Was Grenfell Tower Theresa May’s Black Tuesday?

Britain’s Conservatives are in an extraordinarily deep mess. Their catastrophic their election failure was followed quickly by the Grenfell Tower tragedy, which to many showed the bankruptcy of Tory policy. A union representative at recent meeting I attended confidently predicted that Labour would be in power in six months. That looks implausible, but the Tories could limp on like John Major’s government after Black Tuesday in 1992, before it went down to the Tories’ worst ever defeat in 1997.

It’s a bit shocking to think back to last April, when Theresa May called the election. It looked like a stroke of genius. Labour had some of their worst ever poll ratings and looked hollowed out after their internal struggles. But it wasn’t just that. It also looked clever to go to the electorate then, because the next few years were going to be rough going for the government. Brexit was looking very messy, and the short term economic outlook looked dire – especially if the government stuck to the fiscal conservatism that has been their hallmark. Now the party has lost its parliamentary majority, tarnished its brand, and rescued Labour from oblivion. And prospects for Brexit and the economy look just as difficult as before – worse.  I can only guess at the trauma Tory supporters must be feeling.

There has been some predictable lashing out. Tories cannot bear to give Labour’s leadership credit for anything, so they blame their own side for the calamity. Mrs May is regarded as a dire leader; the campaign is written off as the most dismal in history. And yet they won 43% of the vote, the highest since 1987, and their poll ratings were remarkably stable through the campaign. Still, many of the decisions taken by the Conservatives during the campaign look ill-advised in hindsight. A lot of the problem was that the calling of the election was so sudden. There was no time to put together the type of campaign infrastructure that was in place 2015. They lacked good quality campaign intelligence, and failed to see how the battleground was moving. The political environment, after Brexit and Corbyn, is radically different from that of 2015, and yet the Tory campaign theme – “strong and stable” versus “coalition of chaos” – was much the same. This points to a deeper weakness: the party lacks a strong army of volunteers to fight a ground campaign. So it badly needs the advantages that money and a long lead time can buy – and they need to identify the right constituencies and voters to target. It’s clear they were focusing their efforts on the wrong people time.

I have made a comparison before between Theresa May and John Major. Mr Major was a lacklustre leader, who experienced an initial honeymoon when he took over in 1990. He did not call a snap election, but pulled off a narrow but unexpected victory in 1992, after a dismal campaign. He had a bit of a second honeymoon, but it all came tumbling down on 16 September 1992, Black Tuesday, when Sterling was forced out of the European Exchange Rate Mechanism, shattering Mr Major’s economic strategy. It made no difference that he kept going for over 4 years more with a pretty decent economic record – he and his party’s credibility was shot, and the country was only waiting for somebody to put them out of their misery.

Does the Grenfell Tower fire provide a similar, seminal moment, to follow the failed election itself? There are clear signs of government failure, and Mrs May’s slow reaction showed a massive lack of political judgment by her and her advisers. The official neglect that led to a tragedy on this scale goes back much longer than when Conservative austerity started in 2010, but many of the things Conservatives have been saying about cutting public services and regulation resonate badly.

But, like John Major, I suspect the government will be quite successful at limping on. Only Labour currently wants another election, and they do not have enough parliamentary muscle to force one, nor sufficient political skill to engineer one. Also Mrs May herself looks quite secure for now; each of her potential replacements brings problems with them. Personally I think that the Chancellor Philip Hammond would do a much better job, but he would be distrusted as a more open Europhile. If there had been a strong field of potential leaders, Mrs May would not have walked into her job so easily. Just as nobody could replace Mr Major.

But the Conservatives are vulnerable. Brexit makes the short-term economic prospects look weak – undermining their reputation for economic competence. The lower pound is squeezing what people have to spend; business investment is blighted by uncertainty. A good moment for higher public investment in infrastructure and public services? But that would require the import of a lot of foreign skilled workers (and no doubt quite a few unskilled ones) just as Brexit makes life uncertain for the most readily available people. It may or may not be fair to put a faltering economy down to Brexit (it may have been coming anyway), but it is hard for the government to blame anything else, when the most plausible alternative is their own incompetence. And public services, such as education and health (to say nothing of social housing) are becoming stretched to the point of being politically toxic.

But for the Conservatives to be beaten, it takes somebody to deliver the blow. In 1997 that was Tony Blair, who built up the most ruthlessly effective political machine Britain has ever seen. Labour are confident that the spirit of hope and optimism spelt out in their manifesto will convince enough extra voters to give them a try this time. They have plenty of enthusiastic young supporters to give them an army of foot soldiers. But they are very unlike Mr Blair’s Labour. Mr Blair moved Labour towards the Conservatives in policy terms, in a strategy that I have called “the same, only different”, and picked up many Tory voters. For Mr Corbyn’s  party, their motivation comes from a visceral hatred of the Conservatives and all they stand for. Their policy programme is full of contradictions, not least on Brexit, and would wilt under close scrutiny. This time they succeeded because nobody thought they could win. I can’t believe they will be able to deliver a knock-out blow. Challenges built on populist anger can gain momentum (look at Donald Trump and Brexit), but they provoke opposition, and it is very hard for them to get enough votes to secure more than a narrow victory in a parliamentary election. And the electoral system does not favour Labour either.

The alternative is that a new political force is able to grow and deliver the blow, as Emmanuel Macron has in France, drawing support from both right and left. The Liberal Democrats hope to be that force, but at best they can only be part of it. This new force needs defections from both the big parties, and some people new to politics too. And there needs to be a leader. Is there anybody of the right stature around to lead it?  Maybe somebody will emerge, as Tony Blair did. I can’t help thinking of David Miliband. Vince Cable, who looks likely to be the next Lib Dem leader, has a better chance than the current leader, Tim Farron, of drawing support across party lines.

But for that to happen, Labour will have to start falling apart. This is possible. The hard left looks is continuing its takeover of the party machinery. Mr Corbyn has made no gestures of reconciliation to his party’s centrists. But it will take more than driving out a few tainted centrists to break Labour’s momentum – something has to puncture the enthusiasm of Labour’s activist base, who now have a taste for successful campaigning. Perhaps only power will puncture Mr Corbyn’s bubble. Labour might be too weak to beat the Conservatives, even when they are vulnerable. But they may yet be too strong to allow anybody else to.

And that is the best hope for Conservatives. British politics is volatile. Their luck could yet turn.


4 thoughts on “Was Grenfell Tower Theresa May’s Black Tuesday?”

  1. It may or may not be fair to put a faltering economy down to Brexit (it may have been coming anyway)

    Whoever makes the running they have to understand the nature of the economy much better than the Tories appear to. The Bank of England wants to cut personal borrowing in general and car loans in particular. There’s been several reports recently in the press along these lines.

    Too late. The damage has already been done by letting it happen in the first place. Increased private sector borrowing will always give a stimulus to the economy. The borrowing allows us to afford to buy things in advance of what we might otherwise have done. However, it doesn’t permanently put any more money in our pockets. The initial stimulus will naturally have to be balanced by a later drag on the economy as loans plus interest are repaid.

    Interest rates then have to be lowered further to encourage us all to borrow even more to compensate for us having borrowed too much previously. That’s why we have interest rates close to zero at present. All government wants to do is shift the burden of borrowing to finance the UK’s trade deficit with the R.O.W from itself to the private sector. Of course it eventually becomes apparent to those who run the central banks, and others, that we’re all overborrowed. They then decide to fix things by raising interest rates and restricting new credit. So we have a credit crunch! And guess what follows next! Just think back to what happened in 2008 if you don’t know the answer!

    If we do have Financial Crisis part 2 (whether its global or local remains to be seen) we’ll likely see it blamed on Brexit even though that won’t be anymore the real reason than it was for part 1 in 2008.

    I’m not a professional economist but where we’re at seems painfully easy enough to understand. The economists who seem to understand it too are relegated to the fringe. Prof. Steve Keen, for example, is fond of telling us that the mainstream of the economics profession don’t see the level of private debt as a potential problem. Or at least they didn’t before the GFC, but even since they’ve tended to blame public debt which is missing the point completely.

    I despair of the economic illiteracy that passes as reasonable comment. For example it’s easy enough to calculate how much extra it will cost doctors and nurses each 1% pay rise. But that doesn’t mean that taxes have to rise by that amount. More of the extra money given to nurses will end up boosting taxation revenues. It only won’t come back if it is saved. Extra taxation will deflate the economy meaning that taxation revenues won’t rise as expected.

    But why can’t it be explained like this? Not just by Labour or Lib Dems but by everyone else too?

    1. Hmm. You are making some assumptions I think. The idea behind allowing more borrowing as a means of regulating the economy I think is that incomes overall increase, so that when the money needs to be paid back, it will take out less money proportionately than was put in. Especially if real interest rates are negative. Actually I would agree that this is not how things work out in a modern developed economy like ours, and that varying interest rates is not such a good way to regulate the economy. What central bankers really hope is that more people will take out loans to fund productive investment, rather than people temporarily stoking up demand.

      The whole business about public sector payrises is a bit of a nonsense. Yes taxes will dampen down the impact (though to be fair people usually don’t talk about the extra employer NI that comes on top) – but there are bigger issues, such as any effect on staff turnover and the need for agency staff. It all plays to the idea that our economy is much simpler than it really is, and that you can take efficient decision centrally – like deciding what payrises people need. It’s one the unions seem happy enough to play along with, as it gives them a job to do at the national level.

  2. “Mr Corbyn has made no gestures of reconciliation to his party’s centrists. ”

    This is just not true. He’s appointed Owen Smith back into the shadow cabinet as NI spokesman. Only to be rewarded with the comment that:

    “We might have won election if I had been Labour leader”

    We might have won if I’d been leader too! 🙂

    Jeremy Corbyn hasn’t sacked too many people. Hilary Benn before the election, maybe. A few more just now over some futile protest vote they wanted to make. In general, though, it has been Labour MPs resigning from the shadow cabinet and making it clear why they’ve resigned. They won’t serve under JC.

    If anyone wants to hand in their notice, that’s up to them. They are free to do that at any time but they can’t just expect to change their minds and be given their old jobs back just a few months later when they’ve seen which way the wind is blowing.

    1. Well I have admit my statement was made on second hand info. I should know to be a bit more careful! Still I was hoping for a hoping for something a bit more dramatic than offering Mr Smith a job. But “no gestures” is a bit too strong.

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