U.K. Prime Minister David Cameron’s New Year’s interviews have focused on how tough life is as Britain faces rising unemployment, increased borrowing, ballooning household bills and stagnant growth.
With Parliament back today from its Christmas break, Cameron’s Tories are running neck-and-neck in the polls with Ed Miliband’s opposition Labour Party, and he’s still managing to convince voters that the country’s ills are the fault of the Labour government he unseated in May 2010. Promising to be “bold” and stick to his deficit-reduction plan in 2012, he faces little threat at present from an opposition that’s found it hard to articulate an alternative strategy a third of the way into the parliamentary term.
“He’s kept his opinion-poll rating incredibly so far; they couldn’t have hoped to be where they are now” given the state of the economy, Tim Bale, professor of politics at the University of Sussex, said in a telephone interview. “It’s partly the inadequacy of the opposition. Miliband has failed to capture anyone’s imagination.”
The Labour leader used a BBC radio interview today to try to show that his party has ideas about how to govern in times of austerity. He said energy companies should be compelled to offer their lowest tariffs to the elderly and that welfare should be withheld from people who refuse to work.
He said he still had time to establish himself in the public mind. “The race is not run,” he said. “The race will be run over five years. I have a very strong inner belief that I will win the race.”
U.K. 10-year gilt yields are near a record low at close to 2 percent and fell below those of Germany in November, demonstrating investor confidence in Cameron’s plans and his ability to deliver on them. Even though Chancellor of the Exchequer George Osborne is having to borrow more and extend spending cuts to narrow the deficit, Labour has failed to build a poll lead over the Conservatives, while Miliband has suffered a battering in his personal approval ratings.
Just 20 percent of voters rated the Labour leader as doing a good job in a YouGov Plc poll published on Jan. 8, compared with 66 percent who thought he was doing badly. Even among supporters of his own party, only 48 percent think he is doing well, according to the poll of 1,715 adults carried out on Jan. 5 and 6. No margin of error was given. For Cameron, 44 percent said he was doing well, while 51 percent said he’s doing badly.
With growth stagnating, the Bank of England will maintain its bond-purchase target at 275 billion pounds ($423 billion) this week and its benchmark interest rate at a record low, surveys of economists show. While factory and services gauges improved in December, the debt crisis wracking the euro area is damping export demand.
Michael Saunders, chief European economist at Citigroup Inc. in London, cut his forecast for U.K. growth this year to 0.2 percent from 0.5 percent last week and lowered his 2013 projection to 1 percent from 1.2 percent.
Britons’ concern about losing their jobs soared last month, according to Lloyds Bank Corporate Markets. Britain’s property market also faces an “uncertain” year after house prices fell to their lowest level in 2 1/2 years, Halifax said. Above-inflation increases in rail fares hit commuters last week, coming on top of energy-price rises late last year.
“I know how difficult it will be to get through this, but I also know that we will,” Cameron said in his New Year’s message, broadcast Jan. 2. “We’ve got clear and strong plans to bring down our deficit, which gives us some protection from the worst of the debt storms now battering the euro zone. We have gained security for now -- and because of that, we must be bold, confident and decisive about building the future.”
The YouGov poll had 38 percent support for the Tories, against 40 percent for Labour, even though only 31 percent said they approve of the government’s record in office and 56 percent said it is managing the economy badly.
“Things must be going to get bad this year, because David Cameron feels he has to warn us in every interview,” Steve Fielding, director of the Centre for British Politics at the University of Nottingham, said in a telephone interview. “But however bad things get, Ed Miliband isn’t able to pose as the likely alternative. However much blame the government gets for the state of things, the Labour Party gets an equal share.”
Cameron has been able to score points against Miliband at their weekly question-and-answer session in Parliament by pointing out that Miliband and his finance spokesman, Ed Balls, were part of Gordon Brown’s government when it built up a record deficit. Cameron also argues that Labour has no alternative plan to bring down the shortfall.
“It’s more and more clear that the time Labour spent electing its leader in 2010” after Brown stepped down “allowed the Conservatives to establish a narrative about whose fault the deficit is,” Bale said.
Miliband promised today to offer “a changed Labour Party” at the next election in 2015, saying in a speech in London that “whoever is the next prime minister will still have a deficit to reduce and will not have money to spend.”
He pledged to create an economy in which “we have long-term wealth creation with rewards fairly shared” by “actomg against vested interests that squeeze the living standards of families” and “making choices that favor the hard-working majority.”
Miliband may yet find the tide of public opinion turning in Labour’s favor as the Tory-led coalition gets further into its five-year term should the economy continue to worsen, according to Sussex’s Bale.
“At some point the public has to reach a tipping point where people say the government’s been in power a while now, and this is their responsibility,” he said.