While the chancellor may blame the snow, all of the precedents from the last century suggest the stalling of the economic recovery is an entirely manmade event. But even as confidence in the government’s handling of the economy plunges, trust in Labour’s ability to run it is as weak as the economy itself.

History suggests that banking on an incumbent government’s mishandling of the economy is a somewhat risky strategy for an opposition. The seeming ability of Ted Heath’s government to career from crisis to crisis may have – however narrowly – driven the voters back into Harold Wilson’s waiting arms in 1974, but that was the exception, not the rule. Conservative governments in 1983 and 1992 both comfortably won re-election, despite having presided over recessions for which their policies were palpably responsible. In each case, moreover, they were aided and abetted by the perception that Labour would not only have failed to do much better, but would probably have done much worse.

Black Wednesday shredded the Tories’ credibility on the economy (something which didn’t return until the financial crisis), but, crucially, Labour didn’t rely on this alone to see it through to the 1997 election. Instead, it embarked upon a radical and far-reaching effort to reassure the public and dispel their fears of the party.

The mixture of glee and terror with which the Tories greeted Ed Balls’ appointment as shadow chancellor (see our interview on page 14) suggests they’re not convinced he’s the man to embark upon the herculean task Labour must undertake. Yes, Balls’ lethal destruction of Michael Gove last summer underlined what a menace he can be when let loose on a minister in trouble. But can, as they would have it, the deficit-denying, statist, architect of Gordon Brown’s ‘end to boom and bust’ strategy really be the man to repair Labour’s damaged reputation?

Quite possibly. Balls is a rather more complicated figure than the media might care to admit. It was he, of course, who, from 1994, designed the approach which Brown adopted to shed Labour’s ‘tax and spend’ image. Promises not to raise the basic and higher rates of income tax were made, pledges to stick to the Tories’ eye-wateringly tight spending plans undertaken, and, where higher taxes were threatened, suitably populist targets – like the privatised utility companies, for instance – were identified. In government, plans to reassure the markets by making the Bank of England independent were unveiled, while the receipts from the sale of the 3G spectrum were used to pay off the national debt.

And the statism? Yes, Balls used his tenure as education secretary to issue a recipe book to all schools and, yes, the academies programme was not perhaps pursued with the vigour many Blairites might have wished. Nonetheless, Balls, himself a Co-op party MP, proved himself perhaps the most receptive minister when Tessa Jowell was attempting to corral colleagues into supporting her non-statist, mutualist agenda in the run-up to the general election. Indeed, Balls had already pioneered cooperative trust schools, which, modelled on foundation hospitals, are owned and run by local communities, staff and users. At Jowell’s request, he agreed that Labour’s manifesto should contain a commitment to allowing the mutualisation of sure start centres.

No-one is arguing that Balls should simply repeat the pledges he made prior to 1997, but the sacred cow-slaughtering, iconoclastic approach he adopted the last time Labour’s economic reputation was in tatters is just what the party needs now. Balls’ desire to defy the media’s stereotype and the party’s interests are aligned. If he delivers, the Tories may be in for a nasty shock, and the Blairites a pleasant surprise.

Photo: Downing Street