There's plenty that Labour could do, given some fresh thinking Britain's political classes have succumbed to what Sigmund Freud described as the narcissism of small differences. It suits everybody involved to exaggerate differences. I am certainly not claiming that it is irrelevant who wins the next election. There would be hugely important differences in some areas, such as education and welfare reform. Even the largely trivial deregulation agenda pursued by this Government would be too much for a Labour Party in hock to its trade union paymasters. A pure Tory government would be very different from the status quo. But a Miliband administration would end up spending roughly the same share of GDP as the current Coalition, and would be forced to stick with austerity. Labour's great victory over the past few years is to have moved the economic debate (though not the electorate) to the left; in a surprisingly large number of areas, Brownite ideology still reigns supreme. But that also means that it has become harder for Labour to differentiate itself without embracing extreme policies. Even more problematic is that it no longer has a clear view of what makes the economy tick. All successful leaders must have a strong, easy-to-articulate economic vision. Ed Miliband doesn't. He is hoping that growth will somehow return, but has no idea how to achieve this; he spends his time slamming the Coalition's policies, yet won't break with them. Traditional socialism remains discredited; but the new Labour strategy also failed. In the absence of dramatic supply-side and tax reforms - which neither Government nor Opposition back - the New Normal over the next few years will be growth of 1pc or so a year, meaning no extra money to spend on Labour's client groups or on public services, robbing the party of its main justification. Given all of that, Labour is in desperate need of fresh thinking. It should ditch its meaningless "predistribution" idea, pseudo-intellectual drivel that could be used to justify anything. There are real changes Labour could make to its economic policies while retaining its social-democratic raison d'etre. The aim should be to sustainably boost the working poor, whose incomes are under immense pressure. One way to do this would be to harness markets to help consumers, allowing more home-building and making it easier to switch bank accounts. Another is to push for greater productivity in the public sector: Walthamstow MP Stella Creasy's proposed war on waste and zero-based budgeting, which would reassess every item of spending, are excellent ideas. Crucially, Balls should admit he was wrong on monetary policy: he should call for the Bank of England's Brown-era remit, which failed to control inflation and helped fuel a housing bubble, to be scrapped, giving the Bank a new mandate to target nominal GDP, rather than the consumer price index, with stronger sanctions. He should end his support for endless quantitative easing, which is hurting the poor and savers. Easy money is not as popular in the country as in Westminster and the City. Tackling this could be an open goal for a Labour party that so desperately needs some fresh economic ideas. Allister Heath is editor of City A.M.