Recovery or not, the problem for Labour is that the Tories have framed the debate

The opposition should worry less about the growth rate and more about developing its own story about the economy.

Over the summer a new consensus emerged in the media that our economy was back on track. Tabloids proclaimed "Britain is booming" as a raft of positive figures and forecasts suggested the economy had returned to growth. It’s been enough to embolden George Osborne - this week he announced we had "turned a corner" and claiming victory for his economic policies.

Positive growth rates (even if they are low) are obviously good news for the coalition, but the truth is that their narrative about the economy doesn't rely on statistics at all.

Today nef is publishing research into how economic debates are framed on both sides of the political spectrum to win support for different policies. Our main finding? The coalition has an economic narrative that is the textbook definition of a powerful political story.They have developed a clear plot, with heroes and villains, and use simple, emotional language to make their point clear.

Repeated with remarkable discipline over several years, their austerity story has gained real traction with the British public. In fact, the polling data we analysed showed that month on month, no matter what people think about the coalition, they continue to believe spending cuts are necessary for the economy.

The story relies on a small set of frames to understand our economy. That austerity is the inevitable price we pay for decades of overspending. That spending cuts are the only medicine for our sick economy. That Britain is broke, hobbled by dangerous debts, and government spending is a bad habit we need to kick. It casts the coalition as its heroes, cleaning up the mess of the last Labour government. George Osborne faithfully retold it on Monday as he reminded us pre-crisis Britain was dependent on state spending and blamed falling living standards on his predecessors.

The government has successfully framed all economic debates on its own terms, but what is most powerful about their narrative is how resilient it is to different circumstances. If the economy is strong the medicine is working, if the economy is weak we need more medicine.

Meanwhile those who oppose the coalition have struggled to find their voice. Challenges to the government's policies tend to rely on academic instead of emotional language. Many fall into the trap of accepting coalition frames (a basic principle cautioned against by framing expert George Lakoff).Very few are rooted in a core story about how the economy works that is simple to understand and retell. That uses memorable visual metaphors, like the maxed out credit card George Osborne refers to when talking about the public finances.

George Osborne may have been right when he said "those in favour of plan B have lost the argument" –rightly or wrongly the austerity story has almost become orthodoxy. But it can still be challenged with another story about what is happening in our economy. One that will resonate with people when growth is low and unemployment is high. That explains why the cost of living is rising and how we can deal with it. That is simple, coherent and emotional, so that it is likely to be retold.

The headlines may have changed, but the story the coalition is telling about the economy is still the same. Opponents of the government should worry less about the growth rate and more about developing their own story about the economy.

Carys Afoko is head of communications at the New Economics Foundation

George Osborne and Ed Balls attend the State Opening of Parliament, in the House of Lords at the Palace of Westminster on May 8, 2013. Photograph: Getty Images.

Carys Afoko is head of communications at the New Economics Foundation

Photo: Getty
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Theresa May's U-Turn may have just traded one problem for another

The problems of the policy have been moved, not eradicated. 

That didn’t take long. Theresa May has U-Turned on her plan to make people personally liable for the costs of social care until they have just £100,000 worth of assets, including property, left.

As the average home is valued at £317,000, in practice, that meant that most property owners would have to remortgage their house in order to pay for the cost of their social care. That upwards of 75 per cent of baby boomers – the largest group in the UK, both in terms of raw numbers and their higher tendency to vote – own their homes made the proposal politically toxic.

(The political pain is more acute when you remember that, on the whole, the properties owned by the elderly are worth more than those owned by the young. Why? Because most first-time buyers purchase small flats and most retirees are in large family homes.)

The proposal would have meant that while people who in old age fall foul of long-term degenerative illnesses like Alzheimers would in practice face an inheritance tax threshold of £100,000, people who die suddenly would face one of £1m, ten times higher than that paid by those requiring longer-term care. Small wonder the proposal was swiftly dubbed a “dementia tax”.

The Conservatives are now proposing “an absolute limit on the amount people have to pay for their care costs”. The actual amount is TBD, and will be the subject of a consultation should the Tories win the election. May went further, laying out the following guarantees:

“We are proposing the right funding model for social care.  We will make sure nobody has to sell their family home to pay for care.  We will make sure there’s an absolute limit on what people need to pay. And you will never have to go below £100,000 of your savings, so you will always have something to pass on to your family.”

There are a couple of problems here. The proposed policy already had a cap of sorts –on the amount you were allowed to have left over from meeting your own care costs, ie, under £100,000. Although the system – effectively an inheritance tax by lottery – displeased practically everyone and spooked elderly voters, it was at least progressive, in that the lottery was paid by people with assets above £100,000.

Under the new proposal, the lottery remains in place – if you die quickly or don’t require expensive social care, you get to keep all your assets, large or small – but the losers are the poorest pensioners. (Put simply, if there is a cap on costs at £25,000, then people with assets below that in value will see them swallowed up, but people with assets above that value will have them protected.)  That is compounded still further if home-owners are allowed to retain their homes.

So it’s still a dementia tax – it’s just a regressive dementia tax.

It also means that the Conservatives have traded going into the election’s final weeks facing accusations that they will force people to sell their own homes for going into the election facing questions over what a “reasonable” cap on care costs is, and you don’t have to be very imaginative to see how that could cause them trouble.

They’ve U-Turned alright, but they may simply have swerved away from one collision into another.  

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

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