By Craig Melson, Consultant, London

Is it still the economy? In in the cut and thrust of British politics, how important is the economy to voters, and what role has it played in previous elections?

According to  YouGov, it has remained the single biggest issue for voters and is even more essential when other major issues include tax, immigration and pensions, which are of course related to the economy.

Historically (and unsurprisingly),  the economy tends to be a bigger issue when it’s in a bad state. It defined the 2010 vote, but it wasn’t a number one concern in 2005, 2001 or 1997. It featured heavily in the 1992 election, highlighted best by the famous Conservative election poster attacking the ‘Labour tax bombshell’, and through time has always been on voters minds.

Party games

So how should the Coalition parties play the economy?

The Conservatives want to focus on the economy, as the stats show that the recovery is happening and they rightly use these figures in their campaigning despite  problems with missed deficit and debt targets, low revenue and wobbles in global economy. Despite what their oppenents say, the Conservatives do realise the electoral liability of a recovery not felt by ordinary voters- growth figures and ’the long term economic plan’ are meaningless to those struggling to pay bills. To manage this,  every economic boast is caveated with a ‘job not done’ clause to show that they’re listening and to remind voters ‘how we got into this mess to begin with’.

Last week’s Autumn Statement is a case in point  which combined impressive numbers and headline grabbing policies. Stamp Duty reform will save thousands of pounds for homebuyers and new NHS funding neutralises a Labour pledge. Abolishing Air Passenger Duty on child-places was also a cheap way to show they are helping with the cost of living.

The Liberal Democrats want some of the credit, which is why Chief Secretary to the Treasury Danny Alexander has been all over the airwaves. Despite getting credit for the £10,000 personal allowance, their ‘Stronger Economy, Fairer Society’ message has not got through to voters, who have punished them since 2010. They have to both lambast Labour over economic mis-management, whilst criticising the Conservatives (despite having a hand in designing the policies), which is a difficult hand to play. Clegg has contradicted analysts who said he’d need to hold an olive branch to Labour by giving them both barrels over the economy in his PMQs cameo this week, and will do so again over the next twenty-two weeks.

Labouring away

Labour has to convince the electorate they are economically credible if they want to win, which is why Ed Miliband gave his economic speech today (he forgot the economic parts of his Conference speech). In the speech he spelt out the divisions between Labour and the Conservatives, ruled out any unfunded commitments, and  confirmed that Labour policies will not need extra  borrowing.

Miliband has successfully shifted the narrative to the cost of living and have penetrated with their ‘recovery for the few’ attack lines (for example focusing on cutting the 50p tax rate whilst raising VAT for everyone). However, in policy terms, they have been lacking, which is why Miliband’s speech was so important; it starts a process where key economic policies will be trickled out over the next few months.

Specific measures like freezing energy bills, the mansion tax and the bankers’ bonus tax have been gimmicky, interventionist and met with scepticism. Voters are savvier and can see the problems with fixing prices and new taxes, epitomised by Myleene Klass’s cynicism. Labour’s Living Wage idea has done well with focus groups, but it leaves them open to accusations of being ‘anti-business’.

Tactically, Labour should focus on Government’s failure to meet their borrowing, deficit and debt targets. The TV debates in April should provide Ed Miliband the opportunity to use these uncomfortable truths. Labour knows they are weak on the economy, but also know that Conservatives blaming them for problems in 2015 is no longer plausible.

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