1 October 2012 Last updated at 06:07 ET

Article written by Nick Robinson Political editor

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Labour - what did they mean by that?

 

What, if anything, does Labour's latest economic announcement tell us? Some argue almost nothing. I believe something rather more than that.

This is the case for the prosecution: Ed Balls is only telling us what he would do now if he was chancellor, not what he will do if he becomes chancellor in 2015.

By then, the proceeds of the 4G sale will not be his to spend - the money will already have been accounted for by his predecessor. The promise to increase capital spending by £3bn - if it survives into Labour's manifesto - is also meaningless, goes the argument, unless you know what the baseline is going to be ie £3bn on top of what.

Thus, Labour is merely coming up with an eye-catching announcement which confirms what we already know - Ed Balls would spend a bit more than George Osborne if he were in office now.

All of that is true. The reason I am still interested is because of what it tells us about Labour's strategic thinking. The two Eds are doubling up on the political gamble they've made that the government's deficit reduction strategy will soon be proved to have failed and that Labour needs to continue to highlight what they would do differently.

So, they have decided to pledge to spend more public money to build our way out of recession. They have said they would spend the windfall gain from selling 4G licences even though Gordon Brown used the sale of 3G licences to pay down the debt, and even though Labour has said that any windfall from selling bank shares should be used in the same way.

If Labour were being led by David - not Ed - Miliband the party would probably be using this conference to underline the lessons learned from Labour's past, to indicate how the party could be trusted with the nation's purse strings again and to reinforce that the next Labour government was likely to have to make painful choices of its own.

Behind the scenes those close to the two Eds argue that the public would be confused if they talked simultaneously about the need to spend more now than the government and the need to make cuts in the future.

They insist that the party is showing its fiscal rectitude by fighting with the unions over backing public sector pay curbs and pledging a post-election "zero-based" spending review (that is, one which starts from zero rather than starting with asking whether to cut existing budgets). They say that both Eds talk constantly of the need for iron discipline over spending.

Nevertheless, their choice is revealing.

PS: There is one other reason why today's announcement is interesting. It confirms that housing is once again at the heart of the debate about economic policy, just as it was for many decades when parties competed to promise they'd build more homes. The coalition says it can do it by underwriting first time buyers' deposits and private sector housebuilders whilst Labour say that public money is what is needed and needed now.