I have never met James Morris, who wrote for LabourList yesterday, but he is clearly a bright chap. While there are things that I might quibble with in his piece, there is also perceptive insight.
What Lewis Baston termed ‘the Todd thesis’ concludes that for every one per cent increase in the proportion of the electorate that think the economy is doing well, there should be a 0.6 per cent increase in the Conservatives lead over Labour. Looking at this regression result and James’ argument, there might appear a fundamental difference between us: James sees election victories in terms of living standards and I think they are about GDP. But things are more nuanced than this.
My thesis is silent on why people might think the economy is doing well. If people feel their living standards are rising, they are more likely to view the economy in such terms. To this extent, James and I are consistent.
That said, other things being equal, it would seem to me more likely than not that people will perceive the economy to be doing well if GDP growth is robust. Moreover, as social democrats from Tony Crosland to Gordon Brown always insisted, GDP growth is the means to the end of the rising living standards.
Of course, a core Ed Miliband argument is that the link between GDP and living standards has broken. ‘They used to say a rising tide lifts all boats. Now the rising tide just seems to lift the yachts’ as Ed’s conference speech put it. Thomas Piketty has since given this a thick intellectual gloss.
The link between GDP and living standards has indeed weakened (but Oxford Economics expect it to be more healthy in the next few years). Equally, any perception that attaches to a party for efficacy in GDP growth is unlikely to be wholly effective in building electoral support unless aligned with a view that it will also be effective at distributing the proceeds of this growth. And James is right that this contains massive, Romney-like challenges for the Tories.
Nonetheless, I would encourage Labour to minimise our weaknesses as well as maximise our strengths. It is welcome that Labour is thought more likely than the Tories to distribute growth fairly. This strength will be reinforced if combined with a perception that Labour is also capable of producing growth. Any weaknesses on this front should be tackled.
The United Kingdom’s growth is by no means so strong that it exhausts all suggestions that Labour might fruitfully make for how we could have more. For example, a Financial Times editorial noted earlier this week, iif Britain’s impressive growth spurt is to be sustained in the long term, it needs a supportive strategy on infrastructure’. Labour should be as fluent on how we can have the extra infrastructure that increased growth requires as we are on having access to this infrastructure – rail tickets, broadband charges – be affordable.
Jonathan Todd is a contributing editor to Progress
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