Naturally, today’s first estimate of Q2 GDP figures showing that the economy grew 0.6 per cent makes good news for the Conservatives. They can relax on their sun loungers (sorry, in their desk chairs in their constituencies as they work hard for local people) this summer knowing that though things are only getting better slowly, they are at least getting better.
For George Osborne, this is personal vindication of his private theory that things would start to turn around this summer. The Chancellor’s plan for this year had been to survive the Budget and hope for growth later in the year. He appears to have taken the right strategic course.
The Tories are also aware of the notes of caution that always sound when these figures are released, not least that the ONS can revise them up or down as more data becomes available. They are dealing with the biggest cause for concern over these figures, which is that it matters more electorally whether voters feel that their lives are improving, regardless of what an ONS statistical release says. Today the response from Osborne and colleagues runs along the lines of ‘much done, economy slowly recovery, a long way to go’. CCHQ press office tweeted this line: ‘The British economy is on the mend – but there is still a long way to go and we know things are still tough for families’. Tory MPs are also quite keen to goad Ed Balls: good news on the economy is bad news for the shadow Chancellor.
Balls’ response underlines the living standards challenge for the government:
‘After three wasted and damaging years of flatlining, this economic growth is both welcome and long overdue. But families on middle and low incomes are still not seeing any recovery in their living standards. While millionaires have been given a huge tax cut, for everyone else life is getting harder with prices still rising much faster than wages.’
But his own challenge now, beyond saying ‘families don’t feel like they’re better off’, is to argue that somehow Labour would be presiding over a faster recovery. This is still the slowest recovery: not quite party time yet for the Tories. But can Balls convince voters that Labour would do a better job, or do his words only have resonance when the figures from the ONS bring bad news?
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