And it has nothing to do with the political success of George Osborne’s 2014 Budget. It is a fundamental factor that is largely out of the Treasury’s control, but one which only recently is showing tentative signs of shifting significantly – the perception of household finances.
Aside from the headline-grabbing changes announced in this year’s Budget, it can be claimed to be the most successful “Chancellors Speech” of this Government. Despite the usual convention of Budget’s doing little to impact positively on voter sentiment, the polls, too, back this up with a 3-5% improvement of fortunes for the Conservatives.
With past Osborne Budgets being the harbinger of ambiguous OBR forecasts and often botched populist tinkerings, the agenda of the Opposition has in each case been given the oxygen to gain ever greater public salience. Looking at voter intention over the weekend, however, the Conservatives have seen their polling position elevated significantly.
The result is that three separate pollsters now place the Tories just 1 percent behind Labour and even more tellingly, firmly ahead of UKIP for the EU Elections later this year. This shift is as close to trend-bucking as it gets in politics, especially as the narrowing has been maintained throughout this week. This is likely to be more than just a blip.
The “big if” has always been whether David Cameron and George Osborne could get substantial numbers of people to tie their hopes of economic prosperity to what was always going to be an unpopular austerity government.
Proponents of the efficacy of this strategy have come close to laughing-stock status in recent years, but rapidly changing underlying economic data may well serve to dissolve into obscurity many other headache issues that have dogged the party since 2010.
For the more hopeful of Conservative supporters, it may start to look like victory at the next General Election is becoming an ever more realistic prospect. And it is – but it has far more to do with the changing everyday realities of the electorate than what any Chancellor of the Exchequer could dream up.
The Tories have always needed a seismic event to propel them beyond their 2010 performance. The “big if” has always been whether David Cameron and George Osborne could get substantial numbers of people to tie their hopes of economic prosperity to what was always going to be an unpopular austerity government. Proponents of the efficacy of this strategy have come close to laughing-stock status in recent years, but rapidly changing underlying economic data may well serve to dissolve into obscurity many other headache issues that have dogged the party since 2010.
It might seem too soon to make such a bold assertion, but the evidence is growing.
There is a threshold moment, marked out and analysed through our Cicenomics formula, which projects the point at which people’s “net feel-good factor” means that the electorate is more optimistic, rather than pessimistic, about how the Government’s economic strategy impacts on their household finances. At the time of writing, this stands at -19%.
Should this not sound impressive, it’s worth noting that at this time last year it stood at -39% and is the best rating since April 2010 – before the election.
We are therefore reaching the point at which, sentimentally, people are going to start feeling more positive about their household finances relative to how they felt when voting at the last General Election in May 2010.
Remember; the Tories don’t need everyone to feel like they must peg their economic aspirations to the party. They don’t even need a simple majority. The rough figure provided by electoral maths boffins for the Conservatives to achieve outright victory is closer to 40 percent, just a few percentage points beyond what they scored in 2010. With pollster YouGov showing the Party on 36 percent this weekend, doubters on all sides will be starting to bite their knuckle.
It’s now up to Cameron and Osborne to take ownership of this burgeoning positive sentiment and to convincingly argue the pro-prosperity case. There is ample political space to do this, provided by Labour’s use of rhetoric being packaged within a thoroughly inescapable and negative economic narrative. Labour’s hopes of an undisputed victory may just suffer a death by a thousand cuts as the electorate ebb away from an argument that is ever-less resonant.
Further to this point, we have marked the “feel-good factor” rating against the question which is on the tip of every economists lips: when it is that wage growth will overtake the rising cost of living. This will track whether people’s perceptions are being underpinned by economic reality.
It has so far been the most stubbornly negative of economic indicators, showing real-terms earnings to continue to fall as other areas of the economy have bounced back – but pundits do believe that salaries will finally outpace inflation at some point this year. These factors combine to give the Conservatives considerable economic legitimacy; much more so than in any previous year and arguably explaining why people and pundits alike were more positively predisposed to receiving the changes in this year’s Budget favourably.
So then, should household finances turn around as quickly as our economic indicators seem to suggest, we can expect to see the Tory polling position following this year’s Budget to be both sustained and carried into positive territory throughout the remainder of this year. A small Tory lead will not mean imminent victory, but this will most likely stoke panic in an up-til-now complacent Opposition – and a panicked Opposition seldom sits well with the public.
With the Conservatives overall average polling position now standing at 34 percent, we can seriously start to speculate whether or not May 2015 is too close a date to allow the perceived prospective wealth of individuals to inform a further 6 percent inflation of the Tory vote. Each percentage point gained makes the next all the more difficult to assail, but politics can be characterised as a game of momentum, luck and good story-telling, and the Conservatives’ story looks like it might just win the day.
Could we really be just 14 months away from the first Conservative Government in the UK for 23 years?