Good Economic News Bodes Well for the Conservatives
This has been a good week for the Government. Not that you would know it for all the froth in the media at present! But on the things that really matter it has been one piece of good news after another. Inflation fell again to just 2.2%; unemployment fell to 7.9%; those in work rose to a record high; borrowing came in under expectations and earlier borrowing figures were revised down significantly. The remaining economic piece of the jigsaw is the quarterly growth figure and this is expected to be good news as well.
If we are in a double-dip recession (and it is still a big “if”) it is quite different from others the UK has experienced since WW2. Then we saw unemployment growing during the downturn and sometimes what was characterised as a “jobless recovery”. This seems to be quite the reverse. Unemployment has continued to fall quarter on quarter, against all expectations. When the Conservative-led Coalition took office the Chancellor predicted that the private sector would absorb the job losses in the public sector. Labour and the Trades Unions scoffed but this is precisely what has happened. It may also be one of the factors which has ensured that Conservative support has held up pretty well while the Labour team has failed to make further headway after gaining an early 10% straight from the Lib Dems.
It will be interesting to see what happens to party support as growth returns to the economy, tax receipts rise and the Chancellor has more room for a few sweeteners for the bitter medicine of austerity. Whilst there is currently a lot of focus on froth such as “Pleb-gate” and whether or not George Osborne should have purchased a first class ticket before he boarded, none of that will matter much when most people come to vote in a couple of years. Just think back to Blair’s years when the Ecclestone, Mandelson and other scandals filled the papers day after day only to see the government re-elected with big majorities. Labour only lost when they had a Prime Minister who lacked credibility and a recession which partly resulted from Labour’s actions in office.
Ed Miliband has been Labour leader for long enough for most people to decide whether they like and trust him and he is still usually polling behind David Cameron on most measures of leadership, economic credibility and whether he looks like a Prime Minister. His credibility has not been helped by refusing to back a single cut in spending presented to the House of Commons whilst at the same time hinting that he would follow government spending plans. Yesterday he looked lost as he repeated his non-specific message of the need for cuts at the “Anti Austerity” rally in London. As he addressed an anti-cuts rally of assorted Trades Unionists, Greens, CND, and Socialist Workers Party supporters he looked like a rabbit in the headlights as he was booed and jeered by the people he might have expected would be his natural supporters.
The resignation of Andrew Mitchell as Chief Whip has lanced that boil, although I deeply regret that he will be seen as caving to the very personal and political campaign run by the Police Federation. The government now must focus on what is important to the British people and ensure that it does not get sidetracked. The deportation of Abu Hamza and the prevention of Gary McKinnon’s deportation were important achievements and there are some very important decisions coming soon on the EU. The Conservatives in the government have the chance to get back on the front foot and demonstrate that we are in tune with the attitudes and feelings of the public (unlike Labour). However, the key decisions lay with George Osborne in the next public spending round and next year’s Budget. The party and the government cannot afford another shambles like we saw last March.
Whilst the economic signs are now looking good and I firmly believe that we are on the road to a stronger recovery, I also believe that the so-called double dip recession will in time be revised away by the ONS. However, the current saving grace for the Conservatives is the sheer uselessness of the two Ed’s. Neither Miliband or Balls have persuaded the public of their credibility, despite Miliband’s better than expected speech at his recent Conference, and they are both a significant drag on their party’s ratings. The Conservatives in Parliament cannot rely on this alone and must make much more effort to project an air of competence and purpose. If they are successful, and if the Lib Dems can stage a limited recovery in the polls, Labour’s lead will evaporate like the morning dew in the face of the sun.
In the meantime I am sure readers will enjoy seeing Ed Miliband being shouted down at the rally on Saturday: