Economists will say it’s illogical. They will point to inflation falling and salaries now climbing faster than prices in the shops. They will say that people should be feeling richer, not poorer.
But, like it or not, the cost of living is again rising fast up the agenda of normal voters. It might not make sense to the economists, but it doesn’t make it any less true.
Rachel Reeves isn’t just the Chancellor, she’s also a trained economist. What follows will be hard to hear.
While the data might, broadly, be pointing in the right direction, Reeves and Treasury colleagues need to understand that that is not how it feels out there as the Budget looms.
READ MORE: Budget 2024 fiscal rules: What is Reeves changing – and why does it matter?
Public First, where I am a partner, carried out polling a couple of weeks ago that demonstrated just how hard people are finding life right now. Voters’ number one priority is the cost of living in a way that would have been truly familiar a year or two ago. In fact, it’s now higher than the NHS again in people lists of concerns.
But I’m not just someone who works in a public opinion business, I’m also someone who shops at Sainsburys for food and gin. Last Sunday I was on one of those visits and three times at the tills I heard different people complaining about the price of groceries.
As the long winter nights draw in, and Reeves begins to put the finishing touches to the budget she needs to understand that not only do voter feel the cost of living is biting deeply, she also needs to realise that, relatedly, the political atmosphere is febrile.
In the qualitative research and focus groups we run, the people of Britain are not settling in, waiting for things to get better. No, not at all – they are really, very cross.
The political classes get it in the neck time and again. If Labour ever had a honeymoon period in government, it is dead and buried. Repeatedly telling voters that the country is completely knackered probably didn’t help.
READ MORE: ‘No fiscal rule is perfect. But this one means welcome investment’
The repeated messaging – alongside a total and utter absence of any narrative promise of sunny uplands, however distant – has almost certainly played a crucial role in why, despite the data, people feel so skint.
And so Reeves must tread carefully when she stands up at the Dispatch Box next Wednesday. Not only does she have the nation’s finances to guide – much like the famous electoral Ming Vase – to a more secure footing, she has national morale riding on her approach too.
And, of course, these two things are intimately linked. The fragility of consumer confidence was demonstrated only a few weeks ago when it dipped to everyone’s surprise – especially those in No 11.
In short, the Chancellor cannot afford to give the impression that normal, working people – and this includes middle class teachers and lawyers and doctors – could be feeling poorer in the next few years as a direct or indirect consequence of her decisions. Inadvertently lifting a bunch of those professional people into the highest tax threshold would go down really very badly.
This might sound daft, but I’ve been worried for some time about the idea of having a bona fide economist as Chancellor. The one thing the Treasury doesn’t lack is decent people who are really interested in economics. What it too often does missing is human instinct – remember, for example, the “perfectly logical” pasty tax
The recent change towards an emphasis on investment as a result of changes to the fiscal rules are a start. But fiscal rules are not the chat in the Sainsbury’s cafe.
In the coming days, I really hope that the Chancellor’s human side comes to the fore. It is essential that it does.
Read more of our Budget 2024 coverage:
Labour’s Budget 2024: What policies could Rachel Reeves announce?
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