Mr
Cameron also knows that, as the incumbent, he will need the public to feel that
things are going in the right direction ahead of next May’s election if he is
to come out on top. Currently, more people expect their personal finances to
get worse (28%) than to improve (21%) over the next twelve months. Nearly three
quarters (71%) expect the cost of everyday items to get worse.
The
Prime Minister’s focus on the future was very much an attempt to address these
sentiments and encourage a sense of optimism as the election approaches.
Healthcare – tackling a Conservative demon?
Mr
Cameron also made significant moves on the NHS. In many respects, his offer was
a clever tactical buttress, erected to protect against a traditional Labour
strength. It is hard to overestimate how
much more Labour’s mutedly received proposal for £2.5 billion of new NHS spending
amounts to compared to the Conservatives more modest figure of “millions”.
To get some idea of the difference, a million seconds lasts about 12 days,
while a billion seconds is the equivalent of 31 years In the public mind
however, the difference often boils down to a single letter and Mr Cameron
knows that the average voter does not make this distinction.
The
challenges the Conservatives face on the NHS are great. As the graph above
shows, 57% of Britons think that their management of it over the past four
years has been “bad for Britain” – worse than any other part of their record
other than handling immigration. Labour leads on the issue by a solid, if
undramatic, nine points.
The
purpose of Mr Cameron’s promise appears not to be to overturn this, but to
blunt Labour’s attacks on the issue over the coming months. The strategic
deftness presently appears to be the timing – had the announcement be made by
itself, it would risk moving the debate onto “Labour’s turf”. By proposing it
concurrently with a series of ostensibly major tax cuts, he appears to have
been able to get out the Conservative line on the NHS, while keeping the media
narrative firmly on “home ground”.
Personal Tax Allowance
The
central “rabbit in the hat” was the series of proposed tax cuts. The proposal
to raise the personal tax allowance is very much a counter-attack. The
increases in the allowance over the past four years have been popular and
received with little opposition.
However,
ComRes polling in the first half of this year, suggested that more of the
public thought it was an achievement for which the Liberal Democrats were
responsible, not the Conservatives. By pledging a bold raise in the allowance
in the next Parliament, there have been suggestions that it will enable the
Conservatives to take greater credit for the rises already made.
Raising the upper income tax threshold
Proposing
major tax cuts is not a risk-free endeavour either. The last time the
Conservatives did so – the reduction in the 50p rate of tax – it monumentally
backfired, leading to the 2012 Budget gaining its “Omnishambles” sobriquet and
a two-year collapse in the party’s poll ratings.
While
the public tends
to think individuals on all incomes pay too much tax (although they don’t
much like cuts to public services either), many Britons are keen to cry-foul of
perceived unfairness. The key problem with the 2012 proposals was it
appeared to much of the public that the richest were receiving a tax cut, while
“ordinary” Britons were not, instead being slapped with pasty taxes and public
service cuts. The key test of whether yesterday’s proposals receive a positive
a reaction is whether Messrs Cameron and Osborne can convince a sceptical
public that everyone will benefit from the changes, rather than just a few.
Raising the 20% tax rate at the same time as raising the 40% rate suggests the
Tories may have learnt their lesson.
A deficit deficit
Ed
Balls was quick to point out that the Tories proposed tax cuts were unfunded.
While this might be the case, it appears clear that the Conservatives seem now
willing to spend their accumulated political capital for fiscal management. On
the last count, their lead over the Labour on being the party most trusted to
reduce the deficit was a mammoth 25 points, their highest for any issue. The
Conservative leadership may well have decided that having this lead is worth
little if it is stuck in the bank. It has not touched their own deficit in vote
share behind Labour, so now may well be the time to spend some of the
credibility built up over the past half-decade to try and make up the
difference instead.
Should we expect a bounce?
Finally,
a word of warning. There will certainly be numerous stories over the coming
weeks suggesting that the Conservatives have seen a “bounce” following what is
widely seen in Westminster as a successful speech. These should be treated very
carefully. There were many stories last year pointing to one or two point rises
in Labour’s vote share following the energy prize freeze which supposedly
signified a “bounce”. In fact most of these were all changes within the margin
of error, very similar to those seen in previous months. What had changed was
the narrative around the polling: polls showing Labour increases were seized upon,
those showing the party down slightly, left by the wayside. From September to
December though, Labour’s average lead barely changed.
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