— PolPics (@PolPics) December 14, 2014
David Herdson on the GE2015 battle over the economy
The cost of living crisis: five words that are likely to be repeated by Labour and the unions for another four months at least; yesterdayâ€™s rail fare increases being just the latest opportunity. For the opposition, itâ€™s an easy hit and an easy narrative: the cost of x is rising faster than wages therefore people are getting worse off therefore the government is a failure. As there are plenty of things that go up in price, itâ€™s easy to repeat â€“ and constant repetition is a large chunk of winning the argument.
There is of course a lot more to it than that. For one thing, overall, average prices arenâ€™t going up significantly faster than average wages, if at all (or, put another way, for those costs which are, there are other costs rising more slowly or actually falling, like petrol). For another, the average person and average costs are statistical concepts; in the real world thereâ€™s a whole range of experiences from those who are suffering a very real squeeze to others are doing quite nicely, thank you â€“ and those different experiences will result in different political responses, especially if the experiences are shared within a group whose behaviour reinforces their opinions. For a third, even if the cost of living is below what it was at its peak, it was at that level not much before and people got by.
Underlying the criticism, however, is the assumption that people are entitled to expect both falling real costs and a return to pre-2008 levels. Neither assumption is necessarily valid â€“ in the long run you can only get what you earn and in 2008, Britain was living way beyond what it was earning â€“ though the government parties donâ€™t seem keen on saying so. Quite why that is is an interesting question. It may partly be because to do so implies an inability to deliver on that expectation when Labour claims that it can, and partly because dismissing the claim would sound echoes of â€˜crisis, what crisis?â€™ â€“ not good coming from a government of millionaires. Yet the alternative is to wrongly accept that there is indeed one, which plays into Labourâ€™s hands.
Accepting the basic premise reinforces Labourâ€™s case that the planned Tory cuts are ideological rather than pragmatic because it takes the 2008 baseline as legitimate. Indeed, failing to explain the initial (and ongoing) structural overspending makes it difficult to put Labourâ€™s muddled attack under scrutiny: on the one hand the Tories are criticised for not having cut the deficit enough to date; on the other, theyâ€™re criticised for planning to do so in the future. What should be the objective, and how would Labour do it? For the moment it doesnâ€™t matter as they donâ€™t need to answer the questions if they wonâ€™t be asked them.
And that comes down to having the confidence to declare the so-called cost of living crisis to be bogus â€“ not necessarily for individuals, some of whom are undoubtedly struggling (but then some always are) â€“ but the idea that a nation has an inalienable right to a particular standard of living. However, when elections are essentially auctions, itâ€™s a risky strategy to bid low on the assumption that your rivalâ€™s higher offer will be rejected on grounds of trust or credibility.
p.s. My apologies for the lack of articles over the last few weeks – my wife was badly injured in a car crash three and a half weeks ago and I needed to take some time off while she was in hospital and after discharge. Fortunately, she should make a full recovery but as she will still need care and assistance for a while yet, I’m not likely to be around quite as often for the time being.
p.p.s. On a similar note, I will write up the December PB poll average piece as soon as I’ve had time to compile the numbers.