The (un)changing face of politics

Although I have tried hard to steer clear of politics on this blog over the last year or so in order to focus on the economics, in many ways the two subjects are intertwined. The onset of the global financial crisis in 2008 raised a number of questions that politicians have failed to answer, with the result that the discontent which was already bubbling under the surface spilled out in ways that mainstream politicians have been unable to counter. Populists and authoritarians have had a field day, giving us Orban in Hungary; the Law and Justice Party (PiS) in Poland, not to mention Trump in the US and the Brexit crowd on this side of the pond. But the complexities of real life conspire to confound the simple appeal of many populists, with the result that PiS is a diminished (though still important) force in Polish politics; Trump is out of office (for now) and the gang of zealots that inflicted Brexit upon the UK seem to be fading away into the background.

Indeed, for a long time the British government has appeared to be drifting inexorably to the right, engaging in culture war rhetoric rather than attempting to tackle some of the bigger economic and social problems facing the UK. The sacking of Home Secretary Suella Braverman (the reasons for which you can read here) perhaps marks a watershed as Prime Minister Rishi Sunak realises that the further towards the fringes his party goes, the less likely they are to escape a major trouncing at the next general election, which is expected to be held anytime in the next 6-12 months. The surprise return of former PM David Cameron as Foreign Secretary is the big news, both at home and abroad, and is a sure sign that Sunak is attempting to drag his party back towards the centre before it is too late. If nothing else, it may reassure Tory voters in the shires who have increasingly found the current incarnation of the party unpalatable.

Whether or not Cameron will be the right person to convince the electorate is moot. After all, he is widely blamed for losing the Brexit referendum and ushering in a series of prime ministers who proved themselves more inept than their predecessor (Sunak broke that trend, although he did follow Liz Truss, whose main claim to fame in the eyes of many voters is that she was outlasted by a lettuce). And in an irony that has not gone unnoticed on social media, since Cameron is no longer an MP, he can only enter government by sitting in the House of Lords and cannot be held to account by the House of Commons. Remind me again, but wasn’t one of the benefits of Brexit that we could get rid of unelected bureaucrats?

While it is certainly possible – indeed likely – that changing the composition of his government will allow Sunak to eat into Labour’s polling lead, which has averaged 19 points over the past year (chart above), will voters be sufficiently pacified to draw a line under the last seven years of chaos? If the evidence which is emerging from the Covid inquiry is any guide, Conservative politicians of recent years have a lot to answer for. The tales of incompetence which emerged under Boris Johnson’s leadership will not easily be forgiven or forgotten, highlighting the extent to which governance has been compromised. The Truss government’s short-lived but chaotic tenure severely damaged the Conservatives’ reputation for economic competence while politically contentious decisions such as the cancellation of the northern leg of the HS2 rail project will do little to convince voters in the north that the Conservatives deserve another term in office.

It's the economy stupid

It is only four years since the last election and a lot of water has since flowed under the bridge. But one of the great consistencies of the intervening period has been the Conservative government’s failure to interpret the electorate’s mood in 2019. It did not win a huge mandate because the electorate was concerned about immigration or “wokeism” but rather because it wanted an end to the Brexit wrangling, which Johnson promised, and because Jeremy Corbyn was viewed as an unelectable leader of the opposition.

Matters have been compounded by the fact that the government has failed to deliver on its levelling up agenda – not altogether a problem of its own making, since the pandemic drove a coach and horses through that policy. It has also presided over the fastest rate of inflation in four decades – again the result of forces outside its control. However, it has doubled down on Brexit despite evidence that this is an increasingly unpopular policy, and voter satisfaction with the NHS has fallen to record lows, which is increasingly blamed on government policy (some of which is fair criticism, some of which is not).

Brexit is not to blame for many of the economic ills that the UK now faces, although it does compound them. Dissatisfaction over the state of public services is to a large extent the consequence of the austerity policy introduced by the Cameron government, which resulted in a two percentage point decline in the central government contribution to local authority financing (chart above). Increased unhappiness over the provision of services by public utilities is partly due to a lack of private sector investment following the privatisation of many of these utilities in the 1980s and 1990s. A policy of less government and more private sector involvement is thus not perceived by voters to be acting in their best interests. The debate is obviously more complex than that, but as I have pointed out many times before, the UK cannot afford to operate the same economic model as it did between 1979 and the onset of the GFC in 2008. Demographics are increasingly a headwind and there is no North Sea oil to fund tax cuts. Like all western economies, the UK looks set to experience a sharp slowdown in growth and a commensurate slowdown in the pace at which living standards improve.

As we look ahead to the next election, the party that does best will be the one that has a credible plan to tackle many of the UK’s underlying economic ills. How this will be done is a subject for another time. But changing government personnel does not sound like the game-changer that the UK needs. Forget culture wars and wokeism – the next election will be fought against the backdrop of the economy. Or as Bill Clinton’s strategist James Carville put it in 1992: “it’s the economy stupid”.

Going, going ...

“He's a most notable coward, an infinite and endless liar, an hourly promise-breaker, the owner of no one good quality worthy your lordship's entertainment”

All's Well That Ends Well, Act III, Scene VI

Nothing became his tenure like the leaving of it

Six years ago Boris Johnson made the fateful decision to back Brexit, giving a rocket-propelled surge to his career which eventually led to Downing Street. The rocket has now run out of fuel. His career, having reached its zenith, is plunging back to earth and the blond bombshell who has run roughshod over Britain’s constitutional niceties for three years finally exhausted the patience of his Tory Party supporters. All this was predictable. As I pointed out three years ago when Johnson took up residence in Downing Street, “sometimes you need adults guarding the liquor cabinet. Johnson is akin to the alcoholic who has just been given the keys to a brewery and I fear it will not end well.”

Johnson has now resigned as party leader but plans to remain in place as Prime Minister until a new leader is elected, which could take a couple of months. Given the magnitude of the economic problems Britain – indeed, the world – faces over the coming months, this is not a satisfactory arrangement and there is a large swathe of the party which finds it unacceptable. Contingency plans are required to deal with the prospect of recession and the impact that sky-high energy prices will have on living standards, not to mention the very real prospect that European economies will face serious gas shortages over the winter. The likelihood that the Conservative Party will be absorbed by the contest to choose a fourth leader in six years suggests it will be all too easy for the government to take its eye off the ball.

At least an end to the chaotic Johnson government is in sight. Like Silvio Berlusconi, who dominated Italian political life between 1994 and 2011, Johnson sucked all the air out of the room by being the centre of attention rather than the calm centre of competent government. Indeed, his resignation speech was, in the words of journalist Paul Waugh, “a study in reluctance bordering on petulance.” Unlike Berlusconi, it is difficult to imagine Johnson returning as PM. 

But the extent to which matters will improve once he is gone is an open question. A large proportion of moderate Tory MPs who urged a softer Brexit than Johnson’s government delivered were expelled from the party in 2019 and the current intake reflects a more ideological strand of Conservatism. We should also not forget that many Tory MPs aided and abetted Johnson as he lied his way through three years of “getting Brexit done”, mismanaging a pandemic and straining the very fabric of the United Kingdom. This excellent post by Philip Stephens reminds us that the next Prime Minister has a big job on their hands to restore some of the trust in government that Johnson managed to squander. Nonetheless, a disciplined government which is focused on the job at hand will be a great improvement on the car crash approach adopted by Johnson over the last three years.

A new start

Whoever the next PM is, whether Conservative or even a Labour representative following a snap election, the process of political and economic healing begins on Day One of their term. The first task should be to start repairing relationships with the EU. This may be easier said than done, depending who succeeds Johnson. Whilst some of the likely candidates continue to espouse hardline positions on relations with the EU, the easiest fix would be to call a halt to prospective unilateral changes to the Northern Ireland Protocol. Although a Bill proposing such changes is proceeding through parliament, there is nothing to stop a new administration pulling it from the agenda. At the very least, adopting a more conciliatory approach will make it slightly easier for the UK to achieve any changes it may wish to make.

Taxation is a big issue for many Conservative MPs and many were deeply concerned that former Chancellor Rishi Sunak raised taxes to their highest level since the 1940s. They are consequently desperate to see a return to a “traditional Tory” low tax regime. A responsible Chancellor should resist calls for radical tax cuts. The release yesterday of the OBR’s Fiscal Risks Report made it clear that a “riskier world and ageing population ultimately leave the public finances on an unsustainable path.” Demographics will prove to be a major long-term fiscal headwind as the population ages, whilst a fall in the birth rate and the expectation that Brexit will reduce immigration will combine in the long-term to raise the old-age dependency ratio. In addition, the commitment to net zero will result in lower hydrocarbon taxes (notably fuel duty and vehicle excise duty). Whatever the UK’s current economic ills, and there are many, as Chris Giles put it in his latest FT piece, “cutting taxes will not magically improve the UK’s economic performance. Any politician suggesting otherwise is lying to you."

More thought needed on the future of the political process

The Johnson era – and to some extent the previous May parliament – highlighted the extent to which political arrangements depend on convention rather than codified rules. What the constitutional historian Peter Hennessy called “the good chaps” theory of government is well and truly dead. Whilst not necessarily arguing for a written constitution – just look at the problems that have resulted in the United States – there is a strong case for imposing limits on the power of central government. The passing of the Election Act, for example, has brought the independent Electoral Commission’s strategy and policy under government control which can only be seen as a power grab. Governments must remain open to independent scrutiny.

There is also increasingly a case for reforming the House of Lords. The current system has worked well for hundreds of years but it has increasingly become a place of patronage and the award of a peerage to Evgeny Lebedev is particularly controversial. During Johnson’s term of office, his government elevated 86 members to the peerage accounting for 11% of the total (767). During David Cameron’s six year term, his government created 243 life peers. The case for an elected second chamber has been strengthened by recent research suggesting that political donations are a strong guarantee of a seat in the Lords.

Then there is the vexed question of how MPs should be rewarded – a subject I touched on some time ago. There is a strong case for paying MPs more and banning all outside sources of income in order to eliminate disputes over conflicts of interest that dogged Johnson’s term. The funding of political parties is another issue that perhaps ought to be looked at (but almost certainly won’t be). Many European countries permit systems of public funding and whilst it is fraught with difficulties, if such a system could limit the volume of dark money flowing into British politics, it is an issue that should at least be looked at.

Last word

Over the years I have been consistent in my view that Johnson is unsuited to high office and have pointed out that his tenure has coincided with a deterioration in the quality of governance. Yet despite the relief that Johnson is about to depart, we should be careful what we wish for. I have repeatedly made the point that he is a symptom, rather than the cause, of an erosion of standards in public life. Many prominent Conservatives have noted that the party currently reflects a nationalist, ideological streak that is at odds with the pragmatism for which it was noted. This does not bode well for a restoration of better relationships with the EU. Nor is there any sign that it will take seriously the needs of the economy. But take it seriously they must, for as The Economist noted this week, “Britain is in a dangerous state. The country is poorer than it imagines ... With Mr Johnson’s departure, politics must once more become anchored to reality.”

"Life was never better than in 1963"

According to the poet Philip Larkin “So life was never better than/In nineteen sixty-three.” It was a year when Martin Luther King delivered his “I have a dream” speech and the year when the Beatles emerged to light the touch paper of the 1960s social revolution. It was also a highly tumultuous year which saw increased American involvement in Vietnam and the assassination of John F. Kennedy. Here in the UK the Profumo Affair caught the public imagination in which a cabinet minister was revealed to be having an affair with a woman who was also involved with a Soviet naval attaché, thus posing a potential national security risk.

The Profumo scandal severely dented public confidence in the government and rumours swirled that senior members of the Royal Family were also caught up in this messy web (sounds familiar). The establishment attempted to close ranks to protect the status quo but something in Britain profoundly changed. The author Pamela Cooper concluded three decades later that “it wouldn't be too much to say that the Profumo scandal was the necessary prelude to the new Toryism, based on meritocracy, which would eventually emerge under Margaret Thatcher.” The historian Richard Davenport-Hines suggested that “authority, however disinterested, well-qualified and experienced, was increasingly greeted with suspicion rather than trust.”

Something similar is stirring today with a “last days of Rome” feeling to the UK public debate. Just as voters in 1963 were increasingly out of tune with politicians who had come of age during the Edwardian era, many people today are expressing outrage as revelations of the government’s behaviour during the pandemic come to light. We can even stretch the parallels a bit further. In 1963 the Conservative government was about to celebrate 12 years in office; was onto its third prime minister (Churchill, Eden and Macmillan), with a fourth (Douglas-Home) set to take over before the year was out, and had engaged in a disastrous international excursion in the form of the Suez Crisis. Fast forward to 2022 and the Conservatives are into their twelfth year in office; have had three prime ministers (Cameron, May and Johnson) and have engaged in a colossal economic gamble in the form of Brexit. History does not repeat itself; it may not even rhyme all that often, but the lessons of the past suggest that this is not going to end well.

The playwright Arthur Miller penned the line “you can quicker get back a million dollars that was stole than a word that you gave away.” This goes to the heart of the government’s troubles: It has lost the trust of the electorate. The same thing happened to John Major’s government following sterling’s departure from the ERM in 1992. Boris Johnson today epitomises that lack of trust. Ironically, the foreign press has always tended to see through him in a way that the British press has not. This week the European press went for the jugular with the Süddeutsche Zeitung suggesting that “Johnson does not govern: He merely plays at being premier.” Jyllands-Posten in Denmark commented that “The garden party is over for Boris Johnson” and pointed out that “it's like reading Animal Farm all over again - Orwell's satirical fable about the Soviet Union under Stalin: all animals are equal, but some are more equal than others.” Perhaps one of the most damning pieces was that published in the New York Times which accused Johnson of something worse than incompetence: A full scale “assault on civil liberties” and an “authoritarian assault so comprehensive that once settled as law, it will prove very tricky to unpick.”

It is ironic that drinks parties during lockdown should provoke such outrage whereas constitutionally outrageous actions such as proroguing parliament or the unlawful fast-tracking of PPE contracts to those with political connections were shrugged off. Nor has the assault on civil liberties outlined by the NYT had much impact. So why now? After all, it is not like Johnson’s actions come as any surprise to those who know him. He is clearly temperamentally unsuited for the highest office. Moreover, governments routinely break their electoral promises. It is not as if this government is any worse than many others on that score.

To get to the heart of the matter we ought to draw a distinction between political sincerity and political accuracy. In this framework, voters identify with politicians who reflect their beliefs (the sincerity effect) and are prepared to overlook factual inaccuracies – beliefs after all cannot be proven. Conversely, politicians who try to make a rational case find it more difficult to get through to voters if there is no meeting of minds. This is just a formal way of saying that people will believe what they want to believe, but it makes sense. Johnson was able to use the Brexit issue to propel himself to the political forefront by speaking to large parts of the electorate which were able to tune out his obvious failings. As the old saying goes, if you can fake sincerity you’ve got it made.

On the question of lockdown parties, Johnson was way out of  tune with the electorate. Voters sincerely believed they were doing the right thing by adhering to the Covid rules and were prepared to make the necessary sacrifices, including not being able to tend to loved ones that were dying. Perhaps if the government had come clean at the start rather than trying to pretend there was nothing to apologise for, it might – just might – have been able to ride this crisis out. It would at least have had a chance of maintaining its political sincerity.

Short of a miraculous turn of events, it is hard to see Johnson coming back from this (which calls into question my forecast that Johnson would still be in office at the end of 2022). As to what happens next, your guess is as good as mine. The so-called independent inquiry into gatherings at Downing Street (terms of reference here) represents an investigation by a civil servant into the actions of people she ultimately reports to. It is compromised before it has begun. Whatever the outcome, there has been a certain amount of jockeying for position in the event that Johnson is forced out. But Chancellor Rishi Sunak, who has long been tipped as a possible successor, is not exactly pulling up trees with his approval ratings. Nor is any other candidate for that matter.

One of the things I wish for 2022 is less focus on politics and more on economics. After all, when the UK is struggling to come to terms with the joint economic impact of the pandemic and Brexit, it is important that the government is focused on its job rather than this side show. Yet for all that domestic politics is increasingly viewed as a soap opera (the media’s obsession with tittle-tattle over the years has not helped), we can take comfort from the fact that things do eventually heal. Events do not come much bigger that the assassination of JFK yet the US did (eventually) move on. Perhaps we should view recent events – both in the UK and elsewhere – as the turbulence that results from the swinging of the political pendulum. But the ride could get wilder still before the turbulence abates.

Cummings and goings

In recent months I have tried to steer away from politics and focus on economics. But as a line from the fictionalised memoir The Tattooist of Auschwitz recently reminded me, anyone “who lectures on taxation and interest rates can’t help but get involved in the politics of his country.” So it was that two years after Boris Johnson was elected as leader of the Conservative Party I watched this week’s BBC interview with Dominic Cummings, architect of the Brexit campaign and until December Johnson’s chief of staff, which lifted the lid on life in Downing Street (a short summary for non-UK based viewers can be found here on YouTube). It was many things – compulsive viewing; exculpatory; self-justifying; incoherent and despite Cummings’ denials, clearly motivated by revenge. But most of all it shone a light into the tawdry workings of British politics in recent years and acts as a reminder of how far standards of governance have fallen.

The context of the interview was also interesting. The BBC, and particularly its political editor Laura Kuenssberg, has come in for significant criticism in recent years that it has given the government an easy ride over its many policy failings. In this case Kuenssberg asked some very direct questions, although as many people pointed out, she has not given the same grilling to anyone still in government (though largely because they refuse to submit to such scrutiny). For all that, the interview was highly illuminating and raises questions for anyone with an interest in good governance.

The lies that they told

I will start with Cummings’s observations on Brexit, having pointed out for the last five years that he headed a campaign that wilfully lied to the electorate. He admitted that “on questions such as whether Brexit is a good idea, no-one on earth knows.” This from a man who led a campaign to persuade the electorate that it was! He went further to suggest that “it is perfectly reasonable to suggest that Brexit was a mistake.” As an insight into Cummings’ character, this speaks volumes. His efforts to try and appear thoughtful and rational contradict some of the policies he has long espoused and confirm David Cameron’s judgement that he is a “career psychopath.”

Cummings also denied lying about the costs of membership (the infamous £350 million per week claim), arguing that it was designed to set a trap for his political opponents and dismissed claims that it misled people into voting for Brexit. He further dismissed claims that he used Turkey’s willingness to join the EU to persuade the electorate that the UK was about to be swamped with huge numbers of immigrants. But in the immortal words of Mandy Rice-Davies almost 60 years ago “he would, wouldn’t he.” Cummings did implicitly admit that he did not present the information in its true context (aka he lied) but he justified doing so in order to get people to talk about the issues.

This is both disingenuous and dangerous – dangerous because it has set a precedent for people in public life to make all sort of false claims “in order to generate debate.” But if such lies are not called out, such statements tend to become accepted as truth by those prepared to propagate the falsehoods. Until recently I always thought that George Orwell’s 1984 was a satirical novel warning us of the consequences of totalitarianism (“Ignorance Is Strength”). I now realise that it has become an instruction manual for zealots intent on pursuing their particular interests.

How not to run a government

Given the character of the man, it says a lot about Boris Johnson’s style of leadership that Cummings was appointed the prime minister’s chief of staff. Cummings has little time for Johnson’s ability to lead (although this is undoubtedly coloured by his December sacking) but he clearly thought that Johnson was the only politician capable of “getting Brexit done.” Another insight into Cummings’ character was his response when asked why he took on the role. He told Kuenssberg that he did so only under certain conditions and seemed genuinely baffled when she asked whether he was motivated by any sense of public duty. There was very much a sense that Cummings used the role to pursue his own agenda rather than that of the country. Under the UK’s constitutional arrangements this is highly dangerous. Outside election periods, it is very difficult to call the prime minister to account and they have near-total carte blanche to do whatever they think necessary in order to pursue a particular policy. Giving someone like Cummings the protection of the prime minister’s office is like giving sticks of dynamite and a box of matches to a toddler.

The whole interview exposed the lack of strategy from the current government and the underhand tactics that it used to achieve the one goal that it had – that of getting Brexit done. Outside of this policy, the government seems to be largely rudderless and Cummings gave more insight into its dreadful handling of the pandemic with his central claim being that the prime minister put “his own political interests ahead of people’s lives.” Whilst Cummings' motivation can be called into question, he at least served a purpose by directing the spotlight towards the vacuum at the heart of government.

A deep-seated problem

All this matters because, as I have pointed out numerous times, well-run economies tend to deliver the best outcomes for their citizens. Whilst economics tries to be value neutral, it is hard to accept that the values demonstrated by the British government’s actions in recent years represent a good platform to deliver the best economic outcomes. An excellent post by Professor Geoff Mulgan highlighted that the government is representative of a narrow clique whose interests do not necessarily coincide with those of the wider electorate. Two of his main points bear repeating. The first is that this group does not really understand economics and thus does not grasp the implications of many of their policy slogans. A second point is that this clique “doesn’t really do ideas. It’s much better at commentary and critique than prescription.” 

A second critique was offered by the journalist, broadcaster and clergyman Giles Fraser, who notes that previous Conservative governments were at least guided by some form of moral compass. Even the pro-market Thatcher government, which was widely criticised for its apparent indifference to the social hardship caused by some of its policies, was deeply rooted in a moral view of the world (see, for example, this 1978 article by Margaret Thatcher in the Daily Telegraph). I will come back to the subject of economics and morality another time, but suffice to say a government that continues to make missteps which, (to reuse my all-time favourite political quote from fictional spin doctor Malcolm Tucker) are “the result of a political class, which has given up on morality and simply pursues popularity at all costs”, suggests we are sliding down a very slippery slope.

Last word

Although I do not like a lot of what Cummings stands for, I do understand his position. He sees an ossified political system which is ripe for reform and is prepared to do anything in his power to effect change. But hitching his campaigning zeal to the personal ambition of a Boris Johnson has resulted in a hollowing out of Britain’s political culture. More worrying still is that the vast majority of the electorate do not seem to care. Like him or loathe him, however, I urge people to watch the Cummings interview and make their own minds up as to whether the social, political and economic course upon which Britain is embarking is one that they are comfortable with.

Left behind

Exactly eleven years ago, on 7 May 2010, we awoke to find that the Conservatives under David Cameron had emerged from the previous day’s general election with more seats than any other party. This proved to be sufficient for them to form a coalition government with the Liberal Democrats which lasted until 2015. The Tories have since won a further three elections under three different leaders and are unlikely to relinquish their grip on power any time soon. Although yesterday’s elections were less important than that of 2010, they were nonetheless an important litmus test of the state of domestic politics given that they represented the biggest plebiscite outside of a general election.

In England, 143 local councils (including London) were up for election; 129 members of the Scottish parliament were elected and 60 members were chosen for the Welsh Senedd. The full results are not yet in but the Conservatives have performed well in England and the SNP retains hopes of winning an outright majority in the Scottish parliament which will rekindle the issue of Scottish independence.

Labour’s decline and fall …

But the most significant result of the past 24 hours was the Conservatives’ victory at a by-election in the town of Hartlepool, called following the resignation of the sitting Labour MP.  This was a result of huge symbolism since Labour has held the seat since 1964 and indeed the Tories had previously only won the seat once since 1945. For those not familiar with the town, Hartlepool is traditionally one of the most solid Labour voting regions in the country, with roots in an industrial base extending back to Victorian times. Recent years have not been kind to Hartlepool as north east England’s industrial base has been steadily eroded (as a native of the region I have watched the steady process of deindustrialisation gather pace). As far back as 1971 the town recorded an unemployment rate of 12.3%, more than twice the national average, and in the early 1980s it was running at 33%. In 2016 the town voted 70-30 in favour of Brexit driven in part by the fact that successive governments had failed to deliver much prosperity to the area and its people were fed up. One can hardly blame them: In the words of Public Health England, “Hartlepool is one of the 20% most deprived districts/unitary authorities in England.”

We should be wary of reading too much into what most political commentators are calling a seismic shift in British politics and which the Labour Party itself described as a “shattering” blow. There have been numerous instances of by-election results over the years which have promised radical change only to find that business as usual was restored by the time of the next general election. But this time really does feel different.

One of the remarkable features of the 2019 election was the fact that huge numbers of voters in previously safe Labour seats voted Conservative (the so-called Red Wall effect). This was attributed to two factors in particular: (i) distrust of then-Labour leader Jeremy Corbyn and (ii) the promise by Boris Johnson to “get Brexit done.” In the subsequent 17 months Corbyn has vacated the leadership so in theory this should not have played a role (though there is a suspicion that he has poisoned the Labour brand). In addition, Johnson delivered Brexit and to the extent that a lot of Brexit Party votes in 2019 are likely to have transferred to the Tories in 2021, their Hartlepool triumph could be interpreted as a reward for getting Brexit done. There are also a number of other factors in play, notably the feelgood factor derived from the vaccine bounce and, perhaps more importantly, questions about what Labour stands for (see this article by political journalist Paul Waugh for more detail).

… despite the odds apparently being stacked against the Tories

What is even more striking is that the Tory win comes on the back of extensive media coverage of sleaze allegations against senior Conservative politicians. Former PM Cameron is alleged to have used his influence to secure aid for a company in which he had a significant financial stake. This was compounded by allegations that Johnson had improperly sourced funding to redecorate his flat in Downing Street; a spat with his former adviser Dominic Cummings on behind-the-scenes machinations in government and claims that Johnson was desperate to avoid a third lockdown at any cost (the “let the bodies pile high in their thousands” furore). In times past the torrent of bad news would have spelled doom for the Conservatives but it does not appear to have made a scrap of difference. In that sense there has been a seismic political shift.

What has changed? One possibility is simply that for all the frenzied speculation by journalists inside the Westminster bubble, the issue does not in any way impact on the lives of ordinary voters (there was no “cut through” to use the political jargon). After all, it seems that everybody accepts Johnson has a strained relationship with the truth and simply don’t care what he gets up to. Why should it matter to many voters that Johnson has engaged in “unethical, foolish, possibly illegal” actions if he has not personally inconvenienced them (not my view, by the way)?

A Europe-wide phenomenon

It is not only in the UK where the political centre-left has lost ground. The fortunes of the SPD in Germany have dwindled over the past decade to the point where the Greens are more likely than the SPD to form the next government if current polling results are repeated in the September election. Similar trends are evident across other European countries where centre-left parties have seen their vote shares collapse to varying degrees (chart below).

On the surface it would appear that there has been a reappraisal of the centre-left since the GFC (France being the partial exception where Francois Hollande won the presidency as recently as 2012). A one-size-fits-all explanation cannot be applied to all countries equally but there are some stylised facts which get us part of the way there. In many countries, what we once called traditional working class voters who worked in industry have become much more scarce and the retirees who once would have fitted that description are fewer in number. In addition to these demographic shifts, there is a sense that centre-left parties were left to carry the can for the fallout from the GFC. Many of them were in office in 2008-09 and chose to put in place austerity programmes which hurt their supporters the most, or they left power soon afterwards and were blamed for the austerity that followed. In reaction there was a surge in support across the continent for what could broadly be called right-wing (semi) nationalist parties as voters sought radical solutions to the economic woes that ensued. This was countered by a surge in radical left parties which overshadowed the more moderate centre-left.

Ironically, as Chris Giles pointed out in the FT last week, “the left is winning the economic battle of ideas.” As the pandemic has shown, government has a big role to play in stabilising the economy at a time of deficient private sector demand – a lesson which Keynes highlighted in the 1930s. As Giles put it, “the model of pre-coronavirus capitalism, with high levels of inequality, is losing popular support, suggesting the need for a post-Covid world with more support for the vulnerable and higher taxes, especially on extreme levels of income, wealth and profits.” If nothing else, this suggests that the policies of Joe Biden are in tune with a large part of his electorate.

Here in the UK, the Labour Party has tried to differentiate itself from its Conservative opponents in recent years by promising a bigger role for the state and increasing taxes on the more affluent. However, after having frightened voters by telling them that Labour planned to stymie efforts to reward enterprise, the Tories have since stolen many of their clothes by running huge budget deficits during the pandemic and committing to raise corporate taxes rather than lower them, as previously planned. Faced with this volte face, the centre-left are clearly going to have to find a different economic tune to play.

It is hard to know how to respond

For the British Labour Party, and indeed for their counterparts across Europe, it looks as though they will struggle to remain relevant unless there is a radical change of tack. Quite how that can be achieved right now is very difficult to imagine. They have nothing economically new to offer and in the UK there is no one who can compete with Johnson in the charisma stakes. Sometimes you just have to accept that it is not your day and the best you can do is hang in there and hope that the tide turns your way as the opposition makes mistakes. It is not a particularly palatable message for Labour leader Keir Starmer but it might be all he can do for now. If he cannot generate cut through sooner rather than later, the Labour Party’s spell on the sidelines looks set to continue for a long time yet.