Labour jitters as polls show big Tory leap for pension reform

THERE are distinct signs of jitters in the Labour camp after two weekend polls from YouGov and Survation showed Labour's lead over the Conservatives has narrowed to a single percentage point. At the start of the year, Labour led by as much as nine points.

If the election were tomorrow, and not in May 2015, the figure suggest Ed Miliband's party would fall well short of establishing a Commons majority. He would only be able to take power by forming a coalition with the Lib Dems – and whether they'll have more than a dozen or so MPs by then is a moot point.

Today, a group of Labour-supporting think tanks have written a joint letter to The Guardian warning Miliband not to opt for a “safety first” manifesto for the 2015 general election.

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The letter's authors argue that Britain needs "transformative" change and say: "If Labour plays the next election safe and hopes to win on the basis of Tory unpopularity, it will not have earned a mandate for such change."

Even without the letter – penned before the opinion polls came out – the fact is David Cameron and Chancellor George Osborne have got Labour rattled with the success of last week's Budget.

The radical pensions reform at the heart of the Budget appears to have done its job and won the 'grey vote' back from Ukip, while the increasing signs of economic recovery Osborne revealed on Wednesday have clearly impressed voters too.

The clear signs of recovery have also put shadow chancellor Ed Balls on the spot. He is being blamed by Labour MPs for failing to put forward any convincing economic alternative to Osborne’s Plan A.

"Labour's falling lead in the polls appears to have shaken some of the party's backbenchers, with some feeling that Miliband struggled with his response to Osborne's surprise budget announcement on pensions in the Commons last week," says the Guardian.

Nothing illustrates Labour's lack of clarity better than the dithering response to Osborne's pension reform. Rachel Reeves, Labour's shadow pensions minister, said on Question Time that Labour would likely back the change, including the scrapping of strict rules on annuities. But Miliband has flip-flopped, saying initially that he backed more flexible rules on pensions, but then asking for more time to consider the government's "complex" proposals.

This apparently lame acceptance of reforms that might have been designed by Top Gear’s Jeremy Clarkson has got senior Labour backbenchers including Tom Watson, Miliband's former election organiser, and Dame Anne Begg, chairman of the Commons pensions watchdog, hopping mad.

Commentators on the left, such as the Guardian's Polly Toynbee, are outraged too, particularly by Tory pensions minister Steve Webb's ultra-Thatcherite assertion that pensioners should be allowed to spend their pension pots as they wish – however dire the consequences. "If people do get a Lamborghini, and end up on the state pension, the state is much less concerned about that, and that is their choice," said Webb.

Miliband and Balls's problem is that the pensions reform is proving hugely popular. No wonder Cameron today is rubbing Labour’s nose in it. The Sun is reporting that Cameron will say today: “Labour have been all over the place. First they come out with the patronising nonsense that people can’t be trusted to spend their own money sensibly. Then they back our plans. Then they’re not sure.

Yesterday, Chuka Umunna, the shadow business secretary, appearing on the Andrew Marr Show, dismissed "obsessing" about the new opinion polls.

But Neal Lawson of the think tank Compass, one of those who signed the Guardian letter, hit back on Radio 4's Today programme this morning: "There are only 15 months to go. You can ignore the polls if you want but I think that would be foolish."

Lawson said Miliband's campaign on the cost of living squeeze was not a vision for the future. "We live in the age of Facebook not the factory and Labour needs to shape up to that."