Labour is right about one thing. Living standards have fallen too much over the last six years. Indeed, the Conservatives say as much, reminding people that the biggest part of the fall in living standards happened during the Labour period, when the Great Recession wiped 7% off our national output.
The issue before us is not a choice between a Labour party who now recognise there is a “cost of living crisis” and a Conservative party who fails to understand that many more people want an improvement in their living standards. Both main parties know the figures, and recognise the understandable wish of many to see their incomes rise more rapidly than their costs.
The issue before us is which party if given a majority to govern would be the best able to satisfy these aspirations? Is it Labour who crashed the car in 2008, or the Conservatives who in coalition have gradually got the vehicle back on the road and moving again? Does Labour now know how to improve the car and get it traveling faster? How does their approach differ from the Conservative one, and would it produce better or worse results?
We need to start with how things are currently performing. The latest CEBR independent forecast suggests that over the lifetime of the 2010-15 Parliament national income will have risen by 9% and people’s disposable incomes by an average of 4% in real terms. Much of the growth is taking place in the last two years of the five year period. House prices will be up on average by 16% over the five years, unemployment will be down by a quarter from 8% to 6%, and the state deficit will have decreased by 40%. That sounds like a reasonable record in the circumstances, given the damage done to the banking system in the great crash and the problems in financing a normal recovery experienced in the period 2009-13.
The Conservatives can improve on this record free from coalition. They could cut a wider range of taxes than just raising the Income Tax threshold, boosting output as a result. In some cases like CGT and Stamp Duty they could boost revenues by choosing more sensible rates. They can renegotiate our relationship with the EU, which should include cutting the costs and burdens the EU imposes on business based in the UK but not selling into the rest of the EU. They can produce more imaginative policies to promote wider ownership and entrepreneurial success for the many.
Above all a majority Conservative government could tackle high and rising energy prices. The country’s energy supply needs to be shifted more to domestic production of gas and away from very expensive wind energy and imports. Labour signed us up to the EU and domestic climate change agenda in a way guaranteed to drive industry out of the UK. This now needs to be changed.