Carry on polling: can George Osborne keep it up until May?
This post originally appeared on Progress Online.
Before Christmas, I wrote a piece for Conservative Home about the polling landscape six months out from the general election and what one can tell about the situation from historical precedents. The findings were not entirely encouraging for Labour: Labour oppositions tend to poll worse in the election than they do in the polls at this stage. Steve Fisher does similar things in a somewhat more rigorous fashion and his last look at the charts in December suggested that the likeliest single outcome is for Labour to be the largest single party in a hung parliament, which is more or less what most of the prognosticating classes seem to expect.
Despite frequent warnings about how unpredictable it all is, there is a strong convergence in forecasts of the overall results. Where things get complicated is at the level of individual seats, where we can expect some peculiar variations in behaviour among seats based on region, demographics and relative susceptibility to the appeals of Liberal Democrats, the United Kingdom Independence party, the Green party and the Scottish National party. To strain a scientific metaphor, while all sorts of weirdness might happen at micro level, the macro level national picture will probably not be that far away from the Newtonian world of uniform swing.
In this piece, I shall look in more detail at one piece of the national picture – economic optimism. Conventional wisdom is that the ‘feelgood factor’ helps governments win elections, but I am not quite so sure either that it works that way, or the causation is in that direction. Economic optimism is not independent of the political environment. A curious pattern in polling history is the strong link between elections and spikes in economic optimism. Past Conservative governments have seemed able to manufacture big bounces in economic optimism just in time for an election. The only Labour government to have managed this was Tony Blair’s in 2001 – perhaps significantly, the election at which Labour enjoyed its highest support from the press and at which Alastair Campbell was at the height of his powers. Even dead-in-the-water Tory governments like John Major’s in 1997 can manage it. The Conservatives are trying this trick again, but one may note that in the much-mocked new ‘road ahead’ poster, the gap in the dark hills on the horizon was produced by the wonders of Photoshop, not the actual landscape.
The optimal time for the Conservatives to have held an election might have been autumn 2013; the change in economic optimism from net -30 in March to net +23 in September was a very rapid turnaround. Usually, the British public usually settles into its habitual state of mild pessimism and grumpiness. The longest previously recorded period in which the balance was positive was between March 1987 and July 1988. The current period has endured since July 2013, an astonishing stretch of optimism given the lack of actual economic sunshine experienced by most people. It may be coming to an end if the trend at the end of 2014 is sustained. The longest recorded period of net economic pessimism was, astonishingly, between January 2000 and June 2009, most of which we now think of as being the good old days. We are in the realm of psychology rather than economics, clearly.
Attitudes of optimism and pessimism may be generated as much by the speed of change in economic growth as the actual level of growth or shrinkage. During the course of a recessionary period, the first thing to happen is a downward plunge in the economic optimism index (EOI; I have used Ipsos MORI’s long series for this analysis). This is often followed relatively quickly by the onset of the actual recession, although in 2007-8 the confidence shock from Northern Rock took some time to translate into savagely falling output. Interestingly, the darkest point in the EOI seems reliably five quarters before the economy emerges from recession, ie that changes (if not the overall level) in the proportions of people giving positive answers to ‘Do you think that the general economic condition of the country will improve, stay the same or get worse over the next 12 months?’ are not a bad leading indicator of emergence from recession.
Economic optimism goes positive at some point during the course of a recovery. In 2009 people became optimistic even before the economy started growing again, while in 1981-82 there was a long lag between the nadir of GDP growth and perceptions of recovery – perhaps because unemployment continued rising steeply throughout 1981.
|Optimism crashes||Economy starts shrinking||Most pessimistic point||Growth resumes||Optimism goes positive||Optimism peaks|
|1979-81||1979 Q3||1979 Q3||1980 Q1||1981 Q2||1982 Q1||1983 Q2|
|1990-92||1990 Q1||1990 Q3||1990 Q3||1991 Q4||1991 Q4||1992 Q2|
|2008-09||2007 Q4||2008 Q2||2008 Q3||2009 Q4||2009 Q2||2009 Q3|
|2010-13||2010 Q3||2010 Q4||2011 Q4||2013 Q1||2013 Q3||2014 Q2|
George Osborne and his colleagues, and the media, have poured huge efforts into talking up the economy for nearly two years, with some success at moving the EOI but little direct political benefit. Their problem is that the effort is ever more difficult to sustain, and the narrative could shift towards emphasising problems ahead. This may not be entirely bad news for the Conservatives. The Major and Gordon Brown governments in 1997 and 2010 were both voted out by electorates who were optimistic about the economy. Perhaps the Conservatives would be better off terrifying the electorate about the economic prospects. There would be plenty of source material if they wanted to try