David Herdson’s first post as guest editor
In another recession, in another country, in another decade, an aide to a presidential candidate once declared that one of the three key themes to their campaign was â€œthe economy, stupidâ€. In fact, it was the key issue; no-one remembers the other two (which is ironic, as one was â€œdonâ€™t forget healthcareâ€). The candidate was of course Bill Clinton and he duly went on to defeat the incumbent president later that year.
The crucial distinction is surely the relative trust and confidence the electorate has in the competing parties / candidates. Itâ€™s sometimes said that thereâ€™s little gratitude in politics. Perhaps so, but the counter to that can be that thereâ€™s also not necessarily as much punishment for failings as might sometimes seem justified – especially when the alternatives on offer look worse.
The Conservatives won in 1992 in no small part because their opponents were undermined by their own taxation and spending plans. The severity of the situation meant that the blame game had to be deferred.
Could Labour pull off the same trick? To do so, at least three interlocking conditions will have to be met. Firstly, they need the Conservatives to produce a set of policies sufficiently distinct from their own to make the election a genuine choice and therefore for there to be losers who can be targeted. Secondly, the assumptions Labourâ€™s policies are based on have to be credible, making their opponents measures look excessive. Thirdly, Labour themselves have to be sufficiently trusted to sort out the recession.
To that end, Mervyn King’s comments at the Treasury Select Committee this week, highlighting the dangers of a second fiscal stimulus, wonâ€™t have helped if the intention of Brown and Darling was to use the Budget to tax even less or spend even more, nor will George Soros‘ remarks or the less than unanimous backing that Gordon Brown is finding around the world for his stimulus plan.
That said, bankers and financiers are not terribly popular with the public and their opinions could be ignored by the government if it wanted to, even if those opinions are right – or at least, until and unlessÂ events force the governmentâ€˜s hand. In fact, they probably have to ignore them if their political credibility is not to collapse as to do otherwise would be to admit that their entire policy up until now was wrong.
That creates a dilemma for the Conservatives and so an opportunity for Labour. The Conservatives have gone â€˜heavyâ€™ on the budget deficit implying that theyâ€™d make substantial cuts – an implication that Labour would certainly play up.
The government, working on the assumption that the deficit is both sustainable and necessary, can argue that those cuts would be both damaging and unnecessary. The answer to why Labour is still getting at least 30% of the vote in opinion polls might be found in that debate.
So does that bring us back to 1992? Not yet. There may be a dividing line between the parties and Labourâ€™s assumptions are for now sufficiently credible to enough people to keep them in the game. They are however behind in the head-to-head comparisons.
This weekâ€™s YouGov poll gives the Conservatives a 35-25 lead on the question â€˜Which party do you think is more likely to run Britain’s economy well â€“ the Conservatives or the Labour Party?â€™, a 33-23 lead on which party would handle taxation best, 30-26 lead on unemployment and 33-25 on the economy overall (the last three offering all parties as choices). Turning those figures round is the challenge Labour must overcome if it is to stand a chance of success.