Tuesday, June 12, 2007

Economic Perceptions

I'm of the firm belief that the Labour party's fortunes are tied to the economy, and that when voters are alone in the polling booth, economics trumps all other considerations no matter what they tell the pollsters. So it is worth looking how people perceive their own personal financial situation is doing.

YouGov asks the question "How do you think the financial situation of your household will change in the next 12 months", every two months. Unfortunately their figures don't go further back than Jan 2003, but there is still enough to tell an interesting story.

Get Better Stay Same Get Worse Don't Know
Jan 2003 21 31 47 1
Apr 2003 17 28 53 2
Jan 2004 21 31 47 2
Mar 2004 19 31 48 3
May 2005 23 34 37 6
Nov 2005 18 33 44 5
Mar 2006 21 31 44 5
Nov 2006 21 32 43 5
Mar 2007 24 30 44 4
May 2007 23 35 38 4

The important figure is those saying things will Get Worse.
Some of those who say things will Get Better or Stay the Same will give the government credit, but most will just pocket the benefit. Those who think things will Get Worse however, are highly motivated to kick the government.

It's notable that people were most pessimistic in April 2003, when the Iraq war had started, and the FTSE had reached a low of 3287 in the previous month (March 2003), down from 6900 in December 1999. But by the time of the general election in 2005, the Get Worse figure has dropped 16 points from the April 2003 figure (the FTSE had recovered, housing was going well, and unemployment was 4.5%).

During the grumpy 2006 period, the Get Worse figure climbs, but the May 2007 poll, which was done after Blair announced he would step down (fieldwork done 21-23 May), shows a return to roughly where we were in May 2005, during the general election. Note that this improvement came despite interest rates rising, though it's worth noting that electricity and gas bill have fallen in this period. To me this improvement in the economic polling indicates that voters actively associate Gordon Brown with prosperity. They feel that while Blair's priorities have been foreign policy, Brown's will always be the economy.


John Wheatley said...

While you are broadly right, there is a "government competence" card that can trump the economy. Major did a good job on the economy, but b******d up the politics

snowflake5 said...

I don't think Major did do well with the economy (that's just a myth put about by Tories who want to pretend that they can run an economy as well as New Labour!)

Major became Prime Minister in 1990. By 1992, the country was in severe recession - unemployment was well over 2 million and businesses were going to wall like ninepins. The budget deficit in 1993 was a shocking 7.8% of GDP. They had to increase taxes to try to get it down. And of course there was negative equity.

After they hit rock bottom, it is true that the economy started to recover - but that recovery only took people back to where they were before the recession, with years lost in the middle with no progress. Looking at the recovery post 1992 without the pre-1992 period is like smashing a window, fixing it, claiming that fixing it is "progress" and ignoring the capital, time and inconvenience the whole saga has cost.

This is a whole different proposition to what people have had under New Labour where they have made steady progress every single year, with no back-sliding.