Economic recovery helps the Tories - but it won't win them the next election

http://www.theguardian.com/commentisfree/2014/jan/30/recovery-helps-tories-wont-win-election

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More than 40 years ago, the radical social historian EP Thompson wrote an influential academic article about what he dubbed the "moral economy" of the 18th-century crowd riot. The central thrust was to debunk what Thompson called the "spasmodist" school of historians who explained pre-industrial rioting as a predictably mechanistic spasm in response to quantifiable measures of social tension or economic distress.

According to the spasmodist school, as Thompson mocked it, rioting followed a simple causal sequence. Labourers would clap their hands to their stomachs, register that they were suffering from hunger because of expensive grain, and would instantly set off to liberate the next bakery or burn down the nearest farm. Instead, Thompson argued, rioting involved a more delicate web of behaviour, centred on the crowd's shared belief that they were defending a traditional and fair balance between producer and consumer that had been unjustly thrown out of kilter.

The subtleties that make Thompson's article so fascinating could be valuably applied to the study of more recent British riots, where the old temptation to economic reductionism has not always been resisted. Some of his approach, though, can also shine a light on more docile and everyday British politics too. In particular, it can be used to challenge the electoral spasmodists of the modern era, who assume that voting behaviour is conveniently responsive to the latest economic figures or to the latest tax proposal.

In most modern elections, and certainly in most post-crash elections, economic management and wellbeing are undoubtedly at the heart of both the campaign and the result. But the idea that every voter makes a choice based on rational economic self-interest is plainly false. The great modern upending of that notion came in 1997, when Labour ousted the Tories in a landslide during a period of bouyant economic growth and prosperity. Nevertheless too many modern politicians, strategists and analysts remain in thrall to their own version of economic reductionism when they discuss voting intention.

This week's politics – and in all probability this year's politics too – have been dominated by two such examples. The first, widely held on the right, is the assumption that the UK's annualised 2013 growth rate of 1.9% automatically confers a political dividend on the Conservatives, while being a knockout blow to Labour. Meanwhile the second, almost as widely held on the left, is that Labour's pledge to reintroduce a 50% top rate of income tax on those earning over £150,000 a year will be a sure-fire winner for Labour and will cause confusion for the Tories.

In both cases, there is some genuine basis for the respective displays of confidence. It is obvious that stronger economic growth is better for the Tories than continued stagnation or recession would have been. Stronger growth enables the Conservatives – and, in a different frame, the Liberal Democrats – to mount an argument that the pain of the past four years has been worth it. Similarly, Labour's 50% top rate pledge is a powerful commitment to making the rich share more of the burden of sacrifice than they have so far done. Since the majority of Labour voters (and indeed all voters) are nowhere close to earning £150,000 a year, it is hardly surprising that the polls show strong support for the measure.

And yet in both cases there are also substantial counter-cases to be made. Labour's countercase to the Tories on growthis that the recovery is not fairly shared, because real wages lag far behind the economy, causing a cost-of-living crisis for middle Britain that subverts the claims that everything is on the up again. Vince Cable's is that the recovery is lopsided and fragile, based on a house price boom, while exports remain weak and companies hoard cashrather than investing. In both cases, these are real concerns, and the polls confirm that voters across the spectrum recognise them as such.

The Tory counter-case against Labour's tax pledge is more ideologically alarmist and, in leftwing eyes, more disreputable. David Cameron made the charge in the Commons yesterday, calling Labour a high-tax party whose plans were anti-business, anti-growth and anti-jobs. Labour will have been delighted that Cameron's refusal to rule out a further top-rate cut from the current 45% back to the 40% level has helped sharpen the divide.

But the electoral success of low-tax parties cannot be simply dismissed as the politics of the discredited pre-crash neoliberal past, however much one may wish it so. The German Social Democrats fought a general election only last autumn on the kind of manifesto that Labour seems to be moving towards. The SPD promised a seven point rise in income tax on top salaries, as well as an asset tax for the rich (akin to the mansion tax that Labour is also examining) and a rise in inheritance tax. They ended up with just 26% of the votes, the SPD's second worst electoral performance of the postwar era.

As the German example so powerfully shows, political parties often persuade themselves and their activists that their solutions are logical and potentially popular, only to be confronted with an unwelcome reality when the voting papers are counted on election night. That's not to say that Labour is doomed to replicate the SPD's failure, partly because Angela Merkel's Christian Democrats are a much more centrist party than Cameron's Tories have now become. But there is nothing inherently virtuous about either high – or low – taxes. Taxes are a fiscal means to a social end, not an end in themselves.

The electoral impact of this week's growth figures and Labour tax pledges is no more easily predictable than an 18th-century riot during a bad harvest. In both cases, the facts have to be refracted through the public's prism of trust and confidence. If the voters lose confidence in the Conservatives, the recovery may give them the confidence to give Labour a go. But only if Labour is trusted. Always remember that voters in the 1980s consistently said they supported higher taxes to provide better services while consistently voting against the parties that offered to deliver them. Without trust, the pledges count for little.

The polls underline that truth. In the same week that one poll showed six voters in 10 backing the 50% tax rate, with fewer than one voter in five opposed, another poll found the Tories 15 points ahead of Labour on trust to run the economy and Ed Balls and Ed Miliband at their lowest rating on economic trust since 2011. These two polls are not contradictory. They are simply a reminder that voters have to have confidence in the messenger in order to have confidence in the message.