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It's the direction, not the state of the economy that counts

Labour can be right about the economics of the cost of living crisis and still lose the argument in 2015.

Source: Getty

There has been a lot of argument today about whether the cost of living crisis is easing, as the Tories has claimed. Or not, as Labour insists. George has a robust rebuttal of the Treasury version of events here.

At one level, it is obviously good for Labour that the government has conceded the underlying point that individual living standards matter in terms of how people judge the economy as much as headline GDP growth. And it is a safe bet that most voters neither pay much attention to, nor trust statistics indicating that things are going in the right direction. (Especially when it doesn't feel that way.) That is just another one to file under mistrust of everything that passes a politician’s lips.

Still, not everyone in Labour is as confident about the cost of living argument as the bullish official language suggests. Beneath the surface there is concern that George Osborne’s story of a national rescue mission that is, albeit belatedly, delivering results will resonate. What the Tories like to point out in private is that they don’t necessarily need everyone to think the economy is fixed by 2015, nor even that their own personal circumstances are so much better than in 2010 (for many, they won’t be). What the government needs is for voters to think things are going in the right direction and that it would be a risky gamble to switch to Labour.

In other words, the Conservatives think they just need to sow doubt in people’s minds about the plausibility of Labour’s offer – which they think can be done easily enough when some business figures are noisily anxious – for the electorate’s instinctive caution to kick in. And there are those in Labour who worry that this fear-mongering can pin the opposition back. Their comfort is that, even if the Tories manage to stoke up quite a lot of doubt about Ed Miliband’s prospectus, it doesn’t win great swathes of new votes for David Cameron.

In other words, the Prime Minister still doesn’t have positive reasons to hand for why Britain should have a Tory government after 2015, which means he simply won’t bag the seats he needs to do better than he did in 2010. Throw in a few stubborn Ukip voters and a bunch of Lib Dem switchers and Labour are still the biggest party in a hung parliament. It is true that the maths in that respect are in Miliband’s favour. But it’s not an inspiring pitch and although most of the Labour people I speak to recognise that they have this huge structural advantage, many of them also privately concede that that’s pretty much all they seem to feel good about right now.