by Jonathan Todd
We all live in a George Osborne submarine. Or so he wishes. Doing his work beneath the surface, emerging periodically to bestride events, such as this week’s distinctly wintry Autumn statement.
Osborne saw Gordon Brown use these set piece occasions to determine the terms of political trade. He’s equally keen to exploit his bully pulpit. He faces, though, a number of challenges to doing so:
1.) Has the relationship between economic and Tory recovery broken?
The Autumn Statement is wintry in the sense that it’s being delivered in December. The economy, however, is more mid-March. The darkest days feel behind us and something better nearly upon us.
Given this, Benedict Brogan asked a pertinent question recently: Why are the Tories not doing better in the polls?
The Todd thesis – as Lewis Baston called it – appeared to break down as soon as it was expounded. This thesis was based on a regression analysis of economic sentiment and Labour’s lead over the Tories. It was expounded at the end of October and held that for every 1% increase in the proportion of the electorate reporting the economy as doing well, the Tories would close on Labour by 0.6%. Since then, there has been a 3% increase in the proportion of the electorate reporting the economy as doing well. But, while there is some fluctuation, Labour’s lead has held firm enough to prompt Brogan’s question.
It may be that the Todd thesis will reassert itself over a longer time horizon. If economic sentiment keeps improving, growth in Tory support will eventually catch up. Less positively for Osborne, it may be that the Todd thesis has collapsed because something has happened to disrupt the causality between improving economic sentiment and growing Tory support.
Ed Miliband’s focus on the cost of living may mean that even though people increasingly feel the economy is doing well, they don’t believe this improvement will benefit them, so it doesn’t translate into Tory support. Alternatively, the better people feel about the economy, the less Labour’s reputation for profligacy may trouble them. In better times, Labour becomes a risk worth taking.
