The Balls dividing line on National Insurance

Lord Mandelson is in charge of the Labour election campaign but, in reality, he has little choice but to work to Ed Balls’ playbook. The truth is that when the Tories promised to reverse part of the National Insurance tax rise, it turned this election into a big test of the Balls vision of British politics.

The origins of this lie in the November Pre-Budget Report, which set the cornerstone of the Labour message. Spending on schools went up in real terms, a great triumph for Balls at a time public sector cuts. The downside was that National Insurance had to rise.

In the event the choice of tax was a compromise between applying the 50p rate to those earning over £100,000 (team Brown’s preference) or raising VAT (team Darling’s option). But this debate was beside the point. The most important message was the same: Labour will make the rich pay more tax to protect public services.

In the last week this decision — which could have been avoided — has rebounded badly for Labour. The Tories have made great headway with National Insurance. The big question is whether this will be a tactical or strategic victory.

If Labour remain on the back foot and end up losing, it will be a big blow to the “investment vs cuts” school of campaigning, which prevailed in 2001 and 2005. If the main narrative becomes Tory tax cuts threatening public services and the recovery, if it becomes a question of what schools the Tories will have to close, it will be sweet victory for Balls.

He should take full credit, either way.