Economy

Is the improving economy harming Labour’s standing? According to a new Guardian/ICM survey out today, Labour is still ahead of the Conservatives by three points — but the gap is slowly shrinking. Since the last ICM poll in December, Labour’s lead has dropped to just three points, down from an eight point lead in November: Today’s poll also looks at how assured people are feeling about their own financial position and their ‘ability to keep up with the cost of living’. 52 per cent now feel confident about the state of their personal finances — the highest level since October 2010.

Earlier today the Chancellor gave a speech on the economy where he set up a choice for politicians: cut back on welfare, or hurt ‘hard working families’ with tax rises and cuts to services like the NHS.

At the beginning of the autumn, strategists from all three parties assumed that the theme of the season would be Labour’s poll lead narrowing as the economic recovery picked up pace. But that hasn’t happened. Instead, Labour’s lead has remained and its own poll numbers have actually ticked up. This is, largely, thanks to Ed Miliband’s reframing of the political debate about the economy, making it about living standards But the autumn statement showed that when the political conversation is focused on the broader economy, the Tories have the better of it. Thursday has weakened Ed Balls, strengthened George Osborne and begun to move the political debate off Labour’s turf of living standards and back onto the Tory question of economic competence.

When George Osborne stands up next week to deliver the autumn statement, he’ll have some good news to deliver. Not only is autumn, the dreariest of the British seasons over, but borrowing has come in lower than expected and the OBR will upgrade the growth forecasts. But the return of growth, as I say in the magazine this week, poses a strategic dilemma for Osborne. If he declares the economic emergency over, the public might conclude it was safe to turn back to Labour. But equally he has to show voters that he’s sharing the proceeds of growth. I suspect that Osborne will steer clear of too many sweetners.

The next time you see a Tory minister on television, count how long it is until they say that David Cameron is a leader with a long term plan for this country. This is the Tories’ new message. In a presentation to Cameron’s political Cabinet on Tuesday morning, Lynton Crosby told the ministers present that the Tories would probably lose the election if it was held today or tomorrow. But, as I report in the Mail on Sunday, he stressed that the election was still 16 months away so the Tories had time to turn things round. He emphasised that they should play up that Cameron is a man with a plan and attack Ed Miliband and Labour foir being opportunistic, something that is already showing up in Crosby’s polling.

It has long been suspected that there are tensions between Ed Miliband and Ed Balls. The pair fell out badly over the third runway at Heathrow in government and when Miliband was elected leader, he conspicuously didn’t offer Balls the job of shadow Chancellor. But since Balls became shadow Chancellor the pair has largely succeeded in keeping their differences under wraps. But the leaked emails revealed by Simon Walters in the Mail on Sunday today, show what Miliband’s team privately thinks of Balls. Torsten Bell, one of Miliband’s most influential aides, calls Balls a ‘nightmare’ and complains about how complicated his message on the economy is. Tellingly, he isn’t rebuked for his tone by the other Miliband advisers on the email.

Nick Clegg’s blast at Labour today is just the opening salvo of a Lib Dem offensive against Labour on the economy. It is another reminder that coalition unity is strongest on the economy. Clegg’s jibe ‘Do you know why Ed Miliband suddenly wants to talk about the cost of living? Because they’ve lost the bigger economic argument’ could easily have been said by Cameron. While his argument that ‘healthy household budgets flow directly from a healthy economy. The two go hand in hand’ echoed George Osborne’s response to the GDP figures. At the top of the coalition, they are immensely frustrated that Labour has managed to change the conversation from the economy to energy prices.

One of the odd things about the polls at the moment is that the Tories lead on economic competence and leadership, traditionally the two most important issues, yet trail overall. There are, I argue in the column this week, three possible explanations for this polling paradox. The first possibility is that Ed Miliband is right, that the link between GDP growth and voters’ living standards is broken. A consequence of this is that voters put less emphasis on economic management in the round. Instead, they want to know which party will do most to help them with their cost of living. Then, there’s the possibility that the traditional political rules don’t apply in this era of coalitions and four party politics in England.

Why did the Prime Minister give a statement in the Commons on the outcome of last week's European Council summit? Though he is expected to report back to MPs each time one of these jamborees takes place, David Cameron didn't really have a great deal to tell them other than the tantalising suggestion that the leaders had made progress on cutting red tape and the declaration that 'the EU is changing'. It was hardly one of those statements where Cameron can wave a budget cut or some other great policy victory at MPs.