Another clichéd but copyright free image from Copilot
My survey of the British political parties moves on to the Green Party. The Greens had their most successful general election by far in July, winning four seats – they have had only one since 2005. And given the fragile nature of British politics, where small percentage shifts can change election results dramatically, the party is at its most influential on political events. Let’s look at them through the traditional SWOT framework, much beloved of professional facilitators.
Strengths
The Greens’ biggest strength is that they have a strong political brand. Everybody thinks they know what the party in general stands for: protection of the environment, sustainability and action against greenhouse gases. As a Liberal Democrat activist, I know this well: my party’s brand is much weaker. In local elections where neither party did much work, the Greens would regularly beat us. The Greens could put out dense, unreadable literature and it didn’t matter. People got the message that the Greens were active locally: they already knew what they were for. The party now regularly beats the Lib Dems in London Assembly elections, fought on proportional representation, where brand is critical, as it is so hard to communicate directly with so many voters. Meanwhile, environmental threats, and especially climate change, are so palpable that the brand has the power to resonate with the public.
A second strength is that the party has built up a bit of a local base of activists in swathes of the country. This has allowed them to succeed in Brighton, win a council in Suffolk, and parliamentary seats in both these places and in Bristol and Herefordshire too. This base seems to have two main sources: rural environmental campaigners (Suffolk and Herefordshire), and metropolitan left-wingers (Brighton and Bristol). All successful political parties are coalitions, so the fact that these groups are quite different is not a bad sign of itself.
Weaknesses
Alas both these strengths have a flip side. The brand is strong, but it also has a negative aspect, which currently restricts the party’s strength. Not everybody is comfortable with their environmentalism, and they can get associated with ideological extremism – which puts a lot of people off.
Likewise, though the party has areas of geographical strength, these are quite localised. It is not a mass movement represented in all of the country. Four seats is a good result for them, but they are along way from dozens of seats – much further than their rival lesser parties – the Lib Dems (who are already there) and Reform UK.
A third weakness is that their culture militates against disciplined, effective organisation. They insist on having two co-leaders, for example. While their strong brand allows them to pick up a proportion of voters easily, organising themselves to run campaigns to do more than this has been a struggle for them – more so than for the Lib Dems who make this transition much more easily.
Opportunities
The party’s biggest opportunity is that the Labour Party lacks challengers to its left, while angering left-inclined supporters. This feels not unlike the Liberal Democrats during the last Labour government (1997 to 2010), a period when they had a high vote share and won over 50 seats in three successive elections. They had a similar mix of rural and metropolitan support. Nowadays the Lib Dems are more focused on challenging the Conservatives than Labour, as they are their rivals in all but a handful of their seats (and the SNP most of the rest).
There is a rural opportunity too. The government has shown it is happy to face down rural opposition to its plans. To be clear, Labour doesn’t dislike rural communities, but it is happy to see a degree of collateral damage in their pursuit housing targets, green infrastructure and rich tax avoiders. This is a more competitive market though: Conservatives, Lib Dems and Reform all have a case to make too. But where the Greens are already strong in rural areas, they have the opportunity to advance further.
Threats
One threat to the Greens is the Lib Dems. The overlap between the parties is striking – in the priority given to the environment, and in generally socially liberal attitudes. Prior to this year’s election, though, they conspired to largely keep out of each other’s way – though there were no formal deals. There was just a mutual understanding that if they fought each other too hard, then the benefit would be to the Tories. But the Lib Dems parliamentary success has given them renewed confidence to challenge the Greens, especially in rural areas (like where I live in Sussex). Where the Lib Dems have established themselves they are generally better organised and better disciplined, and the momentum given to their party by success in July will also give them public credibility. The Greens should be able to handle this easily enough where they are already strong, but expanding this base will be harder. The Greens are probably less threatened in metropolitan areas, though, even where the Lib Dems used to be strong.
Perhaps a bigger threat is the party’s attachment to far-left politics. This is great for picking off disillusioned Labour supporters, but it runs against the political zeitgeist, where younger, ethnic minority and working class voters are increasingly put off by leftwing identity politics. These voters are starting to feel that the left doesn’t really care about the mundane issues of jobs and cost of living. Three areas stand out. The first is leftwing protests over Gaza, which the Greens have been strongly supportive of – actively seeking votes from Muslim communities. A second is the Just Stop Oil protests, which have periodically disrupted traffic or damaged works of art. These are separate from the Green Party, but that might not be so clear to voters. A third is the clash between “gender critical” activists and supporters of trans rights.
This last may not bother ordinary voters so much, but it poses a threat of a different sort. Under an employment tribunal case in 2021 it was established that gender critical views (i.e. people who say that birth is fixed from birth and cannot be re-assigned) are protected under the Equality Act. This is a very dangerous ruling for parties where the prevailing attitude that is gender critical views are not far off in kind to white supremicist ones. The Greens, along with Labour the Lib Dems and the SNP are struggling with this. But the pragmatic streak in each of the other parties makes it easier for them to make adjustments. Not making adjustments exposes parties to legal cases and substantial costs as both the Greens (being fined £90,000 in September) and the Lib Dems (who recently conceded a court case and may attract a similar fine, never mind legal costs) have already found. I don’t know how close the Greens are to making the necessary adjustments, but Trans supporters can be very militant, so this will be a struggle.
Conclusion
Green parties elsewhere in Europe have seen a struggle between “realists” and “fundamentalists”. It is the latter that give these parties so much of their energy and drive, but political advancement, and especially participation in government, requires a more pragmatic approach. Indeed environmental action will only succeed when it becomes quotidian – so widely accepted that people automatically assume that it is in their self-interest. Greens must either become more quotidian themselves or be left on the political margins. Such is the choice facing the Green parties in Britain.
In my last post on the US election, I forecast victory for Donald Trump. That was just before Joe Biden stood down – which happened within hours. In a postscript I suggested that the economy and immigration would still swing the election for Mr Trump. So it proved, though as I watched Mr Trump melt down in the first months of Kamala Harris’s candidacy, I thought she might do it – even comfortably. But then Mr Trump’s campaign stabilised, and returned to consistently hammering the points that would swing voters, and he won comfortably. I thought Ms Harris fought a good campaign in the circumstances, but she had no answer on those two critical themes.
And so an earthquake has hit US politics. Mr Trump is much better organised than he was in 2016, and his personnel changes in the American state will be more sweeping. Meanwhile the complacency of the Democrats after beating him in 2020 has been badly exposed: there will surely be something of a clearout on their side. I don’t go along with the idea that this is the most consequential election of our times (which could be applied to 2016, 2020 or 2028 with equal merit) – but the changes will be drastic. To me it evokes nothing more than that what we experienced in Britain after the Brexit referendum in 2016.
Of course 2016 was when Mr Trump was first elected, and we thought that was a Brexit moment too. But his first administration descended into muddle and was reversed in 2020. The equivalent of the first phase of Brexit happened – the chaos after the referendum result as the country turned rudderless, but not the second – which started with Boris Johnson’s landslide election victory in December 2019. It is the equivalent of that second phase that is starting now in America. At first Mr Johnson’s election victory overawed everybody. His supporters projected their favoured outcomes onto the result, and there was much hubris, as his opponents retreated to lick their wounds.
The similarities between Mr Johnson and Mr Trump are striking. Both won by making a series of impossible promises and relying on humour and bluster to persuade voters to give them the benefit of the doubt. Both are personally quite transparent – what you see is what you get – giving a feeling of authenticity compared to other politicians. Both favour loyalty among their choices for political office over competence. They even both have brought in highly intelligent mavericks to spice up their administrations (Dominic Cummings in Britain, Elon Musk in America). It did not go well for Mr Johnson: his chaotic regime collapsed in not much over two years, getting himself replaced by an ideologue who destroyed what was left of his party’s reputation (Liz Truss) – a mess that his eventual successor, the lightweight Rishi Sunak could do nothing to reverse. It was the most spectacular reversal of political fortunes in British history. Will this history repeat? A chaotic regime which results in Mr Trump bowing out prematurely, followed by an even more disastrous lightweight ideologue (JD Vance)?
Maybe. But we need to think about the differences between the two situations. Firstly the two men. Mr Johnson is by far Mr Trump’s intellectual superior, but he had little organisational experience. He couldn’t run a whelk stall, in the British expression. Mr Trump is an experienced businessman, who certainly could run a whelk stall (“the best whelk stall in all the world”), even if his track record is nothing like as good as he says it is. He may not be particularly intelligent in the normally accepted (left-brained) sense, but he has drive, stamina, confidence and intuition that make him very effective in his own way. His management style is chaotic, but there is more method to his chaos than with Mr Johnson, and he is more adept at blaming others if anything goes wrong (Mr Johnson did this too, but without the same chutzpah). And America’s president is far more entrenched constitutionally than Britain’s prime minister, who is at the mercy of parliament. Mr Trump thrives on attention and status, which the job of US president delivers more than any other – it is hard to see him voluntarily letting go. This would take some sort of physical health issue – though this is a clear risk at his age.
But there are going to be problems. His administration will be peopled by chancers and mavericks, who will under-deliver. That happened last time, though in a different way to what is likely to happen this. In the short term I see this as doing little political damage to him though. There will be ethical issues galore – but (unlike for Mr Johnson) these have little capacity to damage him. Failure to deliver on practically anything doomed Mr Johnson and his successors (even Brexit had a big flaw in Northern Ireland); Mr Trump’s downfall is likely to be over-delivery. Mr Trump has made three major policy promises: the mass deportation of irregular immigrants; the raising of tariffs; and reducing taxes. Even partial delivery on these promises will make America worse off. They might have longer term economic benefits (though I’m a sceptic) but these will not come through in time.
It is very hard to see how Mr Trump’s deportation strategy will unfold – it is so unprecedented. But he has laid huge store on it. At a minimum it will create huge uncertainty in the country’s labour markets, and surely many labour shortages. He may try to releive the shortages by relaxing legal immigration, though this looks politically suicidal, but that won’t happen without massive disruption. This disruption will lead to inflation – with the highly sensitive area of food prices looking especially vulnerable. Inflation was the economic event that did most damage to Mr Biden’s reputation, and it will upset many of those that voted for him on the basis of his supposed economic competence.
Something similar will happen on tariffs. These are so obviously harmful that many of Mr Trump’s business backers assume that his policy is simply a negotiating tactic. Nothing, it seems, will dampen their wild optimism, reflected in a stock market rally. But tariffs are central to Mr Trump’s economic outlook. He appears to think that they will be costless to consumers, and raise revenue with which he can cut income taxes. Besides, it is surely hard to negotiate the kind of change to the terms in trade that he so wants. High tariffs will raise the prices of imported products and so inflation. This may not be as disastrous for America as it would be for some others, like Britain, who depend more on trade. But if prices are already going up because his migrant policy has disrupted labour markets, it doesn’t look good.
And then there are tax cuts. Many of Mr Trump’s business supporters set huge store on these, but there is a real problem with the country’s already-huge budget deficit. Adding to this deficit will be inflationary – one of the things that undid Mr Biden. His regime may want to balance this through drastic cuts to public spending (though not to defence), but there is not enough beureaucratics waste, wokery and foreign aid to deliver anything like enough – which would find him cutting into entitlements such as pensions (social security) and medical schemes. That won’t be an easy sell.
All three of Mr Trump’s main economic policy ideas point to inflation and administrative chaos. This will create stormy seas quite unlike his first administration. This is another difference from Brexit, which has proved to be a slow bleed rather than the big dislocation that some predicted. With his regime’s reputation for economic competence shattered there is liable to be a big backlash.
That should be an opportunity for the Democrats – just as Mr Johnson’s collapse was an opportunity for Labour in Britain. It is also possible that a different strand of populist radicalism emerges from the Republican side to take over. Meanwhile in the wider world, the retreat of America from its leadership position will force others to step up. There will be too much collateral damage for this to be a nice thing to watch – but it will be fascinating if you can see beyond that.
Another AI image from Copilot. Rather pleased with this one
My survey of the British political parties reaches Reform UK, the third most important party in terms of vote share. It is hard to understate the influence of this party, the creature of veteran British politician Nigel Farage. In the recent election it made more inroads into the Conservative vote than any other, allowing Labour to win by a landslide on a modest share of the vote; it also helped the rise of the Liberal Democrats, though to a smaller extent. It won only five seats itself, but even this was a bit of a breakthrough in Britain’s electoral system. One of the biggest questions in British politics is whether it can sustain its influence, or whether it will wither, as most third party challenges do in Britain.
Reform’s strategy is to channel the populist backlash that can be seen across most of the western world, from Donald Trump in America to the AfD in Germany. It rages against liberal “elites” and their woke policies, and most of all it rages against high levels of immigration. By and large the established parties handle this criticism badly, accusing it of being racist, amongst other things – even as more and more people from ethnic minorities subscribe to populist politics. The Conservatives are less inclined to do this, but they are badly split between those that want to hop onto the populist bandwagon, and the more establishment types who think that populist politics lead to bad policies. This strand of politics allows Reform to win 15-20% of the national vote, with an effective ceiling of probably about 30%. This invites three questions. What happens if the party reaches this ceiling? Can that ceiling be extended? And does the party have the leadership and organisational capacity to do this?
Supporters of Reform UK, including Matt Goodwin, often cited here, think they represent a forgotten majority. But polling consistently shows that support for their agenda is in the 20-30% region. The rest of the electorate diverges sharply in their views on most issues, and the party has very negative favourability ratings in the population at large. But 20-30% is still an awful lot of people, and if the party could find a way into winning the bulk of them, that would have a big impact. For a start, the Conservatives would be unlikely to survive. Reform’s achievement of about 14% vote share in July proved disastrous for the Tories. No credible route back to power exists for them without pushing Reform back to substantially less than this. Such a Tory collapse would then put Reform in contention to win many seats from Labour, especially in the old “Red Wall”, a swathe of constituencies from Wales to the Midlands to Northern England, based on towns with people who feel left out and left behind. These seats turned to the Conservatives under Boris Johnson in 2019. But how many could they win? I haven’t tried any psephological modelling – but it is surely unlikely that they could even challenge the Liberal Democrats for third place in parliament. They are stuck in the same place as the Lib dems used be in their years of relative success in 1997 to 2010. Lots of votes, but hard to turn these into seats – the Lib Dem vote is now a lot more concentrated, hence its substantial parliamentary presence. Labour would continue to do well in this environment, unless the Lib Dems started to find ways to break out their current geographical containment.
To move into true contention as a challenger to Labour requires Reform to seek an extra 10-15% of the vote, from people who currently disapprove of the party. This is what Donald Trump has successfully done in America, but which European parties in the same space are finding much harder. But our electoral system more closely resembles America’s than it does even France’s, still less those of German and Italy (although there the populists have found a path to power through alliances). Unlike America, Britain does not have a substantial body of active Christians who are appalled by the liberal values prevailing in the governing class. Neither are the liberal left quite as out of control as they have been in America, to stir up those resentments. But what America does show is that economic grievances, and the unsettling effects of mass immigration, can be stoked up among groups, such as younger voters and ethnic minorities, that used be reliable supporters of the left. Wokery played a role in the American realignment in supporting a “there’s madness on both sides” narrative – but it was economic grievance that clinched it for Mr Trump. It is possible for a winning coalition of voters to be built by Reform, or, indeed, by the Conservatives.
But can Reform pull it off? They first have to destroy the Tory challenge, in local elections, and the Welsh Senedd could play a role here. They then need to carry out the second part of the two-step I described in my previous post about the Conservatives. This means drawing support from a number of formerly Conservative politicians and businessmen to give the party some sort of aura of respectability. Reform starts with two advantages. Its leader, Nigel Farage, is an immensely experienced politician and a gifted communicator (the BBC can’t get enough of him). He (unlike the former academic Mr Goodwin) would understand the analysis I have just written, and clearly knows what he has to do. The second advantage is that the Conservatives have a toxic legacy from their years in government after 2019, when they showed themselves to be chaotic and incompetent. The party’s new leadership is clearly struggling to put distance between them and this legacy.
But the Tories have a huge advantage: they have political infrastructure – organisation, networks, administrative competencies. Here Reform are weak: they are way behind the Lib Dems, never mind the Tories. Uniquely amongst Britain’s main political parties, the party has a corporate structure, which makes it easy for the leadership to control, but much harder to build the networks the party needs to sustain a successful political movement. Mr Farage clearly recognises this, and building this infrastructure was a central theme at the party’s recent conference. But it doesn’t help that populist politics tends to attract event more cranks and argumentative types than other forms of politics, and fewer of the steady organisational types. Rapid expansion risks collapse into chaos.
But the potential remains. Reform’s poll share is holding up well after the election. There looks to be plenty of scope for stirring up economic grievance and resentment. Reform UK is very much the party to watch at the moment.
Copilot’s idea of a two-step. Copilot has become very chatty all of a sudden, but much slower at generating images. Is this a portent for the development of AI?
I’m not a dancer. I have no idea whether the two-step really is the appropriate metaphor for what I want to describe – and a quick online search doesn’t really help. But in my survey of the state of Britain’s political parties I have come to the Conservatives. What they need to achieve requires two distinct steps. The question is whether their leadership has the skill to do this, or whether it will tumble in the process of trying.
The Conservatives suffered an unmitigated electoral disaster in July: both in terms of share of vote and in seats won it was their worst performance in living memory… and considerably beyond that. They lost votes in three directions, to Labour, to the Liberal Democrats and to Reform UK. This is all the more remarkable because in 2019 they achieved a landslide victory and it was widely assumed that they would stay in power for the foreseeable future. But this dramatic reversal contains the seeds of hope: politics has become so volatile that even a disaster on this scale can surely be reversed in less than five years? The party now has a new leader, Kemi Badenoch, who is bringing a fresh approach to the leadership. For reasons that I have explained in my earlier post on Labour, incumbency is a tough gig in a world where economic growth has suddenly become much harder to achieve. And Labour’s vote share makes it look vulnerable. Recent opinion polls already show the Conservatives with a small lead, albeit with a still dismal share of the vote.
With rather touching naivety the Financial Times political columnist Stephen Bush suggested a short while ago that what the party needed to next was to grapple with the new economic reality (though he does not frame that reality in quite the same way as I do) and come up with a policy framework that addresses it. Oh dear! Success in current politics comes with magical thinking. Look at the impossible policy programme put forward by Boris Johnson to allow the Conservatives to win big in 2019. Look at Donald Trump’s winning formula in this year’s US election. There is no reward for presenting voters with tough choices, and especially not in a very competitive political market. The party has no need to grapple with the awkward realities of public policy. But that is not as easy as it sounds. Any old magical thinking will not do. After all Labour under Jeremy Corbyn also indulged in magical thinking in 2019, and that was disastrous. The party has to create a narrative which resonates across a wide audience.
Successful politics is about coalition-building: aligning support from disparate groups of voters. Mr Johnson successfully built one that embraced working class voters in Northern, Midland and Welsh constituencies, alongside professional voters in prosperous suburbs, and traditionally conservative rural voters. Mr Trump has done something very similar. This is not easy. Matt Goodwin, the radical-right political commentator, correctly identifies that just such a coalition ensured the Conservative victory in 2019, and the party’s betrayal of the working-class element sealed its defeat. But he then goes on to excoriate those suburban and metropolitan voters (“elites”) that were part of the coalition as being the scum of the earth. How do you rebuild the coalition then? Political activists like Mr Goodwin actually aren’t that interested. They want to promote the interests of one part of a winning coalition, and are uninterested in any compromises that might be needed to bring about ultimate success.
That sounds unhelpful to a Conservative leader, but he isn’t entirely wrong. That seems to be the lesson from America. Mr Trump, while building his successful campaigns (as opposed to what he actually did in office) never compromised with his “base”. This consisted of two distinct, though overlapping groups. These were working class voters with lower educational attainment, who are often looked down on by governing elites, and conservative religious communities, who have their own policy agenda, and dislike of irreligious liberals. Once these groups were secure and enthusiastic, he could work on less committed groups, and persuade them to suspend judgement on issues that they were less comfortable with, and indulge in magical thinking in others. These people were persuaded that it was time for a shake-up, and that the Republicans would surely not be as bad as they sounded. This is what I am describing as the two-step. Secure the radicals first, then move onto the moderates.
It is not the only possible two-step. The more traditional one is to make a strong bid for the “centre ground”, and then turn to the radicals to say that “this is the best you are going to get”. This is the Tony Blair version of the two-step, which secured him three electoral victories for Labour. It is also what Sir Keir Starmer is doing for Labour currently. The radicals-first two-step does seem to be easier to do from the political right. Mr Corbyn did make a valiant attempt with this strategy for Labour, and it came much closer to success in 2017 that most people expected. But he did not understand how to keep the more sceptical voters on board. He was no match for Mr Johnson.
Both versions of the two-step are open to Mrs Badenoch. In the radicals-first version, she would move her tanks onto Reform UK’s lawn, and use the party’s superior resources and organisation to crush it. She needs to lean in to the sort rabid ranting indulged by Mr Goodwin, and weather the criticism from her own side. And then, in about 2027, she needs to start promoting scepticism for Labour, and getting more moderate Conservatives to suggest that she isn’t so bad, and that Labour are truly awful – in the way that so many less extreme Republicans have done for Mr Trump. The centre-first option would involve crafting an appeal to more professional voters first, and then crushing Reform. To be honest, this does sound much harder. Professional voters are much harder to woo with magical thinking, and that would indeed mean confronting some of the policy dilemmas that Stephen Bush was suggesting. Sir Keir understands this well, and would challenge her at every step.
Either way, it requires both political guile and forcefulness. There is no way through the middle with the two-step. Is Mrs Badenoch up to it? It is very early days, and it is hard to tell. The early signs are not encouraging (for her party – more encouraging for those who do not wish her well). It does indeed look as if she is trying to thread a middle way, a bit like the ill-fated Ed Miliband tried for Labour in 2010 to 2015. She enthusiastically attacks wokeness, but she is also trying to give her approach a bit of intellectual rigour, so as to dress it up for more professional types. That gets her into trouble. Is she, or is she not, in favour of maternity pay? She may find these early days bruising, but she may learn from them – much as Sir Keir did in his early days as Leader of the Opposition.
The jury is out. She is already attracting a heavy weight of sneering and criticism. If she does try to carry the battle to Reform as her first step, then a lot more of this is to be expected, and her ratings will dip in the population at large. But if the Reform ratings start to come under pressure we will know if she is winning. I don’t wish her well, but it will be interesting to watch.
Copilot again. If I had asked it to make the knight look like sir Keir Starmer I don’t think it would have allowed me
A while a go I promised to offer my thoughts on each of Britain’s six main political parties. I started with the Liberal Democrats, the party I know best. Today I move on to Labour.
Labour won an exceptional majority in this year’s general election – and unprecedented in the scale of its advantage over the Conservatives. But this is based on under 35% of the popular vote, on a relatively low turnout. A big victory was widely forecast, so perhaps many of the party’s voters stayed at home. That’s hardly a ringing endorsement, though; the Conservatives surely suffered more from the stay-at-home effect. There is, therefore, a sense that Labour’s advantage is fragile, and could be lost after a single term. To be fair, Labour’s leadership seem very aware of this. Perhaps that is one reason why their first months in office seem to be plagued by a strange hesitancy. The Conservatives, under a new leader, sense there may be an opportunity – especially since Donald Trump’s victory in America shows that the electorate’s anti-incumbency mood works even more easily for the right than it does for the left.
This uncertainty is because we are in a transitional period in global politics. This is the onset of the low-growth era. Until now politics has been based on the assumption that steady economic growth would improve living standards across the population, and drive increased tax revenues that can be spent by expanding benefits or increased public services. There are other ways of looking at this problem. Advocates of Modern Monetary Theory produce strong arguments to suggest that governments don’t spend money raised by taxes – they simply need to manage the balance of income and expenditure so as not to let inflation loose. In an innocent age of just a few years ago, when inflation seemed to be yesterday’s problem, it seemed that governments could run up big budget deficits without any problem. But inflation in America is one of the reasons for the anti-incumbency mood, alongside the not unrelated issue of immigration. Liberals can be quite dismissive of inflation – but it is politically toxic. Most people regard it as a breach of the trust they place in state institutions.
By and large, politicians are in denial about the arrival of the no-growth era, and so are most political commentators. They suggest that growth is a matter of finding the right policy mix, with the right political drive behind it. Growth is a political choice, they say. But it isn’t. Low growth results from a convergence of economic circumstances (a less favourable trading environment; adverse demographics; the state of technology; climate change), and the revealed preferences of the public from their consumer and political choices alike. Practically until the US polling day, The Economist suggested that the Democrats’ political fortunes would be changed once the US public started to appreciate the country’s excellent growth record over recent years. It doesn’t seem to have dawned on them that the American public is protesting at the costs of that growth. So far all I hear is the very lame argument that voters think their pay-rises are due to their own achievements, but that rising costs are due to political failure. Meanwhile the Republicans have won comfortably with an anti-growth agenda, although, of course, they and their voters seem to think that its is the opposite.
The problem for Labour is that they are dug into the old growth assumptions. Their plans don’t add up without it. They may be lucky – as there are some specific opportunities for Britain. They might even reach their objective of achieving the highest growth in the G7 – though mainly because the other six countries will perform so poorly. Having said that, Donald Trump’s concerted attack on world trade is bad news for Britain. Another problem is that their pre-election promises on taxes have forced tax rises on business that look distinctly unhelpful for private sector growth – though the overall fiscal effect of the recent Budget was positive.
Meanwhile the public’s anti-growth mood remains. They are sensitive to inflation – the risk of which is heightened by using fiscal policy to drive growth. They don’t like immigration, which is essential to manage the skills shortages that growth throws up – even if not all immigration actually eases growth. Most infrastructure development, including housing, throws up vociferous protests, which causes delay and cost overruns. The problem, though, is that the public remains subject to severe cognitive dissonance. They still think that they are pro-growth policy and have the possibility of stable or lower taxes, a strong social safety net, including state pensions and the NHS, and robust public services. Alas it is in no politician’s interest to bring this dissonance to the point of resolution. With the possible exception of the Greens, no political party is remotely close to tackling it.
What is the answer? That really is the topic for another post, as I’ve digressed far enough from the state of the Labour Party. But there are opportunities out there, and it should be possible to promote improved wellbeing even in a world where conventionally measured growth remains low. But it requires a whole new approach to managing our society.
Meanwhile the Labour government is left with little choice but to try and muddle through, and hope for some economic and political good luck. If they want to make a drastic change in course, they will have to do so by presenting a new manifesto at the next election. It is too early for them to start preparing for that, at least in the open. It is possible that they will start to understand the economic reality in three years time or so and rethink their strategy. But their chances of reaching a second term, which they will desperately want, mainly depend on what happens to the opposition. Here things look much more promising.
The populist backlash is likely to grow. Labour is unlikely to be quite as inept as the Democrats were in fending it off. They are cautious to point on immigration, though unlikely to stem the flow by enough to assuage the public; they will probably keep their woke tendencies at bay. But popular frustration with slow progress will grow, and much of their agenda on infrastructure and clean energy will draw criticism. And yet the populist mantle is being fought over tooth and nail by the Conservatives and Reform. Neither looks strong enough to prevail over the other, leaving the opposition to Labour divided. The Liberal Democrats, meanwhile, will try to consolidate their grip on the Tory left flank. Four years is a very long time in politics, but this dynamic, which won Labour its outsized majority, is their best chance of victory next time.
Meanwhile Sir Keir Starmer, the party’s leader, will start to find his party gets unruly. He has too many MPs to keep quiet with government jobs or the prospect of them. Leftwing causes will come along to challenge is plodding centrist cause. But the growing threat from the populist right may well be enough to keep these in check. Having won power, his party really doesn’t want to lose it.
That is lucky for Sir Keir. The central premise of his party’s programme – that it can restore economic growth to about 2% per annum – is unattainable for more than a couple of years. His is the last stand of the old politics. The new has yet to fully take shape.
I asked Copilot for a picture of a squabbling crowd in America and this is the result. I suspect political guardrails prevent them including the US flag…
One of my rules here is that I don’t like to comment on elections before they happen. Most news reporting on elections happens before the results are known, because, I suppose, it is more newsworthy. And that’s fair enough if your audience are voters in that election – they have a decision to make. But for others the most important thing about an election is its outcome, the point at which most newsmen seem to drift away, for foreign elections anyway. But the coverage of the United States’ general election tomorrow has become a massive thing in itself. And I want to comment on that before we know the outcome.
The first thing to say is that the coverage here in Britain is massive. My main source of daily news is the BBC, and they are throwing huge resources at it. Alas they often don’t have much new to report. It is quite interesting to see in pictures, or hear real voices, to illustrate what I have read about in more substantial reporting in The Economist and elsewhere – but it has become repetitive. This is typical of the BBC’s “headless chicken” editorial policy. They let their agenda be set by other news outlets (as they see themselves as reporters of the news, not makers of it), set a time budget and fill it even if they have nothing to say – meanwhile suppressing coverage all sorts of important news in areas they consider less newsworthy. Things are not quite as bad as they are when there is a death in the Royal Family, but I’m getting some of the same feeling.
For somebody like me, endless repetition of messages by the BBC and others makes we want to challenge them. These include: this is a very close election; it will be decided in the seven swing states; it is the most consequential election in a generation (or more); American politics is toxic and dysfunctional (to be fair the BBC does not push such an opinionated view – though it is very widely held). All of these contentions have plenty of evidential support, but none of them should be regarded as established facts, as most coverage seems to imply.
Is the election close? Yes, all the respectable polling says so, and the campaigns are acting that way. But accurate polling is very hard to do. In the last two elections Donald Trump’s support was significantly underestimated. There are many unique characteristics about this election, and that is going to make it just as hard to predict: learning from past mistakes can simply lead you to new ones. You can make a case that there will be a comfortable Trump win (a repeat of previous polling error, resulting from a broadening of his appeal across ethnic groups, etc.) or a comfortable Harris one (more motivation from outraged female voters, etc.). We don’t know.
Will it be decided in the seven swing states, or perhaps just the biggest of them, Pennsylvania? A recent poll showing Kamala Harris ahead in Iowa (due to predicted high turnout among women voters) raised eyebrows as this is a regarded as safe for Trump, and may well be one of those polling outliers. But it is entirely possible that the intensive attention both campaigns have been paying to Pennsylvania make this an atypical state, and the winner there loses the overall election. Meanwhile it is possible that one of the parties will flip one or more states outside one of those seven and this could prove decisive.
This is the most consequential election in a generation? That is what both campaigns are saying, and it is what a lot of others were saying too. But it’s what they always say – and especially last time. A Harris win is not going to stop the backlash against “elites” from middle America, even if it means the end of the road from Mr Trump himself. She will not put into action the sort of radical programme that Joe Biden did – as she has not prepared a long for the job as he had, and she will be more constrained politically – she is likely to face a Republican-controlled Senate. And as for Trump, he may in some ways be much better prepared for power than he was in 2016, with many more loyalists ready for the call to assist his administration – but he himself is more erratic and even less focused – and as narcissistic as ever. We could well get a chaotic regime that achieves little and quickly becomes constrained by its unpopularity. Yes, the election will be highly consequential – but so was the last one, and the one before – and well you make the case for earlier elections too.
American politics is toxic and dysfunctional. Actually the first of those is pretty much incontestable – toxicity is a Trump and Republican strategy to help motivate their voters. Ms Harris is trying to break with that, which is welcome, but not necessarily a winning strategy. But dysfunctional? There is dysfunction – most notably with the failure of bi-partisan border legislation purely to make a political point. But The EconomistLexington column makes a good case that democracy is actually in quite good shape. The candidates are moving to the middle ground; party support is breaking out of its ethnic silos. And in today’s Financial Times Rana Faroohar points out that there is dysfunction in wider American society, with too much inequality and with governing elites obsessing about the wrong things. But there is widespread recognition of this wider dysfunction in American society, and perhaps the raucous debate, and highly contested nature of its politics will start to produce the sorts of changes it needs for renewal – and has a far better chance of doing so than if a more stable and controlled politics prevailed.
Humans are far from the rational creatures that many like to think they are. Our predictions for the future are too heavily influenced by our experience of the past. We think that our battles of the moment dwarf those of the past and future in their importance. Both biases are running rampant in the news coverage of this US election.
This week Rachel Reeves, Britain’s chancellor of the Exchequer, delivered the first strategic Budget the country has had since George Osborne’s in March 2016, unless you count Kwasi Kwarteng’s short-lived effort in Autumn 2022. Mr Osborne’s effort was, of course, simply maintaining the strategic course he set when he first became Chancellor in 2010, and on which doubled-down in 2015 once he’d dispensed with his Liberal Democrat coalition partners – a strategy usually referred to as “Austerity”. That was to shrink of the British state’s footprint, reversing the trend established by Labour, especially from its second term starting in 2001. Ms Reeves is reaffirming the role of the state, but whether that is simply consolidation or a decisive expansion remains unclear. What is over is the firefighting, bluff and pretence of the years 2016 to 2024; there is now a serious engagement with the challenges confronting Britain.
Mr Osborne’s budget of 2016 was quickly overwhelmed by the Brexit referendum in the following June, which saw a new prime minister, Theresa May, and Chancellor, Philip Hammond. They rejected the Osborne strategy with a turn against Austerity. But the mess left by the referendum result was not conducive to clear strategy, as nobody really understood what the result meant. Was it the creation of a small-state “Singapore on Thames” as many senior Brexiteers wanted, or just a grumpy turning inwards? Any chance of the new government coalescing around a coherent strategy was destroyed when it lost its majority in the snap election of 2017. A new government emerged under Boris Johnson in 2019, but his strategy was to have his cake and eat it – to avoid any difficult choices: a strategy not to have a strategy. Liz Truss and Mr Kwarteng took over in 2022, and although they did appear to be strategic, their efforts collapsed almost before they had started. The Rishi Sunak and Jeremy Hunt regime’s only strategy was to try to survive until their political fortunes turned. They pushed through cuts to National Insurance based on fictional forecasts of future government spending. It was fundamentally unserious.
Labour’s first job after taking power in July was to restore those public spending estimates to some kind of reality, without sparking the kind of panic over fiscal probity that Mr Kwarteng had done. They made this job much harder because they chose to humour the Conservatives’ fiction on the public finances rather than challenge it. They promised not to raise taxes on “working people”, and specifically not Income Tax, National Insurance or Value Added Tax. Since taking power they then suggested that they had discovered a surprise “black hole” of over £20 billion, or perhaps £40 billion. But mostly this was known about before the election – and repeatedly pointed to by the Institute for Fiscal Studies. But no political party addressed the issue properly – not the Lib Dems, Reform UK or the Greens, never mind the main two parties. All said that public services could be maintained based on implausible taxes on other people, or equally implausible cuts to benefits. Ms Reeves decided that raising employer National Insurance was not too egregious a breach of election pledges, and went for that. This raises the overall tax take to its highest ever level as a ratio to income, but well within European levels. Whether this really means the largest extent of the state ever, I suspect, depends on how you treat benefits, which is more of a negative tax than a part of the state apparatus, and which have been steadily creeping upwards. But looking ahead beyond the next two years, Ms Reeves continued her predecessors’ fictions on public spending, and cut safety margins to nothing, in order to demonstrate medium term financial targets were being met.
That was because the Office for Budget Responsibility (OBR) forecast meagre growth. Labour’s plans had always been based on improved economic growth – but they cannot give the OBR anything solid enough to raise their forecast. A lot of growth comes from the zeitgeist, out of reach to policymakers and economic forecasters alike. And many of the government’s pro-growth policies have yet to be worked out. Landing a big extra tax burden on businesses in the short term, moving to workers medium term, leaves a bit of a credibility gap there, and it’s hard not to think that Ms Reeves is relying on a positive change to the zeitgeist to get her out of the hole.
Still, the government was never going to solve its economic challenges in one go. This budget is seen as a necessary first step, setting a credible baseline from which to move forward. To me that is a convincing enough narrative, but one that clearly leaves many questions. I have already mentioned growth. Social care is an issue that overshadows all health and welfare spending – and even the Tories attempted to tackle it on occasion – but it has so far been ignored by the government. The government wants to increase the efficiency of government services – but so has every government I can remember: what makes this time different? And many stretched government services, notably those within the remit of local government, are getting little if any extra funding: how sustainable is that?
The one thing going for the government is that expectations are dismal – it will not be so hard to beat them. They aren’t making the mistake that Mr Johnson made in 2019. A good run of luck could change the climate completely.
For me the jury is still out on this government. This Budget isn’t a bad start by Ms Reeves, but many more tests are to come.
“Don’t bet against the American economy,” says The Economist in a recent special report. I understand where that sentiment is coming from. Over the years I have read many prophesies of doom, or at least of decline, for that economy, and often found them persuasive. On each occasion they have proved false. Two thoughts have struck me from this report: first that America’s success can’t be replicated by Europe, and that Europeans shouldn’t try; and second that America’s economic success, paradoxically, lies at the heart of its toxic politics. It is that last paradox which might cause the American success to unravel, as, to be fair, the report acknowledges.
My first insight flows from the principle of comparative advantage – a core economic insight originally articulated by David Riccardo in the 18th/19th Century. It is part of Economics 101, and is the critical idea about what drives international trade, and why such trade is mutually beneficial even if one economy imports stuff that it could make more efficiently for itself. It’s all about opportunity costs, as more modern language than Riccardo’s would have it. At a strategic level the theory of comparative advantage has massive predictive power – explaining so much of the world economy as we see it, including, for example, why exchange rates don’t match purchasing power parity. But as you try to get into more detailed, and tactically useful, predictions, economists have been unable to turn it into anything more precise, in spite of one or two attempts. Therefore it is left out the economic models that drive so much of the work of economists, and it does not progress beyond Economics 101. That is why so many economists, not least writers at The Economist, often forget that it is there and seem ignorant of how it actually plays out. So far as I can see, the great (and late) economist Paul Samuelson is one of the very few economists of modern times to properly have internalised its implications. He it was who pointed out that as undeveloped economies converged with advanced ones, the gains from trade between them would diminish, at the expense of the advanced economies. This does much to explain the relative economic stagnation of advanced economies since the financial crash of 2007-09, compared with the era of rampant globalisation before it (which happened after Samuelson died, having forecast it) – though there are other factors, not least demographics. And yet this is never mentioned amid the wringing of hands about the backlash against global trade, which is generally blamed on politics alone. And yet the invisible hand is so often behind the politics.
I have a another insight arising from Riccardo’s thesis. America’s recent success compared to Europe, as The Economist‘s report points out, is based on high-tech industries, where productivity has soared, while it has plodded elsewhere. This success is surely based on the scale of America’s market, and the relatively lack of legal and cultural barriers to trade and the movement of labour. This is clearly a source of comparative advantage over Europe – though not to China, which has a very similar advantage. This means that the relative productivity of the tech sector compared to others (making aircraft, for example) is always going to be greater in America than in Europe, apart from a few specialist niches. That will drive America to specialise in hi-tech industry, while Europe’s direct competitors will diminish – to the benefit of both, as an Economics 101 student can readily explain. If this the way of the invisible hand, then why does The Economist (and such luminaries as Mario Draghi the EU éminence grise with an economics training) spend so much time bemoaning Europe’s lagging hi-tech industry and urging it to to try harder? Economically literate politicians, like Mr Draghi, often do this sort of thing because it is a convenient argument for policies that are actually about economic efficiency in general . Journalists in more sophisticated publications have no such excuse. Europe is never going to match America, or China for that matter, in some areas and it will be a waste of effort trying. Meanwhile they are doing well enough exporting the many products where they do have comparative advantage – Europe does not operate with a large trade deficit, after all. Of course European leaders must keep trying to improve economic efficiency, and perhaps watching America will act as a spur, but a clearer understanding of the workings of comparative advantage would mean better-directed public investment.
Back to America. The Economist does not fail to attribute some of America’s success to an entrepreneurial zeitgeist – but it points to more solid factors too. First is that it has comparative advantage in industries that happen to be highly productive – not just in hi-tech, but also oil and gas. The former advantage stems from the size and flexibility of America’s product and labour markets – something that only China matches (India seems to be closer to Europe in this respect); the latter from a geological endowment. That’s all very well, but it creates tensions. The successful industries take off, but the corollary is that many others are left behind – and through the laws of comparative advantage – become less internationally competitive (as the dollar strengthens, and as they have to pay workers more to compete with the more productive sectors). This creates what Donald Trump calls “American carnage” – the flip side to economic flexibility, as factories close and more productive workers flee to the booming parts of the country. How much the imbalance between globally successful industries and the mainstream is driving high inequality is an interesting question. The Economist suggests that the poorest quintile has seen significant income growth in recent years with tighter labour markets – but in the middle of the income distribution there may be more stagnation – as the higher income groups continue to do fabulously. But if things happen quickly in America, the human cost is going to be high. Rapid growth breeds “carnage”.
A further source of advantage, according to The Economist, is access to large numbers of immigrants, and not least those flooding across the southern border. This seems to act as a lubricant: jobs get filled more quickly in the growing parts of the economy. Europe has immigrants too (though not China) but finds these harder to integrate. And yet this is a central driver to the country’s toxic politics.
And so the rapid change to the structure of the US economy, and the flood of immigrants that its success attracts, are driving a sense of dislocation among Americans, which in turn is driving the highly destructive direction of US politics. This is placing all its critical institutions under threat. Four dangers lurk in particular: the capture of US institutions by a big business elite (“rent-seeking” in economic jargon); rolling back international trade through tariffs and other measures; clamping down on immigration; and finally macroeconomic instability arising from public finances going out of control.
The concentration of big business, leading to capture of the political system and the corruption of institutions to protect established business from competition (often in the name of social stability), is a familiar process. We see variations of it in many places (although sometimes, as in Russia and Hungary, the relationship between political leader and business elite is more complex) – and , indeed, it is alleged to have happened in America in the late 19th Century. The concentration is happening in America now, as is the business elite’s dabbling in politics (most egregiously by Elon Musk) – but The Economist does not think it is leading to significant anti-competitive practices. Competition between the major hi-tech companies remains intense and the pace of innovative product development is hardly slowing. We might raise eyebrows about the way money buys influence in the US, but it does not appear to be a big threat to the US economy.
The backlash against foreign trade is a more substantive concern and especially the advocacy of tariffs. This seems to be mainly driven by Donald Trump – and as such it is one of his most distinctive contributions to economic policy – but the Democrats are copying him. It is hard to see how such policies will do much to help the American public – their main effect will be to raise costs. However it may not do much damage to the main drivers of US economic health: the technology giants and the oil and gas industries. It is not good news for the rest of the world, however, especially Europe.
Anti-immigration will also probably not hurt as much as it could – unless Mr Trump is actually tries to fulfil his campaign rhetoric about mass deportation. The Economist is also quite sanguine about the impact of public budget deficits, which few politicians seem to be taking seriously. There remains little threat to the US Dollar as the world’s preeminent currency, and hence the ease with which dollar finance can be obtained.
Still, there does seem to be an unhealthy cycle here. Growth in the American economy remains robust, but it is driving US society apart. Politicians and commentators alike focus on the choices at the next election, always described as the most important in modern times. But neither side is able to deliver a killer blow to the other. If Mr Trump wins next week’s election, his movement will have to find ways to survive his departure, amid the inevitable chaos of his administration. If Kamala Harris wins it is hard to see that she can convince Trump supporters that she is taking America along the right course, continuing to fuel the destructive radicalism of the right. One way or another this political toxicity will surely affect the astonishing robustness and resilience of the US economy that is one of its main drivers.
My life being what it is, my posting on this site will remain erratic. I do take time thinking about my posts and composing them – so I have to make time while juggling with other things. After an absence of over a month, I am planning to run a series of posts here on the British political parties after the election of July. We have entered a period of multi-party politics, with no less than six parties able to have a significant impact on the next General Election (Labour, Conservatives, Liberal Democrats, Reform UK, Greens and the Scottish National Party – I am perhaps being a bit dismissive of Plaid Cymru). I plan to have a look at each of these six.
I start with the Liberal Democrats, the party I know best. I joined its predecessor the SDP in 1981, and my membership has been continuous ever since. I have been active as a local party officer (Treasurer and Chair) and election agent. I have served as Treasurer of the London party, and on a couple of policy working groups. And I have attended many party conferences, though not this year. I am no longer very active locally, but I do belong to the party’s Federal Audit and Scrutiny Committee – so do regularly exchange with senior officials of the party, albeit only tangentially on the subject of political strategy. I gave the current leader, Ed Davey, his Chair’s reference so that he could stand as a parliamentary candidate in Kingston, before he first won the seat in 1997. I’m no outside observer, but I will try to comment as if I was – with a bit of inside knowledge. As a member of the family, though, I will refer to the main protagonists by the first names.
The party managed a superb result in July, with 72 MPS, the best result for it or predecessor parties since the days when the Liberals were a party of government a century ago. This was delivered on the basis of a relatively modest share of the vote (about 13%) that was actually a small decline on its previous performance. This has added immeasurably to its stature; it is taken much more seriously by the outside world, and its supporters are happy. It feels like a big moment for the party, which for the past five years has been teetering on the edge of extinction and irrelevance, and it poses the big question of who the party is and what it is for. It is worth looking at this in the context of the party’s history.
When the party was created in the aftermath of the 1987 election, from a merger of the Liberals with the SDP, the party was at a very low ebb. Its fortunes revived under the leadership of Paddy Ashdown. Paddy wanted the party to matter. It was his aim to enter government in coalition if he could, and to influence government even if that wasn’t feasible. As New Labour emerged under the leadership of Tony Blair he saw an opportunity to influence that party in a future government by working alongside it in opposition to the Conservatives. In the 1997 election Labour won a landslide, and needed the support of no other party. But it was a breakthrough election for the Lib Dems too (winning over 46 seats, up from 20 in 1992, although with a lower vote share). There continued to be a relationship with Labour, and it was possible to see Lib Dem influence, especially on constitutional matters. But the relationship was going nowhere. Labour did not see the need for it. Tony Blair was “unpersuaded” by the case for electoral reform for parliamentary elections, the Lib dems central objective. Paddy resigned and was replaced by Charles Kennedy.
Some people in the party look back on Charles’s leadership as a bit of a golden age. The Conservatives remained unpopular and the party was able to harvest disaffectedLabour voters. But there was muddle at the heart of it. This period peaked in the 2005 election, when the party won 65 seats, on the back of Labour unpopularity over the Gulf War in particular. With the third successive substantial result for the party, it seemed to be part of the Westminster furniture. And as MPs retired they were replaced, not by local activists as had been the way before, but by political professionals working internal politics, in the manner of the Labour and Conservative parties. There seemed to be (almost) such a thing as safe Lib Dem seats, not so attached to the personal local standing of the MP. These political professionals started to dominate the parliamentary party, and one of them, Nick Clegg, became its leader. The objective of these professionals was clear: to enter government in coalition, so that they could shape policy. This seemed like the natural next step in the party’s growth and maturity. But its offer to the public was not a clear one. To insiders the party was bound by its liberal and internationalist values, but this was less important to voters.
In 2010 the party did well to hold onto 57 seats in the face of a resurgent Conservative Party. With a hung parliament, this was the moment the professionals had been looking for: they entered coalition with David Cameron’s Conservatives. The party made a solid contribution to this government – it is striking how many successes over the 14 years of Conservative-led government have the party’s fingerprints (renewable power and gay marriage, for example), and how things went wrong after the party left (Brexit…). But the party’s left-leaning supporters felt bitterly betrayed. This was especially deep for three groups in particular: students, let down by the introduction of tuition fees in spite of promises made during the election; public and third-sector workers, who developed hostility to austerity, which threatened their jobs, into a near-religion; and working class voters, shocked at the party’s support for Tories. Nearly half the party’s support vanished almost overnight. Then the Conservatives, sensing weakness, pulled won over many of the rest by playing on the fear that the party would let Labour in. The 2015 election was a massacre – the party only just hung on to 8 seats. Third place in parliament went to the SNP. Like Icarus, the party had flown too close to the sun and were punished for their impudence.
The party managed something of a revival following Brexit, as the party most committed to opposing it, recovering to 12 seats in the 2017 election. New members flooded in. Under Jo Swinson, another of the 2005 intake, though somebody that had to win her seat from Labour rather than walking into a held seat, the party doubled down on its opposition to Brexit, while Labour vacillated and the Conservatives turned into hardline Brexiteers. The party launched a well-funded campaign in the December 2019 election suggesting that they might lead any government that emerged – as way of avoiding the question of which of the others they preferred. But they flew too close to the sun again, and support melted: they were limited to 11 seats, in spite of decent vote share by post-2015 standards. The high hopes of many members at the start of the campaign were crushed; quite apart from the party’s own poor performance, Boris Johnson’s victory meant that Brexit would indeed be “done” – something that they had become passionate about.
Ed Davey took over at this low point. It needs to be remembered that he has witnessed all this history first hand. I first remember him when he moved into our local party area in the late 1980s; for some reason I have it my mind that he was ex-SDP, though he must have moved in after the merger. He was working as an economist at the British computer company ICL (which was later subsumed into Fujitsu) but not long afterwards he took up a position as an economics researcher for the central party. He then became the parliamentary candidate in the Liberal council stronghold of Kingston, where he enthusiastically adopted the Liberal style of community politics, and won a striking victory in 1997, when his seat wasn’t one of the official targets (it didn’t stop me going to help…). He witnessed the evolution of the party in the period of its significant presence in opposition from 1997 to 2010, but he wasn’t part of the intake of 2005, who did so much to shape the culture of the parliamentary party. Nevertheless he became a minister in the Coalition, eventually at cabinet rank – and appeared to be having the time of his life. He took to being a minister like a duck to water. A lot of the credit for Britain’s remarkable progress on renewable energy is down to him, though he was building on groundwork laid by Chris Huhne. But he lost his seat in the 2015 massacre, though he won it back in 2017. I worked with him on fundraising for the Lib Dem London Assembly campaign of 2016, where his wife was a candidate.
Ed is not for flying close to the sun, unlike his predecessors Nick and Jo. The party reorganised with a highly professional Chief Executive, Mike Dixon, recruited from the charity sector (by Jo, to give credit where it is due). It focused on the mundane issues that were the primary concern of voters: health and social care, sewage pollution, and so on. It concentrated resources on areas where the party already showed strength – primarily in Conservative-held suburbia. Strong message discipline was developed; activists were encouraged to knock on doors to talk to voters. The reward, in July, was beyond all but the wildest dreams of activists (Lib Dems can dream wildly). This, of course, was a question of capitalising on the opportunities made by the other parties – especially the Conservatives and SNP, but Labour helped by not scaring voters. But experienced Lib Dems know all too well about having an opportunity and fluffing it during the campaign. Many of the victories were massive. In a parliament where there are an unusual number of close results, and MPs with under 40% vote share, the Lib Dems are in a relatively comfortable position (although there are a few close results, of course). They would have done extremely well even if Reform UK had not spit the Conservative vote. There are not many second-placed seats left, though I live in one of them. This sizeable number of MPs looks eminently defendable, though in some places campaign infrastructure needs to be built.
So, where on earth does the party go from here? The message from Ed is to show humility, and to keep working on the themes that party campaigned for – it is important to maintain the trust of the electorate. But how do you expand on such a good result, and what is the party building up its parliamentary presence for?
The party itself is more coherent than at its previous high of 2005. Its MPs look distinctly professional, and it draws a huge amount of its support from professional people. The working class supporters it used to attract have not returned, by and large. It is a party of middle class angst. When populists like Matt Goodwin rage against the “elite” and their “luxury beliefs”, they include people like Lib Dem supporters, who, in fact, are frustrated with their powerlessness. They want the country back in the European Union; they look sympathetically at the plight of refugees; they want to confront the black spots in British history; they wouldn’t mind a bit if an Indian or African family, or a gay one, moved in next door; they want state schools to promote these values. But these values do not have mass appeal. In polls the Lib Dem vote share hovers in the range of 10-15% and never beyond.
Still, there are two electoral opportunities. One is to keep mining from the seam that has already given so much: disaffected Conservatives. That party has to scratch the populist itch, and chase voters that supported Reform, the Lib Dems’ polar opposite. More liberal and pragmatic Conservatives will surely continue their exodus. And then there are disaffected Labour supporters. There are bound to be a number as the government faces grim choices on public spending, and the more liberal must choose between the Lib Dems and the Greens. There are very few Labour seats that are realistic targets for the Lib Dems, but attracting Labour supporters will help secure the Lib Dems’ existing gains, and even to pick off a few more Conservatives (for example in the seat where I live, East Grinstead and Uckfield, where Labour has a significant vote). In some relatively affluent middle class suburbs where the party is still third, they might be able to move to second place, to either party.
Some of the party’s members want to attack a distinctly conservative Labour government from the left – as they believe Charles Kennedy’s party did in the Blair years. But that risks putting off many of the voters that the party has drawn from the Conservatives. The party can push for closer integration with Europe, however – such as joining the Customs Union or even the Single Market. The party can’t afford to ignore people who voted for Brexit, but it is not nearly so much of a problem for them as it is for Labour. Brexit is widely seen as a disappointment, and the number of people who voted for it is in steady demographic decline. One day the party might even talk about rejoining the EU – but that remains a long way off. If there is an upwelling of support for electoral reform, the Lib Dems are ready to embrace it. Beyond that I don’t any big shifts in campaigning themes.
What’s it all for? The Liberal Democrats are a natural party of government, even if they so rarely exercise power. They are happy to engage in conversations about the sort of compromises needed to make things happen – it’s part of the mindset of a professional, perhaps. At conferences activists discuss detailed proposals for policy as if power was round the corner – to the incredulity of outsiders. And where the party controls councils, it is very pragmatic. For example, a neighbouring council to where I live is refusing planning permission for local housing developments regardless of their merit, and it is suffering fines as a result, because of implacable opposition by the Greens and Conservatives alike. Lib Dems protest that this is nonsense – the fines take away resources from desperately stretched public services. And they know that the shortage of housing is extreme. Instead they want to engage with the planning process and allow some developments and while opposing others. This pragmatism contrasts with the Conservatives, who gradually became a party of protest, even while in government.
That pragmatism will manifest itself with measured opposition at the national level, compared to hysteria from the Conservatives and Reform. But it only goes so far. The party is not engaging with the critical economic debate on how to balance taxes, public services and benefits. And how to balance the demographic need for immigration with the pressure it puts on infrastructure such as housing. Instead they complain about pressure on public services and cuts to benefits, while only suggesting half-baked gimmicks to raise extra taxes. This, of course, copies Labour strategy before the election – but the party shows no sign of engaging with the difficult policy choices that any government must face.
But the party now has an army of MPs, which will be supported by an even bigger army of paid researchers and the like. They will want something more than mere political survival. In my view the party needs to aim for working in coalition with Labour after the next election, if that party’s majority vanishes, as well it might. Perhaps it is still too early to think of such things, and the party needs to learn the lessons of the previous coalition episode. It would help if the party was on the up, and entering coalition from a position of strength.
Ultimately, if the party can’t fly close to the sun, it is unclear why it should exist. How far Ed recognises this I don’t know. But he does know how important it is to ascend with humility. And I am sure he is right there.
05/07/2024. London, United Kingdom. The Prime Minister, Sir Keir Starmer and his wife Victoria arrive at Number 10 Downing Street upon his appointment. Picture by Kirsty O’Connor/ No 10 Downing Street
Sir Keir Starmer, Britain’s Prime Minister, can be summed up in a single word: Focus. He is learning the problems that this characteristic brings. His focus on winning the election on 4th July has made his life much harder now that he has won. Labour has made an awkward start to its term of office.
In government Sir Keir’s focus is on five “missions”. This is an admirable approach compared to the chaos of Conservative governments, especially since 2016. We can quibble about the design of those missions: number one is “kickstart economic growth”. Growth makes a poor target: it’s both a bit like targeting happiness, which is something that happens when your are trying to achieve something else, and a bit like targeting the birth rate, which just isn’t under state control. It is under this heading that housing is being tackled: much better to have targeted housing specifically, surely. Social care doesn’t make it into the five – which cover the energy transition, law and order, education and the NHS (or in fact health) – but which of the others would you drop? Neither does immigration, which would have featured in any Tory big five – but that is more understandable. Focus is integral to achievement,- but it comes at the expense of risk management. A lot of the skill of management is learning how to balance the conflicting requirements of focus and risk management. Sir Keir must not be too relentlessly focused – he needs to have a strategy for dealing with the many other issues that have the potential to derail. He needs to use trusted colleagues for this.
What Sir Keir had clearly hoped was that the sight of a government clearly focused on achieving the nation’s priorities would present such a contrast to the previous government that he would have a prolonged honeymoon – especially as there is no coherent opposition. That has not been so. The summer’s big unforeseen event was the rioting that followed the Southport murders – but these played to Sir Keir’s strengths. A strict no-excuses crackdown was what the public wanted and this was delivered without hesitation. But from this emerged a big problem: neither he nor his most important colleague, his Chancellor of the Exchequer Rachel Reeves, are good communicators. They are wooden in their presentation and in their responses to questions. This has not helped them in their presentation of bad news about the government finances, the need for continuing austerity, and in particular the cancellation of the winter fuel allowance for all but a few state pensioners, just as fuel costs were rising again. They are blaming this on the previous government covering up a black hole in the nation’s finances -but this is coming across as insincere. Not without reason.
The problem is that the “black hole” in government finances is not at all surprising – so acting surprised looks fake. Throughout the election campaign the Institute for Fiscal Studies, a well-respected think tank, complained that all the parties were painting too rosy a picture of the nation’s finances. It really wasn’t hard to see why. The previous government was trying to use inflation to squeeze public sector costs – and noticeably force down the real pay of public sector workers. On this basis they fairly transparently cooked official forecasts that they could make cuts to National Insurance – even after they had tried to raise the tax in 2022. But Labour were silent about all of this, choosing not to challenge the Conservative’s general policy direction. Both parties seem to have been obsessed by the thought that the 2024 election could be a repeat of the one in 1992, where the Tories successfully built a campaign on “Labour’s Tax Bombshell” that turned a seemingly inevitable victory for Labour into defeat. Labour promised not to raise any of the main taxes (Income Tax, National Insurance and VAT), matching a Tory promise and said they would match Tory spending projections except in a few specific places. They were evasive on the clear implication (highlighted by the IFS) that this meant austerity in most aspects of government spending. Sir Keir’s focus was on winning the election with an outright majority, and he wanted to leave nothing to chance. If he was being dishonest, then he was no more so than the Tories, the thinking g seems to have been.
But, as my mother used to say, two wrongs don’t make a right. Labour could have been more honest about the state of the nation’s finances before the election, and they weren’t. The focus on winning the election has made the task of government much harder. Sir Keir has been desperate not to repeat the Tory habit of over-promising and under-delivering, and has been caught out over-promising. He is, of course, trying to pin this on the previous government, in the manner that David Cameron’s coalition government pinned the blame for its austerity policies in 2010 on the previous Labour one. But Mr Cameron, his Chancellor David Osborne, and even his Lib Dem deputy, Nick Clegg, were all much better communicators than Sir Keir of Ms Reeves (not that this did Mr Clegg any good…). Their hopes rest on the fact that with the next election four or more years away, some more positive events may have overtaken this difficulty.
I am disappointed. I had allowed myself a brief moment of hope. The speed with which the government settled the various public sector wage claims seemed to show a degree of imagination. They must have overcome firm Treasury pushback that “we can’t afford it”. But the better country that they want to bring into being features a happier public sector workforce, and better pay for the bottom and middle quartiles, and less dependence of cheap overseas immigrant workers. Squeezing public sector pay, with no plan for when any catchup might happen, is just takes the country further away from this goal. This is the reason I think that Jeremy Hunt, Ms Reeves’s predecessor, was one of the most disastrous Chancellors of recent times. He swallowed the Treasury logic on payrises and then made things worse with tax cuts.
But that flicker of hope has been suffocated. No evidence of such a degree of long-term vision has emerged. Instead the story was that the urge to settle the disputes was because they were unpopular and a distraction, and the previous government could be blamed. I was particularly disappointed that the government allowed the Treasury to defer the previous government’s plan to tackle the growing social care crisis, for the nth time. The government has to stick to its promises on tax, and social care didn’t make it onto the big five priorities. But the long-term consequences are not good, and some kind crisis is in the making. Labour’s focus on the election is making the challenge of decent long-term government harder.
Still, it isn’t all bad news for the government. None of the contenders for the Conservative leadership look capable of leading a revival for that party. The rift on the right, with the success of Reform UK, looks as if it will do for Labour what the rift on the left did for Mrs Thatcher in the 1983 and 1987 elections – enable landslide victories on the basis of lacklustre vote share. And the Lib Dems show some of the same problems as Labour. A relentless focus on doing well at the election at Tory expense leaves them ill-equipped to tackle Labour. The prospect that Sir Keir will get a second term remains good. The mandate that he seeks at that election will be critical to the success of his project overall. He needs to give himself much more room for manoeuvre.
PS Other commitments mean that this will be my last post for at least a couple of weeks. I plan to resume after the Lib Dem conference with my thoughts on what that party should do next.
