Spending ‘lost Labour election’

John Cruddas, the party’s former policy co-ordinator, warned Labour had to face “hard truths” over its defeat and in particular the perception it was not serious about tackling the deficit.

The review’s findings will further fuel concern in sections of the party at Jeremy Corbyn’s popularity in the Labour leadership contest fuelled by his anti-austerity message.

Mr Cruddas said: “On the basis of the data, the public appear to think anti-austerity is a vote loser - we cannot ignore that,” he said.

“We can seek to change the views of the public, but it’s best not to ignore them.”

In an article on the LabourList website he said: “The Tories won because voters believed they will cut the deficit, even though a majority understand that the economic system is unfair.

“The Tories’ message on the deficit was clear, Labour’s was not. The Tories are trusted to manage the country’s finances, Labour is not.”

Polling of 3,000 people in England and Wales for the review found that 58 per cent of voters agreed cutting the deficit was the “top priority”, with just 16 per cent disagreeing.

But some 60 per cent agreed the economy unfairly favours powerful interests and 43 per cent said they would vote for a party that would redistribute wealth from the rich to the poor.

Labour’s crushing defeat in Scotland to the anti-austerity message of the SNP “does not set a precedent for its leftward shift in England”, Mr Cruddas added.

“The SNP’s anti-austerity politics simply increased the risk that Labour represented to English voters,” he said.

Mr Corbyn’s call for Labour to press for an end to public sector cuts has proved hugely popular with party members and made him the unlikely favourite in the race.

However, many of Labour’s senior figures have argued his views are out of touch with mainstream public opinion and would condemn the party to years in opposition.

A poll of Labour voters, rather than just party members, on the leadership candidates found Andy Burnham was the clear frontrunner on 39 per cent, 15 points clear of Mr Corbyn, with Normanton, Pontefract and Castleford MP Yvette Cooper on 22 per cent and Liz Kendall on 15 per cent.

Some 70 per cent thought Mr Burnham was likely to win a general election as leader, while just 51 per cent thought it likely that Mr Corbyn would walk through the door of No 10 as prime minister.

Mr Corbyn sought to regain the initiative in the campaign by promising a radical series of measures to improve the supply of housing, including rent controls and the possibility of extending right-to-buy powers to private tenants while restricting them for council house occupants.

His policy document said: “The free market free-for-all in housing has failed. Only the Government is able to play the strategic, co-ordinating role to tackle the housing crisis.”

The plan floats the idea of a “right-to-buy shared equity scheme” for private tenants renting from large-scale landlords.

Mr Corbyn calls for at least 240,000 homes a year to be built, with more than half of them council houses.

The document proposed strict limits on rent rises.