In the News Teaching Activity – as the General Elections looms, what are the key economic arguments likely to be? (June 2024)

It would be hard to miss the news that the UK’s next General Election is on 4th July. Politicians are already rolling out all sorts of economic policy ideas to try to win the electorate’s votes. Torsten Bell at the Resolution Foundation sums up some of the key economic areas we are likely to hear about.

For the Conservative party, Bell suggests they will use the arguments that the UK has the fastest economic growth in the G7 (as it did in Q1 this year), that the cost-of-living crisis is over now inflation is back in its target range and real wages are rising, making people feel better off. For the Labour party, Bell anticipates their focus will be on a longer term view of growth which suggests the economy has largely been flatlining and that the price level is still punishingly higher than a couple of years ago and that living standards measured by real disposable income have fallen since 2019, the worst record for any post-war parliament. There is also the issue of tax with the Tories arguing they are the ‘low tax’ party (see their recent cuts in NICS), while Labour points to the extremely high tax burden in the UK. Both have ruled out increases in income tax, NICs and VAT despite concerns about public finances. There is going to be much more of this electioneering talk and good economics students may want to arm themselves with accurate economic evidence, especially if they are voting!

The economic arguments for the General Election 2024 • Resolution Foundation

1 Assess whether the UK economy has ‘turned a corner’ and that economic growth and price stability have been restored. Use the evidence in the charts in the article to support your answer.

2 Using the chart showing Annual Growth in Average Weekly Earnings, explain the difference between nominal and real earnings growth.

3 Discuss the relationship between real household disposable income and living standards.