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politicalbetting.com » Blog Archive » If it really is “the economy stupid” then LAB has a big problem. But is it?
That famous sayin from Clinton’s 1992 campaign about it “Being the economy, stupid” conitnues to colour our thinking about what actually influences electoral outcoes but it’s hard to reach any conclusion either way.
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The economy is going to remain the dominant issue at the next GE, that and which party is best able to keep steering it in the right direction. So yes, Labour has a very big problem.
"...As I always say when polls move, there is no easy way of proving what caused a poll movements, we can only really hypothesize. My own best guess is that there are a couple of likely reasons behind the recent movements. The first is the improvement in economic confidence. This is a polling blog, not an economics blog, I don’t claim any great expertise in economics and have no idea if the economy is actually getting better. However, it is very clear that the general public are being more positive (or less negative) – the economic confidence trackers from MORI, YouGov and NOP all show sharp increases in economic confidence, with people the most optimistic they’ve been since 2010.
Back in April only 14% of people told YouGov they thought the economy was showing signs of growth, by August that had risen to 37%. This has equally been reflected in growing support for the government’s economic policies – from April 2012 until this Spring YouGov consistently had Labour and the Conservatives pretty level pegging on the economy, the Conservatives now have a modest lead. Whereas last year a majority of people thought the government’s cuts were bad for the economy, the gap is now much closer, with a couple of recent polls showing people evenly split over whether they are good or bad for the economy..." http://ukpollingreport.co.uk/blog/archives/8007
"...Then all of a sudden, like a sociological version of the Likely Lads, they were gone. The world had moved on, but the Squeezed Middle had not moved with it. Or, to be more specific, the Labour Party had decided to move on without them.
Miliband’s abandonment of the politics of the Squeezed Middle for the politics of One Nation has passed virtually without comment. Partly that’s because most people don’t take the slightest notice of what Labour’s leader says any more. And partly that’s because among those that do, “One Nation” initially had a superficial attraction.
But in its own way, Miliband’s decision to ditch the Squeezed Middle narrative may prove to be amongst the most fateful of his leadership. A few months ago I asked one Miliband adviser why it was he didn’t talk about them any more. “It’s because he feels it excludes people at the bottom,” he said, “One Nation is more inclusive. It’s what Ed feels more comfortable with.”
Which is precisely where Labour has once again retreated to. Its own comfort zone http://blogs.telegraph.co.uk/news/danhodges/100235685/labours-crusade-for-the-poor-is-morally-commendable-but-its-political-suicide/
Miliband took an important step in accepting Tory spending limits,similiar to Cameron copying Labour`s NHS spending.Maybe enough to see him through as long as the economy doesn`t go into stratosphere.
"As we approach Labour conference the pre-briefing has already started. And it is clear that one of Miliband’s keynote announcements is set to be a repeal of the Bedroom Tax. It will be rapturously welcomed by those in the Hall. It may even earn him a nice telegram from Ban Ki Moon. And it will be strategically disastrous.
Labour refuses to learn a simple lesson. Politics is binary. You are either for something or against it. And by abolishing the Bedroom Tax, indeed, by possibly framing its entire conference around that announcement, it will again be giving the wrong answer to a simple yes or no question"
Make your mind up.
http://yougov.co.uk/news/2013/09/12/infographic-countdown-election-day/
http://www.abc.net.au/news/federal-election-2013/guide/ling/
Hurting but not working.
How does that square with no cuts and increased welfare?
Not saying you're wrong, but the attack is wasted if it gets lost in a load of muddled/mixed messages.
http://blogs.telegraph.co.uk/news/telegram/100235708/has-red-ed-turned-into-dead-ed/
Gavin Barwell MP @GavinBarwellMP 4h
All was quiet in the deep, dark wood. And then @JohnLoony started singing the German National Anthem #scariestcreatureinthiswood
(1970 being the exception)
So in 2016 the real hard choices will begin.
If it is anything like last time, the debates will not answer any of the real questions.
However the normalisation of interest rates,will come as a shock to many.
Even at these rates, standard mortgages, are near 5% , way above the historic low bank base rate.
If the banks maintain this difference as they will, it will be a difficult period for many.
@tim - I don't know why you're so obsessed with that. Lots of industries have a universal service obligation, from telephones to electricity, in most countries in the world (though, oddly, water companies don't in the UK). It has nothing much to do with privatisation; the 'subsidy', as you call it, exists with or without privatisation, is partially mandated by the EU, and remains unchanged.
One caveat: if personal living standards in early 2015 are not improved, improving or obviously about to improve, then the Coalition is in trouble.
Osborne will then blame the LDs for stopping him taking the steps he would otherwise have done to raise those living standards AND if the polling looks very bad at the time of Budget 2015, he'll announce very large rises indeed in the Personal Allowance AND some form of Marriage Subsidy, claim both would have been enacted earlier but for the LDs (who by then will have gone their own way) AND challenge Labour to match his tax and spending plans for X years.
In short, he'll torpedo Balls doing a 'Brown 1996/7' on himself.
All the good news will be claimed by the Conservatives/Osborne, all the bad news will be dumped on the LDs holding them/him back.
Tough for Danny Alexander, in particular, but politics, particularly Coalition politics, is a rough, tough game.
I've no idea how much we've had to borrow to pay for it, but if Osborne is still Chancellor after the next general election it will surely in large part be because of those increases to the personal allowance.
But sometimes, another factor is more dominant. From the mid-1990s onwards, there was a fierce and deliberate policy to trash the Tory brand. Nothing else mattered. Although the front man was Tony Blair, the architect was Alistair Cambell. As is agreed and well-known, the economy was very succesful in 1997---remember the PSDR? (under Chancellor Ken Clarke, the most succesfull CoE since the war?) When else have we had a Public Sector Debt Repayment?
The over-hang for that trashing of the Tory brand is still evident. A hugely unattractive non-tory nearly won the 2010 GE. Gordon Brown was, judging by his stewardship of the economy--measured by what he inherited compared with what he bequeathed--the worst CoE in history.
Repairing a damaged brand is tough, and Cameron's attempts to do so have looked clumsy and clunky. Sadly, he has looked far more effective when attempting to wreck the UKIP brand.
In politics, destroying an opposing brand may be 'all part of the game'. But it is purely negative, and has the unfortunate side-effect of promoting disinterest in politics---'they're all as bad as each other'.
* This is using Electoral Calculus, and interestingly it really makes little difference how well UKIP or the Lib Dems do within reasonable bounds, except insofar as they take votes from Labour or the Conservatives. Due to FPTP it's still the Conservative to Labour swing that counts, even if there are no direct vote transfers between those two parties.
Yes, the quote is still valid. Never underestimate the feel good factor when (a) the economy starts to pick up (b) people begin to see the difference in their wallet.
However, we have only just started on the road to recovery, it will take quite a bit longer for most people to benefit from the change.
If it'll resonate given an improving economic picture... i have my doubts.
Royal Mail raised parcel prices sharply in April, but competitors fear it will strike cut-price deals with selected big clients. Rivals warn that Royal Mail could offer deals on small packets, where it dominates, in return for gaining parcels business.
“Its strategy will become more purely commercial,” says David Stubbs, a postal consultant. “But it’s a mixed bag for the competition.”
http://www.ft.com/cms/s/0/d435db1c-f7d1-11e2-87ec-00144feabdc0.html
http://www.bbc.co.uk/news/uk-england-lincolnshire-24060176
Go look up the ONS figures for [I think] Real Household Disposable Income and you will see that the picture is not so bad.
If it's as much about perception as reality, if things are looking rosy is it a good idea to point out how grey it was?
The Daily Mail reports:
"Arsene Wenger has said he will walk away from Arsenal if the club fail to win a trophy this season.
The 63-year-old's contract expires in June 2014 and there has been speculation over whether the Frenchman will stay on at the club.
Arsenal have not won any silverware since 2005 and the Wenger says there are 'no new talks planned'."
It looks like he'll be going then - Arsenal are best-priced at 2/7 NOT to win a trophy in the current season and should that prove to be the case I can't see him staying on until June - indeed should Arsenal not qualify for the Champions' League by finishing in the top four, I could see him walking before the end of the season. Those nice people at Stan James are offering quite tasty odds of 8/1 against such an eventuality.
With all his millions, I really can't see him wanting to take on the manager's role with another club - he's more likely to be appointed to head up a national side, maybe even England, post Hodgson, available at 14/1 from Paddy Power or more likely with France at much shorter odds obviously, although I can't find a market for this.
As ever, do your own research.
It will be the economy barring a major event, which will determine the GE2015. The 2 Eds are running out of areas to land blows on the coalition government. If the economy continues to grow, we will see salaries in the private sector start to rise even if those in the public sector do not. People respond to positive news in a generally positive manner. As long as the government doesn't become triumphalist they should get the benefit of the doubt by the electorate.
However it was hardly very fair when they dump all their deliveries with Royal Mail for the post person, to deliver the last mile to the house, which I imagine will be the most expensive.
http://www.birminghammail.co.uk/news/local-news/former-mp-jacqui-smith-gets-5912320
Other than Jacqui Smith, who else was considered for the post?
If Italy had left the Euro, the banks would still have owed €120bn. There was no legal way for the Italian government to allow its banks to be forgiven the money they owed the ECB. So, the Chief Executives of the big Italian banks made it known to the politicians that they would have gone bust (taking the savings of millions of Italians down with them) in the event of Euro-exit.
This has always been the problem with the simple option of Euro exit - there is no way for the government of the day to revalue the Euro denominated debts of the companies in their country.
edit: to add, it is not just Germany on the hook for Target-II; most Northern European governments are in 'credit' and most of the periphery is in 'debit'.
I was at university with Gavin Barwell, and he was a super nice guy.
Just to summarise my earlier point, the consequences of Euro exit would have been worse for Italy than for Germany, and this was true in particular for those businesses in Italy that bankrolled the politicians - i.e. the banks and the big Northern exporters.
Silvio - who hates competition from Rupert Murdoch in Italy - would love to leave the EU and turn Sky Italia off; amusingly, it is the EU's competition laws that stop him.
So they're trapped inside a burning building. What happens when one of the GIPSIs goes bankrupt? (They can't borrow forever). The Germans/Dutch/Finns etc are going to have to move ASAP to a transfer union. There will be riots. IMHO I think the Eurozone is going to get effing ugly politically. They're in denial.
Thank the Lord we are out of it. Over time the EZ countries will shrink relatively as the Euro burden holds them back. Bizarrely, over the course of years / decades this is likely to put the UK in a geopolitically stronger position relative to the EZ. Huzzah!
Michael Heaver (@Michael_Heaver)
12/09/2013 14:23
How funny that people now realise UKIP is against Royal Mail privitisation. Short term populism? Clearly weren't paying attention in 2007.
If not them your statement is either misleading or wrong or both.
"It’s two weeks since David Cameron looked rather sick in the House of Commons and Labour MPs jeered ‘resign’ following his defeat on Syria. On that night, all sorts of wild predictions were flying around about what this meant for the Prime Minister. But even some of the more sanguine commentary looked rather misplaced this week when Cameron was able to stand up at PMQs and produce a range of punchy jokes about how weak Ed Miliband was. Could a Prime Minister who had just lost a vote on a matter of war really call the leader of the opposition weak?
By contrast, Labour doesn’t have a plan, and it knows it doesn’t have a plan. Senior party sources tell me they are aware of the need to tell backbenchers what it is that the leadership is doing so that Conservative-style chaos doesn’t ensue. They’ve got plenty of examples of Conservative-style chaos on Europe to understand what it is that causes these ructions: often it’s a failure to brief MPs behind the scenes and to get some of the key strategy out via commentators."
http://blogs.spectator.co.uk/coffeehouse/2013/09/two-weeks-after-his-syria-defeat-david-cameron-looks-less-wounded-than-many-thought/
Well Greece has gone bust once, and will do so again. Private (and public) sector creditors will take a hit and we'll see a 35-50% write-down (again).
Ireland is now bouncing back strongly. It's PMI was actually stronger in August than the UK's. Irish 10 year bonds are below 4%, and it is now able to fund itself. Unemployment is falling. The country now runs a significant trade surplus. And, the Irish property market - the source of all its problems - has just registered its first rise in five years.
The Spaniards, as I've pointed out on several occasions, are also bouncing back strongly. It is almost inconceivable that they have doubled exports since late 2009, and turned a 10% current account deficit into a surplus. They have also done an extraordinary job of dealing with their bad debts - something like €210bn of losses were recognised last year and 38 out of 40 Caixa were closed.
Portugal is a year behind Spain, but is on a similar trajectory.
Italy is more of an issue - unlike Spain, it has not implemented dramatic Thatcherite labour reforms. But it also runs only a tiny budget deficit and runs a substantial trade balance.
It's worth noting that the major bear case on the Eurozone two years ago was that the PIIGS made nothing the world wanted to buy, and had lived the high hog on Germany's dime for years. Yet now Italy, Spain and Ireland run trade surpluses, and Portugal and Greece have seen their deficits halve or better.
You - and Ambrose Evans-Pritchard - can live in your pessimism land if you like. But all the Euro is is a currency. It's neither hemlock nor elixir. If you make goods the world wants to buy, and keep your expenditure in check, you'll do ok. And despite painful adjustments in Spain, Ireland and Portugal, that is what the periphery is trying (and mostly succeeding) to do.
The UKIP group on Lincolnshire CC has split in two . A group of 6 led by Chris Pain have formed a new grouping leaving just 4 UKIP councillors .. Labour now become the official opposition .
(gay marriage, royal mail, citizens pension + tax cuts...)
Correction there are still 10 UKIP councillors
It's funny, back in 2008 I was having lunch with the Chief Economist of a major Spanish bank, and he was incredibly bearish. What he said was - and I remember it word for word -
"Robert, you have to understand that the Spanish economy is based on selling over-priced apartments to Germans. When that goes... poof..."
Yet Spain now runs a trade surplus, and one driven by rising exports rather than by suppressing imports. (Our trade deficit keeps worsening, by way of comparison.) I think that's a pretty incredible achievement.
Compulsory retirement saving scheme as in Australia
No benefits for anyone for any purpose (with the exception of the severely disabled) until they have paid two years of National Insurance
I'd also remember that immigration is a symptom of a problem with our benefits system and our education system. Why do I get 100 CVs from non-Brits and none (zero, nada) when I advertise for a cleaning job paying £10.50 an hour, when I'm only 15 minutes walk from areas with 15-25% unemployment?
http://www.allthatsleft.co.uk/2013/09/the-lib-dems-enough-is-enough/
Let's hope he lives in a Con/LD marginal.
Week 36: Hero – Noel Gallagher
Week 36: Prat – Ed Miliband
But if people are feeling good, the Tories should win in 2015. The issue is whether they are going to be feeling good. In the SE they probably will be. But elsewhere? I am not so sure.
@rcs1000
while I have no doubt the change in circumstance is great news for investors, that's hardly going to bring much help short term to alleviate PIGS suffering.
wrt your spanish contact 2008, I'd simply note it was still a better business model than Ireland, where the Irish sold over priced properties to other Irish people :-(
Another Conservative led coalition predicted in the polls in 2014, might persuade many more there to vote Yes for Independence.
Just been checking for the Singapore Grand Prix on Ladbrokes and they still only have the basic winner's market up. However, they also have the 2014 titles up. The prices are very tight-fisted, however.
http://www.economist.com/blogs/blighty/2013/09/mapping-gentrification
'The blame for spending cuts tracker is always amusing.
There
Hasn't
Been
Any
Spending
Cuts.
Have you conveniently forgotten about Labour's NHS spending cuts in Wales?
"Tory
Governments
Always
Increase
Welfare
Spending"
Not something the Tories OR Labour would want publicizing I'd suggest
His proposal comes just days after Knight Frank, the estate agent, warned that under their current plans the Liberal Democrats will fall short of their plans to raise £1.7 million* from the tax.
They suggested that the levy would need to be extended to all homes worth more than £1.25 million. This would more than double the number of homes affected from 55,000 to 140,000.
Mr Farron is now proposing making the most wealthy pay even more.
"You could have various rates within the mansion tax. A property worth £4 million, for example, paying a higher rate."
http://www.telegraph.co.uk/news/politics/10305288/Hit-wealthiest-with-super-mansion-tax-senior-Lib-Dem-says.html
And I wonder were in 5 years we will be if this is implemented? Talking about the pros and cons of the bungalow tax? The semi-detached in non-nameville tax?
* I think the Telegraph need to check their copy!
Next year will be a very strong year for the UK economy. I expect growth to exceed 3%.
Unemployment will fall month after month in the same way as we saw yesterday, the deficit will undershoot by a reasonable margin, the squeeze on real wages will start to ease and those who are underemployed (for example on zero hour contracts) are going to find themselves a lot busier.
So we are going to have another few thousand comments from Tim about how this is an unsustainable housing boom, how Osborne is being reckless, about how this is "the wrong sort of growth (this from a party where growth=borrowing, simple as that). Most of the public will not be listening but they will get good news stories on their TVs every week, week after week.
The British people get this. You see it in the economic optimism figures which have changed by a substantial margin over the last 6 months. I suspect these figures are a lagging indicator of tory support. Unless we have a repeat of the omnishambles or some serious mistakes in the Health service it seems very likely that the tories will start to lead the polls at some point next year. Whether that lead will ever be enough to let them win the election outright or even stop Labour squeezing in as the largest party is much more difficult to tell.
But it is the economy and it is starting to roar.
Labour have made this problem worse by their failure to provide any credible alternative economic policy, and without this they were even able to make any firm commitments to reverse these cuts. But it's also left Osborne with one stationary target with which to attack and undermine the current Labour Leadership, Ed Balls and the last Labour Government's disastrous economic legacy. And now the Labour party have basically capitulated, and plan instead to stick to the Government's spending plans at the next GE. Ed Balls 'too far, too fast' slogan and flat lining hand gestures don't look so clever now.
The previous predictions look set to be blown out of the water by far stronger signs of recovery and growth in the UK economy in the next few months, and this was the one scenario that was always going to blunt Labour's strategy of making the Tories toxic on austerity. It was also going to blow a great big hole in their attempts to make Tories appear incompetent as well, especially when they kept interest rates low and saw an increase in employment. At the moment, its Labour that remains by far the most toxic when it comes to the economic indicators in the party polling, and the two Ed's personal polling ain't doing much better.