Labour's response to next Wednesday's Budget will be the starting pistol for the next election.

That is why Labour activists are gathering at the Labour Assembly Against Austerity meeting on Monday night, with Katy Clark MP, Steve Turner, Owen Jones and Polly Toynbee, to discuss what positive alternative to cuts Labour should offer.

The Tories' general thrust was set out by David Cameron speaking from his golden throne at the Mansion House in November last year - an ideological charge for a permanent reduction in public spending.

The signs are that George Osborne's fourth austerity budget will make good on that pledge and extend his projection of public spending cuts by another year, to 2020.

That means more job cuts, lower pay and a growing role for private business interests in the provision of public services.

Already this week the government has screwed down harder on public-sector pay and told over half a million health workers they won't even receive a below-inflation 1 per cent pay rise this year.

The results of this policy are clear.

People are suffering because of public spending cuts with those on lowest incomes and reliant on social security hit hardest.

Other potential Budget announcements to shift tax thresholds whether on the personal allowance, as Lib Dems favour, or the higher rate, which their Tory partners want, will ignore the five million suffering on the lowest incomes and already living with less than £10,000 a year.

Ed Miliband's message on the cost of living crisis needs to be developed into a real and positive alternative to the Tory austerity agenda as Labour responds to this year's Budget and sets out its election pitch.

The leader has previously shown willing to set the political agenda.

Previous announcements on the bedroom tax, freezing energy bills and building homes have struck a chord.

Labour now needs new policy announcements that will reverse the cost of living crisis, identifying cuts to reverse, market failings to correct, areas for public investment.

But ensuring Labour delivers this agenda though will require a mass movement - through the TUC and trade unions and the People's Assembly and wider anti-cuts campaigns - demanding a political alternative.

After years of pay freezes and job cuts it's no surprise that public-sector workers now earn less than equivalent staff in the private sector, but they also face greater job insecurity. 

Recent action in universities and planned national strike action in education develop that pressure.

Disputes over pay may open up in local government and health. The TUC has announced a new national demonstration under the slogan Britain Needs A Pay Rise.

Labour must recognise that real-terms pay cuts are unjust and unsustainable.

Facing such attacks, the public will support clear policy pledges on improved pay, new council homes, on a universal childcare system or a national insulation scheme to further bring down energy charges - and polls show they are more supportive than ever on returning industries to public ownership, particularly in transport where ever increasing fares and reduced services only damage the economy. This gives Miliband space to manouevre.

But opposed to this positive message some on Labour's right are on an offensive to push policy that accepts the Tory framework, with some now advocating an end to ring-fencing of health and education spending.

While such sentiments are aired in public, Labour's opinion poll lead will remain vulnerable.

And Labour politicians should be under no illusions about the public response to an austerity-lite agenda.

It is only too apparent that a centre-left government imposing cuts on a vulnerable population will rapidly lose support as in France - and be forced from power, as we have seen in Greece.

Support for French Socialist President Francois Hollande recently fell to the lowest levels recorded for a president since the second world war, while Pasok, the "green socialists" who polled 43 per cent in 2009, have struggled to poll 5 per cent in recent weeks after serving repeated rounds of cuts while in government.

Labour activists must work with trade unionists and anti-cuts activists to drive a positive alternative to Tory Budget proposals, which is why they should get involved in both the Labour Assembly Against Austerity and support the work of the People's Assembly.

Opposition to austerity is widespread among Labour Party members but it is down to us to ensure that message is felt in Westminster and our policy-makers are compelled to set out the positive policies we need to succeed in government.

Join us on Monday as we set out our alternative to Tory austerity.

n Ending Austerity Budgets: Labour policies to win in 2015 will take place on Monday March 17 at 6.30pm in the Wilson Room, Portcullis House, Bridge Street, London SW1.