It is just over two years since Ed Miliband greeted the election of François Hollande with the words ‘the tide is turning against an austerity approach’. The new French president, he said, offered a ‘different way forward’ and praised his determination to create a ‘Europe of growth and jobs’.

With his promise that ‘another way is possible’ and pledges to introduce a 75p tax rate, wage a ‘war’ on finance, and reverse Nicolas Sarkozy’s modest public service reforms, Hollande’s victory appeared to suggest an alternative path to power for the left to New Labour centrism.

For Labour the dangers of this approach are now all too clear. Hollande-style populism may win elections, but it is not a credible prospectus for government.

The tide of which Miliband spoke so hopefully has yet to turn. With growth stalled, unemployment hit a record high this summer, despite the president’s repeated promises that the increases would soon abate. Harsh public spending reductions are funding a ‘responsibility pact’ in which taxes are cut in return for businesses creating 500,000 jobs over the next three years. Ministers speak of scrapping France’s 35-hour working week, a sacred cow for the French left and trade unions.

Adrift on a sea of broken promises after his first 18 months in power, Hollande’s presidency today lies shipwrecked, the victim of a harsh collision with the rocks of economic reality. Like his Socialist predecessor, François Mitterrand, the French president has now been forced to conduct an abrupt U-turn. The political consequences have been a toxic slick of Socialist division and defeat. Last month, Hollande’s new, self-proclaimed Blairite prime minister, Manuel Valls, was forced to reshuffle the government for the second time in less than six months following the departure of three leftwing ministers. The Socialists’ annual congress was wracked by infighting and talk of the party’s parliamentarians bringing down their own government. Hollande’s approval ratings are the worst of any fifth republic president: 85 per cent of voters do not wish to see him seek a second term, while polls indicate that, were he to stand, he probably would not reach the second round, leaving voters with an unedifying choice between the centre-right and far-right, as in 2002. One recent poll even showed Marine Le Pen of the National Front beating Hollande by eight points in a head-to-head contest.

For Labour, avoiding the fate of Hollande – victory built on a false promise, swiftly followed by a crippling political collapse – must be a priority in the remaining months before the country goes to the polls next May. Outlining how Labour will balance the nation’s books is key to that task. Already the party has promised that it will eliminate the deficit in the government’s day-to-day spending during the course of the parliament. However, Hollande, too, committed to eliminating France’s deficit by 2017 prior to his election. It was the failure to prepare people for the pain of doing so that, in part, now explains his difficulties.

Labour has said there will be ‘no big spending’ if it wins next May. But this is only half the story: as Chris Leslie, the shadow chief secretary to the Treasury, suggested in an interview with this magazine last month, there will actually have to be ‘a very significant level of reductions in those areas of public expenditure which are not priorities’. It is now time for Labour to start indicating what those areas that are ‘not priorities’ are.

Some will no doubt argue that this is a distraction from Labour’s focus on the ‘cost-of-living crisis’. In fact, they are intimately linked. As Mark Carney, the governor of the Bank of England, has made clear, interest rates are likely to begin to rise slowly next year. For a nation that has become accustomed to historically low rates for the past six years, this will come as a shock. The ‘squeezed middle’ will face a further squeeze on its incomes. In his interview with Progress last month, Leslie dropped a heavy hint that middle-income Britain should not expect tax relief from a Labour government, at least for the foreseeable future. It will thus be incumbent on a Miliband government to do all it can to reassure the markets and the Bank of England that it will keep a tight grip on spending, and deliver its deficit-reduction promise: only by doing so can it ensure those interest rate rises are kept to a minimum.

Such an approach may well delay some of the party’s cherished ambitions. But it should keep its eye on the longer-term prize. When he became president in 1993, Bill Clinton was faced with a similar choice: he opted to prioritise cutting the deficit he had inherited after 12 years of Reagan-Bush profligacy, thereby ensuring interest rates remained low. His decision paid off handsomely: as the deficit tumbled, growth returned, the American economy expanded for a historic 116 consecutive months, and unemployment fell to a 40-year low. Together with investment in welfare-to-work programmes, the result was the lowest poverty rates ever for the elderly, African Americans and single parents.

How, then, can Miliband convince a sceptical nation? It is an unenviable challenge. He faces not only continuing scepticism about Labour’s economic credibility but a pervading fug of voter scepticism about all politicians’ promises. Perhaps, therefore, he should recognise the foundations of that distrust in order to break through. Voters believe politicians are greedy and power-hungry. ‘Golden rules’, promises to legislate deficit targets or submit plans to independent scrutiny are too easily dismissed as the typical wheezes the ‘political class’ employs – and then disregards without penalty. Miliband should put his ministers’ money – and his own job – where his mouth is. A pledge that he will suspend ministerial salaries after two years in office if deficit-reduction targets are not met would grab the voters’ attention. An unambiguous pledge that he would not seek re-election as prime minister if his government has not met its goal after five years might just win their votes.