Brian Monteith: Autumn Statement not enough to secure election

Shadow chancellor Ed Balls is not the sort of person who is afraid of a fight. Such is his take-no-prisoners combative style that he has often been described in a complimentary manner as pugilistic. I do not expect then that he was grateful for the timing of the sad passing of Nelson Mandela and the complete change of focus of the broadcasting media away from his lamentable performance in responding to the coalition government’s Autumn Statement.

Balls would have been happy to defend his red-faced, nothing to retract, nothing to apologise for, nothing’s wrong with his analysis or solutions stubbornness in the face of good news from George Osborne.

The same might not be said for others on the Labour backbenches who cringed, looked at their watches, and feigned support, when clearly highly irritated with the collapse of Ed Balls’s alternative economic strategy. That the media no longer wished to dwell on murmurings about him needing to be replaced also meant that the government’s good news was quickly forgotten. Even the storms raging across the country were dropped for live broadcasts from Johannesburg and around the world.

Nevertheless the Labour Party can take heart. Although the news of continued and continuing rising employment (and falling unemployment) together with an expected reduction in the deficit that should see the nation’s public finances finally move into surplus might normally result in support for a government’s economic plan, an opinion poll carried out immediately after the Autumn Statement showed greater support for Ed Balls than it did for George Osborne.

If the poll by Ipsos-Mori is an accurate reflection of the public mood, then the 60 per cent that agree with shadow chancellor Balls suggests that the government and the Conservatives in particular should be the ones thinking of changing their personnel well before the general election. With only 23 per cent of those asked accepting George Osborne’s claims for economic progress and a further 27 per cent agreeing with neither politician, the smart money will still be going on a Labour election victory in the summer of 2015.

In addition to what the public thinks about the economy and whether or not the so-called cost of living crisis will be resolved before the election, the Conservatives also face the real prospect of the continued growth in support for Ukip denying them seats they currently hold, never mind those they wish to gain.

Add to that the inbuilt disadvantage of fighting on very old parliamentary boundaries that is estimated to be worth at least 20 seats to the Conservatives and it is hard to see how David Cameron can do any better than his performance at a more propitious time when Labour had presided over what George Osborne now calls the Great Recession.

The Labour mantra about the cost of living crisis is undoubtedly hitting home – but while it lacks a serious economic strategy it is the governing parties that need to find a way of addressing what concerns the majority of people – how they are going to make ends meet and when the recovery will help them. Although earnings growth is predicted to overtake inflation there is still much that can go wrong and the Chancellor will undoubtedly be accused of manufacturing a feel good factor if he is too obvious in pulling economic levers to change the short term mood.

My interpretation on the Ipsos-Mori poll is that the majority (eg those in work) are more worried about their own circumstances than about the minority (those out of work) who are in a worse position.

One of the positive aspects of the economic recovery has to be the number of private sector jobs (over a million) that have been created, and the continued growth that is expected. Uncharitable Labour and trade union opponents seek to move the debate on to what kind of jobs they are, what rates of pay they offer and what kind of contracts they mean – forgetting about the dignity that having a job brings to so many people and the ladder it places them on so they can complete their CV and begin to climb to a better position.

That we have avoided the cataclysmic predictions of over three million, pushing four million unemployed, is also routinely forgotten – yet we only need look no further than countries such as France, Spain and Ireland to remind ourselves of the poverty and unhappiness that comes from people, especially young people, being out of work. No two recessions are ever the same but our Great Recession is indeed different from others before it, not so much for how we went into it but how we are coming out of it. The economic data suggests that unlike previous occasions British workers are willing to endure pay freezes, pay cuts and reductions in hours to stay in employment – when previously jobs would be lost as less flexibility resulted in job losses while those in work maintained their relative income level.

This new behaviour results in a fall in real earnings while the cost of living climbs – meaning this crisis for a majority becomes a self-fulfilling prophecy when pollsters ask is Ed Balls right. Whether it would be any different under Labour or any other party in government remains open to question. Labour may be offering to freeze energy prices in opposition but would it have cut fuel duty by 20p a litre, worth an equivalent of £11 on an average tank of fuel?

Ed Balls undoubtedly crashed last week but that does not seem to have changed the public’s perception about the economic arguments and the Conservatives could therefore remain in serious trouble trailing Labour in the polls as the general election approaches. While the Tories must hope Ed Balls remains in post, they need to do far more to convince the public they are right.

Using the improving public finances to their advantage will no doubt be on Osborne’s agenda – but it may yet be Ed Balls who has the last laugh.