Last month I put up a post that argued that the Labour recovery in recent months co-incided with a rather counter-intuitive increase in the proportion of people who thought the economy would be doing better in 6 months time, something that had emerged since the bank bailout in the Autumn. I speculated that, if bad economic news meant economic optimism fell again in 2009 it might also go hand in hand with Labour’s poll ratings.

Well, back then I used the Nationwide’s consumer confidence tracker, carried out by TNS. They’ve just released their latest data, and it shows people’s confidence about the economy in 6 months time falling again. If there is any correlation with how the government’s support is holding up (and it is, I hasten to add, only a hypothesis) then it doesn’t bode well for Labour support in the first voting intention polls of the year.

graph


71 Responses to “Economic confidence on the wane again”

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  1. JackR

    Sadly, the “if you vote conservative public services will be put at risk, jobs will be put at risk” has proved very effective for Labour in the past and they will use it every time any party talks of public spending cuts. There is a clip on youtube on a queens speech debate where Brown says that Tories IHT cuts would result in giving the richest 3,000 estates £1bn that could be spent on 25,000 nurses, teachers etc. Despite being completely bogus (the £1bn was never going to be spent on nurses anyway) this line of attack worked because the Tories didn’t counter effectively enough by saying, as they have now, that health, education etc will not be cut back on.

    You have to give Labour some credit for their powers of persuasion. They’ve convinced millions of people that there is no way to cut even a penny from a £650bn budget without affecting front-line services. I’m sure there are many Labour voters who do realise that money can be saved and they support Labour for reasons other than ‘we spend more than the tories’, but the ones who staunchly defend them on the grounds that nurses and teachers will be put out of work as a result of any spending cut need to enter the real world.

  2. And to carry on – it was just bad luck that the Conservatives had two recessions. These things typically happen every 7-10 years. That it was 16 years to this one shows how deep it will be. Yes, America may have been the catalyst to this downturn, but if they hadn’t have been, someone else would have – and we can’t have been far from the front of the queue. In all the talk of ending boom and bust though, Brown forgot to prepare the economy for a downturn, which is why we are going to get hammered by it. The ERM fiasco may have been bad at the time, but it paved the way for the 16 years of growth we’ve just had. This recession may prove to have a silver lining too.

    My question to you is though, if Labour stay in power, and we have another recession in 8 years, as the Tories had to deal with, do you think the country can survive another borrowing binge and bailout package? Or do we need to accept that recessions happen, and the best we can do is to get our economy in a position so that we don’t end up with crippling debts when the next one comes?

  3. Mark – that’ll be a lot fewer than the richest 3000 now that property has crashed, and I think the boost to the richest was more like £2bn. It wasn’t an effective attack by brown though, since the majority of people are in favour of abolishing IHT, no matter how much of a boost it is to howsoever few estates.

    On the issues – I disagree with you over what paves the way for what are better, but this is no place for such an argument; rather it’s a place to discuss public perceptions and the evidence thereof in the polls.

  4. I think the debate on public spending will be different at the next GE than at previous elections.

    For one thing the huge budget deficits the Government are building up are being covered in the media a lot and also, several recent polls have shown that the public are decidely not in favour of continually increasing Government debt .

  5. Jackr and MarkM: You guys seem to have gone a bit off message for a polling site!!

    Roll on the next poll – I am not convinced we will see a big increase in the Con support yet. The BBC narative particularly is still very much with the govt, though newspaper headlines are starting to go seriously against them. I personally don’t think we will see Conservative leads of more than 10% for at least another six months, until the media return to the belief that Gordo is not up to the job.

  6. Kudos to Marm M for posing in my view the right questions many voters will ask. I think though the memories of the 18 Tory years are not just economic numbers but social division. As a Notherner I do not remember enough SEast voters bothering too much about manufactruing decimation during those 18 years with few mitigation policies and continued voting Tory in sufficient numbers.
    This recession is likely to hit the SE more as more jobs are in the financial service sector plus the fall in £ will help what industry we have left ,more of which is in the North and house price falls have been greater in the SE.
    Labours vote (or seat count as safe seat votes will be well down) may well hold up better in the Regions (Scotland aside) but they will lose many key marginals in the South unless Osborne messes things up again,
    Man U fans sing ‘Viva John Terry’ Labour activists could be singing ‘Viva George Osborne’.

  7. Yeah, ok we’ve gone a bit off topic. It’s hard to discuss polls when there are none though :)

    I thought we were having quite a grown up debate about issues. You’ve got to admit it was nicer than a full heated argument with name-calling that has happened lately. Roll on the next polls, let’s see if anthony’s theory holds up.

  8. The choice is much starker now than it was before the Conservatives’ pledge to cut spending.

    If people regard government spending cuts as the same concept as private company spending cuts, then it’ll be easy for Labour to paint such cuts as job cuts. (ie when a company wants to save £200m, they cut jobs).

    If, however, people regard government spending cuts as somehow different – eg taking buses instead of taxis, etc, then the Tories’ argument that they would be cutting waste, not jobs, might prevail.

  9. Again I think the argument that the Tories are spendthrift and Labour profligate is false. Yes Labour spent a lot more money than before, but as the economy was growing rapidly at the time it looked sustainable.

    The error was that the growth wasn’t sustainable as it was driven by inflated asset prices speculation and debt.

    I suspect that the Tories wouldn’t have spent so much and might have cut taxation but then there is a good chance that that would have fuelled the boom even more and that we would be in a deeper hole now.

    I don’t suppose people will stop the right/left Tory/ Labour bashing here regardless of what I say but if you look at the difference in cash terms between the two sides with regards to tax cuts and public spending and compare them to the overall tax take, public spending and GDP there really isn’t that much difference.

    Truth is, partly due to triangulation and spin we have two political parties which for the last decade or so, have ritually condemned each others economic policies while by and large subscribing to the same free market city/consumer approach.

    On a separate note I final got round to doing a spread sheet on all the Yougov sub-samples for 2008 for Scotland, partly to see how Labour in Scotland faired with regards to economic confidence.

    The results are over a total of 24 polls and they show that as with the UK Labours fortunes have as ielsewhere pretty much tracked economic confidence.

    If anything they have faired slightly worse even though economic confidence in Scotland has been higher than the rest of the UK. I think there are a number of possible explanations for this;

    Firstly Labour in Scotland had never fallen as far as in the south so any recovery wasn’t likely to be as large.

    The second often noted aspect is that in a four party system and rise is likely to be less than in a three party one, even when there is a principle beneficiary.

    A third factor could be that as this is a Westminster focused event the gain may well have come more from UK parties than the SNP and as they have a lower share of the vote then there was less for Labour to gain.

    If this is in part the explanation then where as the SNP have been overtaken by being sidelined by events focused in London we may also have escaped some of the damage if the electorate are focusing on UK political responses.

    One thing that might suggest that this is the case is that over most of the year the combined Lab/SNP vote has been 60-65%, but over the period of he last month or so as Labour have strengthened it has risen to over 70% (although it has just dipped below that).

    There are of course caveats to all this. The samples are small, there is a fair variation from poll to poll and there are clusters of polls in some periods and gaps in others.

    However I did mean, mode and median for all the parties and came up with the following;

    Lab; mean 32%, mode 32%, median 32%
    SNP; mean 33%, mode 34%, median 34%
    Tory; mean 19%, mode 19%, median 19%
    LibDem; mean 11%, mode 13%, median 12%
    Others; mean 3%, mode 3%, median 3%.

    Over the year these look pretty stable in terms of the three different measures compensating for each other.

    The fact that four of the twenty four polls were full Scottish ones helps to pull the Libdems over 10%, which I think overcomes the fact that the distribution of their vote (with some much of it in a few locations) tends to mean that in the UK Scottish samples they are probably under represented, often scoring well below 10%.

    Currently the Parties in the run up to Christmas were on ( compared to the average for 2008);

    Lab 38% (+6%), SNP 30% (-2%), Tory 17% (-2%), LibDem 10% (-2%), Others 5% (+2%).

    A good result for Labour although since late October they have been running at 40% or over. Equally compared to the last few months this looks like a bit of a recovery for the Libdems and ups and downs for the Tories, with the SNP the most stable.

    I’ll probably use these 2008 averages for my base line till about the spring and then update it to cover the last financial year.

    Peter.

  10. Sorry for going off topic, its just as there were not any polls to talk about it seemed better to have a mature talk about the various parties and it’s been nice to be able to talk about that without being called names just because someone doesn’t agree with me.
    I’m quite interested in the Scottish Polls too because Labour needs to do well in Scotland to have any chance of winning. I think that whilst the SNP did well last year they won’t do exceptionally well come the next election, I think the polls show that the Lib Dems might be the big losers in Scotland and nationwide. The problem for the SNP is that I don’t think that the majority of Scottish People are in favour of an independent Scotland and the economic crisis has shown that it would be hard for Scotland to cope at a time of economic turmoil, I used to live in Perth which is SNP and I must say that I always found them to be fine and I don’t think they will lose the seat to the Conservatives any time soon!

  11. @ NigelJ – “I am not convinced we will see a big increase in the Con support yet.”

    I agree with you on that. I think the next round of polls will show pretty much what the last couple before Christmas showed, perhaps with a small 1 or 2 point shift in favour of the Tories. After that, though, I think we’ll see the Tories solidly back in double figure lead territory – assuming, of course, nothing unpredictable such as a miraculous economic recovery happens.

    I think Brown will revert to flapping, dithering and clunking again as things don’t go his way, and that will be the end of him really.

    But we’ll see :)

  12. A belated reply to Richard’s riposte to my point about a possible upturn in the US housing market.

    I agree that the latest official data (from November) is still not positive, but the BBC’s US correspondent was reporting last week on anecdotal evidence from some real estate agents that they ‘were rushed off their feet’ over the holiday period as new interest in the market appeared from nowhere.

    I’ve no idea if this is true or not, but just as the mood in the UK turned earlier this year in matter of weeks, if not days, I think the next change of mood will be equally rapid and take many by surprise. It will start in the US, and I wouldn’t bet against it having something to do with a new President. The US is entering a new age, and they know it – its a very potent mix.

  13. Mike S on Political Betting reporting rumours of a You Gov poll in the Sun showing 41 / 34 / ??.

  14. Alec

    So the basis of your idea of a reviving US housing market is a vague comment about estate agents! A profession not noted for it’s realism or honesty.

    As I said the most recent official figures show that the US housing market is not only continuing to decline but that the decline is actually accelerating. With increasing job losses and deepening recession in the USA I can’t see confidence returning to the housing market for a long while yet.

    The USA is entering a new age, however it’s rather more likely to one of relative decline than improvement. Barak Obama has proved that he is a skilled politician and can recite a speech very well whether he can actually govern is yet to be discovered.

  15. New Yougov poll – Con 41/Lab34 – 7% difference no change.

  16. Yep the sun has released a poll saying Conservative:41 Labour:34 Lib Dem:15

    Not what I was hoping hoping for but at the same time its not a great shock.

  17. just what i was hoping for from the you gov poll in the sun. just going to get worse for the unelected one

  18. JackR,

    I’m no fan of the Tories. But I think it is almost inevitable that Labour will fail to win the next election.

    A lot of people will feel that with the present Tory leadership there is a relatively fresh and decent alternative. And it seems to me that many who used to support new Labour now perceive it as an old Nanny who has lost touch.

    On a positive note for Labour I see no reason for not thinking it has every chance of winning the following election. But this time too many people will want a change.

  19. It is my feeling that whoever wins next time will only be in for a term.

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