by Jonathan Todd
Budgets are supposed to be big moments. The kind that determine general elections. But maybe they are decided by millions upon millions of quieter moments. When payslips are inspected, profits turned, and housing wealth accumulated.
In these quieter moments judgments are made on the economy’s performance. In turn, these bear upon general election votes. It is a eighteen months since Uncut spotted a gradual rise in the proportion of the electorate reporting the economy as doing well and a steady decline in Labour’s poll lead. We ran a regression to assess the relationship between these data series and postulated that the Tories would overtake Labour when a quarter of the electorate came to the view that the economy is doing well.
In May last year, when YouGov’s tracker on economic sentiment first started to bump up against a quarter of the electorate being of this belief, we noted that Tory poll leads had started to emerge. These leads were faltering and slow to confirm themselves. Like the upward trajectory in the proportion of the electorate positive about the economy.
24 per cent of the electorate thought the economy was doing well last May and Labour held an average of a 3 point poll lead, as the table below illustrates. Occasional Tory leads then existed but the average favoured Labour. The Tories weren’t consistently ahead but nor was economic sentiment resoundingly over a quarter. At 30 per cent, economic sentiment now comfortably clears the quarter threshold, and Labour’s poll lead is less impressive than last May.
If we simply compare the data in May 2014 and March 2015, they seem to confirm the original Uncut hypothesis: the more the economy improves, the narrower Labour’s lead. The pattern of these series between these two months, however, rewards inspection.
Between May 2014 and September 2014, economic sentiment slowly ticked upward. No dramatic moves but the direction of travel was clear. This series, though, fell to 22 per cent in December. This came on the back of a fall between September and October. The coldness of winter may have bitten into our economic judgments. During this period, the Tories were stalled a percentage point behind Labour.
As the weather has warmed up, economic judgments have brightened too, with February recording a 4 percentage point improvement in economic sentiment and March adding a further 2 per cent on to this. This has been reflected in March’s political polls. The Tories have moved from being a point behind, as they were throughout November and February, to being tied with Labour.
If the weather is driving economic sentiment, Labour has cause to worry. This seems unlikely, however. If economic sentiment could decline through September and December, it might do so again between March and May. The longer term trends, however, are clear: improving economic sentiment, declining Labour poll leads.
None of this changes quickly. It moves at a glacial pace. Nothing seems to spur the data into dramatic movements. Not ISIS or Putin. Not – we might assume – Budget 2015 or the short general election campaign to follow.
This suits the Conservatives. George Osborne decided in the Budget to stick and not twist. No big moves or rabbits. Just – as Uncut predicted – tidying up a careless Autumn Statement to realign the fiscal projection away from the 1930s, undercutting a key Labour attack line.
Osborne decided to do so little in the big moment of the Budget because he is confident that the small moments of economic judgments will continue to increasingly favour him. The underlying trends in the table above support this judgment.
Osborne has made his choice. Have Labour? Ed Miliband played a greatest hits set at the Spring Rally: love for the NHS and apprenticeships and contempt for Tories and tax avoiders. The point of the rally was to motivate an activist base fired by Tory scorn.
But there is a sense that Miliband is now a tribute act to himself, repeatedly playing the greatest hits, and hoping they still work. They do in the pantomime atmosphere of the rally – booing Tories, cheering the NHS. Whether they are heard in the quiet moments of economic judgment is another thing.
Rick Rubin is a music producer to have reinvented many performers seemingly reduced to self-tribute status. Even at this late stage, if Miliband can find a Rubin to make him heard in the quiet moments, I would encourage him to.
Jonathan Todd is Deputy Editor of Labour Uncut