Monday, 21 December 2009

Of Polls and PBRs…


After a few days of frantic speculation over on and conflicting rumours in the wider blog sphere, last night’s Ipsos-MORI poll for today’s Observer was a huge letdown for Labour supporters who had been wound up by rumours of a narrowing of the Conservative lead to under five points.

The 17-point Conservative lead (43-26) with the Liberal Democrats on a solid 20% is about as bad as it gets for a government months away from a General Election.

It seems there has been a further erosion of the Labour position since the publication of the Pre Budget Report (PBR) on December 9th. The media coverage was almost uniformly hostile with Chancellor Alastair Darling widely accused of having missed an opportunity to begin remedying the parlous state of the public finances.

That said, I think there is a growing realisation that the real “hard times” are close at hand – literally, one election away. There is a real climate of fear in the public sector workforce and given the six million people involved, that’s a lot of fear.

Mixed retail signals and continuing job losses still send signals that the economy is at best fragile and while fourth quarter GDP will show a return to positive territory, the road to recovery will be long, slow and painful.

The problem remains of course less the spending than the lack of income into the Government coffers. The Conservatives are focussed on spending and spending cuts possibly because of a genuine belief it offers a solution to the public finances but also perhaps it offers the more vindictive in the Tory ranks the chance to “punish” the public sector, which it perceives as a pro-Labour front, from a position of credibility and public support.

The failure of the PBR to address the key issue of improving the income side of the public finances is a damning indictment of Darling but the Tory response had little to recommend it. Neither party seems as committed to economic growth as it does to playing a dutch auction to show who can cut public spending the most and the quickest.

Not very edifying, to be honest….

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