It is clear that Gordon Brown has successfully portrayed this crisis as one caused almost entirely by global forces, thus downplaying his own incompetence, overspending, misregulation and complacency (remember the endless boasts about “the end of boom and bust”). At the same time, the economy now feels as if it is recovering, if only slightly, boosting Labour’s position; house prices are 6-7 per cent higher than they were at their trough, interest rates remain low and there is more work around. Most people haven’t lost their jobs; many have even enjoyed a boost as their mortgages became a lot cheaper.
To a tourist walking around the streets of London, or chatting to taxi drivers, it wouldn’t really feel as if the economy had suffered its worst slump in decades (the same cannot be said of someone visiting the US, where the ravages of the recession are easier to spot).
This seeming normality has lulled voters into a false sense of security: they simply don’t believe that the public finances are on the verge of a Greek-style crisis. Many still think that public spending and the size of the state are choices that can be made by politicians, rather than constraints about to be imposed by the financial markets on a hapless and powerless Westminster.
For the first time in a generation, the establishment – including the likes of the BBC – broadly agrees that spending cuts are necessary and inevitable. Yet the Tories have been unable to explain this clearly to the public and have watched powerlessly as Labour dissembles. The result: a YouGov poll for the Sunday Times showing that 37 per cent of the public think the Tories will be the party most likely to hike tax, whereas just 26 per cent say Labour (and 26 say no difference). Just as depressingly, when asked who would cut public services the most, 50 per cent say the Tories, against 14 per cent Labour and 21 per cent no difference. The truth is that they will all be forced to cut similar amounts; Labour would probably put up taxes even higher than the Tories.
The Tories urgently need a new message. It should communicate the looming disaster that is about to befall ordinary consumers and savers unless radical action is taken to regain control of the public finances. It should explain that mortgage rates will go up (and by how much), that inflation will go through the roof and how a sterling and sovereign crisis would affect lives, jobs and savings, with copious illustrative examples. No claim should be too abstract; there should be clear, simple numbers. There should also be a renewed emphasis on waste and transparency; the polls show that the public knows a lot of spending is squandered. There should be absolutely firm promises that income tax won’t go up. Their inheritance tax cut policy should be brought forward to day one, helping to eliminate their new-found pro-tax image.
Time is running out for the Tories: they need to forget about macroeconomics and focus on household economics instead. It is their only hope.