Issues & Ideas | 10th April 2015

What do we mean when we say Labour trail the Tories ‘on the economy’?

Labour fare just as well as the Tories when voters are asked about small businesses. The Tories’ strength is about a perceived ability to help big business.

Photo: Getty

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It’s a commonplace that the Tories ‘lead Labour on the economy’. It is well-trodden election ground.

Just turn to the Independent in December (“Poll: Tories still more trusted than Labour on the economy”), the Mail in September (“Tories build up huge lead over Labour on the economy”), Opinium two months ago (“Tory lead on economic trust increases”), or YouGov last week.

The Tories are trusted on “the economy in general” by nearly twice as many people as trust Labour, as the graphic below from May2015’s ‘Drilldown’ shows. The Tories have re-created their lead after losing it in 2012. But what does a lead on ‘the economy’ really mean? What is it voters think the Tories will achieve that Labour won’t?

The Tories' lead on the economy.
The Tories’ lead on the economy.

A recent YouGov poll offers insights. It separates big from small businesses, and owners and workers from buyers. The findings are stark. For instance, by 78 to 2 per cent voters think the Tories are good for the shareholders of big business. But only 3 in 10 people think another Tory-led government will help those who work for small businesses.

Voters are more likely to think the Tories would be bad for small business employees than good for them. They feel the opposite about Labour (by 34 to 25 per cent they reckon Labour would be an aid).

This is the type of statistic Labour rarely emphasise. The Tories’ lead on the economy seems to be powered by a general belief that the prosperity of big business will have a general trickle-down effect. It is not based on any perceived ability to power small businesses, despite the Tories’ attempts to champion ‘SMEs’.

Voters are ambivalent about whether the Tories or Labour are best for small business owners or consumers, or for the general economic strength of the four or five-strong company.

But when voters are asked which party will most help the consumers of big business – in other words, all of us – they are far more likely to say the Tories. They are also more likely to think the Tories more effective at fuelling the contribution of big business to the British economy.

This is Labour’s problem. While they at least match the Tories on helping the prototypical small business, they are perceived as being somehow anti-big business, or are at least not considered as encouraging as the Tories.

Voters seem to (rightly) link the fate of buyers with the economy. Individuals create about two-thirds of all growth – investors, government and exporters make up no more than a third. As long as Labour are seen as bad news for the average consumer, they will have to concede any election perennial issues: who will make you better off?

It’s not clear what exactly Ed & Ed are failing to do. Many voters agree with their specific policies on the economy, and their general approach, but they seem to suffer from a wider image problem (in the same way that the Tories are regularly thought to only represent one part of society).