By Matthew Gass
Voters are giving governments less credit – and blame – for economic events
Recoveries in the US and UK are, finally, becoming entrenched. However this has yet to yield dividends for the respective governing parties in their upcoming elections. In the US steadily improving job figures are have not given Barack Obama’s Democrats any reasonable prospective of regaining the US House of Representatives and in serious danger of losing the Senate.
The picture in the UK is even starker. Strong economic figures in growth, jobs and overall outlook have become regular occurrences. David Cameron and George Osborne hold a whopping 25 point lead over Ed Miliband and Ed Balls on the issue of economic competence, yet remain persistently stuck a few points behind in voting intention.
Many other factors are contributing to this – too many to attempt to list here – and of course these are both elections that have yet to take place. However it is starting to look like the historic link between perceptions around economic competence and votes is starting to blur.
This is not entirely a post-Crash phenomenon, but it seems to be building significantly in its wake.
Following Britain’s ejection from the ERM the Conservative’s long-held advantage in economic competence was shattered. Despite a growing economy in 1997 they suffered an enormous defeat and struggled to regain credibility in the years that followed. Fast forward to 2010 though and despite presiding over a far greater economic calamity during his premiership, which itself followed 10 years as Chancellor, the Tories were unable to win a majority over Gordon Brown and the Labour Party.
Similarly Barack Obama was easily re-elected over the Republican’s Mitt Romney, who ran on a platform of fiscal competence, in what we then improving but still dire economic conditions.
This would appear to be worrying to those on the right, who tend to value economic and business credentials over little else. However it could also be the effect of a voting public which is becoming more realistic about how much influence the governing party and its economic team really have over the economy.
Don’t get me wrong, governments in all countries have a huge influence in creating the conditions for strong economic growth. These includes setting tax rates and borrowing amounts, providing direct support to certain sectors of the economy thought to be in need and more indirect measures such as developing a skilled and educated workforce. It is unlikely that the UK recovery would be looking as strong as it does today without the early focus on the deficit.
However with many governments giving away certain economic power – most significantly in the UK the delegation of interest rate setting to the independent Bank of England – and globalisation giving much greater visibility to external forces people are giving less credit, and less blame, to elected politicians. If voters start to discern more carefully what the government can and cannot do for their pocketbooks the debate over national and global economic policy at election time may be stronger for it.
Old fallacies, such as that the Chancellor somehow ‘runs the economy’ instead of merely setting fiscal policy, are starting to give way. This may be frustrating for leaders who feel their records are being ignored.
Matthew Gass is a former director of Parliament Street
Image from telegraph.co.uk
