How crucial are next week’s figures?

The provisional growth figures for the last quarter of 2011 will be published next Wednesday and will be keenly anticipated and picked over by media and politicians alike because of the prediction by the ITEM club report[1] this week that the UK was probably already in a recession. Recessions require at least two consecutive quarters of negative growth and as yet, we’ve not had one, never mind two. Even so, if the ONS publish a negative number on Wednesday, Labour will undoubtedly seek to make political capital out of what they will call the government’s ‘failure’.

That of itself demonstrates something of a win for the Eds: that ‘growth’ is the main battleground in the economic debate. By definition, reducing the deficit will restrict growth and so Labour starts with a structural advantage.

If the government’s first objective is to get the deficit down – and it is – then it should be seeking to shift the measure of its success onto the borrowing figures.

The win only goes so far though. Against it is that the public believe in deficit reduction (though not necessarily how it is being done) and the Tories are also overwhelmingly seen as the party most prepared to make the tough and unpopular decisions that implies, by a margin of 55-9 against Labour in Thursday’s YouGov poll. In fact, even Labour supporters gave the Tories an advantage there.

It is probable that if the economy does worsen – especially if it returns to recession – Labour will make relative gains in terms of the party most trusted to run the economy, though they’ll need to get their policy straightened out if they’re to sell it to the electorate. They have, after all, been predicting that the government would lead Britain into recession ever since it was formed, and would claim vindication.

On the other hand, the issue itself will become more important, as will the perceived personal abilities of the party leaders to deal with ‘hard’ issues. It was notable that in 2008, when the Credit Crunch first hit, the huge Tory lead in the polls collapsed to almost parity as Brown’s perceived economic ability came to the fore and Cameron’s campaigning on ‘soft’ issues no longer chimed with the changed mood.

That tension is at the heart of which way the voting intention figures will move. At the moment, 28% believe the Tories are led by people of real ability against just 12% for Labour (39% answered ‘no party’). Only a third of Labour voters backed Miliband and Co on the question. The answers to many of the polling questions below the voting intention one demonstrate plenty of dissatisfaction with the government but as long as the Conservative leadership is seen in relatively better terms, the greater the challenges facing the country, the harder it is for Labour to get into the game – but the greater the challenges, the more the Tories risk losing their advantage.

David Herdson