David Herdson on why it suits all that a debate on the economy is effectively closed down

David Herdson on why it suits all that a debate on the economy is effectively closed down

Contradictory nuances make it hard for both CON or LAB

You might think that the extremely positive employment figures released yesterday would be cause for a great deal of campaigning from the Conservatives, both positively on their record and negatively against Labour. After all, the repeated criticisms and past predictions of doom from the Eds Balls and Miliband can now be set against the facts of the UK having one of the fastest-growing economies in the developed world, record employment, rising real wages (finally), unemployment at a seven-year low and the timely endorsement from the head of the IMF.

To an extent, you’d be right to so think, but while both Tories and Lib Dems played up the figures as evidence of their policy success, the game is too complicated to allow them to simply run on that record. For a start, there are still flies in the ointment: the deficit remains too high, productivity improvement too low, and while overall wages may be growing, that’s only started recently and is a long way from being a universally shared experience. But the reticence to trumpet the numbers is about more than that; it’s not necessarily in the interests of the Conservatives for the economy to be seen to be doing too well.

The relevant history here is 1992 and 1997. In the earlier election, the Conservatives not only had the better rating on the economy but that subject was foremost in the election debate; which the Tories duly won. Five years later, not only had their relative ratings slipped but other subjects mattered more – in the Mori issues index, unemployment was ranked fourth and the economy sixth, behind the NHS, education, Europe and crime. Once things are going well enough, the question turns from how to make enough money to what you spend it on. And Labour traditionally has the edge on spending money.

On that note, what is perhaps surprising is that more hasn’t been made of the record of two of Gordon Brown’s closest advisors while in office. Yes, plenty of people blame this government for the cuts but plenty don’t, or blame both roughly equally, and elections are won at the margins. You don’t need to persuade all the people, just enough make the difference. Furthermore, in this election, the Tories don’t even need to persuade some of those supporting Labour (though obviously it helps if they can), when plenty of supporters from last time have drifted to UKIP. Again, while there are lots of UKIP supporters who were previously non-voters or non-Blue, that doesn’t matter; the primary target audience is those who did back the Tories in 2010.

The problem of course with the message that Labour can’t be trusted or that the job isn’t yet done is that they both have the negative subtext that austerity is still needed. Both parties have paid lip-service to closing the deficit but both have also engaged in a spending auction on the NHS and elsewhere. The public mood is not one for more austerity. Or perhaps not even one for responsibility. The most recent Mori issues index poll had more people saying that how the respective parties handle the NHS would determine their vote than the question of economic competence. In comparison, whereas in 2010 fully 55% rated the economy as an important issue, this time only half as many say so, with the issue dropping to third, behind immigration and the NHS (which was only fifth-most important in 2010).

The result has been to minimise policy differences and close down debate, giving the public very little to go on than the (almost certainly accurate) perceptions that the Tories would cut more and Labour would spend and borrow more – but that won’t shift votes. It is, however, why Labour is also keen not to downplay the economy too much: it would reinvigorate a dangerous subject as well as undermining their own spending plans.

So we have a situation where the Tories don’t want claim too much credit for fear the electorate will wrongly confirm a growing belief that the ‘job is done’ and a Labour party which has gone quiet on the government’s record because of the mixed messages it sends about its own policies. And we wonder why the polls are static.

David Herdson

p.s. One man who may be happy for the debate to move on from the employment figures is Mark Carney. Back in August 2013, he said that interest rates wouldn’t begin to rise until unemployment fell below 7%, which could take three years. At the time, the rate was 7.8%; yesterday, it stood at 5.6% – triple the fall in half the time – prompting the question as to when rates will start to rise and QE be wound back. With the economy expanding firmly, the stock market at record highs and lending seemingly more relaxed than it was, one does wonder whether the Bank’s crisis-state monetary policy is still appropriate, even when accompanied by the current low inflation. Though you can bet that electioneering politicians will steer clear of answering that question too.

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