23/07/2011 11:46 BST | Updated 21/09/2011 06:12 BST

Can Miliband Drive the Economic Debate now?

Miliband could build on his recent popularity and capture the economic debate now. Labour should shift the focus in the public domain from deficit to growth.

Ed Miliband has come up trumps in the last three weeks on the home front. He has driven the agenda on the Murdoch saga. But to be a rounded leader, he needs to win the argument on the economy and show gravitas on Foreign Affairs now.

The Foreign field can wait. It's the economy that concerns people more than Murdoch, phone tapings and whether the Prime Minister had appropriate or inappropriate conversations with spin doctors. No doubt the Murdoch saga will continue for quite some time as Cameron is pressed for his level of engagement in the BskyB deal. He can't really hide behind another Minister. After all Cabinet decisions stop with him, right?

The unemployed want to know whether there will be jobs in future and those in jobs want to know whether their jobs are safe. And most want to know that if interest rates rise, whether they might end up losing their homes if they go spending now. Young people want mortgages and older people want decent pensions. Small businesses want cash flows. Whether Murdoch junior knew about phone hacking or not does not impact one bit on these concerns foremost in the public's mind.

The problem for Labour is that the Tories successfully framed the economic question in the public domain, determined the argument, influenced public response and now control the policy. That their policies are not quite working is beside the point. In the public mind the common sense answer to the question of 'deficit' is 'austerity.' Tories won the argument.

This is a high street Banker's perspective. It is simple economics. You get X amount of loan. You pay Y amount of interest. And you put back Z amount of capital back over the years. If you default, Bank looks at your income and prospects. Rarely it may increase the loan but if it can't find enough collateral, it will advise you to go on 'austerity' measure, call back the loan, sell your assets and leave you on a luxury free life. Luxuries to banks mean anything from a decent accommodation to a square meal.

Fact is that State and global economies are not as simple as a High Street Banker's bible on the meaning of life. There is life and liberty to safeguard, people to govern, courts to be run, criminality to be policed, young to be educated, vulnerable people to be assisted, roads to be maintained, foreign exchange to be earned and jobs to be created among some of the responsibilities. And for a British Government, of course international wars to be fought.

Imposing severe austerity measures on all these simply shrinks the economy. Which means further austerity. Which means further unemployment. Which means no money to go for buy two get one free shopping sprees. Which means less money to buy the products that private enterprise is supposed to produce. Which means that if someone had a few millions, he /she will be wiser to invest in a country where the economy is growing and their money can earn a bob or two. Which is what the bailed out Banks did. Which means further austerity for the middle classes. Which means ... and the cycle continues.

Growth is the key to come out of this economic downturn, particularly for a country like Britain which has tremendous talent, a dynamic middle class, world class management and great education institutions. Even the much maligned British workforce which was once the butt of tea break jokes, has become more efficient and flexible than counterparts in most European countries. Britain Plc needs to invest in its human asset.

The economy is in a big deficit due to many factors but mostly because the revenue to close the gap isn't forthcoming. And that's mostly due to the financial crises precipitated by those mysterious money whirlpools created by Bankers. The head looks massive but the body tapers to a pencil tip. Even that becomes erasable. Yet the Tories successfully laid the blame at Brown's doors and the 'deficit' debate took a life of its own with Labour on the back foot.

Labour allowed the 'deficit' argument to dominate the economic debate. When growth was mentioned, Tories magically produced a list of clever rich entrepreneurs and CEOs with the money to invest. We are still waiting for Mr Marks Sparks to fill that store with goods all made in Britain. In fact he left before he could make Britain profitable again. Perhaps it didn't work because those people with the money want quick profits and invest abroad. Moreover a country is not like a retail store which can cut staff and buy cheap goods from China to maximise its profits. The growth to recovery is slow, needs State funding and as in USA further borrowing.

Miliband could build on his recent popularity and capture the economic debate now. Labour should shift the focus in the public domain from deficit to growth. It should pose the question. Where is the income generation to reduce the deficit and create jobs? Where is the investment in Britain's extraordinary talents, dynamic middle class and flexible workforce? The important question now is, 'Where is the growth?' The deficit debate is false and negative.