How to talk economics in an election

The five rules of economic campaigning

Ed Conway
Ed Conway
Jan 5, 2015 · 5 min read

In the end, every election comes back down to economics. If only the same could be said about electoral campaigning.

For while it may look to all extents and purposes as if all the candidates are talking in economic language — about deficits, GDP, unemployment and so on — the truth is that election campaigns are where real, considered economics goes to die. Winning the economic argument during an election isn't about being right — it’s about seeming right.

If you think that makes election campaigns particularly tough to follow these days, spare a thought for the poor political candidates who actually have to navigate the tricky waters of electoral economics. So, in the spirit of public service, here’s a cut-out-and-keep guide to the top five rules for talking economics during a political campaign. Hopefully candidates find it useful over the next four months.

1. Never compare like with like

A stroke of genius, this rule. There is a tedious convention in economics whereby economists are duty-bound to contrast comparable numbers. Happily this stricture does not apply to election campaigning where, in fact, it’s positively frowned on. Provided the two things you’re comparing seem at least vaguely similar, you can get away with juxtaposing anything — however invalid that might be.

Take today’s war of words between the Conservatives and Labour over so-called “unfunded spending plans”. The Conservatives say Labour has a £20bn black hole in its finances; Labour says the Tories have a £7bn black hole of their own. An interesting comparison, until you realise it isn’t really a comparison at all.

First off, the two numbers reflect different dates: the Conservatives’ £20bn refers to 2015/16, the Labour £7bn figure pertains to 2020. Second, and more importantly, they are based on entirely different models: the Labour claims merely tot up the total cost of the Tory tax cuts unveiled at the party conference earlier this year. The Conservative claims involve inserting assumptions about the behaviour of the economy into the Treasury model and seeing what it churns out.

They are, in other words, apples and oranges. Still, neither party cares all that much since all they really want is a number to beat their opponent with. Anyway, the more comparable the numbers, the plainer it is that their election plans aren’t all that different anyway. And no campaigner wants that.

2. Use whatever figure best suits your needs

Related, in a way, to rule 1, but so important it deserves its own entry. The key thing is this: almost every economic statistic can be portrayed in a variety of different ways. You can talk about cash figures, real-terms figures or figures as a percentage of GDP. Each can tell a radically different story. An economist would remain consistent. So, as a politician, you must do precisely the opposite. Mix and match like there’s no tomorrow.

The original master at this was Gordon Brown. One year his fiscal rules would compel him to keep the deficit to a certain cash figure; the next year that same target had transmuted into something based on a percentage of GDP. Such tactics helped him avoid breaking those rules until he was safely out of Number 11.

But this is a habit now wholeheartedly embraced by the Conservative Party. Take their spending plans. The OBR recently said that they mean that expenditure on public services will eventually drop to the lowest level since the 1930s. Nonsense, say the Tories: the OBR were depicting spending as a percentage of GDP, not in cash terms, on which basis spending is far, far higher than in 1938. So the claim is bogus.

But take a closer look at the Tories’ new election poster, which claims that the deficit has been halved. Read the small print and you’ll see they really mean the deficit as a percentage of GDP. Not the cash figure, which shows the deficit is down by only a third or so.

Such masterful arbitrariness is particularly useful on the campaign trail, where reporters rarely have a moment to fact check candidates’ claims. The technique can apply to all sorts of statistics. Consider the employment numbers: far better to cite the number (not the proportion) of people in work since, as a result of population growth, that is frequently at record levels.

3. “Don’t just take it from us — take it from the IFS/OBR/IMF/OECD”

Remember: you’re a politician. No-one really trusts you. So always, always cite the experts. That way you might actually gain a little bit of credibility, if only through osmosis. However, there is a catch. Independent experts tend, annoyingly, to be independent. That means you might have to be rather, ahem, selective, in your quotations.

Labour provided a rather useful example in its response to the Tories today. It quoted an IFS document from last month. “Of the main parties, Labour has perhaps been the most cautious of the three in that, at least on the basis of its own costings, it appears to have managed not to announce an overall net giveaway.”

However, it omitted the following line about the Labour (and LibDem) plans which “would obviously come at the cost of government debt remaining higher for longer. This would have two costs: more public spending would have to be devoted to making interest payments on debt, and the UK would be less well placed to absorb any future large shocks that pushed up public debt, as the financial crisis did in 2008.”

4. Never confront the most straightforward issue

You remember that saw from politics class that elections were about ideological battles? Probably best to wipe it from your memory. Were this a straightforward economic debate, the dichotomy between the two main parties would be relatively clear. Both of them are committed to more austerity. But Labour wants to borrow a bit more and use that cash to invest. The Conservatives would rather continue to cut spending and reduce the size of the state.

But don’t, whatever you do, put it as straightforwardly as this. After all, the key thing in an economic debate isn’t to be clear: it’s to throw as many unsubstantiated claims at your opponent and scare the hell out the voters, which brings us to number 5.

5. Fear, fear, fear

Whether it’s “choice vs chaos” or “1930s-style cuts”, the key is to terrify the voters. After all, this election isn’t about hope. It’s about fear. Or at least that’s what our focus groups are telling us. That’s what you need to impress upon the voters. Yours are the only safe pair of hands; don’t trust the other guys; and watch out, because the euro crisis might just come back to haunt us. Do you really want the other guys in charge when it does?

You get the idea.

Ed Conway

Written by

Ed Conway

Economics Editor of Sky News

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