Sunday, 6 April 2008

Why Broon is Doon

Talking to a number of people who know more about electoral politics than I do at the PSA conference in Swansea confirmed my intuition that we are experiencing one of those sea changes in British politics (of the kind that happened in 1950/1, 1964, 1979 and 1997) that may see Dave Cameron installed in Downing Street. I still think that the result in 2009/10 might be a hung Parliament and that the Conservatives might need a follow up election to get a working majority (as Labour did in 1966 after winning a virtially non-existent majority in 1964 and to a somewhat lesser extent in October 1974).

It seems to me that Labour has made a number of fundamental errors of judgement which show that they are losing touch with the electorate, just as they did in the run up to 1979 and the Conservatives did in the late 1980s.

I haven't got time and space to discuss all of these mistakes, but I want to focus on some of them. First, the increases in taxes on alcohol will do little to curb binge drinking, but have upset many core Labour voters who enjoy a few pints in their clubs or pubs.

It's always a mistake to upset the licensed trade and many publicans have put up posters banning the hapless Alastair Darling from their premises. It has even happened on the Isles of Scilly, where Harold Wilson is buried, according to my friends on Radio Scilly ( Scilly ). Of course, Alastair Darling is hardly going to make a pilgrimage to Wilson's grave any time soon, but that is not the point: publicans can have quite a substantial informal influence on their customers - they are 'opinion formers' in the jargon. (According to Radio Scilly, a recent visitor to St.Mary's turned down an offer on a tour to see Wilson's grave, asking to see the nearby vet's house, followed by the question 'has she got a man yet?')

The other decision which I found quite extraordinary was the abolition of the 10p tax band. Indeed, it has provoked a revolt among normally loyal backbenchers and even one minister which the whips had to smother. Apparently, there has been some talk of amelioration at the margins but this will do little for relatively less prosperous core Labour voters who will be hit quite hard by the change.

According to the Institute of Fiscal Studies the Budget will leave 5.3m households worse off, in particular those earning between £5,345 and £18,500. They will be hit by the changes in income tax and national insurance, while those earning more than £18,500 will gain. The apparent justification is to simplify the tax system, but this seems to be a bureaucratic rationale rather than one understanding of the position of the very people Labour is supposed to be helping.

If that was not enough, Labour is also setting out to offend another group of core voters by holding back public sector pay. This is supposed to be a move to fight inflation, but no semi literate economist believes this explanation. It is because the public coffers are empty.

Middle Britain is currently taking a big hit from higher mortgage interest rates (which are currently not much affected by adjustments in the Bank of England rate), higher utility bills and higher Council tax. It is not a recipe for Labour success in the local elections or the next general election. Like many governments that have been in office for a long time, they seem to have lost the plot.


Justin Greaves said...

The result of the next election will depend (in part) on the extent of 'Tory bias' in the electoral system. As you have mentioned previously, the boundary changes will reduce this a little. Also, tactical voting will probably no longer work to Labour's advantage and I suspect the swing to Dave in the marginals will be larger than in the country as a whole (just as Labour's vote swung more in the marginals as public opinion changed in the 1990s). It is often claimed that Dave needs to be 10% ahead or so to get a majority. Just a hunch, but I suspect it will end up having to be only 5% or so (and, of course, Labour may have the added problem of losing seats to the SNP in Scotland). It isn't looking too good for Gordon!

VCB said...

Failed hop harvest and the tax increase combine to push up prices in my local to £3 a pint for guests or >5%abv beers. I'm taking quite a hit. As I was saying on the 4x4 London surcharge, though, it's all about raising revenue in easy places. Low price elasticity of demand makes it easy...nothing to do with the rhetoric behind it. As CAMRA says, you're much less likely to drink to excess with regulars and a responsible landlord around, in a proper pub.

Wyn Grant said...

In response to Justin, I think that the effect of the boundary adjustments will be more substantial than 'little'. Just consider the case of Warwickshire where the new constituency of Kenilworth and Southam should be safe Conservative; Warwick and Leamington will still probably go Conservative; and it is doubtful whether Labour can capture Rugby - hence the Conservatives would be 2 seats better off. Not so sure about SNP gains in Scotland - there may actually be some Conservative gains.

Vcb's local sounds more expensive than the one I go to in London. I think he is broadly right about raising revenue in easy places. Of course, the government would say that the real price of drink has fallen, but consumers tend to think in terms of nominal rather than real prices (money illusion as Keynes called it).

Justin Greaves said...

I am thinking of a recent YouGov poll which on Westminster General Election voting intentions (NB: not for the Scottish Parliament) puts Labour on 35% and the SNP on 31%. This would represent a considerable swing to the SNP.

Added to the boundary changes reducing Labour’s notional majority (I think to around 40 seats or so) and the Tory surge in England any losses to the SNP north of the border add to the pressure on Brown.

Wyn Grant said...

I'm not convinced that the SNP support would be that solid in a general election. There are electors who would vote SNP for Holyrood, but might make different calculations in a general election. This might particularly be the case if a Conservative government was in prospect which might be seen as threatening to Scottish interests (or a particular definition of them).