In last week’s Autumn Statement, the Chancellor basically admitted that his economic policy has failed on its own terms, i.e. the national debt is not going to fall in the time that he had planned. In a previous post I argued that I am unable to say with any authority whether a better policy is open to him in economic terms. Today I want to look at the politics surrounding his austerity program, because the public reaction to the failure is somewhat counter intuitive, to say the least.
As a rule, the British public is unforgiving of politicians. We tend to distrust them and, especially in the wake of the expenses scandal, assume the worst about their intentions. Combine that with the very serious argument against the Chancellor’s economic policies and you would think that we would be ready to throw him out of power at the first available opportunity. Yet this does not seem to be the case.
The message that George Osborne wants us to hear is that the coalition inherited a huge mess from the previous administration, and that it is taking longer than expected to clean up. He wants us to think that although it is hard going with him in charge, Labour would be even worse, and that they cannot be trusted with the economy again. What is interesting is that despite the dire economic circumstances many of us find ourselves in, the evidence suggests that we are taking him at face value.
According to a Yougov opinion poll, conducted after the Autumn Statement, more people blame Labour for the cuts than blame the coalition. A majority believe the cuts to be necessary, indicating that Ed Balls’ “too far too fast” Keynesian argument has failed to get through. Only 24% of those polled think that the economy would be doing better under Labour, and 38% think it would be weaker. The general feeling seems to be that the situation we are in is bad but it is Labour’s fault and Labour cannot be trusted to fix it.
This is a disastrous result for Ed Miliband’s party. Right now, in the middle of the Parliament, is traditionally the time when public disaffection with the governing party is at its highest. The economy looks set to be the central issue of the next election (assuming no large scale war breaks out) and yet the public do not want Labour to go anywhere near it. The consistent and intellectually coherent Keynesian argument that Ed Balls has spent two years setting out has basically been rejected. They are no closer to winning back the public’s trust on the key issue of the day than they were when Gordon Brown was Prime Minister.
I personally think this is an almost impossible situation for Labour to turn around. If they stick with their current position the public look set to continue rejecting it. Yet how can they credibly change course now, having spent two and a half years making this case? As things stand, George Osborne has presided over the longest economic slump in British history, and probably won the next election as a result. No wonder he’s smiling.