Olympics bounce: Cameron may be wrong to play down his chances

Rule one of politics: never assume people are "sensible".

David Cameron is probably right to play down an Olympics polls bounce, but the reason why is not as obvious as he makes out.

The Financial Times reports that the PM told colleagues:

People are too sensible to confuse a sporting event with their day-to-day lives.

Which is just not true. New rule of politics: never assume people are sensible.

A 2010 paper by political scientists Andrew J. Healy, Neil Malhotra, and Cecilia Hyunjung Mo (via WonkBlog), titled Irrelevant events affect voters’ evaluations of government performance, shows just that:

Does information irrelevant to government performance affect voting behavior? If so, how does this help us understand the mechanisms underlying voters’ retrospective assessments of candidates’ performance in office? To precisely test for the effects of irrelevant information, we explore the electoral impact of local college football games just before an election, irrelevant events that government has nothing to do with and for which no government response would be expected.

We find that a win in the 10 d[ays] before Election Day causes the incumbent to receive an additional 1.61 percentage points of the vote in Senate, gubernatorial, and presidential elections, with the effect being larger for teams with stronger fan support.

The authors also find that the more surprising a win, the stronger the incumbency affect; that the effect seems to occur because the happier people feel, the more likely they are to vote for the incumbent; and that if they are made conscious of their reasoning, the effect of irrelevant events diminishes.

So the real question for Cameron isn't whether people are "too sensible" to confuse a sporting event with their day-to-day lives; it's whether the sporting event makes them happier, and, if it does, who they attribute (subconsciously) that happiness too.

The former question is something we'll have to wait until the end of the games to properly answer. The Opening Ceremony, certainly, resulted in a tremendous outpouring of goodwill nationwide, and while it is still a bit too early to tell (literally – the morning rush hour has not yet begun as I write this), it seems unlikely that the much-feared transport chaos will hurt too many people. Partially, admittedly, because many, fearing the worst, have already gone on holiday/arranged to work from home/told their bosses they are planning to contract smallpox for a couple of weeks, so don't expect them in, OK? But also because most of the nation does not actually live in London, and is experiencing most of the games as a televisual event with no real downsides.

National pride will also play a part in any Olympics boost. If Britain wins a lot of medals, then expect at least some people to wander around feeling a lot cheerier than they might otherwise.

The latter question, though, is harder to answer. If the Olympics does make people happier, is it going to be on such a subconscious level that they just attribute it to whoever's in charge? But unlike most sporting events, there is actually some political relevance to consider. It was, after all, Labour who chose to bring the games to London, and who ensure the bid was a success. But it was the Conservatives who oversaw the high-stakes final stretch. And does more of the credit go to the successive Mayors of London, or to the Governments who were ultimately in charge?

Ultimately, the goodwill effects of the Olympics are likely to be too small, too diffuse, and too unclear in provenance to give Cameron much of a boost in the polls. But the reason for that is emphatically not because people are too sensible. Cameron's just lucky he's not being blamed for a tornado.

A spectator walks past the Olympic Stadium. But is she happy? Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Photo: Getty Images
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There are risks as well as opportunities ahead for George Osborne

The Chancellor is in a tight spot, but expect his political wiles to be on full display, says Spencer Thompson.

The most significant fiscal event of this parliament will take place in late November, when the Chancellor presents the spending review setting out his plans for funding government departments over the next four years. This week, across Whitehall and up and down the country, ministers, lobbyists, advocacy groups and town halls are busily finalising their pitches ahead of Friday’s deadline for submissions to the review

It is difficult to overstate the challenge faced by the Chancellor. Under his current spending forecast and planned protections for the NHS, schools, defence and international aid spending, other areas of government will need to be cut by 16.4 per cent in real terms between 2015/16 and 2019/20. Focusing on services spending outside of protected areas, the cumulative cut will reach 26.5 per cent. Despite this, the Chancellor nonetheless has significant room for manoeuvre.

Firstly, under plans unveiled at the budget, the government intends to expand capital investment significantly in both 2018-19 and 2019-20. Over the last parliament capital spending was cut by around a quarter, but between now and 2019-20 it will grow by almost 20 per cent. How this growth in spending should be distributed across departments and between investment projects should be at the heart of the spending review.

In a paper published on Monday, we highlighted three urgent priorities for any additional capital spending: re-balancing transport investment away from London and the greater South East towards the North of England, a £2bn per year boost in public spending on housebuilding, and £1bn of extra investment per year in energy efficiency improvements for fuel-poor households.

Secondly, despite the tough fiscal environment, the Chancellor has the scope to fund a range of areas of policy in dire need of extra resources. These include social care, where rising costs at a time of falling resources are set to generate a severe funding squeeze for local government, 16-19 education, where many 6th-form and FE colleges are at risk of great financial difficulty, and funding a guaranteed paid job for young people in long-term unemployment. Our paper suggests a range of options for how to put these and other areas of policy on a sustainable funding footing.

There is a political angle to this as well. The Conservatives are keen to be seen as a party representing all working people, as shown by the "blue-collar Conservatism" agenda. In addition, the spending review offers the Conservative party the opportunity to return to ‘Compassionate Conservatism’ as a going concern.  If they are truly serious about being seen in this light, this should be reflected in a social investment agenda pursued through the spending review that promotes employment and secures a future for public services outside the NHS and schools.

This will come at a cost, however. In our paper, we show how the Chancellor could fund our package of proposed policies without increasing the pain on other areas of government, while remaining consistent with the government’s fiscal rules that require him to reach a surplus on overall government borrowing by 2019-20. We do not agree that the Government needs to reach a surplus in that year. But given this target wont be scrapped ahead of the spending review, we suggest that he should target a slightly lower surplus in 2019/20 of £7bn, with the deficit the year before being £2bn higher. In addition, we propose several revenue-raising measures in line with recent government tax policy that together would unlock an additional £5bn of resource for government departments.

Make no mistake, this will be a tough settlement for government departments and for public services. But the Chancellor does have a range of options open as he plans the upcoming spending review. Expect his reputation as a highly political Chancellor to be on full display.

Spencer Thompson is economic analyst at IPPR