A progressive alliance would help the Tories not hurt them

Last week, I was still in shock from Theresa May’s announcement of a British General Election three years early on 8 June, and I predicted that the Conservatives would end up much where they had started. A few other Lib Dems were coming to similar conclusions (see this from Richard Morris)  But I closed with the thought that I might have underestimated Theresa May. A week later I think I did.

The campaign is taking shape. The Conservatives are dusting down their campaign from 2015 – portraying themselves up a stable government against a “coalition of chaos”. This message is being repeated relentlessly with discipline. Mrs May looks good at discipline. While the principal opposition party is Labour, this line of attack must surely resonate with the public. No government led by Labour in its current state can be anything other than chaotic. And all the other parties (bar the now irrelevant Ukip) have ruled out working with the Conservatives.

The Tories are making headway on three fronts. Firstly they have won back their direct defections to Ukip. Douglas Carswell, the Tory MP who defected to Ukip, has given up the ghost. Mrs May’s support for Brexit and turn against social and economic liberalism has satisfied them. This victory may look good in the polls but matters least where the Tories need it most: in the marginal seats. They had done a good job of squeezing Ukip there in 2015.

The second area of Tory success is picking up votes from Labour, even from Labour’s low point in 2015. A lot of these seem to be coming via Ukip. After former Labour voters rejected the party to support Ukip, they are ready to switch to the Conservatives this time – especially under Mrs May. And it isn’t hard for the BBC to find people in their vox pops who have defected directly from Labour ro the Tories. She has accomplished a significant detoxification of the Tory brand for older, working class voters at least. This will help the party make headway against Labour in England, and Wales (where local polls show the Tories with an unprecedented 10% lead over Labour). All this gives the Tories a high poll share in the mid 40s in the country as a whole, and the prospect of winning many seats from Labour.

The third area of Tory success is that the party is gaining ground in Scotland. It is now firmly established as the second party after the SNP, whose poll share is coming off the boil from its high point in 2015. It could be that the SNP’s policy of advocating for a second referendum on independence will push unionists in the direction of the Tories, allowing them to pick up many more seats than I thought (perhaps as many as 10). After the cataclysm of the 2015 election, who can say that there will not be some very sharp movements in some seats?

What to make of Labour? Their leader, Jeremy Corbyn, looks to be in good form – confidently pitching to bands of his supporters as he did in the Labour leadership election. Even in 2017 a hard left campaign can develop momentum, as has just been shown in France by Jean-Luc Mélenchon, somebody whose political attitudes look quite close to Mr Corbyn’s. Still, he only achieved 20%, and the other left-wing candidate, Benoît Hamon, the official Socialist, failed to reach 7%. Mr Hamon was also a left-winger, and put forward a radical policy agenda, but was regarded as an irrelevance by the public. That looks closer to Mr Corbyn. Perhaps Mr Corbyn will attract a sympathy vote; perhaps local MPs can rely on a personal vote. But all this reminds me of the clutching at straws indulged in by Liberal Democrats before their disaster of 2015. The party is disorganised and disunited; Mr Corbyn’s spokespeople are very much a B team, if that. The Tories are content to let Labour make all the running in the media they want to  because, they are making the case to vote Tory better than the Tories themselves.The party is out of fashion and demoralised.  A rout looks a distinct possibility.

And the Lib Dems? They are in good heart. New members continue to flow in (my local party has grown by over 20% in a week).  They are getting plenty of media coverage after a period of being ignored. And they are well led. This week’s Economist said no less than three times in three separate articles that the party is suffering from weak leadership under Tim Farron, while otherwise being quite encouraging for the party. They offered no evidence for this assertion: so what can they mean? Tim is not highly regarded at Westminster; he has not made much impact on the public – his approval rating is negative. But as a party member I have seen somebody who understands campaigning much better than his predecessor, and has pushed through some very well-judged changes. First was preparing the party for a snap election last summer, by ensuring that all constituencies had selected candidates. Second was forcing through changes to selection procedures to ensure that more women and ethnic minority candidates would be selected in target seats. This will be critical to any rebranding of the party. He did take a little longer than he should have done to rule out a coalition with the Conservatives, after ruling out one with Labour – but he got there quickly enough. And now he is talking up the idea of the party being a the real opposition – so as to undermine efforts by the Tories to talk of a “coalition of chaos” – and move it on to not offering the Tories a blank cheque.

So the Lib Dems have momentum. And yet they have a mountain to climb. Taking back the seats that they lost last time to Labour and the Conservatives will be hard work. The new MPs are well entrenched – and the sheer scale of the Conservative popularity under Mrs May makes it an uphill battle. At every general election since 1997 the Lib Dems have failed to live up to my hopes and expectations. I am trying to keep them under control this time.

Furthermore some Lib Dems are being distracted by notions of an anti-Tory “progressive” alliance, by doing deals with Greens and Labour, up to the point of even withdrawing candidates. The Greens in particular are talking up the idea. While there may be virtue in some local arrangements (covering Brighton and Lewes perhaps?), and especially local non-aggression pacts, this looks like a very bad idea.

The main electoral task for the Lib Dems is to detach some of the 30% or so of Conservative voters (15% of the electorate) who think Brexit is a mistake. Being part of an alliance, especially with Labour, will make this task much harder and indeed plays right into the hands of the Conservatives’ “coalition of chaos” mantra.  Labour and the Greens are making no serious attempt to challenge for these voters – and yet any anti-Tory coalition is doomed without them. The first problem for the progressive alliance is that the Tories are too damn popular. The second problem is that any alliance is not credible as anything more than a temporary electoral arrangement.

Unlike some Lib Dems, I am not against electoral alliances in principle – indeed it may be the only way to beat the current electoral system. But any such alliance needs to have clear, agreed objectives, and momentum. Labour are so far away from agreeing to such an alliance (to many of them, Labour IS the progressive alliance) that there is hardly any point in talking about it. Labour still dreams of recreating on the left what Mrs May has achieved on the right.

Until and unless Labour sorts it self out, rids itself of the hard left, and starts to embrace the compromises required to win back voters from the Tories, the best hope for progressives is that the Lib Dems surpass Labour and can build an electoral alliance from a position of strength.


13 thoughts on “A progressive alliance would help the Tories not hurt them”

  1. “……rids itself of the hard left, and starts to embrace the compromises required to win back voters from the Tories”

    But is the Labour Party really so much of the hard left? I don’t see any call for workers’ control of all industries or all power to the Soviets (ie workers councils!) I don’t think the Windsors need have any immediate concerns they might befall the same fate as the Romanovs!

    Is a call for renationalising the Railways, the Royal Mail, or the public utilities really an indication that the “hard left” are in control? The Lib Dems , or Liberals as was, used to support the idea of a mixed economy too at one time. Many Lib Dem and Tory voters still do.

    I don’t see that as a major problem. There’s a big problem, for all parties, with economic theory though. The voters, of all parties, want a balanced budget. They find it hard to understand why that is just not possible for any length of time. Theresa May’s govt won’t be able to do it. Just like David Cameron, Gordon Brown, Tony Blair and John Major couldn’t either. Margaret Thatcher was a “failure” too in that sense. No-one can succeed by promising the impossible.

    Getting some voter education on all this is much more important than whether we have left or rightish politics. I’m not going to fall out with anyone who might want a smaller government than I do. That’s just a matter of personal opinion.

    1. Fair point. Labour does not have a coherent policy position, and most of its official policies are unremarkable. This reflects that the battle for control of the party and policy is still in progress. It is particularly disappointing that Jeremy Corbyn dropped the idea of developing a new economic narrative pretty much as soon as he was elected. But with Corbyn in charge, the hard left does have something like a policy veto.

      And I agree with you on the general quality of the economic debate – of which the attraction of a balanced budget is a part. I am more conservative than you on that front, but agree that we talking about the wrong things.

  2. A Progressive alliance is out of the question until the Brexit issue is resolved one way or the other. The Tories, with just a few exceptions like Kenneth Clarke , seem to have come to terms with the referendum result whereas the left of centre parties are hopelessly split.

    So whereas at one time the Lib Dems would have benefited from all Labour tactical voters, I’ve been one myself in the past, they will only get those votes from Labour Remainers at this election. I couldn’t vote Lib Dem at present.

    It’s been easy enough for Theresa May to see the weakness in the Opposition generally. It’s much more than the split in the Labour Party, though the split on the EU runs right it. The Lib Dems have their own 25% or so of digruntled Leavers. Then there is still the recent memory of how the Lib Dems were in coalition with the Tories. That, too, will have to fade before there can be any meaningful talk of a Progressive alliance.

    Which is a pity because now that Scotland’s Labour seats have nearly all gone to the SNP, it’s only a progressive alliance which will stand any chance at all of defeating the Tories in England and Wales.

    So I’m just going to shut my eyes and hope for the best at this election. I’m expecting the worse so anything slightly better than that will be a bonus!

    1. Fair challenge, and I agree with your conclusion. But Brexit is too good an opportunity to for progressives to miss. 45% of people think that Brexit was a mistake – the first time the poll has shown the number higher than those who thought it was right (though not by much). And you may not understand why so many remainers are quite so angry about the whole thing. But they are – they think Brexit was won by means of deceit and is a shorthand for xenophobia and they don’t see why they should roll over and play dead. They are also very conscious how the level of direct threat Brexit poses to things they value (like working in other EU countries, participating in EU projects, the complications of having spouses/family/colleagues who are not UK citizens, etc). A minority, but a very angry one.

      You might be right intellectually. There is no way back. Soft Brexit may be a mirage. But the anger of remainers has to be channelled if the Tories are to be beaten. The trick for progressive politicians is taking those angry people on a journey that runs from reversing the referendum result, to calling for a soft Brexit, to establishing an open relationship with the rest of the world including the EU and a long transitional period. We are slowly moving through the first part of that journey. The second part will only come as the negotiations take place and the choices become clearer.

      But the real problem with the Tories is that they are driving austerity to the point where long term damage is being done, and that they are making things worse by the direction they are taking on education and immigration. Now if Labour had spent time building an alternative economic narrative rather than on a hyper-whinge, there might be an alternative to Brexit to beat the Tories with. The Lib Dems must rally around the Brexit issue because of who they are – even though they must pick up a lot of Brexit sympathisers too.

  3. “45% of people think that Brexit was a mistake– the first time the poll has shown the number higher than those who thought it was right”

    As it happens, I was just reading Anthony Wells’ article on UK polling report immediately before clicking on to your blog.
    Anthony can always be relied on to make an intelligent interpretation of what these figures actually mean. This comment is spot-on.

    ” As a result, a lot of people have got rather excited about today’s figure, when they really shouldn’t”

    They’d be much better off having a play with an Excel spreadsheet. Use the random number generator to produce 100 random numbers in the cells. This can represent the likelihood that a voter will be Con, Lib-Dem, Lab or Remain-Leave etc. Then add an if-then statement to simulate what answer they would give to a pollster. The results will jump around from simulation to simulation by several percentage points each time the recalculate result is pressed.

    The bigger the sample the less jumping around there will be. Statisticians call it noise. But as Anthony says, the sample size is often only about 100. He reckons on +/- 3% noise. I suspect that might be a slight understatement. There will just occasionally be a bigger error than that.

    1. Anyway, having got the maths out of the way, we’ll have to see just how the election pans out. The annoying thing is that TM is absolutely right about the Tories being the only party who are capable of negotiating a good Brexit deal for the UK.

      IF Jeremy Corbyn had enough Parliamentary support for his position then there would be no reason why he couldn’t negotiate a deal too. Probably a better deal than we’d get from TM. But this is all pie-in-sky stuff.

      The only (very) remote chance of anything other than a Tory government would have to be a coalition which wouldn’t have JC as leader. It would be run by Blairites and Lib Dems.

      How could they possibly negotiate a good Brexit deal when they are very much anti- Brexit?

    2. Agreed that the poll does not deserve the sort of excitement it has generated. A look at the series since August is completely consistent with sample error around a fixed position. And it is too early to suggest that the trend is for the anti-Brexit camp. But an awful lot of people think Brexit was a mistake, and they are not coming round to the idea, as some had suggested they would. Neither is there any real evidence for the claim sometimes made that Brexit voters are regretting their vote. No doubt there are some, but there seem to be an equal number of reconciled remainers, like Mrs May. This does make Mrs May’s claim that the public is generally reconciled to Brexit but that the political class isn’t a bit of a nonsense. If anything it is the other way round.

      1. You and I have different ideas of what a good Brexit deal would be. But to judge from David Allen Green’s articles in the FT it won’t make much difference who is negotiating from the UK side, we’ll just have to accept what the EU gives us, as they are better organised, united, and a no-deal would hurt us much harder than the other EU countries. The evolution of T May’s public position can be read as a gradual dawning of that reality. Barnier and Tusk were talking about hard Brexit long before she was.

        1. Possibly we do have different ideas. But I agree that there isn’t a lot that the UK can do to force the EU to do something it doesn’t want to do. So, initially, it isn’t going to be too far off a take-it-or-leave it offer.

          But that won’t be the end of it. There won’t be any one deal as such. Trade talks between the UK and the EU will continue afterwards. So having made a political point, by offering us a seemingly punitive “deal”, the EU will want to make sure that an important customer continues to be an important customer and will start to soften later.

          I was listening to a podcast by Steve Keen the other day in which he talks about MMT as espoused by Stephanie Kelton, Bill Mitchell, Warren Mosler and Randall Wray. he calls them the “MMT crowd”!

          SK disagrees with them over their relaxed views about trade and other deficits. I think I can see both sides of the argument but I’m tending towards Steve’s view at the moment. I have always thought that the relationship between the EU and the UK could only work, in practice, if the EU was a good market for our exports as well as the UK being a good market for EU exports. That has simply not happened. German exports to the UK are more than twice UK exports to Germany. The EU can’t possibly be a good customer for us. Their economies are either too much in recession of their Governments are running a mercantalist policy. They really don’t have much too offer. So if they want a hard initial Brexit, it has to be their call and I’m sure we can live with that.


          1. Well I don’t agree with much of that, Peter, but I did write in my “hair shirt case for Brexit” that there was something unhealthy about Britain’s trade balance with the rest of the EU, and that the best case for Brexit was that it would force the UK to sharpen up.
            The conventional economic view about current account deficits is that they reflect net savings. Because the Germans insist on being high net savers, they run large surpluses. Because we Brits are the reverse – and especially because we like to public services to run ahead of tax revenues – we end up running a deficit. Relative competitiveness determines the terms of trade, how many VWs we can get for one of our Nissans, etc. Believers in efficient capital markets, if there are any, will suggest that the fall in Sterling after the referendum reflects a sharp deterioration in terms of trade for being outside the EU.
            My feeling (it is an intuition more than a well-found logical argument) is that within the EU it was too easy for Britain to sustain its low net savings (or live beyond its means) with terms of trade that you would not expect from ur relative productivity. Hence the substantial trade deficits with the rest of the EU, and with the rest of the world too. Why that should be I remain a bit puzzled.
            According to that hypothesis, outside the EU we will find life much harder, but at the same time reduce our trade deficits, because British products become more competitive within Britain itself – while a sinking pound helps keeps exports completive. This no doubt would pair up with reduced budget deficits.
            Of course, since the relationships of cause and effect between the various deficits are so complex, there are plenty of other ways of interpreting the figures. If our low savings ratio is baked in, and actually sustainable through world capital flows little affected by EU membership, then we would simply replace net imports from the EU, with net imports from somewhere else. Or maybe we will continue to run a large deficit with the rest of the EU, but with worse terms of trade.
            And I am not so sanguine about getting a good (free) trade deal with the rest of the EU. I’m not sure how dependent German industry really is on net exports here, or how much political clout they have (they were certainly unable to block Russian sanctions). Besides, though the Germans may find it harder to export directly to us, if it is harder for us to export our Nissans and Toyotas into the EU, so there will be at least some compensation for them. And it will be a lot easier for them to rearrange their multinational supply chains than it will be for UK businesses to do likewise.
            Still, technology may be moving in the direction of shorter supply chains. So who knows?

  4. I guess we’ll have to wait and see how it all turns out on the EU. TM has played it all very well. She’s going to cast herself as the ‘good guy’ standing up for the UK against the ‘bad guy’ in the form of Jean-Claude Juncker. Even I find it hard not to side with her against someone like him.

    It’s inconceivable that the UK would treat Scotland as badly as the EU is treating Britain. Would we ask for billions in compensation from the Scots and threaten them with trade barriers?

    I might just quiz you on your statement:

    “The conventional economic view about current account deficits is that they reflect net savings.”

    You know what I think about “the conventional economic view”! But why do they think that? If we want a lower CAD why keep on lowering interest rates which discourages savings?

    If the Govt wants balanced trade, or a surplus, then it needs to keep the exchange rate down. Every other country which runs a surplus does exactly that. They don’t leave it to the citizens of the country to decide how much they want to save!

    Don’t economists actually look around the world and see that surplus countries like China, Denmark, Switzerland etc peg their currencies at relatively low levels against other key currencies and it is this that causes the Current Account to be what it is?

    Can you imagine telling the Chinese Govt that they should just let their currency float? Then wheel out all these distinguished economists (Not!) from the LSE to reassure them they can safely assume that the good people of China will continue to save enough and therefore their surplus will be safe?

    1. Well with Scotland England is subsidising them; with the EU we are the ones paying the money. and cutting off our contributions causes the EU a problem which they are trying to soften. And the Brexiteers who said they’d be falling over themselves to be nice to us so that we keep buying BMWs were peddling their usual lies. Still, as a loyal citizen I must wish Theresa May well on this one, and for the first time in a long time I find that the Brexiteers on R4 Today often talk more sense than the Remainers.

      And as for the economics, it comes back to the sectoral balances, surely? If you run low net savings, then foreign balance must take the strain. I think conventional economic managers (and I agree with a lot of what you say about them) are actually pretty relaxed about CADs, and not so worried about low net saving, if that’s what people want to do. They don’t like budget deficits and are suspicious of fiscal policy – so that leaves them with interest rates. I don’t disagree with your critique there. I am more worried about current account deficits than I am about budget deficits, as I think they are a more reliable predictor of financial crises. And if I thought that sterling was too high. BUT I also think the budget and the current account are linked – so that the reason exchange rates have been too high is because of high budget deficits. That’s an old discussion here of course.
      I guess it all depends on how you look at it. Currency manipulation comes with huge risks, and if your economy does not behave consistently, it will fail. So does Denmark have high net savings because it keeps its currency pegged low? Or is its currency pegged low only because it has been able to keep net savings down? But clearly, if the Germans saved less (e.g. through running a budget deficit), they would have a much smaller current account surplus. Using the exchange rate to manipulate net savings seems just as useless to me as using interest rates for the same purpose.
      And what would happen if the Chinese currency was allowed to float? Most economists think it would fall, in the outrush of Chinese savers trying to buy foreign assets. The Chinese govt used to try and keep the RMP low, nowadays they try to keep it high.

  5. I think you’re right about China. I always feel slightly uneasy picking on them! Their current account balance is about 2.2% of GDP. I think Keynes might have had a figure of +/-2% in mind as an acceptable limit (I’d need to check on that) but something like that would seem reasonable.

    There are cultural differences between Germany and the UK on the question of personal debt. But are they overplayed? I’d suggest that main factor is that the UK government encourages us all to take on debt. Someone has to borrow to finance the trade deficit and Govt doesn’t want to do all the borrowing. So, you think Germans are big savers first and that means their trade has to be in surplus?

    So what would happen if everyone saved like the Germans? Obviously not everyone could be in surplus in their current account . That would be impossible. But it would be possible that everyone everywhere saved at approximately the same rate. There would still be half the countries in deficit and half would be in surplus (in their current account).

    So obviously then it wouldn’t be possible to say that different levels of saving were the cause of anything. It would mean that those governments with a CAD had to run a big enough deficit to cover both that and the savings of their own population. Those countries with a CA Surplus would have to run a smaller govt deficit or might even have to run a surplus.

    There would be one simple test of who’s right. The Danes have a similar mentality to the Germans and they have their own currency – the Krone pegged at about 7.5 kr to the euro. They have a similar CA Surplus. 6.5% of GDP. Their Govt budget deficit is slightly higher than I would have expected at 2.5% of GDP. So that must mean that the non government sector saves at 9% of GDP.

    So what would happen if the Krone were unpegged?

    I’d say it would rise. The Danish CA Surplus would then fall probably to zero. I don’t really know what would happen to Danish savings. And it doesn’t really matter. If they stayed the same the Govt would need to increase its deficit to 9% of GDP. If the Danish Govt thought that was too high and tried to reduce its deficit by cutting spending and raising taxes the Danish economy would be thrown into recession.

    The only other way of reducing its deficit and keep the economy going at the same time, would be to encourage Danes to save less and borrow more. The Danish Govt would do that by deregulating the lending market and keeping interest rates down as far as possible. They’d maybe tweak the tax system a bit to get things going. Once Danes started to see property prices rise they’d want to get on the bandwagon. They’d be happy to stop saving and start borrowing to buy overpriced property. They’d be just like us Brits in no time at all!

    Then we’d see that they weren’t so very different from us after all!

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