by David Talbot
When the shadow chancellor declared on Sky’s Dermot Murnaghan programme that Labour was winning the economic argument, one can be forgiven for thinking that not even he believed the words he had just uttered.
He certainly hadn’t convinced the Commons the Thursday before, standing up to a wall of noise the previously iron-clad shadow chancellor delivered a puce-faced riposte that fell flat in the chamber and barely reverberated outside. Osborne, grinning and preening himself like his newly purchased cat, luxuriated in his adversary’s obvious discomfort – recognising not only the personal but the political challenges the shadow chancellor has to slay.
And, earlier today, at the year’s final PMQs, the sight of rows of silent, doleful Labour MPs, arms folded, as the prime minister ran through his stand-up repartee at Ed Balls’ expense, told its own story.
After three years of stagnation, the economy is showing tentative signs of recovery. Growth may be unbalanced and anaemic, but the threat of returning recession has been averted. A change of mood is altering the terms of political argument in British politics, and with it Labour’s much-heralded ‘cost of living’ campaign appears increasingly redundant.
To say the least, it remains highly questionable as to whether the living standards argument will enable Labour to make incursions into the electorate where the party’s appeal has so far been rather limited. The voters Labour have to win over to achieve outright victory in 2015 appear far less persuaded about its core arguments on the ‘cost of living crisis’, and are increasingly optimistic about the general state of the economy.
Labour has done nowhere near enough to address the basic charge of economic mismanagement; from the ludicrously long leadership hustings, which allowed the coalition government an unrivalled opportunity to set the political narrative for four whole months, to Balls’ stupid delight in his ‘flat-lining’ gesture, the damage has been done and is yet to be repaired. Voters may have been prepared to rethink some now entrenched assumptions about Labour’s responsibility for the economic crisis, but only if the party showed that it too was rethinking and reflecting, including being humble about its own failings.
Well the voters have delivered their Christmas present early to Labour and it comes in the form of some dark polling undertaken by YouGov. Slipped out to little festive cheer the findings indicated that if Labour had hypothetically won the 2010 election, 42% of voters believe the economy would now be doing worse under the party’s stewardship. This is a quite staggering statistic. Revised OBR figures confirm that the fall in GDP between 2008 and 2009 was not the previously thought 6.3% but 7.2% – wiping £100bn off the UK economy. And yet just under a majority of voters now seemingly believe that if Labour had won the last election the economy would have gone on to plumb new depths.
Equally those who think that the economy is recovering has shot up nearly 30% since the Chancellor’s budget in April, whilst a majority of the public expect to be at least as well as off in a year’s time as there are now. And, crucially, as argued on Uncut, on the question of sheer economic competence Osborne has widened his lead over Balls to ten per cent. And, to finish the season’s greetings, a clear majority of voters now support cutting spending to reduce the deficit – killing at source a key Labour charge against the coalition.
The party ought to be remarkably open that it has been losing the argument on the economy for the best part of three years. It has been too content for too long in believing that deteriorating economic indicators for the Conservatives would guarantee rising political numbers for Labour. The party’s challenge is to provide a compelling case as to why Britain would be better off with Labour, and that categorically does not mean the facile equation with higher public spending to achieve social justice.
For all the huffing and puffing, and the rosy red cheeks of the vexed Balls, the simple truth went unspoken during the Autumn Statement. The Labour party has lost the economic argument. Balls, dressed as Santa last week, deep down knows that he would dearly love the present of economic credibility for Labour this Christmas.
David Talbot is a political consultant