Public opinion and confidence will be central to how the recession plays out and its impact on political fortunes. Commentators are making contradictory claims about the country’s response: are we backing the government in hard times or blaming it for the state we’re in? The confusion will be partly because the landscape of opinion is changing rapidly – but there are a number of clear messages.
The first thing that strikes you from long-term data on perceptions of the economy is that the last eight to nine years stand out as the exception. We have forgotten that the norm has been for worry about unemployment or the economy to be front of mind for the majority of the population, as we can see in the chart on the next page. We may well look back on this time as the end of an extraordinarily optimistic economic period rather than the start of an unusually negative one.
Of course what is happening in the economy is still momentous, and that is reflected in rapid shifts in opinion. What is most interesting so far is that the current record-breaking level of economic concern has been seen at a time when most people are not yet worried about their own jobs – only 15 per cent say unemployment is a key issue facing the country. It won’t be until the current wave of job losses hits home that we can start to gauge levels of public anger and the extent to which they blame the government.
But for now the polling data confirms what many have said – the focus on the economy does seem to have advantages for Gordon Brown and Labour. For the past decade Labour had been seen as the best party on the economy. The party lost its advantage, quite spectacularly, over the course of last year – but more recent polling suggests it is now back on level terms with the Conservatives.
And the position with leaders is even more marked. In the late summer Brown was as unpopular as John Major at his lowest point – but by the end of the year, satisfaction levels had doubled, and 41 per cent trusted him to get us out of our economic problems, compared with 29 per cent for David Cameron. Other polls have also shown a doubling in the belief that Brown is showing strong leadership – although from a very low base, and still only 32 per cent think he is.
And if the prime minister is having a pretty good recession so far, it is partly because Cameron is having a bad one – the Conservative leader’s ratings drifted throughout the autumn, until by the end of the year as many were dissatisfied as satisfied with him. This is not primarily because he seems out of touch, or too posh to deal with the real concerns of ordinary people in hard times (a message some have tried to push), but more to do with his perceived lack of experience and substance – the majority of the population still see him as a ‘lightweight politician’.
And if Cameron is having a bad recession, George Osborne is having a terrible one. Different polls, both taken in November, showed that Cameron faired much better against Brown than the Cameron/Osborne team faired against Brown/Darling.
However, one caveat in this relatively positive picture for Labour is that surveys among businesses are much less positive – some show that the Conservative leader is twice as likely to be trusted on the economy as the prime minister among business audiences.
Looking more specifically at policies, the measures in the pre-budget report received a cautious welcome from the public, with 54 per cent supporting them and 30 per cent opposing – but there were significant doubts about whether they would have any impact (only 28 per cent said they would, and even fewer said they would change their own behaviour).
On individual measures, again the picture is changing so quickly it is hard to come to a firm view, but there do seem to be consistent themes.
The first is that the Conservatives are absolutely right to focus on government debt and the message that this is storing trouble up for the future. This is a real concern – and the logic of debt having got us into this trouble, so how can more debt get us out, does resonate. Two-thirds believe the Conservatives are right that increased borrowing will lead to big tax rises in the future, and three-quarters agree that it is important to keep borrowing under control so that we don’t store up problems for the future.
The second is that the focus on cutting waste as a way of offsetting some increased spending or avoiding some tax rises is always going to be popular. This is partly because it is a no-cost option for most of the population – but it does also play to a deeper held feeling that government and public services are not as efficient as they should be. The government would do well to make more noise about the efficiency savings it is promising.
The wider question of whether the public would prefer cuts in public spending to pay for tax cuts and breaks for savers is much harder to call. If you ask generally about cutting back on public spending, people are much more likely to be in favour than when you are more specific about this meaning cuts to, for example, health and education. But overall there doesn’t seem a huge appetite for significant public spending reductions – we still want Scandinavian levels of service at US levels of taxation.
There is, however, clear support for paying for some measures through increases in taxes for the highly paid – but this is very sensitive to both the income threshold chosen and the tax level. So while three-quarters support increasing the tax rate to 45 per cent for those earning over £150,000, support falls significantly when the threshold is lowered to £100,000 or the rate increased to 50 per cent (only half would support a 50 per cent rate for those earning above £150,000, even though this directly affects a tiny proportion of the population).
So overall, among the public at least, and with the help of a lacklustre response from the opposition, the government has clawed back some level of credibility and trust. But we have seldom seen such erratic and unpredictable polling – and we are only starting to see the real impact on perceptions. The Conservatives might be right not to be too concerned about being caught short on the financial crisis, as the impact on the real economy will make that a distant memory by the time of the election.
But also, while the economy and jobs will be the main concerns at the time of the next election, they will clearly not be the only issues deciding how people vote.
On this, it helps to look back to other hard economic times – and our data shows that even in the worst downturns, other issues remain vitally important to electoral success. In fact, in 1986 (when unemployment was above 3m) and 1992 (our last official recession), people said that other issues like healthcare, education and law and order were just as important to deciding their vote as dealing with the economy.
For the next election, crime and immigration are likely to be two of the most decisive issues beyond the economy – and Labour are now hugely behind the Conservatives in both. Some have said that an improved performance on economic issues has made the public willing to listen to the government again, but the challenge will be not only to maintain this as times get harder, but to use the opportunity to convince on a wider range of issues.