The question of economic competence is crucial. Many reasonable people, especially outside the public sector, will accept the need for cuts. Labour will represent the public sector workers and public sector unions and be more powerful in the north.
The Tories may have only bad news, but they have not been challenged on the economic fundamentals.
Labour thinks it is being smart by hedging its bets and refusing to give much indication of what it believes until directly before the election. In the meanwhile, it is hoping that no one will notice its own disarray on the economy. Ed golden Balls has promised not only to maintain austerity, but also to produce some kind of stimulus. This is fairly close to what the much maligned George Osbourne has already tried to do. Labour imply they have a magic formula - a plan B - which will make everything all right. They also have to pretend that there was an alternative to coalition polices which would have produced different results. Both of these positions are pretty much untenable and they will be called out on it in 2015. If the economy has not improved- and at the moment it is reasonable to think that it won't have made much progress by then - then it will remain the central issue. When an electorate is insecure and fearful about the future, then Labour will have to disavow their own record in government and produce some more credible policies than they have come up with so far.
Labour party members and public sector unions will believe everything they are told. Labour may also briefly capture the student vote, who are very noisy about the Lib Dems, tax avoidance and so on. Will it be enough ? I'm not convinced so far. Certainly there are loads of disaffected middle class families who would be easy pickings for an opposition. Trouble is these people are not stupid. If Labour were to restore child benefits and so on, they would be expected to make cuts elsewhere. Now that the windfalls from the property /banking bonanza have melted into the air, Labour haven't adapted to the new conditions. We have no idea how they would generate any money at all, but a few ideas how they would spend it.
Well, that ain't coming back, so the UK needs to adjust its spending accordingly.
The idiot Labour party was running a large deficit during the middle of the biggest-ever credit bubble.
Labour restructured the economy around consumer debt and rising public spending. Now the debt needs to be repaid, and the money isn't there to sustain ever-rising public expenditure.
That remains Labour's economic policy - more public spending that the country cannot finance or afford.
When Labour's debt-bubble burst in 2008, we could see the true shambles that Labour had made of the economy.
NO PARTY IN GOVERNMENT HAS EVER RUN BRITAIN AS BADLY AS LABOUR, 1997-2010
It was even worse than Labour 1964-1970 and 1974-1979 in its profligacy and ineptitude.
It left the UK economy uniquely dependent on debt-financed consumer spending, which is why the economy remains smaller today than in 2008.
And until public spending is slashed - which it hasn't been - the UK economy will struggle to rebalance.