Cameron and Osborne are benefiting after three years of a crippled economy. Photo: Getty.
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Will the economy hand Tories the election?

The recovery may be feeble, but voters are rewarding the Tories as GDP rises – and the 'cost-of-living' is half the issue it was in 2011.

What issues will decide next year’s general election? For the major parties, the challenge is making their issues the topic of national debate.

For the Tories that means focusing on the economy, immigration and crime.

For Labour, it means steering every news agenda towards health, education and housing.

The Tories are the more trusted stewards. Voters back them to safeguard our finances, control our borders and police the streets – despite three years of sluggish growth, uncurbed immigration levels and cuts in police numbers.

Nevertheless, they are far more trusted on each of those issues than Labour. But, if the Tories are trusted to apportion the money, voters would prefer Ed Miliband’s party spend it.

This reflects a trend across developed democracies. Voters want Scandinavian levels of spending but want to pay Texan-level taxes. They want left-wing parties when asked about their public services but right-wing ones when asked about actually managing the economy or country.

That is what makes Ed Balls’ speech today on taxes and wages interesting. While Labour are reportedly going to focus on the NHS over the summer, Balls is showing how Labour will challenge the economic recovery being trumpeted by the Coalition.

Balls is doing this even though the government’s economic approval rating has dramatically recovered in the past year, buoyed by near 4 per cent growth.

This is despite only a few voters thinking the economy is on the way to recovery. But more voters think the UK is at least now showing signs of it – which most didn’t in 2013.

And in welcome news for the country, if bad news for Labour, the number of voters feeling the cost-of-living crisis has halved in the past three years.

In October 2011, 49 per cent of people were worried they wouldn’t have enough money to live comfortably. Now 25 per cent are.

This is slightly at odds with what has happened to real wages over the past four years. As George Eaton noted today, “Labour will still be able to go into the general election and answer Ronald Reagan’s question – “Are you better off than you were four years ago?” – in the negative”.

That is because inflation has outstripped people’s wages throughout this parliament.

But this appears to have little effect on the government’s economic approval ratings.

Headline GDP appears to be the only statistic that matters. At first glance there is little link between GDP and economic approval.

But, by using a three-month rolling average of GDP, we can uncover a relationship. 

The data implies that if GDP growth were 0 per cent, the government's economic approval would be -30 per cent. But for every 1 per cent of quarterly GDP growth, their approval increases 24 per cent. The realtionship is not that strong – GDP growth explains only about half of the approval rating (R² = 48 per cent) – but there is a link, as we might expect.

The importance of the economy in predicting elections is widely recognised in academic work.

As one paper recently put it, “If all you know is the state of the economy, you know pretty well how the incumbent party will do”. Nate Silver agreed – a composite measure of economic health was one of the pillars of his perfect predictions in 2012.

The fact that link appears to exists for the Tories is worrying for Labour. Until very recently, the economy had been the number one issue for voters throughout this parliament.

The growth of the past year, and the recent UKIP-fuelled focus on immigration, has changed that, but that’s more encouraging for the Tories than Labour – it’s another sign of the recovery.

This is why Labour are zeroing in on the NHS. It is the only issue on which they both have a significant lead and voters care much about (education and housing are not rated as top issues by most voters).

Immigration helps UKIP more than either party, but it helps the Tories before Labour – as their attempt to lead the news with it yesterday showed.

Labour can try and make the NHS the election’s pivotal issue, but this parliament has been defined by the economy. If GDP stays strong the left may face another five years in the wilderness.

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David Osland: “Corbyn is actually Labour’s only chance”

The veteran Labour activist on the release of his new pamphlet, How to Select or Reselect Your MP, which lays out the current Labour party rules for reselecting an MP.

Veteran left-wing Labour activist David Osland, a member of the national committee of the Labour Representation Committee and a former news editor of left magazine Tribune, has written a pamphlet intended for Labour members, explaining how the process of selecting Labour MPs works.

Published by Spokesman Books next week (advance copies are available at Nottingham’s Five Leaves bookshop), the short guide, entitled “How to Select or Reselect Your MP”, is entertaining and well-written, and its introduction, which goes into reasoning for selecting a new MP and some strategy, as well as its historical appendix, make it interesting reading even for those who are not members of the Labour party. Although I am a constituency Labour party secretary (writing here in an expressly personal capacity), I am still learning the Party’s complex rulebook; I passed this new guide to a local rules-boffin member, who is an avowed Owen Smith supporter, to evaluate whether its description of procedures is accurate. “It’s actually quite a useful pamphlet,” he said, although he had a few minor quibbles.

Osland, who calls himself a “strong, but not uncritical” Corbyn supporter, carefully admonishes readers not to embark on a campaign of mass deselections, but to get involved and active in their local branches, and to think carefully about Labour’s election fortunes; safe seats might be better candidates for a reselection campaign than Labour marginals. After a weak performance by Owen Smith in last night’s Glasgow debate and a call for Jeremy Corbyn to toughen up against opponents by ex Norwich MP Ian Gibson, an old ally, this pamphlet – named after a 1981 work by ex-Tribune editor Chris Mullin, who would later go on to be a junior minister under Blai – seems incredibly timely.

I spoke to Osland on the telephone yesterday.

Why did you decide to put this pamphlet together now?

I think it’s certainly an idea that’s circulating in the Labour left, after the experience with Corbyn as leader, and the reaction of the right. It’s a debate that people have hinted at; people like Rhea Wolfson have said that we need to be having a conversation about it, and I’d like to kickstart that conversation here.

For me personally it’s been a lifelong fascination – I was politically formed in the early Eighties, when mandatory reselection was Bennite orthodoxy and I’ve never personally altered my belief in that. I accept that the situation has changed, so what the Labour left is calling for at the moment, so I see this as a sensible contribution to the debate.

I wonder why selection and reselection are such an important focus? One could ask, isn’t it better to meet with sitting MPs and see if one can persuade them?

I’m not calling for the “deselect this person, deselect that person” rhetoric that you sometimes see on Twitter; you shouldn’t deselect an MP purely because they disagree with Corbyn, in a fair-minded way, but it’s fair to ask what are guys who are found to be be beating their wives or crossing picket lines doing sitting as our MPs? Where Labour MPs publicly have threatened to leave the party, as some have been doing, perhaps they don’t value their Labour involvement.

So to you it’s very much not a broad tool, but a tool to be used a specific way, such as when an MP has engaged in misconduct?

I think you do have to take it case by case. It would be silly to deselect the lot, as some people argue.

In terms of bringing the party to the left, or reforming party democracy, what role do you think reselection plays?

It’s a basic matter of accountability, isn’t it? People are standing as Labour candidates – they should have the confidence and backing of their constituency parties.

Do you think what it means to be a Labour member has changed since Corbyn?

Of course the Labour party has changed in the past year, as anyone who was around in the Blair, Brown, Miliband era will tell you. It’s a completely transformed party.

Will there be a strong reaction to the release of this pamphlet from Corbyn’s opponents?

Because the main aim is to set out the rules as they stand, I don’t see how there can be – if you want to use the rules, this is how to go about it. I explicitly spelled out that it’s a level playing field – if your Corbyn supporting MP doesn’t meet the expectations of the constituency party, then she or he is just as subject to a challenge.

What do you think of the new spate of suspensions and exclusions of some people who have just joined the party, and of other people, including Ronnie Draper, the General Secretary of the Bakers’ Union, who have been around for many years?

It’s clear that the Labour party machinery is playing hardball in this election, right from the start, with the freeze date and in the way they set up the registered supporters scheme, with the £25 buy in – they’re doing everything they can to influence this election unfairly. Whether they will succeed is an open question – they will if they can get away with it.

I’ve been seeing comments on social media from people who seem quite disheartened on the Corbyn side, who feel that there’s a chance that Smith might win through a war of attrition.

Looks like a Corbyn win to me, but the gerrymandering is so extensive that a Smith win isn’t ruled out.

You’ve been in the party for quite a few years, do you think there are echoes of past events, like the push for Bennite candidates and the takeover from Foot by Kinnock?

I was around last time – it was dirty and nasty at times. Despite the narrative being put out by the Labour right that it was all about Militant bully boys and intimidation by the left, my experience as a young Bennite in Tower Hamlets Labour Party, a very old traditional right wing Labour party, the intimidation was going the other way. It was an ugly time – physical threats, people shaping up to each other at meetings. It was nasty. Its nasty in a different way now, in a social media way. Can you compare the two? Some foul things happened in that time – perhaps worse in terms of physical intimidation – but you didn’t have the social media.

There are people who say the Labour Party is poised for a split – here in Plymouth (where we don’t have a Labour MP), I’m seeing comments from both sides that emphasise that after this leadership election we need to unite to fight the Tories. What do you think will happen?

I really hope a split can be avoided, but we’re a long way down the road towards a split. The sheer extent of the bad blood – the fact that the right have been openly talking about it – a number of newspaper articles about them lining up backing from wealthy donors, operating separately as a parliamentary group, then they pretend that butter wouldn’t melt in their mouths, and that they’re not talking about a split. Of course they are. Can we stop the kamikazes from doing what they’re plotting to do? I don’t know, I hope so.

How would we stop them?

We can’t, can we? If they have the financial backing, if they lose this leadership contest, there’s no doubt that some will try. I’m old enough to remember the launch of the SDP, let’s not rule it out happening again.

We’ve talked mostly about the membership. But is Corbynism a strategy to win elections?

With the new electoral registration rules already introduced, the coming boundary changes, and the loss of Scotland thanks to decades of New Labour neglect, it will be uphill struggle for Labour to win in 2020 or whenever the next election is, under any leadership.

I still think Corbyn is Labour’s best chance. Any form of continuity leadership from the past would see the Midlands and north fall to Ukip in the same way Scotland fell to the SNP. Corbyn is actually Labour’s only chance.

Margaret Corvid is a writer, activist and professional dominatrix living in the south west.