Conservative and Labour need to overturn negative perceptions if they hope to win

Last week’s Tax and spending plans show why the election is still on a knife edge.

Labour’s plan to scrap non-dom status last week caught the Conservative Party on the hop last week and illustrated how both the Conservatives and Labour will have to change perceptions about their party if they are going to hope to win on the 7th May.

Despite the speediness of the Conservative rebuttal which showed that Ed Balls had warned of the harm to the British economy that ending said status could cause as recently as January this year, the pledge seems to have been a success for Labour

The public seem to agree with both of the positions that the Conservatives have accused Ed Balls of holding; ending the status could be a cost to the economy but the principle of fairness means that it is still something that they support.

A snap poll using YouGov’s First Verdict app showed that 77 per cent said they supported removing tax breaks on the overseas incomes of non-doms, while 20 per cent opposed the move, but a plurality, 44 per cent, thought the economy would be harmed if the wealthy non-dom business leaders left Britain.

This split in the public’s view on the issue seems to sum up one of the key themes of this election and offer some explanation as to why the race is still so tight.

Conservatives have pinned their hopes on the economic recovery leading voters to decide that their party will be the best custodians of the country’s economic future. Whilst the Conservatives enjoy a strong lead on economic competence the Labour Party is ahead on being on the side of ordinary people.

Each of the political parties seems to have understood the need to build on their areas of strength and address their areas of weakness over the final weeks of the election campaign.

As the Conservative columnist Tim Montgomerie has pointed out, the Conservative language on the economy has changed over recent months. Language is now focused on the importance of economic security and more bracing language focusing on freeing up markets and the need for the UK to ensure that it is winning in the global race has been dropped. The party was also quick to respond to Labour plans to end non-dom status with proposals of their own to address some of the most egregious aspects, such as the right to inherit the status.

The Conservative campaign seems to shifting to a more positive note. At the end of last week we even saw the re-emergence of the idea of the big society, with a pledge for time off for volunteering and help for commuters with a promise of a real terms freeze in rail fares, more investment  in the NHS and a re-emergence of the pledge to scrap inheritance tax for everyone apart from millionaires, which last saved them from possible election defeat in 2007. There are promises of more positive messages in the manifesto which is due to be published tomorrow.

Labour have tried to build their reputation for economic competence by launching their campaign with a business manifesto. The party has made it clear that it accepts the need to balance the books and get the public finances into surplus in the next Parliament. A high profile intervention by Tony Blair, warning about the economic consequences of an EU referendum was aimed at winning over business leaders concerned about the instability that a referendum could cause. Their manifesto, launched today, pledges that that they will cut the deficit every year and won’t increase Government borrowing.

With less than a month to go, the final result will depend on the success of the Conservatives persuading voters that they can combine compassion with competence, and Labour showing that they can combine their reputation for understanding the worries of ordinary voters with trust that they have the ability to manage the economy.