It’s time to revive James Carville’s slogan. In 1992 Bill Clinton’s adviser repeatedly reminded campaign workers: “It’s the economy, stupid”. For a while, other issues here in Britain came to the fore, such as Brexit and immigration. However, following a decade of austerity and stalled living standards, more than a year of high inflation, and nine months after financial lunacy destroyed Liz Truss’s premiership, Carville’s slogan is plainly back.
The following table tells where we stand. It compares where the two main parties stand on the economy, (a) compared with their ratings at the time of the last election, and (b) compared with other issues today.
A preliminary point: typically only around half the electorate name either party. In each case around a quarter name another party (Lib Dem, Green, nationalist, Brexit party, Reform etc) and a further quarter say “don’t know”. On each issue there are millions of voters for Labour and the Tories to win over.
That said, there are some issues where one party comes out on top, regardless of the general state of the parties. Four years ago, Labour had clear leads on the NHS and housing, even as it headed towards its worst election result since 1935; and even today, with the government in deep trouble, the Conservatives remain ahead on defence, albeit far more narrowly than in 2019.
The economy, though, is what matters most. Four years ago, the Tories were preferred by two-to-one. No party on the wrong end of figures like that ever has a chance of winning an election. Today, Labour enjoys a six-point lead. Moreover, Labour’s rating is up by six points (from 19 to 25%) – more than on any other issue – while the Tories are down 18 (from 37 to 19%) – again, more than on any other issue.
That should cheer Keir Starmer. In the past, the Conservatives have usually enjoyed a lead on the economy: Labour’s challenge at election time has often been to neutralise it as a vote-winner for the Tories, rather than win outright on the issue.
So: mission accomplished? Not quite, and not yet. On every issue, the story is far more one of Conservative collapse than Labour recovery. Labour has yet to seal the deal with a sceptical electorate. 25% is enough to put Labour ahead on the economy, but not enough to give it real bragging rights on its reputation for economic management.
So what must Labour do? Having the right policies is part, but only part, of the story. In 2019, Jeremy Corbyn’s allies seemed to have been surprised that popular individual policies, from higher public spending to bigger pensions, did not translate into extra votes. The reason was straightforward. When a manifesto promises X, swing voters do not just judge whether they like X but whether the party and its leader have the qualities needed to keep that or any other promise. Can we trust them? Are they tough enough? Are they on my side? How will they cope with a crisis? Above all, are they competent? Labour’s core problem was not so much its detailed policies (though these were not to everyone’s taste) but these other things: “valence” factors in the lingo of political scientists. Bluntly, a large majority of voters last time would no more trust Mr Corbyn to fix the economy than trust Mr Bean to fix their car.
Keir Starmer’s biggest single challenge between now and election day is to consolidate Labour clear, though still modest, lead on the economy. This means persuading more voters that he is tough, competent, on their side and so on.
The latest row over child benefit illuminates this challenge. At one level it is about the plight of families with three or more children, whose lives have suffered since the Tories limited the benefit to two children. At another level, it is about whether voters think Labour has what it takes – its character as well as its policies – to revive a flagging economy and not to wreck it.
Starmer’s problem is made worse by the fact that, unlike Tony Blair 26 years ago, if he becomes Prime Minister he will not be able to count on steady growth and continually rising government revenues to finance his ambitions, at least in his early years. Which is why the matter of child benefit is so tricky. The merits of reversing the two-child limit that George Osborne introduced eight years ago are obvious. So are the dangers of Labour starting to promise more generous welfare payments which require either higher taxes or more borrowing.
This weekend, Labour’s National Policy Forum will grapple with such issues. I am nor sure how this battle will play out. But I am sure what the Tories – desperate to undermine Starmer’s credibility – will want Labour to do.
Peter Kellner. The Politics Counter 