YouGov President, Peter Kellner, discusses the impact of the UK losing its top credit ranking for the first time since 1978
Some Conservative insiders worry that February 22, 2013, might go down as "Black Friday", comparable to "Black Wednesday" in 1992, when Britain fell out of Europe’s currency club, the Exchange Rate Mechanism, and the Tories lost their reputation for economic competence.
They are right to be worried, for there are similarities; but there are also crucial differences. The bad news for today’s Conservatives is that once a reputation for competence is lost, it’s devilishly hard to regain. Just before Black Wednesday, Labour and the Conservatives were level-pegging. Within weeks, Labour had jumped into a 20 point lead. Voters feared the economy would crumble.
In fact, the economy recovered strongly. Unemployment fell. Mortgages became cheaper. Living standards rose. But none of this did the Tories any good. They went on to be thrashed in the 1997 general election, losing half their seats.
In yesterday’s Sunday Times / YouGov poll, Labour leads by 11 points – much the same as its leads since last March. It is a clear lead but well short of the 20 point lead that Labour enjoyed after Black Wednesday – and, indeed, well short of the leads that oppositions usually enjoy in mid-term when the economy is in trouble.
So could Labour’s lead now jump as it did twenty years ago and put the next election beyond David Cameron’s reach? I doubt whether this will happen swiftly. Black Wednesday was a seismic event; on its own, a long-expected decision by a credit-rating agency is unlikely to have the same impact.
The danger facing David Cameron and his Chancellor is different. It is that Moody’s announcement on Friday will be just one of a series of bad-news stories, along with figures showing the economy flatlining and government borrowing remaining stubbornly high. It is not so much a Black Wednesday-style torrent of public contempt that should worry the Tories, but the remorseless, cumulative drip, drip, drip of gloomy news.
However, for Labour to benefit, something else is needed. YouGov’s polls in recent months have shown two things that should concern Ed Miliband and Ed Balls, and help to explain why their party’s mid-term lead is modest by past standards. The first reason is that, almost three years after Gordon Brown left Downing Street, more people still blame Labour rather than the Conservatives for the state of the economy and the public spending cuts that Osborne has imposed. Secondly, when asked who they trust more to run the economy, more people still prefer Cameron and Osborne to Miliband and Balls.
For Moody’s decision, and other bad news, to make a lasting difference, it won’t be enough for the Government to remain unpopular. Voters must decide that Labour can be trusted to run the economy effectively. That was something that Tony Blair achieved in the mid-nineties, and caused the Tories’ post-Black Wednesday blues to become a lasting affliction.
The big question, then, is whether "Black Friday" is a blame-changer. Will Balls and Miliband manage to persuade voters that blame for Britain’s economic plight should now shift from the Gordon Brown era to the Cameron/Osborne era? If they succeed, then - and only then - will the two Eds stand a chance of winning the race that really matters – the trillion-guineas economic competence stakes.