Britain does not need a new conservative party

How the Tory party looks to some… More from MicroSoft Image Creator

In the local elections this month the Conservatives did very badly. Their leader’s attempt to suggest that they pointed to a hung parliament is delusional. I have heard the suggestion that they may do so badly at the next election that the Liberal Democrats will form the official opposition. The example of the Conservatives’ Canadian sister party in 1993 is quoted – they slumped from being governing party to just two parliamentary seats. The vultures are starting to circle, with at least two people (Matt Goodwin and Dominic Cummings) suggesting that a replacement party be built to cater for conservative voters, alongside the rising ambitions of Nigel Farage’s Reform UK. But that is folly.

First of all, I think the Conservatives are heading for a rout in the next general election – and probably their worst ever result. Some people simply can’t believe that such a reversal of the 2019 landslide is feasible; others suggest that the polls always narrow as an election approaches. Party managers at the Labour Party and Liberal Democrats are both (rightly) anxious to suppress complacency amongst their campaigners, and are happy to promote such talk. But this is driving through the rear view mirror, and reminds me of the sort of things some Lib Dems were saying before their polling disaster in 2015. History does help us judge the future, but you should never be slave to it. The Conservatives are in a unique predicament, and show now signs of understanding a way out.

But we can dismiss talk of the Lib Dems getting more seats than the Conservatives. They did manage to win more council seats at the local elections, which was quite a feat when the councils in contention weren’t particularly advantageous to the party (unlike last year). But that’s council seats: as you go higher up the election size, the Lib Dems rapidly disappear. The Conservatives won 19 out of 33 Police and Crime Commissioners in England; Labour won the other 14, and three more in Wales, where Plaid Cymru won one. The Lib Dems were nowhere in sight. Neither was the party in contention in any of the 11 regional mayoral elections (10 to Labour, one to the Tories). This shows that there remains a massive bedrock of Tory support in rural areas, which the Lib Dems (and Greens for that matter) can only tackle in a very localised way; the Labour vote is also very patchy here. Even when the Tories are doing very badly, the anti-Tory vote is very fragmented. In order to win one of the other parties has to convince the voters that the other potential challengers aren’t in serious contention; not only is that a hard case to make in many places, but they don’t have the campaigning strength to get that message across in these often massive constituencies. There will be no electoral pacts involving Labour – and if there is one between Greens and Lib Dems (there is no such talk that I’m aware of – although this did happen in 2019) it will be very limited in scope. The Lib Dems are focusing their campaigning efforts on a relatively small number of constituencies, although exactly how many is always under review. This number is not likely to be more than 40 seats; when they targeted much more than this in 2019, the result was disaster. The polls, and the local results, show that the party has no general groundswell of support, and it will only succeed in places where it has campaigning strength. The Greens may have more of a general groundswell of support, but their campaigning strength is much weaker. If they spread their efforts over more than half a dozen seats they will be seriously wasting resources; they are in serious contention in about three at the most – one of which (Brighton Pavilion – their only existing seat) they might well lose to Labour, after the retirement of the popular Jean Lucas. The insurgent right is at this stage only represented by Reform UK, which has little grassroots organisation, and is unlikely to present a serious threat in the Conservatives’ rural strongholds either – though their presence seems to terrify many Tories. The party should secure at least 100 seats even on a very bad night – and easily enough to surpass the Lib Dems’ practical maximum of 50.

The more interesting question is what happens after the election, and whether one of the right-wing insurgents can supplant the Conservatives, now much reduced in parliament. The obvious challenger is Reform UK, which is regularly polling third in national polls, and can even surpass the Tories in some demographics. But it is hard to take this party seriously as more than a nuisance. It is constituted as a limited company, under the legal control of a tight clique, led by Mr Farage. Unlike other political parties, there is no attempt to give grassroots supporters any kind of serious say. This limits any development of a serious grassroots organisation. This might work if Mr Farage could muster the sort of charisma and wealth that Donald Trump does in America. But he is not in that class, even if he is quite successful in drawing attention so himself: at one point it was hard to keep him off the BBC. And he isn’t a team player – indeed right-wing insurgency is not a team sport.

It is also hard to take Mr Cummings seriously. He masterminded the successful Vote Leave campaign in the EU referendum, one of the outstanding political achievements in recent British political history; one feature of this campaign, incidentally, was the sidelining of Mr Farage. He actually cares about making things work and designing coherent policy, rather than just grandstanding on the latest political fad. But he is tarnished by his association with Boris Johnson, for whom he was a senior adviser, though eventually falling victim to the chaos that afflicted the Johnson regime. His lack of political skill was evident – and especially his combative style of doing business. It is hard to imagine that he could put together a successful political party.

Matt Goodwin, whose name repeatedly comes up on these pages, is altogether more interesting. He is not the damaged goods that both Mr Farage and Mr Cummings are. He also applies an academic’s discipline to his thought and research. He runs regular polls and focus groups to give him a good understanding of potential supporters and resonant messages. This, apparently, has enabled him to find financial backers, and he is increasingly open over his plans to build a new political movement. His organising theme is his anger at political elites, whom he accuses of trying to impose their liberal values onto a majority of people, who don’t share them. In policy terms his main focus is on excessive immigration, but he also turns his ire onto multiculturalism, wokism and Islamic minorities. As an academic, he lives and works amongst these liberal types, and is very familiar with their complacency and limited vision (“luxury beliefs”) – and his academic research shows how much this is at odds with what the public at large thinks. He further points out that support for liberal policies tends to be in metropolitan areas, and concentrated in an electorally inefficient way. He thinks that this adds up to a political opportunity for a new conservative movement – citing Mr Johnson’s landslide in 2019 as proof that conservative voters form a substantial electoral majority. But that government, he says, was taken over by the liberal elites, and betrayed its voters, for example by opening the floodgates to immigration.

But life is hard for insurgent parties in British politics. It is commonplace to condemn the complacency and out-of-touchness of the existing political parties, and to say that there is an opportunity for a new movement – only for the whole thing to fizzle. None has succeeded since the rise of Labour more than a century ago – and that took a world war. There are three big challenges in particular: first is assembling a winning coalition of support; second is campaigning infrastructure; and third is developing a coherent policy programme.

I have talked about electoral coalitions before – with my image of a kaleidoscope. It’s all very well finding majorities to agree to particular polling questions on immigration, say, but political success means holding together disparate groups. It is not nearly enough to find disaffected voters with lower educational qualifications in the ex-industrial heartlands of North England, the Midlands and Wales. Mr Johnson succeeded because he managed to add these to more liberal metropolitan types wanting to end the Brexit chaos and assuaged by his greenery, and to the retired mass-affluent traditional Tories in the wealthier areas, and so on. This required a combination of political skill and charisma. I don’t see any of the putative Tory rivals providing this.

Then there is campaigning infrastructure. It is just about possible for a small but focused organisation to find 600 parliamentary candidates and get them nominated at election time. Rightwing insurgents have an advantage in that there are likely to be plenty of volunteers, but less so in that they are likely to be a fissiparous and ill-disciplined bunch – one reason for reform UK’s highly centralised power structure (which followed the chaos of Ukip, Mr Farage’s previous vehicle). Creating an organisation able to carry out campaigning – such as door-knocking and leafleting – in a wide enough number of seats is daunting. Campaigners imagine that they can make up for grassroots weakness with canny social media and publicity strategies, but that is an uphill fight against established parties who have the local organisation. The nearest any new movement that has come to succeeding here was the SDP in 1981 (which I was part of) – but this allied with an existing party (the Liberals), used many experienced politicians, and attracted higher-skilled liberal types with strong organisational competence. Current conservative insurgents lack these advantages, unless they can secure mass defections from the Tories, and then ally with it. And the SDP ultimately failed in its aim of replacing the Labour Party in spite of impressive polling numbers in its early days.

And then there is a coherent policy programme. In a political culture that seems to value winning elections (or referendums) more than governing or implementing viable political programmes, this might seem superfluous. Mr Johnson did not have it in 2019, and neither did Donald Trump in 2016 – and he still doesn’t. But you can’t succeed in government without it, unless you resort to repression and corruption. If electoral success depends on building a disparate coalition, unless they unite around a viable programme, this coalition cannot hold – and such a programme offers credibility. Mr Goodwin talks of the Tory government of 2019 betraying its voters – but that was always going to happen as it promised so many incompatible things. A central theme was cutting immigration to move towards an economy where lower skilled wages weren’t being undermined, and so creating a more equal society. But higher wages for less skilled people (and this did start to happen in the early days of the government) leads to inflation and puts pressure on public services, major employers of lower-paid people. That puts pressure on interest rates (and hence mortgage costs), and taxes and public services. The government was simply not ready for this dilemma, which meant betraying other parts of the coalition, and quickly buckled on immigration policy. I don’t actually think that Mr Johnson’s idea on low immigration was necessarily a bad one – but it needed to have coherent planning behind it, and answers to the resulting dilemmas. Mr Goodwin’s policy ideas seem to be similarly based on focus groups and polls, and not on any serious understanding of the practical trade-offs.

Even a charismatic and well-funded person such as Donald Trump, with considerable, if unconventional political skills, chose to co-opt the established Republican Party rather than set up in parallel with it. The conservative insurgents have no such leader, and even if a new party has strong initial success, it surely cannot succeed in the longer run in competition with the existing Conservative Party. They would only serve to offer a lifeline to a new Labour government, who might well find themselves struggling rather quickly.

It is much more viable for conservatives to bend the Conservative Party to their liking, and to promote a comeback as spectacular as Labour’s. Mr Goodwin suggests that the rump Tory party left after an electoral rout will be too dominated by Oxbridge types from the old elite. But the grassroots are more radical, and a strong conservative agenda offers a pathway back to power. The next election may over bar the voting – but the election after that is very much in play.

The lightbulb moment is past. Why we must break the growth mindset

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Back in the 1970s there was a persistent story about lightbulbs (then incandescent tungsten ones) that was trotted forth to demonstrate the madness of capitalism. It was that the life of a bulb was kept deliberately short so as to create demand for replacement bulbs. Apparently it was true – but nobody cared. Whinge as we might at the fringes, politicians and the public were happy to keep the economic treadmill going. Longer-lasting lightbulbs would mean fewer jobs. Those days are long gone. Our lightbulbs now are immeasurably more efficient, and they aren’t built to self-destruct. Few jobs are at stake, and even fewer jobs in countries that use the bulbs. This leaves the world materially much better off. But politicians and economists alike hanker after the those old days – hence their obsession with economic growth.

Even serious economic commentators like the Financial Times’s Martin Wolf can’t break this: Mr Wolf started a recent column with the words: “If the UK’s real gross domestic product per head had continued on its 1955-2008 path, it would now be 39 per cent higher.” This implies that the lack of economic growth in the last 15 years is a failure of economic policy, and not due to a change in the way the modern economy works. This is wrong: instead we should think of the second half of the 20th Century as a unique period in economic history – and recognise that we have long since entered a new era, one in which sustained growth of gross domestic product per head is not a feature – nor even really desirable. Life can get better, but not through consuming ever more stuff.

Economists don’t like to look behind their beloved aggregated economic statistics, which they like to treat as classical physicists once did the measurements of pressure, temperature and volume of gases. What the gas molecules were made of didn’t matter. Some economists try to construct historical time series of centuries and more in an attempt to build a narrative of economic policy, as if to say that there are common economic principles that are everlasting. To them the post-war era in the developed world, and parts of the developing one, featuring consistent growth is a model of wise policy. Firstly through good macro-economic management, with Keynesian demand management, and then inflation targeting monetary policy: these smoothed out the dips and troughs that were a feature of previous eras. Then there was a consistent advance of productivity through the use of new technologies and more advanced management. “Productivity is not everything,” said the economist Paul Krugman, “but in the long run it is almost everything.”

But looking back on it, that golden age was the result of the convergence of four factors, each of which has reached its limit: the post-war baby boom, bringing women into the workforce, the expansion of world trade, and the rising consumption of manufactured goods. The baby boom expanded the proportion of the workforce that was of working age, but by the 1980s the babies were now all of working age while the birth rate had fallen; and as the boomers reached retirement age in the 2000s, the proportion of people of working age shrank. The economist Dietrich Vollrath did the maths and found that this accounted for most of the tail-off of economic growth per head in the 2000s in America – and in Britain the effect would have been greater, if anything. This led to my comment that “Demographics is not everything, but it is almost everything.” The war brought many women into the workforce, but in the 1950s the convention that married women should stay at home remained powerful. But as families wanted to spend more on consumer goods and property (and technology made housework easier), women were steadily brought into the workforce, increasing the overall rate of employment, and thus driving growth. This trend has been slow but steady – the proportion of women at work was still growing through the 2000s – but now there is not a big difference between male and female employment, and in most economies, including Britain’s, the limit has surely been reached.

Freedom of trade has also been an important driver of economic growth, as the laws of comparative advantage and economies of scale came into play – in notable contrast to the pre-war years. First came GATT – the General Agreement on Tariffs and Trade, part of the great post-war settlement. Then, for Britain, there was membership of the European Economic Community – which in turn was given a major lift when this morphed into the European Union with its Single Market. But perhaps even more significant was the steady rise in Asian economies, and the huge increase in trade in manufactured goods – a succession starting with Japan, moving through to the Asian “Tigers” (Taiwan, South Korea and so on) onto China, with India in a supporting role. The rise of this trade, referred to as “globalisation” was transformative. The cost of manufactured consumer goods in the early 2000s tumbled as a result, and was one of the critical underpinnings of economic growth. But this trade is no longer growing – and is probably shrinking, while Britain has left the EU and Single Market. Gains from trade are unravelling. This is partly a product of the rise of protectionist politics, but it is also because economic convergence has reduced the potential gains from comparative advantage. Funnily enough the reversal of globalisation is often celebrated by politicians, almost in the same breath as they call for stronger economic growth.

These three factors are well-known amongst economists, even if they don’t talk about them enough when considering the slowdown of economic growth – compared to familiar targets such as lack of public and private investment, NIMBYism, muddled political policy and so on. In contrast my fourth factor seems to be less well understood. In the post war era there was a massive expansion of consumer goods, from cars to cosmetics. This was made possible by advances in technology during the war, with the development of plastics, for example. Keynesian economic policy helped to pump-prime a virtuous circle of increased supply and demand – the expansion of manufacturing and distribution jobs helping to fuel demand. This cycle became central to the growth of advanced economies, copied by many less developed economies, though, interestingly enough, not so much by China, which is another story (they channeled much more of the extra demand into investment, relying on exports much more for growth). Along the way absurdities like the built-in obsolescence of light bulbs were tolerated. Many view this era, up to the late 1970s in Britain, as something of a golden age: one with a largely stable working-class culture, geographically well-spread, and quite a bit of upward mobility into an expanding middle class – before the destruction of the industrial heartlands that started in the 1980s. This view requires rose-tinted spectacles. Some things were clearly better then: access to social housing, for example; and this, combined with high taxes on the rich meant lower inequality and better social cohesion (so long as you weren’t brown or black skinned). Public services were more generously staffed, though usually terribly managed. But was an era of massive environmental degradation and plenty of social strife; film and television dramas of the era depict people shouting at each other but failing to communicate – which is largely how I remember it as I was growing up.

But this age of expanding consumerism could not be sustained. There are only a certain number of cars, fridges and so on the people can own. There was a limit to the amount of electric light that people could constructively use. And besides, advancing productivity meant that fewer jobs were required to sustain demand, and expanding trade kept up fierce pressure on efficiency. The final blow came when when, for reasons of comparative advantage rather than efficiency, the developing economies of Asia took over a huge share of the production of consumer goods. The 1980s onwards saw massive closures of factories and other infrastructure, such as coal mines.

But the standard rejoinder to this from economists is that these developments shouldn’t really matter. Cheaper consumer goods mean that people have more to spend on other things, and these require people to provide them – and these people can be made more productive. Lightbulbs may have been replaced by cheap LEDs made in China, but the new technology can be arranged into much more complicated and creative arrays, which need people to design and install them. But there have proved to be a number of problems with this idea. Economists will admit that manufactured consumer goods have largely been replaced in the modern economy by services, where productivity is a much trickier thing. They call it “Baumol’s Cost Disease”, teach it in Economics Batchelor degrees, and then forget about it.

Unfortunately, a Batchelor Economics degree is as far as my formal economics training went. The theoretical complexities of an economy where increasing productivity comes about through higher quality rather than quantity, and were an increasing amount of consumption goes into access to land, rapidly takes me out of my depth. But the outcome of these complexities is surely that developed economies do not behave as they once did. One problem is that the modern economy is more unequal. Large numbers of people are now extremely well off by past standards, and we have the phenomenon of “mass affluence”. Millionaires are commonplace. But at the other end of the scale many working class jobs are much less secure than the factory and office jobs of the past. The better-off, meanwhile, spend a lot of their money is on status goods and services, rather than basics. (They also save more, which complicates things more – though overall savings rates have gone down rather than up). One of the key ingredients is human content. In olden times this might be the number of servants you employed; nowadays it is the consumption of personal services and use of products whose whole point is that their production processes are inefficient (hand-stitched handbags, etc.). These often require low-paid people to provide. There is surely a danger that this inequality gets entrenched, and that this is a drag on economic development. This is surely one reason that minimum wage policies have not caused the damage that a consensus of economists predicted in the 1990s.

Then you have the problem of leisure. One way for people to exploit the benefits of higher productivity is to work less. This might be more holidays, or (as in my own case) retiring early. Then there is the hobby economy – where people produce things deliberately on a non-commercial basis for the sheer enjoyment of it. All this is perfectly rational economically, but it makes a mess of classical economic assumptions. And here’s the thing: a society were people don’t have to work as hard to achieve a comfortable and fulfilling life is not a failure. But listening to conventional economists you might think it was. Such a society is taking shape through the freely made decisions of economic agents: it is not a failure of policy. We need to understand how much slow growth is the result humanity realising the benefits of greater economic efficiency, and how much is through dysfunction – and I will admit there still quite a bit of dysfunction about.

So what are my conclusions? Firstly it is that most economists are suffering from a fallacy of composition when talking about productivity and growth. They have a mental model of the supply side of an economy being a single business scaled up (“UK plc”) when the reality is much more complicated. Advances in productivity in one place can simply lead to a reduction somewhere else. Secondly we are often confusing the creation of wealth with its realisation. Many people rationally choose to realise wealth by earning less – and the number is growing. Thirdly, the inequalities in our economy aren’t just a bit of untidiness that will resolve itself, but need to be a central focus of economic thought and policy development – as this is likely to do more to advance economic wellbeing that overall economic growth.

Politically this means that both the left and the right are barking up the wrong tree – at least as represented in Britain by the Labour and Conservative parties. Conservatives hanker after a low-tax high-growth society, powered by free-wheeling entrepreneurs. Those days are long gone. Lower taxes simply increase inequality and have nothing to do with growth. Labour assume that better direction from government towards constructive investment will unleash growth that will generate taxes that will fund improvements to public services. This is a lot less wrong-headed than the Conservative narrative. After the years of chaotic Conservative government, it is surely true that a bit of grown up government will unleash a some catch-up growth, enough to generate a bit more tax revenue – and maybe even to lift growth to the top of the G7, as Labour predicts (doubtless thinking that the other six economies are due for a bit of a stall…). But it can’t last – and the party is not ready for the hard choices that lie when it all fizzles out and they are forced to confront various combinations of austerity and higher taxes.

What we need to do is to take a fresh look at society and its dysfunctions and address that dysfunction through slimmer but more effective public services, and intelligent redistribution. Technological advance continues to offer the opportunity to advance human wellbeing – but we will get there faster if break the growth mindset.

Britain’s electoral kaleidoscope makes its politics very unpredictable

Kaleidoscope by Rudolf Altmann published under Creative Commons licence

The kaleidoscope is an old-fashioned toy that I remember from my youth, which has long since been superseded by digital effects that don’t reproduce its magic. It was a cardboard tube that you looked down, with mirrors inside creating a symmetrical pattern. The magic came from small bits of coloured glass; as you twisted the end of the tube, gravity would force a realignment of these into an ever-changing series of patterns. I could not find an animation of this that did not involve an expensive subscription. You might be able to see this video (which is the real thing, not an animation) by Yuri Pomonev published by Adobe from this link. Digital kaleidoscope animations are plentiful, and they reproduce the mirror effect well enough, but they don’t attempt to replicate the effect of bits of coloured glass and gravity. And that is what my metaphor draws on.

Society is made up of a collection of individuals. We each have a point of view that is unique, shaped by our experiences and our own inner make-up. That applies to our politics, as it does to everything else. But we are social animals, and we like to line up with our fellow humans to feel a sense of togetherness and belonging. This creates political movements and collective alignments. But they are much more fragile than people suppose. As circumstances change, alignments break up and new ones are formed. Like the glass bits in a kaleidoscope.

Politicians often struggle with this. They try to simplify the complex world around them by investing in these temporary alignments, with themselves to at the centre, and imagining that they homogenous blocks that will endure. History is littered with examples. The British left thought this was happening in 2017, when Labour under Jeremy Corbyn did unexpectedly well in the general election, after tacking to the left, and raising turnout among younger voters, among others. They imagined themselves to be one step short winning outright – and many on the left retain this illusion. But instead there was a devastating realignment and in 2019 many of their former voters stayed at home, or voted for other parties, while other voters who had stayed at home in 2017 turned out in droves to vote Conservative. Labour crashed to a huge defeat. The kaleidoscope had turned.

We are now witnessing a similar delusion on the political right. The Conservative landslide in 2019 was interpreted as a popular, majority movement in favour of a suite of far-right policies, often referred to by people like me as “populism”. This was evidenced recently by the extraordinary launch of a new political faction called “Popular Conservativism”, who also want to be known “PopCons”. That this movement was led by Britain’s most unpopular leader of a major political party ever, Liz Truss, just goes to show that Ms Truss is a gift to political satire that just keeps on giving. The remarkable thing about this event was the attention it drew; the launch venue was packed, with many disappointed that there was no room for them. These Tory politicians feel that they are with touching distance of rebuilding a political movement which can give them a strong parliamentary majority.

What drives this view? The answer can be seen from the writings of Matt Godwin, the populist commentator who seems to provide the intellectual fuel for the modern political right. He produces plentiful polling evidence that disillusionment with politics is widespread, and especially evidenced by anger at high levels of immigration. His narrative is that these people are angry at a liberal minority that effectively controls state institutions, and is imposing its often delusional “luxury beliefs” on the rest of the nation. He suggests that support for anti-liberal policies is not just in the majority, but efficiently distributed in Britain’s electoral system, with liberal voters concentrated in a relatively small number of seats.

This narrative has weaknesses, but it is far from nonsense. Mr Goodwin is an academic and knows how to talk about evidence. That is one reason that he is required reading for the whole political spectrum. I have not yet mustered the courage to move beyond my free subscription to his Substack, he tends to talk of his paying subscribers as “supporters” of a political movement, and I think that, for all his useful insights, he is a malign force, acting to make the country’s difficult problems even harder to solve. His demonisation of the liberal elite is especially egregious, and is, in fact, another example of the kaleidoscope delusion. But my views count for little. The more important thing is that he has created a trap that Conservative politicians like Ms Truss have fallen into.

The trap is to think that the popular majority that Mr Goodwin identifies supports the full suite of nationalist-libertarian beliefs that these Tories espouse. These include not just lower migration and a rejection of multiculturalism, but the need for a low-tax, low-spending state, and a minimum of laws to restrain personal freedom. They were outraged by the application of a strict lockdown to combat the Covid-19 pandemic. They also espouse a powerful commercial sector, driving high levels of economic growth and the accumulation of wealth by a lucky minority. In fact the polling evidence points to strong support for regulation of behaviour deemed as antisocial (including the spreading of the covid virus); for strong state services, especially health and a relatively intrusive police force; and for welfare spending, as long as it for universal state pensions to people that have lived in the country most of their lives. Lower taxes are popular, but to the extent that there are trade-offs between taxes and critical public services, or inflation, this cannot be taken for granted. The majority are decidedly indifferent to such abstract ideas as economic growth, and have reservations about rampant commercialism, and the already wealthy getting wealthier still, especially if they are paying less taxes than poorer people. Green policies are ambiguous; Tory populist politicians tend to think that anti-carbon policies are the result of an alarmist conspiracy. A significant proportion of the public probably believe this too – but many more are worried about global warming; David Attenborough’s popularity goes well beyond the liberal 30% that Mr Goodwin demonises. But well-meaning regulations that impinge on people’s daily lives are a tough sell, and the populists may be onto something there.

The PopCons show little sign that they are really in touch with people at large, or that they are able to craft a programme that will allow them to recover their support anything like enough. Their competitors on the right, Reform UK, show even less sign they understand this, though that could change if their President, Nigel Farage, steps back into day-to-day control. But once the current government is consigned to history, there is certainly a chance that a populist coalition is reformed as the kaleidoscope turns again. Out of power, they will not be under such pressure to develop coherent policies, and in particular they will not need to choose between the holy trinity of low immigration, low taxes and low inflation – unless the public twigs that having all three is impossible. But they should give thought to how to appeal to younger voters without overly alienating older ones, as right-wing populists have managed to do in other countries. They might emphasise how high immigration is screwing up the housing market. They should probably talk less about Brexit. It might also help if they downplayed their nativism and criticism of multiculturalism – although these are themes that play well to younger voters in other countries.

But it is not just the political right that needs to worry about the kaleidoscope. Sir Keir Starmer’s Labour Party is polling very well but support is unenthusiastic. Once in power another twist could see its support collapse. If the political right fluff their opportunity, could a challenge emerge from the left? Mr Corbyn’s success in 2017 is perhaps a precedent – but his coalition included mainstream Labour, a lot of whom would stay loyal to a Labour government. Perhaps the rise of Syriza in Greece offers a better example; another case is Jean-Luc Mélenchon’s La France Insoumise movement, although this has failed to win power. Both left-wing movements were alliances of socialist and green parties, co-existing with significance far right populist movements. Both effectively destroyed the historical and centrist socialist parties.

This possibility should not be ruled out, led by a breakaway from Labour, if an appropriate and charismatic leader can be found. It faces two difficulties, however. One is that it probably needs to link up with the Green and perhaps even the Liberal Democratic parties – and these parties have recently being doing well by scooping up liberal-minded voters in the rural areas – to whom a far-left movement is anathema. However, both parties may sense an opportunity if Labour weakens once in power – as they did during the last Labour government. The second problem is that the core of such an electoral coalition is metropolitan voters, typically graduates and working in the public or third sectors – these voters are not distributed efficiently geographically, as conservative voters are: they are concentrated in the big cities (hence “metropolitan”), and the country’s electoral system punishes such concentration. The two issues are linked – as those new Green and Lib Dem voters are distributed in a complementary way. So the far left somehow needs to fuse with the liberal middle class. Perhaps that is not so fanciful – if a programme can be agreed with electoral reform at its heart.

A further possibility is for a liberal-led revival – although this is arguably a variation of the left-led one, as the potential electoral coalition has a strong overlap. The model for is Emmanuel Macron’s En Marche in France – a move which also grew out a lacklustre government of the centre-left. That would be one in the eye for Mr Goodwin – but a Labour government would have sink rapidly for that to be a possibility.

The bigger picture, though, is that Britain’s post-election politics is extremely unpredictable. Much will depend on whether and where capable political leaders emerge. They are lurking deep in the undergrowth at the moment. But the opportunities are palpable.

The 2024 election is over. The 2029 campaign has begun.

AI is already outcompeting humans in the production of bullshit. It’s clearly got a talent for the surreal too. The prompt for this Bing Image Creator gem was “Political parties campaigning in a British city in 2029”.

We will have to endure many more months of campaigning, but the result of the British general election due later this year is not in doubt. Political leaders, at least in the Labour and Conservative parties, are now turning to the election after that. That anyway is what their behaviour seems to reveal.

Of course some important things need to be resolved for 2024: will Labour have a small working majority, a landslide or be forced to work as a minority government (a coalition is most unlikely)? Will the SNP or the Liberal Democrats become the third-largest party in parliament? Who of the Conservative leaders in waiting will retain their seats? But there is no doubt that the Conservatives are shot and that Labour will win enough seats to form the next government. The harder the Tories try to change this outcome, the worse it gets for them.

This is an astonishing turn of events given the margin by which the Conservatives won the election in 2019. They had assembled an electoral coalition that harnessed the populist rage at liberal elites. Labour and the Lib Dems were on their knees, their electoral strategies in complete tatters; only the SNP were offering the Tories serious competition, and they were limited to the Scottish seats. What went wrong? First was incompetence. Boris Johnson the Conservative leader in 2019, was a brilliant campaigner for bringing desperate political constituencies together. But he was a useless prime minister, not least of whose failings was that he appointed mediocre or worse people to his cabinet (Nadine Dorris for heavens sake!), and kept changing them. The few points of light in his ministry (the rapid roll-out of covid vaccines; decisive support for Ukraine; ambitious commitment to climate change objectives, although with zero follow-through) required little actual political heft, and a bit of luck in the case of vaccines. Things didn’t get better after Mr Johnson’s departure, with the calamity of Liz Truss and hollowness of Rishi Sunak. Second was that the government had no answer to the populist policy trilemma: low migration, low taxes and low inflation. All three aren’t possible at the same time, and you need to decide which of them goes to the wall. Instead they pretended that the trilemma didn’t exist and failed on all three. And third, the electoral coalition had a weakness: it didn’t include younger people. This is not the case with similar movements in other countries (for example Donald Trump’s in America, or Marine Le Pen’s in France). This seems to be linked to two things, which are not so applicable to other countries: the way home prices have escalated out of reach for younger people, and the centrality of Brexit to the British populist narrative. Brexit never convinced many British younger voters, and events since have further tainted it. Remarkably, in Britain, the general rightward shift in people’s political alignment with aging isn’t happening. That means that the Tory coalition is weakening as older voters leave the electorate, and the coalition lacks strategic depth. See this analysis by John Burn-Murdoch in the Financial Times.

These problems run so deep that it is impossible for the Conservatives to fix them while still in government. The party needs to be radically reshaped, to freshen up their message with more appeal to younger voters, and to replace their current leadership with something much stronger. Many consider that this is impossible – but they said that about Labour after the 2019 election. Labour will come under pressure in government quickly, and the fate of Olaf Sholz’s government in Germany shows how quickly things can get rough for a centre-left government. They, too, will be faced by the tax-immigration-inflation trilemma. They have more ideas about how to tackle it than the current government, but it probably won’t be enough. There will be an opening for a populist party of the right, and with their organisational depth and networks, there is a much better chance of the Conservatives being that party than anybody else. Reform, their main competitor currently, may be doing well for now, but it is too much the personal creature of its founder, Nigel Farage, who is an able communicator but lacks the skills hold together a serious political party.

Conservative leaders seem to understand this. Potential new leaders are jockeying for position within the party, so that they will be able to hit the ground running after the next election. It is notable how most Tories aren’t even trying to sing the praises of their record in government, but spend their time criticising it. That even applied to Mr Sunak’s conference speech last October – when he sought to contrast his leadership with the previous thirty years. This is self-evidently a pitch for the election after next. The party is not seriously trying to win this time, because its knows the task is hopeless. They are instead trying to build the narrative for afterwards. Government polices are designed either to make political statements, or to limit any future labour government’s room for manoeuvre. The idea of tax cuts is sheer lunacy, and yet the government is determined to make them before it leaves office, predicated on impossible spending plans for the next government. Labour dare not challenge this. The Rwanda policy for relocating illegal migrants is predestined to fail, but it helps build a narrative of liberal elites and what the populist commentator Matt Goodwin calls their “luxury beliefs”.

The Labour leadership are waking up to the 2029 challenge, while desperate to keep its activists motivated for 2024. This best explains their recent ditching of a commitment to spend £28 billion a year on green investments. This was always a number plucked out of the air, and never fully backed by serious investment proposals. It was consciously following President Joe Biden’s radical investment plans after he won the presidency in 2020. That was then – but now inflation stalks the land, and that limits the headroom for such ambitions. Mr Biden’s policies exacerbated America’s inflation problems, and helped trash his reputation for economic competence amongst US electors. It was a promise a Labour government could not keep. Abandoning it will have little impact on this year’s campaigning – the Tory attack lines need only minor adjustment – but in 2029 Labour will want as few broken promises as possible.

Back in 2019, nobody thought the 2024 election would look like this. 2029 will be equally unpredictable. But the best guess is that there will be a strong populist challenge from the right to a stumbling Labour government. It makes sense that politicians now are preparing themselves for that challenge.

This image from the same prompt for Bing Image Creator is less surreal but shows how backward looking AI creativity is

The Conservatives are unpopular because power has forced them to make hard choices

Bing Image Creator is much easier than trawling public domain photos, though it’s quite hard to realise your initial vision. This is supposed to represent the collapsing Conservative coalition – but it looks more robust than the reality

I have discovered Matt Goodwin. Of course I have long known about him, as he is frequently quoted in articles on British politics. He started as an objective-sounding commentator on the rise of British populism, and has been slowly morphing into an partisan advocate for it. But he still has a certain respect for evidence, unlike many of his fellow advocates. Which means that it is more useful to read and digest his output, and not dismiss it out of hand. Recently a friend quoted one of his Substack posts at length, and this was interesting enough for me to subscribe to his feed, though not enough to be a paid subscriber, which limits my access somewhat.

The post quoted talks about the death of the British Conservative Party. Most political commentators assume that the party will recover to some extent before the forthcoming General Election. This has been the pattern for pretty much for every governing party in Britain that had been lagging the opposition in the year before an election. Personally I am not so sure this time, and Mr Goodwin helps me to sustain that doubt – albeit that we have very different ideas about where this should lead. He thinks that nationalist populism will be reborn and triumphant in a new guise; I think that it will usher in a long period of mediocre Labour-led government.

Mr Goodwin’s argument is that the Conservatives won their substantial majority in December 2019 by “leaning in” to the populist trend evident elsewhere in the developed world, and mobilising a discontented group of voters angry at the level of immigration, the loss of national sovereignty and “woke” values infecting state institutions. These voters backed Brexit, and, he suggests, form a majority in 60-80% of parliamentary seats – evidenced, I suppose, by the referendum result in 2016 (whose parliamentary majority was much higher than its voting majority). This was main reason for the Tory victory, rather than the personality of the party leader at the time, Boris Johnson, or fear of the Labour leader, Jeremy Corbyn, he says. However, since that election, Mr Goodwin argues, the Conservative leadership have completely failed to live up to the expectations of these voters. Mr Johnson proved lazy and incompetent, filling his Cabinet with lacklustre loyalists. Subsequent leaders, Liz Truss and Rishi Sunak, have been out of sympathy with the populist project, in their different ways. Instead they listened to business lobbyists “addicted to cheap labour”, and to the liberal SW1 elite. The current government has no coherent ideology, and continues to be liberal on immigration in practice, if not in rhetoric. Whether this is a matter of their own policy preferences or sheer incompetence doesn’t really matter. The newly motivated 2019 voters have been betrayed, and will not be brought back to vote for the party, but will either stay at home or vote for the Reform party. It gets worse. The oncoming electoral disaster awaiting the party will wipe out all those MPs with populist sympathies, leaving the more liberal part of the coalition in charge – who will then blame the populists, and fail to rebuild the winning coalition. Or so Mr Goodwin suggests.

Mr Goodwin feels that the Tories have squandered an opportunity to drive forward a government true to the principles of low immigration and ultra-nationalism. It is worth developing that thought a little. The narrative prevalent in 2019 was that restricted immigration would boost wages for lower-skilled workers and enabled a redistribution towards many of the left-behind groups. This isn’t nonsense. A couple of years ago our local refuse collectors got a massive pay rise because restrictions to foreign lorry drivers had drastically increased pay for these workers. This was an example of this idea in action and working. So why has the government used the inflation crisis as an opportunity to squeeze public sector pay rather than try to draw in more local workers with more generous pay? It is not just businesses that are addicted to cheap immigrant labour, but public services are too. Generous public sector pay settlements in areas formerly reliant on immigrant labour would be a sign that the government believed their narrative. But, of course, it is in fact much harder than that.

I haven’t read much of Mr Goodwin’s work, but his narrative seems to be that a large majority of British voters are sympathetic to conservative values, especially over immigration and national sovereignty. These voters are being ignored or patronised by an “elite” of about 25% of the country, mainly university graduates, who have liberal values, and who control almost all the state institutions and big business. This dynamic is present across the Western world and is why populist movements of the right, from Donald Trump in the US to Marine Le Pen in France, and the AfD in Germany are gaining popularity. This narrative clearly touches on a grain of truth – but there are many problems with it.

Doubtless answers to polling questions and probing in focus groups can demonstrate majorities of the public supporting certain conservative views, and scepticism over immigration in particular. But turning these attitudes into both an election-winning coalition of voters, and keeping faith with them once in power, is a much more complicated business than Mr Goodwin allows. Those majorities can vanish very easily once the harder choices behind them are exposed. The 2016 Brexit referendum majority was a small one; populists have repeatedly fallen at the last hurdle in Europe – and their victories often aren’t what they seem. British media often report that the populist Geert Wilders “won” last year’s election in the Netherlands – but what they mean is that his party received more votes than any other. It was still less than 25% of the total vote, scarcely more than the serial British losers, the Liberal Democrats, get in a good year. Other winners, such as the populist coalition led by Giorgia Meloni in Italy only succeeded by making some major compromises to establishment politics – notably by dropping opposition to the Euro.

A particular part of the problem is that a critical part of the conservative coalition is formed by the mass affluent – people with a significant stake in financial assets such as property, pension schemes and other investments. Property investment are typically financed by mortgages. Shortly after the Brexit referendum I attended an event put on by an investment manager for the mass affluent (I too am part of this group, and I was one of their clients); I was taken aback that the overwhelming majority of people in the audience were pro-Brexit. These people were not the left-behind working classes of the Brexit legend. The mass affluent, and especially those with mortgages, have a huge stake in financial stability. Fulfilling the anti-immigration dream of rising wages for lower-skilled workers means letting inflation rip, at least in the short term. It is a wealth redistribution exercise, and inflation is one of the classic mechanisms by which such redistribution takes place. People imagine that a tiny mega-rich minority take the strain of wealth redistribution – in fact the pain goes much, much wider. Conservatives may be insouciant about the effect of conservative policies on economic growth – but that is largely because they assume that somebody else will face the pain. In particular high inflation leads to higher nominal interest rates, and that can cause the dreams of newer property owners to collapse, as their mortgage payments become unaffordable, and their property values plunge into negative equity. And those without mortgages will still see the real value of their assets sinking. High inflation is one of the reasons that Americans think their economy is in terrible shape, and blame President Biden for it – in spite of otherwise very good statistics. A conservative government can’t afford to let inflation get out of hand. Hence the tough line the present government is taking on public sector pay and the softer line on immigration.

In these circumstances it is hardly surprising that the Conservatives fell apart after 2019. They needed a strong dose of economic good luck to come anywhere close to fulfilling their promises. Instead they had the opposite – the Covid pandemic followed by the escalation in the costs of fossil fuels. Even a competent government would have found itself having to make impossible choices. It was Donald Trump’s good luck that he lost power in 2020, before the inflation surge took off. The main reason why Britain’s Conservatives are doing so badly while other conservative movements are doing so much better is that they are in power and the others aren’t, and therefore they cannot escape the blame for the economic mess. Their incompetence just compounds the problem.

The problem for all conservative populist movements is how to reconcile their hostility to immigration and free trade, and worship of national sovereignty, with maintaining a financially stable economy. This is not impossible – the Liberal Democratic Party in Japan has succeeded in just such an accomplishment – but it requires the cooption of those hated elites, who bring with them the administrative competence required, and not hounding them out of government. The Conservatives after Brexit did have an opportunity, but by selecting Boris Johnson as their leader in 2019, they threw away that chance. One of his first moves was expel almost all his most experienced MPs who had demonstrated administrative competence. He demanded that loyalty was the only prerequisite for ministerial office.

This is yet another example of a wider political lesson. Electoral success is gained by stitching together coalitions of voters who can agree on some things, but who also have conflicting vested interests. The creation of these coalitions, and holding them together in power is where the skills of political leadership lie. Elements of a coalition will aways end up feeling let down or taken for granted. This has happened with unusual speed to the Conservatives after 2019.

What of the future? Mr Goodwin is wrong to suggest (as I think he does) that a stable electoral coalition can be built on a radical populist base, i.e. based on very strict limits to immigration. But what is surely true is that no stable governing coalition can be put together without the support of conservative voters. The current Labour leadership clearly understands this, though many of its activists do not.

What of the Conservative Party? The odds are surely that it will reform and survive after losing the next election. A radical rival, based on the Reform Party perhaps, would undermine it but not destroy it, unless a particularly skilled leader emerges from the shadows that understands that it must ultimately make compromises. That leader is not Nigel Farage, Reform’s most successful leader, who effectively owns Reform. And even if the party goes down to a heavy defeat, unseating its most radical MPs, I don’t see that the rump party will reject radicalism. Too many of its centrist denizens have left, and its activist base remains radical. A long period in the wilderness beckons. Probably.

That bodes well for Labour, in spite of its evident mediocrity. But it too could be ruined by economic bad luck. There may yet be an opportunity for the 2019 conservative coalition to come back quicker than anybody expects. Opposition is much easier than government, after all.

Britain’s politicians are in denial – are the voters?

From the Office of Budget Responsibility: Economic and fiscal outlook November 2023

This week’s Autumn Statement by Britain’s Chancellor of the Exchequer, Jeremy Hunt, was a miserable affair, full of political chicanery with little to effort to tackle the country’s deepening problems. Worse yet, the opposition parties (Labour and the Lib Dems anyway), for all their huffing and puffing, are also unable to face up to these problems.

The Conservatives billed the set of measures as the biggest set of tax cuts since the 1980s. And yet the overall tax burden is rising as the freezing of tax allowances and thresholds will bring ever more people into tax or higher rates of tax, and increase the proportion of income people pay as tax. An even bigger problem is that the government has been using inflation to squeeze public spending, while services across the board – health, education, the police, the courts, and the list goes on – are clearly overstretched and in many cases breaking down – with collapsing buildings and rising waiting lists. The Chancellor offered not a penny to alleviate this crisis, while planning a further squeeze in the years ahead. Labour and the Lib Dems gleefully pointed out the first problem, but failed to address the second. They will stand by the announced tax cuts, while offering only gestures (taxing non-domiciled residents, or private schools, for example) to help fund public services. These tax-raising wheezes are nowhere near enough to match the scale of the crisis. Meanwhile all parties suggest that a bonanza of economic growth is coming to the rescue, without acknowledging the severe headwinds that will limit the country’s long-term growth prospects.

I am also highly sceptical of the one measure that seems to be getting widespread support – the full expensing of investment in machinery and systems against corporate profits. It is said that this will boost business investment, which is sorely lacking. It is in a fact the revival of a policy that failed in the 1980s, and was abolished by Nigel Lawson, the Tory tax-cutting Chancellor, who has been about the only holder of that post in memory that had a grasp of how the tax system as a whole worked and could be reformed. Back then it created a tax-avoidance industry and encouraged wasteful investment with fancy kit, rather than the thinking through of business processes which is the real key to improved productivity. That fiasco occurred at the beginning of my professional career as a Chartered Accountant, where I could see the nonsense it was creating up close. Alas the current crop of politicians and their advisers are too young to remember this. And it is of little use to new businesses, where the need is most acute, as these typically do not generate enough profit for this to be of use. What a silly waste!

Meanwhile the fiscal climate is getting a lot worse. Interest rates are rising at time that the size of the national debt is historically very high. If interest rates are higher than the overall rate of growth, and there is a budget deficit, then a debt spiral threatens, which, if it leads to an international loss of confidence in the public finances, could usher in a severe financial crisis. At the moment it is actually quite hard to understand how much of a problem this is. You should be comparing real interest rates to real growth rates – i.e. after inflation. But there are mixed signals on real interest rates. If you compare the nominal rate on government lending, it is if anything less than reported inflation – indicating a negative rate. But yields of index-lined bonds are positive and have risen sharply. Meanwhile the budget deficit is quite high – at 4% of GDP. It wasn’t so long a go when none of this seemed to matter. Interest rates were low, and the Bank of England’s Quantative Easing (QE) programme made large government debt look manageable. But conditions have changed. Inflation has made money much tighter – with interest rates rising, and QE going into reverse. I am starting to suspect a deeper change is afoot in the world’s capital markets. Earlier this century a number of countries ran large trade surpluses – notably China, Japan and Germany. This made trade and budget deficits more stable in countries like the UK and US, as the surplus countries had plenty of spare currency to provide funding. As the world’s trading environment is getting more difficult, this may changing – though it is not yet evident in public statistics. After over-reacting to fiscal risks in 2010, and moving into austerity too quickly, the opposite risk beckons. But the Autumn statement proposes tackling the budget deficit only slowly, leaving the very high level of net debt virtually unchanged. Politicians seem to assume that as inflation comes down things will simply go back to the easy financial environment that pertained before. This is complacent.

More from the OBR report – government plans make little impact on public debt

If that is complacency, the politician’s attitude to economic growth is outright denial, though some economists who should know better seem to be in the same place. It is assumed that the UK’s poor performance has an easily fixable cause. More investment perhaps, or encouraging more people into work, or perhaps lower taxes. Rachel Reeves, Labour’s Shadow Chancellor, blithely talks about sorting out public services through economic growth – even applying the first-person to the process, as if growth was the gift one individual, and not the collective result of many millions of decisions. International comparisons seem to show that Britain’s productivity lags against peers. All that we need to do is fix this, the argument goes, and we will unlock growth. Well it may be that a burst of catch-up growth that is obtainable – but I suspect that these comparisons reflect an irreversible de-industrialisation, when a swathe of high-productivity industries left the country in the 1980s and 1990s and will not return. But stepping back, most or all of the developed world faces a number of headwinds that reduce growth potential, and in some case send it into reverse:

  • Demographics: more people are retiring as lower birth rates take their toll. Immigration can make up some of the difference, but is politically fraught, and stresses housing resources.
  • Trade: as globalisation runs into reverse, gains from trade are turned into losses. The UK is spared the American obsession with “near-shoring” or the reversal of the off-shoring of industries – but we have our own demons unleashed by Brexit.
  • Overdevelopment. The increasing consumption of goods, a critical driver of past growth, is simply a phase in economic evolution that has clearly ended. People move on to improve their quality of life in other ways. Meanwhile massive increases to the productivity of manufacturing industry mean that its impact on the total economy is much reduced. All this means that lower productivity parts of the economy, including many public services, loom larger. Productivity gains are harder to get, and where they happen the result is not so much increased production, but a transfer of resources to low-productivity sectors.
  • The energy transition. The country needs to make big investments to sources and distribution of energy, and its more efficient consumption. While the end result is desirable, in the meantime this will push down consumption. This, in fact, applies to pretty much all forms of investment. The country has become used to high consumption and low savings – reversing this won’t necessarily reduce growth as it usually measured, but to many people it will feel that way.
  • Housing. One way of achieving growth, or at least burst of catching up, is to allow people to move to places where the most productive jobs are. But these areas lack enough housing to accommodate this. Britain’s house builders have growth rich on the skilful management of land portfolios, rather than the actual building of houses, which many are actually very bad at. They have no incentive to increase the pace of building. And if the pace is increased, skill shortages quickly become evident. And I haven’t even mentioned slow and restrictive planning processes. Politicians at least show some awareness of this issue, but action never matches the promises.

The days of steady economic growth over the medium to long term are over, whether we like it or not. The best we can hope for is a short-term spurt. There is plenty of potential for human wellbeing to improve, but this will manifest itself in other ways.

The central problem is the funding of public services and maintenance of social safety-nets. A combination of two things are required here. The first is higher levels of taxation – and mainstream taxes which directly affect demand, and not gimmicks around capital and wealth (the latter may help make debt more manageable, but won’t suppress demand and prevent inflation). The second is a radical reform of public services so that demand for them is reduced – reducing the level of social problems, so that we require fewer police, courts, hospital beds, etc – and managing those problems so that they are solved early rather than passed from agency to agency. Alas we have very little idea how to bring such a change about – though we can see that some countries do this better than us (Japan, Switzerland, Denmark perhaps). A radical reform of government is clearly a part of this, with less centralised control – but it needs much more than this: decentralisation by itself could actually make things worse. With the possible exception of education (which has become more effective rather than cheaper) the reform efforts made by our governments in the last twenty years have taken us in the wrong direction – from Labour’s over-centralisation, to the de-skilling and outsourcing of the Conservative and coalition years. Unfortunately the choice between the two approaches of higher taxes or radical reform is not a binary one. Reform will require substantial investment, and that is likely to mean higher taxes in the short term at least.

If our politicians are in denial about all of this, how about the public? They surely understand that public services are in a dire state – and that fixing this will not come cheap. But they are too wrapped up in their own personal struggles to spend any energy on demands for change. Politicians are in denial for a reason: they don’t just a lack imagination and perception, but they also know a voter-loser when they see it. Still, Labour are clearly presenting a more realistic prospectus than the Conservatives, even if it is based on wishful thinking. Their poll lead at least seems to show some wider awareness by the public at large. And we must grasp at that straw.

Sunak remembers Tunbridge Wells

The Pantiles, Royal Tunbridge Wells – photo Paul Collins

Media commentary on British prime minister Rishi Sunak’s cabinet reshuffle largely misses the point – the exception being the FT’s Stephen Bush, whose newsletter came out after I started drafting this – and who is absolutely on point here. Most reflect on the ironies of the shock appointment ex-prime minister David Cameron to be Foreign Secretary, and the impact this may have on various groups of voters. Many cast it as the desperate act of a failing administration. I would rather see it as a rather brilliant move to the front foot.

First things first. The most important move yesterday was the removal of Suella Braverman as Home Secretary. She was never qualified for the job and, predictably, proved a loose cannon. But she is a darling of the Tory populist wing, who gave her a rapturous reception at the party conference – and her appointment was widely regarded as necessary for Mr Sunak to secure his uncontested nomination to the top job. Last week her attention-seeking criticism of the pro-Palestinian demonstrations and criticism of the police helped take the heat off Labour leader Sir Keir Starmer’s typically leaden response the Gaza crisis. This was an excellent opportunity for the Conservatives to cast doubt on Sir Keir’s ability to take on the job of prime minister. Instead the story was Ms Braverman’s extraordinary conduct – which included direct defiance of Mr Sunak in an article published in The Times. That undermined Mr Sunak’s authority. This exasperated respectable Tory-leaning voters in places like Tunbridge Wells, without doing much to rally disaffected voters in places like the West Midlands, site of a recent spectacular by election loss, which had been critical to the party’s success in 2019.

But by appointing Lord Cameron, as we must now call him, to the cabinet Mr Sunak relegated the Braverman story to the back pages. Instead of outrage by her supporters bringing attention to the fractured state of the Conservative Party, all anybody wanted to talk about was Lord Cameron and Mr Sunak stamping his mark on on the cabinet. Ms Braverman’s sacking was passed off with a shrug as a rather obvious move. She will try to regain the initiative – she is clearly politically ambitious – but it will be hard for her to recover. Her moment has passed. The Tory populists will seek out other standard bearers.

This will do much to reassure those voters of Tunbridge Wells, a short drive from where I live. Here a traditionally safe Tory seat is under attack from the energetic Lib Dem candidate, Mike Martin. These voters, to generalise, never rejected the Cameron brand of politics, as the West Midlands voters had. To them the problem with Ms Braverman wasn’t really her politics, it was the fact that she wasn’t a team player, and showed no particular signs of administrative competency. To people who are professionals themselves, as so many of these voters are, this is a cardinal sin. It is a point that the Brexit-supporting populists simply cannot understand. The professionals have warmed to Mr Sunak, who is well to the right of their normal politics, because he displays this professionalism – unlike his two immediate predecessors – Liz Truss and Boris Johnson. They abhorred former Labour leader Jeremy Corbyn with a passion, as he was the diametrical opposite of professional.

But, alas for Mr Sunak, Sir Keir is a consummate professional too. As is Sir Ed Davey, the Lib Dem leader – and indeed this group of voters rather liked the Lib Dem – Conservative coalition that Lord Cameron led, and probably like the idea of a Lib Dem-Labour one (anathema as that is to Sir Keir). Mr Sunak may have stopped a rout, but he will need to do more to secure a win.

To do that Mr Sunak will need to show that he is getting to grips with the crisis in public services, and the chaotic illegal immigration in small boats across the Channel. Pretty much all public services are in a sorry state, but the most important politically for now are the NHS, the courts and water and sewage (where problems are close to home in Tunbridge Wells). But to seize the initiative here Mr Sunak will need to unlock public spending, to invest in facilities and to restore lagging pay – otherwise he will not be seen as serious. This matters more than the tax cuts beloved of the Tory right. There is talk of cutting Inheritance Tax, as this is a wedge issue with Labour. Inheritance Tax does weigh heavily in the minds of the wealthier people of Tunbridge Wells, with its high property prices – but my guess is these voters would be unimpressed with such shameless politicking. The forthcoming Autumn Statement from the Chancellor of the Exchequer will be a critical test for this government.

But as Stephen Bush says, just as Mr Sunak was unable to capitalise on gestures to the populists because of his lack of follow-through, he will not capitalise on his gesture to voters of Tunbridge Wells for the same reason.

Starmer triumphant

Photo: Petr Kratochvil

Recognition of Sir Keir Starmer’s achievement as Labour leader has been grudging. Even as Labour dominates the opinion polls with leads of over 10%, and local elections and by elections confirm it, the response has been “Yes, but…”. Any straw in the wind that might throw doubt on Labour’s dominance is leapt on and magnified. Labour’s victory in two by elections last week, in two ultra-safe Conservative seats, should end that, following as these do a spectacular victory over the SNP in Scotland in a another by election. The party can win almost anywhere it chooses to fight. 

The three October by elections each throw a different light on the stranglehold Sir Keir now has on British politics. The first, in Rutherglen and Hamilton West, on the outskirts of Glasgow, shows that Labour is at last breaking the SNP stranglehold north of the border, which resulted in Labour winning just one seat in Scotland the 2019 general election. The constituency was marginal but the swing was huge. This follows the implosion of both the SNP and the Conservatives, which had been the second party in Scotland. This is important, as Labour failure here under both Ed Miliband and Jeremy Corbyn was a critical aspect of the failure of both of these leaders. This makes winning an overall majority in the country as a whole much easier, both directly and indirectly, as the prospect of the SNP holding the balance of power has been used to scare English voters into voting Conservative.

The second by election was in Tamworth, in the West Midlands. This seat shared characteristics with the “red wall” seats that used to be Labour, but which have been swinging to the Conservatives since 2010, and especially in 2019 – and which voted heavily for Brexit. In this case the Conservatives first won it in 2010 and improved their margin in each of the elections in 2015, 2017 and 2019 (even in 2017 when the national swing was against them). Labour’s success here is a sign that Labour is at last reversing this trend; even if it can’t back to 2010 in a general election, pre-2019 will bring in plenty of seats.

The third seat was Mid-Bedfordshire which is altogether more middle-class, and a classic, largely-rural safe Conservative seat that they have always held. What was particularly interesting this time was that the Liberal Democrats fancied their chances here, after their four spectacular by election victories this parliament, including two from third behind Labour, as in this seat. The argument was that many voters might contemplate voting Lib Dem but would never consider Labour. The Lib Dems put in a massive effort on the ground. But Labour’s success in the safe Tory seat of Selby suggested to them that they could win here, putting the Lib Dems in their place. And so it proved. Apart from the battle with the Tories, this was a trial of strength against the vaunted Lib Dem by election machine. Labour won.

Labour can’t win just by reinstating their red wall losses, even back to 2010, or recovering the seats lost in Scotland in 2015 – they lost in 2010 after all. But progress in Mid-Bedforshire and Selby show that they are making ground everywhere except, perhaps, in a few areas where the Lib Dems are already well-established, and London which they already dominate. By contrast their failure in Uxbridge, on the same day as Selby, and which the Conservatives and their supporting commentariat took to be a sign of hope, is an outlier. It is a London seat and London is the one area where the party had progressed since 2010.

All this brings to mind the build-up to the 1997 general election, and Mr Blair’s landslide victory for Labour, when Labour was similarly winning across a broad front. Then too, the Conservatives clutched at every available straw; they talked of creating “clear blue water” between themselves and Labour, much as they do now, without using those words. The Conservative prime minister was John Major, and his advisers kept saying that “the darkest hour is just before the dawn,” oblivious to actual cycle of light (the darkest hour is midnight). Meanwhile Labour shadowed Conservative fiscal plans in order to head off fears about extra taxes – and generally tempered its radicalism. I recently heard a claim that Labour promoted radical policies before 1997, and so should not fear doing so again. This is nonsense: any radicalism was confined to constitutional policies that were popular amongst key minorities, and few others cared much about. There were no promises on country-wide electoral reform or English devolution, and radical increases in spending on the NHS, for example, did not come until Labour’s next term.

But there are differences between now and 1996, and they are interesting. Then Mr Blair was putting most of his energy into winning over liberals. He had an unwritten pact with the Lib Dem leader Paddy Ashdown, but it was a scary time to be a Lib Dem – what was the point when Labour seemed so interested in liberal ideas – promoting education, Scottish devolution, freedom of information – and even some signs of flexibility on electoral reform? Sir Keir is not interested in any of this – except with the adoption of a green agenda, though he is hedging even on that. The Tories have alienated liberals so thoroughly that he doesn’t have to try to win them over. Instead, he is focusing on Brexit-supporting working class and lower middle-class voters, which Mr Blair did not completely neglect (his law-and-order policies were designed to appeal to them), but treated secondary. Sir Keir dead-bats the endless culture war provocations that the Tories throw at him and drives home his message on chaotic state of public services, important to this group. Sir Keir’s uncharismatic style seems calculated to reassure, compared to Mr Blair’s slippery charisma. 

Of course, Labour’s strength largely reflects the Conservatives’ weakness. And yet there is little they can do to correct that. Their attempts to imitate the US Republicans with nativist and culturally conservative causes, and rowing back on green policies, seem to have little traction with their key audience, while alienating middle-class liberals, who have been a key part of their electoral coalition. Perhaps their best hope is to stoke up fears of tax rises under a Labour government. But the dire state of public services has probably reconciled most people to higher taxes, and the Conservatives have shredded their reputation for competent management. Even those who think the prime minister Rishi Sunak is competent, will not think the same of most of his colleagues, and will have noted how often the party ditches its leaders.

Big swings can happen in a short space of time. A notable case was in 2017 when Theresa May lost a commanding lead over Labour in weeks. But that was a snap election when neither side was prepared, and Mrs May compounded it by trying to capitalise on her lead by putting risky policies in the party manifesto. Most people expect the Conservatives to close the gap a little, leaving Labour with a small majority or just short. But a complete Tory meltdown is also on the cards, such is the party’s weak credibility and penchant for self-destruction.

There are legitimate questions over Sir Keir’s policies. His talk of making public services work better through reform, and not by radically increasing funding, is just not credible. Furthermore, the public finances are looking weak. High inflation means a tight monetary policy. The country still depends on funding from foreigners, and yet the funding environment is getting much more difficult. Promising to fill this gap by growing the economy lacks credibility too, given the headwinds of demography, the retreat on open trade, and the rise of low-productivity services.

But whatever the doubts, Sir Keir Starmer is offering a much more convincing alternative government to the Conservatives, and there seems to be nothing the latter can do about it.

The Tories don’t need more humanity: they need competence

Last weekend The Observer reported that a senior Conservative had suggested that the Tories were in danger of being the “nasty party” again. They needed to show more humanity, he said. This followed some provocative language on the subject of asylum seekers from the Home Secretary and the party’s deputy chairman. The nasty party epithet resonates because it was attributed to the party during the long period of its doldrums while Tony Blair was prime minister, and and the party suffered three crushing defeats to Labour in general elections. It took a conscious rebranding effort by David Cameron to break free of the tainted Tory brand.

The Tory brand is undoubtedly deeply tainted once more. Their poll ratings are dire. Even in traditional heartlands, like where I live in rural Sussex, the party is being rejected in local elections by spectacular margins. Nice middle class people treat the party with disdain. The party’s main electoral strategy, though, is not to woo these voters but lower middle class and older working class voters who were part of the anti-establishment coalition that supported Brexit, and flocked to the party in 2019 in the “Get Brexit Done” election. It now seems that appealing to these voters is one of the driving principles of government policy, casting aside all considerations of national or wider interest. These voters are thought to like the “nasty party” image.

The problem of small boat crossings across the Channel illustrates the government predicament well. It is this flow of illegal immigrants that provoked those nasty comments. The government promotes a series of “tough” but token policies – such as trying to transport migrants to Rwanda, and housing them on a barge that looks distinctly like a prison ship. Ministers then attack “leftie lawyers” for slowing down (or even stymieing) these ideas, in the hope that mud will stick to Labour, led by lawyer Sir Keir Starmer. Certainly the flow of migrants across the Channel irritates Brexit-supporting voters, who are no sticklers for the rule of law.

But the flow of boats goes on. There is apparently a slight dip in numbers in 2023 compared to 2022, but this may just reflect weather conditions. The people traffickers are getting better organised, and are easily able to outwit government efforts to impede them. For some rather puzzling reason government ministers have been claiming that their policies are designed to “break the business model” of the traffickers. Perhaps they think this form of words sounds clever. But their policies are not directed at this goal at all. The business model depends on the absence of legal routes of migration, or even alternative illegal means – this forces migrants into the traffickers’ arms, allowing them to extract high prices and therefore invest significant money and effort in beating the government efforts efforts to make their lives difficult. Of course the government does not feel it can offer alternative routes, because that means letting more in legally, and their whole aim is to reduce flows overall.

And the longer the flows persist, the more the government has to confront difficult questions. The first of these is why all this is blowing up now, after Brexit, when Brexit was meant to enable Britain to “control its borders”. The business of managing borders is clearly a lot harder than most Brexit advocates had said. Then there is the the rather pathetic scale of the Rwanda and barge policies compared to the volume of incoming people: hundreds compared to tens of thousands. Worst of all is the effect of painfully slow processing of asylum claims, which has left tens of thousands in limbo, many having to be put up at state expense. What the government has not quite admitted was that this backlog arises from deliberate incompetence, as the former Home Secretary Priti Patel seems to have though that processing claims more slowly would reduce the incentives for people to come over and make claims. That hasn’t worked: instead state agencies and their political masters are made to look chronically ineffective.

Polls now show that few people think that the government will fail to stem the flow of boats. In the short term it might work for the Conservatives to deflect the anger towards the liberal “elites”, personified by leftie lawyers. But we probably have more than a year to wait before the next election. It is hardly worth suggesting that the opposition would do no better, when it doesn’t look as if things could get much worse.

If it is to turn the tide of opinion, the Conservatives needs to demonstrate competence above all else. Those nice middle class voters will forgive a lot of nastiness for that. Angry Brexiteers are not so dissimilar. And as for international standing, foreigners have their nasty side too – it is competence that inspires their respect. The problem for the party is that it has turned incompetence into something of a feature since they chose Boris Johnson as their leader. Both he and his successor, Liz Truss, openly selected cabinet ministers on the basis of loyalty rather than ability. Political posturing mattered above all.

Since then there have been an endless succession of ministers evidently not up to the job. Mr Sunak seemed to break from that idea. His stock (and the government’s) was never higher than when he reached a deal with the European Union over Northern Ireland – allowing competence to trump political posturing. But then again, his appointment of the inexperienced but ideological Suella Braverman as Home Secretary always pointed in a different way. Now political messaging is once again the priority, as the government stumbles from one mishap to another.

This recalls the government of John Major in the 1990s, with the party exhausted and fractious after the Thatcher years. It is true that this government managed to pull off an election win against the odds in 1992 – but at that point the government was being given the benefit of the doubt on its economic strategy, while doubts over Labour leader Neil Kinnock persisted. By 1997 the government’s haplessness was exposed to all, while his Labour opponent, Tony Blair, was the very picture of slick competence. Sir Keir can’t aspire to Mr Blair’s heights, but he looks competent enough. Mr Sunak’s supporters may keep clutching at straws (as did Mr Major’s “the darkest hour is just before the dawn”, they said, inaccurately) but it is heading for humiliation all the same.

Anti-Tory pacts – lessons from Wealden

Analysis: Matthew Green

Such is the paradox of the information age. Massive amounts of information from across the globe is at our fingertips, and we can now use AI tools to retrieve it with startling efficiency. But news reporting, especially local news reporting, has collapsed – so many, many interesting things are liable to escape our attention because they will never get into to the accessible database. There has been a wealth of reporting on last week’s local election results in England. But many interesting, and important, local stories remain unremarked. Such is the case in my local area, with the district council elections of Wealden in East Sussex – and arbitrary bureaucratic agglomeration of villages and small towns, whose main centres are Uckfield, Hailsham and Crowborough, each of roughly equal size.

The first point to make about this is that I wasn’t involved in these elections, in spite of being a party member. I haven’t talked to any of the actors since long before the campaign started. My reporting is based simply on the results published by the council. I hope to find out more later – but I’m not minded to harass exhausted newly-elected councillors who have important decisions to make about running the council. I’m a blogger, not a journalist.

It was the first British public election since 1979 in which I did not vote for the Liberal Democrats, or one its predecessor parties. That was because they did not field a candidate in my ward. There were only three candidates: a Conservative, a Green and an independent who did not put up much of a visible campaign. I voted for the Green candidate, Christina Coleman, who won with 64% of the vote against the Conservative incumbent councillor, Roy Galley, who had won in 2019 with 59% of the vote, against just a Green candidate. Ms Coleman increased the Green vote from 523 to 1,107, while Mr Galley’s vote sunk to 545 from 749. As I searched through the results, I found that this outcome was not untypical. The Conservatives contested wards opposed by typically only one other party. And they lost badly, sinking from 34 councillors (out of 45) to just 9, behind both the Lib Dems (13) and Greens (11). This was a shocking result in a part of the Blue Wall that is so blue that most people don’t regard it as politically competitive. This bespeaks serious trouble for the Conservatives. It is hard to exaggerate the degree of disgust with the party amongst most of my neighbours, whom I would describe mostly liberal conservatives. One Conservative inclined neighbour is even more unforgiving of the Liz Truss episode than I am.

But that is unremarkable. It has been picked up by the main media commentary. What is remarkable was the degree of cooperation amongst the Conservatives’ opponents, and how well this worked. To put a bit of substance behind this story I have analysed the detailed results in the table above. This is all my own work and it’s possible the odd error has crept in. First, some basics to help understand the figures. There are 41 wards, four of which elected two councillors, and the rest just one. One was uncontested – the Conservatives were elected unopposed. The Conservatives contested all the wards except one (where an independent stood, and lost, against a Green). In the analysis I have tried to exclude candidates without serious backing or a campaign. I judged these to be independents who did not manage to gain 100 votes, and minor parties (though in one ward there was a Reform UK candidate, and in a another a pair of Ukippers, all of whom received over 100 votes); I have left in all of the Labour candidates, although one failed to reach 100.

The Lib Dems put up 23 candidates, doubtless so that they could claim that they could theoretically win a majority on their own. But they were opposed by the Greens in only three cases, and Labour in one, with “serious” independents in four. Eleven of the Lib Dem candidates faced no other serious opponent than the Conservatives; they were all elected – but only two others were. The Greens put up only 14 candidates – nine of these faced only one serious opponent (well, 10 if you exclude a weakly supported Labour candidate) – all (ten) of these were elected, along with one other. Three Labour candidates out of 11 were given a clear run against Conservative candidates; none were elected. Two Labour candidates were elected in three-cornered battles with Conservatives and independents (including a split result in a two member ward) – their first councillors in the district. The independents are by their nature not a coherent party, so the analysis means less – but their 18 serious candidates were involved in only four straight fights – three against the Conservatives (which they all won) and the lost fight with a Green. There were 13 three or four cornered contests: the Conservatives won six of their councillors here. These six, the two straight fights with Labour and the one uncontested ward were all the councillors they won. They won no contest in a straight fight with Lib Dems, Green or Independents. In two case of the more complex contests, the Conservatives prevailed with under 40% of the vote. In only three cases Greens and Lib Dems ran candidates against each other – the Conservatives won in two of them (with under half the vote), with the Greens winning the third comfortably with the worst Lib Dem performance of the day.

So far as I know there were no formal pacts – if there had been, the picture would have been a bit tidier. But cooperation is evident, and, as a device for winning against Conservatives, it proved highly effective – but less effective where Labour were putting up the candidate. How far can we extend the conclusions to a general election? Local and national elections are different – but the main problem for the Tories in Wealden was their unpopularity at national level. Their Wealden administration is not particularly unpopular, though no especially popular either. This suggests to me that an electoral pact between the Greens and the Lib Dems could turn some seats in the Blue Wall unless the government can seriously scare voters about the prospect of a Labour-led government. Wealden borough closely corresponds to a parliamentary seat, also called Wealden, which is very safely for the Conservatives (the Lib Dems edging ahead of Labour into a distant second) – but this all changes when new parliamentary boundaries come in. Such a pact would follow one made in 2019, but could be much more effective if voters are less scared of Sir Keir Starmer as Labour leader than Jeremy Corbyn.

But it would be very hard to bring Labour into such a pact. Many former Conservative voters will vote for the Lib Dems or Greens (somewhat ironically since the Greens are closer to Corbyn’s Labour than Starmer’s), but draw the line at voting Labour. So there is much less in such a deal for Labour than the other parties, and it would be a major distraction from Labour’s main campaigning focus. Also Sir Keir is setting his face against electoral reform (which would be another distraction for him), which reduces the attraction of Labour to Lib Dems and Greens.

In the right circumstances electoral pacts work. Given the severe distortions imposed by the current electoral system I would have no qualms about my party entering into such a pact.