Labour close the gap on economy with Conservatives, but still don't convince that they would do a better job

As economic optimism declines, the credibility gap on economic issues between Labour and the Conservatives is closing, with the parties nearly level when it comes to which party has the best policies in this area

Labour close the gap on economy with Conservatives, but still don’t convince that they would do a better job

See our poll on the state of the parties here

Economic optimism in Britain has declined since February, with an Economic Optimism Index score of -30, the lowest level of economic optimism recorded by Ipsos MORI since before the London Olympics in July 2012. Fewer than one in five (18%) believe the state of the economy will improve over the next 12 months while 48% believe it will get worse.

As economic optimism declines, the credibility gap on economic issues between Labour and the Conservatives is closing, with the parties nearly level when it comes to which party has the best policies in this area. 27% believe the Conservative Party has the best policies on the economy (compared to 30% in September 2012) and 26% believe that the Labour Party has the best policies (up one point in the same period).

However, few people believe that Labour would do a better job at managing the economy. Only a quarter (26%) believes that a Labour government with Ed Miliband as Prime Minister and Ed Balls as Chancellor would do a better job of managing the economy than the current government (though this is a six point increase since October 2011). Three in ten (31%) believe that such a government would do a worse job, while almost four in ten (38%) believe their performance would be about the same.

Despite this lack of enthusiasm for a Labour government’s management of the economy, satisfaction with the current Chancellor’s performance has also fallen. 27% are satisfied with George Osborne’s performance as Chancellor (down one point since April 2012) while six in ten (60%, up two points) are dissatisfied. This leaves a net rating of -33, the lowest approval rating in Mr Osborne’s time as Chancellor.

Ipsos MORI asked people to choose between two statements about the best way to deal with Britain’s economic difficulties - either tackling the national debt or increased government spending on investment:

·       “(George Osborne argues that) Britain has a debt problem built up over many years, and we have got to deal with it. If we don’t, interest rates will soar. That’s why tackling the deficit and keeping interest rates low should be our top priority

·       “(Ed Balls argues that) Without growth in our economy, we are not getting the deficit down and are borrowing more. We need more government spending on investment to kick-start our economy and a temporary cut in taxes to support growth

When presented just as two different ways of dealing with Britain’s economic difficulties, half (52%) choose tackling the deficit compared with 41% who choose increased government spending on investment. However, if these statements are associated with Mr Osborne and Mr Balls respectively, the balance of favour tips the other way and 37% prioritise tackling the deficit compared to 53% who choose increased government spending.

When considering any potential reduction in government spending the public have two clear priorities – overseas spending (55%) and benefit payments (44%) – with defence and armed forces the next most common priority for spending cuts (28%). Though half of people (50%) believe that the NHS receives one of the highest levels of government spending, just 5% believe it should be a priority for spending cuts. However, the public clearly does not have a strong understanding of the detail of public finances. While most people think that the NHS and benefits are where the Government spends most (50% and 45%), they are followed by defence and overseas aid (28% and 26%), while for example only 12% think state pensions is one of the largest areas of government spending.

Gideon Skinner, Head of Political Research at Ipsos MORI said:

The economy is the number one issue in the eyes of the British public, and while Labour have closed the gap they still have some way to go. But people don’t think that the Government is doing a great job either  - as shown by the drop in those saying we should prioritise tackling the deficit when that policy is linked with George Osborne.”

Technical note

Ipsos MORI interviewed a representative sample of 1,009 adults aged 18+ across Great Britain. Interviews were conducted by telephone 9 – 11 March 2013.  Data are weighted to match the profile of the population.

More insights about Public Sector