Labour fell between two stools this week

There were two possible strategic approaches Labour could have taken to the PBR. One option was to surprise everyone by actually making cuts. They then could have said, “we’ve made all the cuts we can. Anything else would really hurt frontline services”. This would have put them in position to challenge the Tories as to what they would cut to reduce the deficit faster.

The other was to be really populist. They could have carried on spending, bashed the bankers, soaked the rich, and hope that they could get away without a crisis in the markets until the election.

Instead, they’ve fallen between two stools. They’ve increased public spending, which has irritated the markets and means they can’t be taken seriously on deficit reduction, but they’ve also proposed a tax rise that will lighten the pay packets of the ten million people who earn more than twenty thousand pounds.