Why Labour could win in 2015 even if the Tories are more trusted on the economy

In 1997, the Tories enjoyed a 22-point lead over Labour on "managing the economy" but with growth restored, voters decided it was safe to change captain.

The economic recovery has barely begun but David Cameron and George Osborne already appear to be reaping the political benefits. The latest Guardian/ICM poll shows that support for their management of the economy has risen to 40 per cent from 28 per cent last month giving them a 16 point lead over Ed Miliband and Ed Balls. 

With growth likely to be purring along at around 2 per cent by 2015 is it game over for Labour? Not necessarily. It's true that economic approval ratings are frequently a reliable long-term indicator of the election result but it's worth noting the exceptions to this rule. Ahead of the 1997 election, as Balls likes to remind his colleagues, Labour trailed the Conservatives by seven points on "managing the economy" and by 22 points among those who said the issue was important, according to MORI's regular tracker. It was only after the party's victory that it established a consistent lead over the Tories. While voters believed the Conservatives would run UK PLC better, they still preferred Labour after years of sleaze and run-down public services. 

Source: Ipsos MORI 

It's possible, then, that Labour could win in 2015 despite not being trusted over the Conservatives on the economy (just as it leads today). Indeed, if growth returns as strongly as the Tories hope, the voters may conclude that it's safe to change captain now the storm has passed (as was the case in 1997). A Miliband government that would invest more heavily in areas such as housing and jobs and ensure that the proceeds of growth are distributed more fairly may be preferred by an electorate weary of small state conservatism. 

But it would be Panglossian for Labour to assume as much. As things stand, while the party retains a slight but consistent poll lead over the Tories, it is still viewed as less economically competent and its leader as less fit to be prime minister. Oppositions have managed to defy one of those handicaps in the past (as I've noted before, the Tories won in 1979 despite Jim Callaghan's 19-point lead over Margaret Thatcher as "the best prime minister") but I know of none that has defied both. 

It is already clear that the Tories' election campaign will focus on maximising both of these advantages. "Do you want David Cameron or Ed Miliband as prime minister?" they will ask, framing the contest as a presidential one, and "do you want to hand the keys back to the people who crashed the car in the first place?" It is a ruthless and simple message of the kind Labour still desperately lacks. 

Ed Miliband and David Cameron during the service to celebrate the 60th anniversary of the Coronation of Queen Elizabeth II at Westminster Abbey, on June 4, 2013. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty
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Sooner or later, a British university is going to go bankrupt

Theresa May's anti-immigration policies will have a big impact - and no-one is talking about it. 

The most effective way to regenerate somewhere? Build a university there. Of all the bits of the public sector, they have the most beneficial local effects – they create, near-instantly, a constellation of jobs, both directly and indirectly.

Don’t forget that the housing crisis in England’s great cities is the jobs crisis everywhere else: universities not only attract students but create graduate employment, both through directly working for the university or servicing its students and staff.

In the United Kingdom, when you look at the renaissance of England’s cities from the 1990s to the present day, universities are often unnoticed and uncelebrated but they are always at the heart of the picture.

And crucial to their funding: the high fees of overseas students. Thanks to the dominance of Oxford and Cambridge in television and film, the wide spread of English around the world, and the soft power of the BBC, particularly the World Service,  an education at a British university is highly prized around of the world. Add to that the fact that higher education is something that Britain does well and the conditions for financially secure development of regional centres of growth and jobs – supposedly the tentpole of Theresa May’s agenda – are all in place.

But at the Home Office, May did more to stop the flow of foreign students into higher education in Britain than any other minister since the Second World War. Under May, that department did its utmost to reduce the number of overseas students, despite opposition both from BIS, then responsible for higher education, and the Treasury, then supremely powerful under the leadership of George Osborne.

That’s the hidden story in today’s Office of National Statistics figures showing a drop in the number of international students. Even small falls in the number of international students has big repercussions for student funding. Take the University of Hull – one in six students are international students. But remove their contribution in fees and the University’s finances would instantly go from surplus into deficit. At Imperial, international students make up a third of the student population – but contribute 56 per cent of student fee income.

Bluntly – if May continues to reduce student numbers, the end result is going to be a university going bust, with massive knock-on effects, not only for research enterprise but for the local economies of the surrounding area.

And that’s the trajectory under David Cameron, when the Home Office’s instincts faced strong countervailing pressure from a powerful Treasury and a department for Business, Innovation and Skills that for most of his premiership hosted a vocal Liberal Democrat who needed to be mollified. There’s every reason to believe that the Cameron-era trajectory will accelerate, rather than decline, now that May is at the Treasury, the new department of Business, Energy and Industrial Strategy doesn’t even have responsibility for higher education anymore. (That’s back at the Department for Education, where the Secretary of State, Justine Greening, is a May loyalist.)

We talk about the pressures in the NHS or in care, and those, too, are warning lights in the British state. But watch out too, for a university that needs to be bailed out before long. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.