What will it take for voters to choose Labour over the Tories on the economy?

by Atul Hatwal

It’s the question on which the next election will turn.

David Cameron and George Osborne have been at the helm for just over two years and in that time the economy has been shrinking for five out of eight quarters.

While other countries that were also in the eye of the financial storm, such as the USA, have recouped their lost output since 2008 and are growing, our economy is still 4.5% smaller than when the banks collapsed.

Even in the nightmare of the Eurozone, only Italy is in a double dip recession like Britain.

The situation could hardly be worse, but still, almost beyond logic and certainly beyond the comprehension of most of the Labour movement, the public believe Cameron and Osborne to be more economically competent than Ed Miliband and Ed Balls by a double digit margin.

July’s ICM poll had the Tory incumbents in an 11% lead over Labour’s challengers. This lead actually grew between June and July by 2% from 9% to 11%.

So what would it take for the two Ed’s to take the lead or at least wipe out the deficit?

ICM has regularly asked voters which of the competing political duos they would prefer to be running the economy in their monthly polls for the Guardian, over the past nine months.

Mapping the Cameron/Osborne lead over Miliband/Balls against the actual movements in growth over these three quarters gives us a sense of whether there is a link between growth and the public’s preference, and if so, how bad the economic situation would need to become for Labour to be preferred.

Based on the last three quarters, it is clear there is a correlation between growth and the Cameron/Osborne lead.

The minor easing in the rate of economic contraction at the start of 2012 was mirrored in a slight increase in the Tory lead while the steep acceleration in decline in the second quarter this year was reflected in a sharp fall in the Cameron/Osborne lead from 17.5% to 10%.

Electorally for Labour, that’s the good news. Cameron and Osborne are definitely paying a price for their economic incompetence.

But then comes the very bad news.

Using the last six months as a guide, if we extend both of the lines in the graph we can see the level of contraction needed to finally drag Cameron and Osborne down to parity with Miliband and Balls: -1.5% per quarter.

That is more than double the drop which was so shocking in the last quarter. It seems difficult to see how, barring a complete meltdown in the Eurozone, even someone like George Osborne could contrive such a disaster.

Given the experience of the past three quarters, the level of contraction at which the public would turn to Labour is barely conceivable. It is significantly worse than at the height of the financial crisis and does not compare to anything in living memory.

It seems Britain really would have to become Greece before the public even think about turning to Ed Miliband and Ed Balls (bear in mind that -1.5% per quarter brings parity with Cameron and Osborne, not a Labour lead)

Such a bleak conclusion begs an obvious question: why?  Why are Ed Miliband and Ed Balls held in such low regard by voters, despite the visceral evidence of David Cameron and George Osborne’s economic malfeasance?

There are excuses the party can make that have some level of resonance –  the public were going to give the new government the benefit of the doubt for a couple of years, and it was always going to take time for voters to take a second look at Labour.

There is a degree of truth to these points but they do not explain the sheer scale of the perceived competence gap.

No, at the heart of the answer to why Labour is so far behind lies the same issue that defined the last election: the deficit.

The current discourse of the economy can be simply characterised: Labour talks about short term, targeted spending to boost growth. Voters’ think deficit. General spending restraint remains the great unmentionable. Voters’ tune us out of the economic debate.

For voters, Labour is a spendaholic that can’t kick the habit. Even when spending is so desperately needed, Labour is the last party they will trust lest debt spirals out of control and the position is made much worse.

Even after two years of this government, the polling on culpability for the problem remains constant.

The latest YouGov poll that asked the relevant question was two weeks ago with the response that 35% of the public hold the last Labour government solely responsible for the cuts, 27% the current government and 28% both. One year ago, 37% blamed Labour, 25% the current government and 26% both.

To date, out of well over 1000 press releases issued by this Labour shadow cabinet since last October only two have focused on spending restraint. They were back in January when Ed Miliband and Ed Balls backed a public sector pay cap.

We all know what happened next: the unions savaged the leadership and little has been said about spending restraint since.

Despite Ed Balls being proved right on the double dip recession and policies that would inject badly needed demand into economy, as far as voters are concerned Labour isn’t even in the fight.

This is why the country can plunge into deep recession and voters still think David Cameron and George Osborne are substantially more economically competent than Ed Miliband and Ed Balls.

And it is why, unless Labour addresses voters’ doubts on spending, only a financial cataclysm will change the terms of the debate so that Miliband and Balls have a chance of being the country’s choice on the economy.

Atul Hatwal is editor at Uncut


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22 Responses to “What will it take for voters to choose Labour over the Tories on the economy?”

  1. Julian says:

    As a “voter” referred to in the headline, I certainly think Osborne has been pretty hopeless. However, Osborne and Balls aren’t on a see-saw that makes one go up just because the other goes down. Labour spent far more than they were prepared to raise in taxes, which has contributed to this mess (although not the only reason).

    “Despite Ed Balls being proved right on the double dip recession and policies that would inject badly needed demand into economy …”

    Ed Balls being right on the recession doesn’t mean he was right on the policies. He’s in the fortuitous position of being able to push this point but no one knows whether we would have been better or worse off if the debt had been increased even more, as he wanted.

  2. swatantra says:

    Atul is absolutely right. The electorate still blame Labour for the Economy and Deficit although you and I know it was the Bankers that caused the collapse. And nothing will convince the electorate otherwise; it coukd take another 5 years before they soften, by which time the Economy will have recovered a bit, and the Torie take the credit.
    But the key to Labour returning to power lies in the fate of Cameron; if right wing Tories decide Cameron is being too liberal and decide to ditch him, then that spells the end of the Coalition. Lib Dems will pull out; they will not be prepared to work with anyone but Cameron; the bond betwen Cameron and Clegg is that strong. Which means we get a Minority Govt for 6 months followed by a GE, and another hung Parliament, but Labour being returned as the largest Party.

  3. Helen says:

    One of the points I noticed being made during the Leveson inquiry is that the difference between facts and opinion get blurred in the media leading to misinformation. Obviously this happens consciously or unconsciously for political reasons. I wonder if this is one of reasons people are so turned off politics. How can we ever know what is the ”truth” about the economy and politics? Last year a letter in our local paper called for getting the facts straight on the deficit. Labour inherited a public debt of 42.5% of GDP in 1997 and reduced this to 37.5% prior to the banking crisis. I think this indicates that Labour was not a spendthrift government. Judgements are made for emotional reasons and maybe for many people debt is wrong, so Osbourne’s complaints about Labour ring “true.” The fact that the UK has had a public debt for 300 years doesn’t get factored into the emotional response.

  4. Felix says:

    “It’s the question on which the next election will turn.”

    Bollox. Not even your beloved Blair could poll higher on the economy than the Tories in 1997.

  5. Felix says:

    “the public believe Cameron and Osborne to be more economically competent than Ed Miliband and Ed Balls”

    That depends which polls you look at, but I wouldn’t expect Uncut, renowned for its partial use of facts to stitch story, to inform its readers of that.

  6. Robert says:

    Hung Government then……

  7. paul barker says:

    Couldnt the explanation be that the voters arent as stupid as you think they are ? They can see that we are in 2 seperate crises, a recession – largely due to events in europe & the US & a crisis of government debt which prevents us spending our way out of the recession.
    The recesion is neither labours nor the coalitions fault & theres little anyone in the UK can do about it.
    The debt crisis is seen as largely labours fault because you were the government for 13 of the last 15 years.
    Unfortunately the voters will eventually forget but luckily, not for a long time.

  8. Julian says:

    @Helen, you say “Labour inherited a public debt of 42.5% of GDP in 1997 and reduced this to 37.5% prior to the banking crisis”. Looking at the graph here http://www.economicshelp.org/blog/334/uk-economy/uk-national-debt/, that would seem to be true.

    However, the downward slope of the line started before 1997. Labour at that election promised to stick to the Tories’ spending plans, which contributed to significantly to their victory. Hence the line continued to go down. After 2001, it started going up again and kept on doing so. During the good times, it should have been coming down again. Also, not included in the figures are the huge PFI debts that our hospitals and universities are destined to pay for over decades.

  9. Samson Dada says:

    Good article Atul.

    I think Labour can begin to convince voters to choose them over the Tories by tangibly showing that they are serious about spending public money wisely if they governed the country.

    One way to do this would be to announce a credible fiscal golden rule limit that then Shadow Chancellor Gordon Brown did when Labour were in opposition.

  10. BASR says:

    The only way Red ED Miliband & Ed Bald (his topee was slipping on TV yesterday) Can gain the publics confidence they could possibly run the British economy properly.

    Is to convince 80% of the population they did not leave a £1 trillion debt mountain in Britain ammassed in the boom years they were in control of the economy. With fellow systers Brown Byrne Cooper & the Eagles Clowns in the Last (for ever we all hope) Labour Government!

  11. Jane says:

    It is because Ed Balls who was the power behind Gordon Brown is in the Shadow Treasury Post. People will never trust him – they see him as being behind the financial mess. Please do not blame the Bankers – the bailout is not included in the deficit. The structural deficit was dreadful when governments changed. I now look back on the last decade and yes there were some excellent policies worthy of the money spent on them. However, there were also some ghastly policies which cost a fortune. Many of the PFI contracts are shameful, we increased GPs salaries by some 56%and permitted them to opt out of 24 hour cover. We permitted a culture of the State will provide and only later in government did we start responding to public demands that people should work and not choose a lifestyle of living on benefits. We poured money into public services without ensuring higher performance. The police have had huge above inflation budgets, higher salaries, better equipment and sanctioned detection rates still stand at 14%. Home Affairs Report undertaken by last government points this up. Immigration became an issue and was not dealt with. Regional government aspirations, huge procurement blunders on computers, military equipment etc etc.

    This is the legacy that Ed Miliband is having to persuade people that he will never permit to occur again. He needs to reign in some of his colleagues who continue to promise the world and who oppose every policy the coalition government is having to consider and which has the support of many people in the country. There is a danger that the notion that Labour in government just spends to support the feckless and forgets those who work hard. It sometimes feels that some shadow ministers also sound shrill and aggressive. Wonderfulopposition but not fitting for a government in waiting.

    Ed Balls is a liability regardless of his abilities. It does not matter if he is right or not. He is too much associated with the dreadful GB who surrounded himself with thugs. That is the problem and not one easily resolved.

  12. Mike Homfray says:

    Far too early to say, but I’m sure Uncut will do its bit to portray Labour in the very worst light possible

  13. vern says:

    In simple terms, during an economic boom time Labour had no plans in place for an economic downturn-other than to keep spending money that we did not have. Nothing in the bank.
    The lingering fear of trusting Labour again followin Byrne’s “There’s no money left” will take a very long time to disappear.
    You cannot, spend, spend, spend – the electorate knows this

  14. Seriously? You’re extrapolating from two pairs of data points? That’s the silliest graph I’ve seen in ages.

  15. Amber Star says:

    “The support for a change of economic strategy continues to grow – now only 28% of people say the government should stick to their current strategy compared to 45% who would like to see growth prioritised instead. David Cameron & George Osborne’s lead over Ed Miliband and Ed Balls on who people would most trust on the economy has also fallen, now down to 3 points. 34% would trust Cameron & Osborne more, 31% Miliband and Balls more.”

    Anthony Wells, polling expert with YouGov & UKPR guru.
    http://ukpollingreport.co.uk/blog/archives/5927

    Miliband pretty much neck & neck with Cameron.
    Miliband & Balls pretty much neck & neck with Cameron/ Osborne.

    Now this should be good news to any Labour supporter but I’ve a feeling that Atul will read it & weep…

  16. Rod Sherrin says:

    Labour needs to return to the Union/Working Class roots . This won’t happen until they eliminate the professional politico wonks, and replace them with ex-Union member who have worked, gotten their hands dirty and sweated a day of graft for their pay , not had their snouts in a trough of public money since their teens.
    That’d make people decide on voting Labour

  17. Renton says:

    Several points need to be made here, firstly extrapolating from two points is completely ridiculous.

    Secondly, many polls have Milliband/Balls neck and neck if not ahead of Cameron/Osborne.

    Thirdly, becuase the graph does not contain enough data to extrpaolate meaningful equations, we cannot isolate other factors – for example, are we to assume that public dissatisfaction will always result in a linear and predictable slump in Tory polling? I would imagine that the patience of the public would vary inversely to the time spent in recession. Another quarter or two in recession and you’d see the floor start to fall out from under Tory polling numbers.

  18. Rallan says:

    “Another quarter or two in recession and you’d see the floor start to fall out from under Tory polling numbers.”

    The point is this; dissatisfaction with the current government does NOT mean enthusiasm for the Labour party. Britain is totally sick of you. Mid-term protest polls at a time of massive economic stress are pretty meaningless.

    Labour says nothing positive, offers nothing constructive, is trusted by no-one and is (rightly) blamed for appallingly irresponsible government that will blight the nation for another decade at least.

    The Tories & Lib Dems are going to be increasingly unpopular, obviously. If things don’t improve the Tories may even manage to become almost as unelectable as Labour is. And that’s the Labour game plan, yes? No attempt to make a decent offer to nation, no purging of the people who caused this mess. Just more of the same lies, spin, dodging and denial.

    There will be no popular, respected candidates at the next election – that’s clear. The winners in 2015 will be the lesser unbearable bunch of dreadful lying irresponsible shysters.

  19. swatantra says:

    Must say Ed the Unready did a very good interview with Huw Thomas on BBC yesterday.But then he was talking about the Olympics, showing that we’re all in this together, and not about the Economy. Thoroughly relaxed and thoroughly charming and thoroughly engaging. If only he could capture that same spirit when he does Politics.

  20. uglyfatbloke says:

    The two Eds need everyone to forget that Blair, Brown and Darling made a total mess of the economy before Labour can make headway. That may take more than the three years between now and the next GE.

  21. uglyfatbloke says:

    Also…Rallan makes a good point – dissatisfaction with the tories does not necessarily mean a benefit for Labour. It may be more the case in England where there is really no alternative, but in Scotland the tories are absolutely nowhere, in fact they are currently in a decline from 12% in the polls. Realistically, if the choice of person to run the economy is Balls or Osborne thing look good for Labour. If the choice is between Balls and Salmond things look very bleak indeed.

  22. Rallan says:

    “benefit for Labour … more the case in England where there is really no alternative”

    The Labour electoral strategy in a nutshell. Simply hope for the failure of your hated enemies in anything they do, and rely on being the least-worst remaining option if/when they do fail. Focus on misery and discontent. Attack anything positive. Offer nothing constructive. Don’t worry about winning on merit, don’t bother enthusing the nation, don’t consider what the general public want, don’t concern yourselves with decency, duty & integrity. Don’t worry about representing the people (especially those who don’t agree with you). If you can avoid sullying yourselves with popularity then you should just continue to ignore the electorate.

    You must be so proud, Comrades.

    But you can’t rely on being the only other option for much longer. Things are changing. You wont accept it, you can’t stop it and it’s too late for you to change with it.

    In 10 to 15 years they will be teaching history in schools about the dramatic decline of the two major 20th century parties, the widely popular collapse of the two party state and the bankruptcy of the Labour party.

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