Tuesday, 26 January 2010

Statistics and Perceptions..

There are two interesting statistics worth mentioning this morning. The first is the preliminary estimate (based on about 40% of the data) that GDP grew by 0.1% in the fourth quarter of 2009 and so technically we are no longer in recession.

Yes, I know, hardly earth-shattering stuff but to be fair the figure could be revised upward as more information arrives. It's still pretty bad and with what is coming over the horizon in terms of public spending cuts and tax rises it's not hard to conclude that growth figures of this order may be the future with the odd negative figure thrown in.

The far more interesting figure comes from last night's ICM poll and shows that 66% of those asked now want a change of Government as against 25% who want to see Brown remain in office.

That is a damning number and probably means, as I've thought for some time, that the game is up for Brown and Labour. If people want change and no longer care about the consequence of that change, there's very little the incumbent Government can do. Rightly or wrongly, a majority of voters directly or indirectly blame the current Government for the economic situation and believe not so much that any new Government will fix things but that we can't get on as we are.

Against that, no amount of positive spin or statistics will make any difference - as Conservatives rightly point out, they lost in 1997 despite the economy being in good shape.

So, we're left with perceptions rather than statistics. For many, the recession has already impacted directly but all of us have seen its indirect impacts and there is a grim sense of forboding out there that for many others the worst is yet to come as public spending cuts and job losses have a huge impact.

The Conservative majority on politicalbetting.com is in good form this morning with a liberal (so to speak) application of the f-word but the Tories will soon have to deal with these problems and while "vote for us on Thursday and the recovery begins on Monday" has a certain charm, beyond a short-term uptick in confidence disguised as post-election euphoria, there are undoubtedly dark days ahead for the Conservatives.

While the incoming Government may think it has the answers, it is among the 66% wanting a change that the problems lie and that is expectation management. People will expect things to get better with a new Government and when they don't, the clamour of opposition will rapidly grow.

I once thought it would take 24-30 months before the Conservatives hit serious political trouble but now I think it could be 12-18 months. There look certain to be industrial disputes with the public sector and transport unions among others as the real impact of Osborne's cuts begins to hit home and with tax and interest rate rises, it doesn't look good over the next few years.

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