrow more to fund the VAT cut’ would provoke triumphant howls from his opponents, and so ended up nervously jabbering away as Martha Kearney asked the same question over and over again. But yesterday he told Daybreak that ‘I am clear about this: a temporary cut in VAT, as we are proposing, would lead to a temporary rise in borrowing’. He added that ‘I suppose I felt it was rather a commonplace’ to make that clear the first time around. This morning, on the Today programme, Harriet Harman repeated that ‘commonplace’:
‘I’m saying for part of our programme, it would need to be financed by a temporary increase in borrowing, for temporary measures. Some of it would be it which showed how we could pay for it by for example, through cutting tax relief on pensions, some of it we’ve thought it would be self-financing, some of it would be through borrowing. But I think you would agree that our messages, that the cuts have been too far, too fast, actually strangling the economy and making it stagnate, we have been relentless in those messages.’
What’s going on here? Miliband’s party is trying to work out whether it can really push an argument about the difference between its ‘good borrowing’ and the government’s current ‘bad borrowing’. Miliband started trying to make this distinction between David Cameron ‘borrowing more for failure’ at Prime Minister’s Questions in January. But the big question is will the electorate trust the party more if it is upfront that its vision of economic rescue involves a whole heap more debt, or if they try to get away with not mentioning it at all. Neither strategy will enable Miliband and his team to escape relentless attacks from the Tories about how Labour’s plans for debt would strangle the economy and make it stagnate. But the party is being forced into deciding whether it brings the good borrowing line into the public sphere before it felt ready, or had really worked out a strategy for doing so.
One awkward question is how much does Miliband let Ed Balls start talking about good and bad borrowing? He’s the shadow chancellor, so by rights he should be the one shouting loudest about the party’s plans. But there appears to be a sensitivity about whether one of Gordon Brown’s closest allies can really get away with saying ‘we need more debt’ without putting voters off. If Miliband starts sending out Harman, or those shadow frontbenchers who have no association with the Brown regime at all like Rachel Reeves and Chuka Umunna, to do broadcasts about borrowing, then it will be clear that he fears voters won’t be able to make the distinction when the argument is being put by one of the old guard.