THE BLOG

Too Much Too Soon?

04/12/2013 09:56 GMT | Updated 02/02/2014 10:59 GMT

At last! The economic recovery is finally under way. Its dynamics - rising borrowing, a housing "bubble", uncertain prospects for the eurozone - may trouble some readers. But, as the news over the last month or two has underlined, we are at least now living with an economy which is growing rather than shrinking.

What can we say about what all this adds up to politically? After all, the forthcoming election is now on the not-too-distant horizon (less than 18 months to go) and stewardship of the economy is certain to be at the forefront of the campaign. But, while the election may be getting closer, there are very few people currently making confident predictions about what will happen. It's all a bit complicated. The outcome in the 2010 election was so very close. The coalition is such a new experience for politicians and public alike. The Conservatives are moving to the right and Labour is moving to the left (according to the voters). UKIP are the epitome of a "known unknown". Heaven knows what this all adds up to. Time will tell...

What of Labour? The party has already decided that it will go into battle as the defender of living standards. On the face of it, they are batting on quite a strong wicket. Real incomes are falling, and people have most certainly noticed. Ed Miliband's plans for the energy bills went down well: they were the most popular policy announcements of the Autumn, leaving the Government on the back foot. His proposals for rewarding employers who pay the living wage are described as "interesting" by the Federation of Small Businesses. And in the opinion polls, the Labour leader's personal ratings are, at last, starting to improve - his satisfaction ratings are now broadly similar to David Cameron's. As for the "recovery"? Well, half the public say they are feeling "no benefits" of economic growth at all.

That said, I can't help thinking that the Conservatives are better placed on the economy than even they themselves may think they are. Labour is certainly making its stand on living standards. But ask the public which party would be most likely to improve their family's living standards and, rather than this being Labour's territory, we have a dead heat. Twenty-three per cent say Labour, 22% the Conservatives, and 52% say it would make no difference. What's more, when we ask which party has the best policies on the economy, it's the Tories who beat Labour, by 38% to 20%. A 2 to 1 margin, despite (or perhaps because of) the economic belt-tightening of the last few years. We haven't seen clear blue water between the parties on this measure since the early 1990s, before Black Wednesday played such havoc with the Conservatives' reputation for sound economic management.

Looking ahead, both the public and business are expecting to see things improve over the coming year. Ipsos MORI's monthly economic optimism index is now in the black, standing at +15 points. A year ago we were at -6, and two years ago it had slumped to -43. Meanwhile, the proportion of Britons worrying that the economy is one of "the most important issues facing Britain" is on the decline. It was 71% when the Prime Minister took office in 2010. It is 40% now, and falling. Indeed part of me thinks that David Cameron may well have been happier to be fighting the election in 2014 rather than 2015, on a "let us finish the job" ticket. A year later, with things looking a little brighter all round, Labour's focus on living standards could look that little bit more attractive to swing voters. In an understated way, it feels like the momentum may be with the Conservatives, but the electoral timetable may count against them.