'Don't despair': Miliband's message to a sceptical public (and his party's doubters)

The Labour leader said people should not feel the Government was powerless to act (PA)

Ed Miliband has set the Labour Party a mission for 2012 to overcome what he calls the "counsel of despair".

His New Year message is overtly aimed at public scepticism about whether politics can make any difference to the gloomy economic outlook – though others will see it as a message to the party faithful not to be downcast by opinion polls.

"Many people feel politics cannot answer their problems. Some believe things would be the same whoever was in charge. And others fear the Government is in the grip of forces so powerful that nothing can be done," Mr Miliband said.

"It suits the current Conservative-led government to go along with this idea. Having failed in their promise to make Britain a safe haven, they now say that there is no alternative to rising joblessness and years of falling living standards for working people. It is a counsel of despair."

The country could not afford to "stand back and watch" the economy stagnate and jobless numbers grow, he said, leaving a "lost generation" of young people. He added: "There are choices to be made every day about how best to reduce the deficit and restore growth to the economy. There are choices to be made about who should bear the greatest burden in these difficult times, choices to be made about what Britain will be like to live in next year and in the future.

"Tough times expose your values, because they force you to choose. So when this Government takes three times as much from the working poor as from the banks, it shows where its priorities lie – with the privileged few.

"And when Labour says it would choose to tax the bankers' bonuses in order to put our young people back to work, it shows who we are as a party and where our priorities lie."

Mr Miliband has had a difficult year struggling to convince the public that he is a credible Prime Minister-in-waiting, with a poll last week showing that 49 per cent think he has done a bad job compared with 32 per cent who say he is doing well.

But he was not the only political leader urging supporters to keep their nerve yesterday. The Liberal Democrats are also struggling to retain even the support of those who voted for them in 2010.

The party's deputy leader, Simon Hughes, told the BBC yesterday: "I knew when I signed up to the Coalition that the first two years would be very difficult politically and very difficult economically. We have to hold our nerve."

He admitted that the party had had to make compromises in power, but claimed it had achieved "two-thirds" of what it had promised.