Friday, 9 April 2010

The Lines are Drawn

Election campaigns typically get quickly dominated by one or two big issues. Often as the campaign wears on which issue dominates changes. So in 2005 there was a week where the news was dominated by immigration debates, a week where the news was dominated by NHS debates and a week where the parties debated Iraq, and so it has been with this election campaign already. We are now reaching the end of week one and much of the campaigning in the national news has been dominated by one policy – whether or not to raise National Insurance contributions.

This may seem like a small issue in some respects - the rise that was in the budget is only 1% - but in many ways it is a symbol. Firstly the Liberal Democrats have basically backed Labour's stance on the issue of a NI rise, meaning the Conservatives can differentiate themselves not only from Labour but also from the Liberal Democrats. In an age where it is often commented how similar our political parties are such differences are vital. Secondly there is an implicit suggestion that Labour is once again the party of 'tax and spend' a party out of kilter with business whose policies are economically dangerous. Reams of business leaders have supported the Conservatives who have sought to paint out the policy as a 'job killer'.

Today Alistair Darling admitted that the attack on Labour's plans is working, yet argued that it was the Conservative policy that would risk jobs. However it appears the tide may begin to turn on the Conservatives as economists have begun to warn that the Conservative's sums may not add up. The Tory strategy is a risky one. Their argument about NI contributions is clear, and an argument that has a nice simple logic to it that one does not have to be an economist to understand (more expensive to hire people? Well then hire less people), but at the end of the day this country currently has a budget deficit equivalent to 11.8% of Gross Domestic Product, one of the highest in the Western world. That is a hole in the country's finances that needs filling, and people are going to ask how the Tories are going to fill it AND cut this tax rise.

The reality is that you can talk about 'efficiency savings' as much as you like but one man's inefficiency is another man's required process, job or otherwise. In the end the attack may come back to bite the Conservatives on the posterior. Nonetheless it is clear that so far the Conservative attack has worked much to Labour's chagrin. It has also had the effect of squeezing the Liberal Democrats out of the debate during the first week as their position on this issue is so similar to Labour's as to make it uninteresting to the media. As such we can put the first week of the four week campaign down as a Conservative win. Nonetheless there are still three weeks left and this attack will run out of steam in the next couple of days. Either Labour will succeed in reversing the attack, or the Conservatives will find a new avenue of attack. Roll on Week 2.


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