‘I have done a terrible, terrible thing. I have voted Labour for the first time. My father and grandfather would turn in their graves, but I was worried about my pension. All I have is my house and the state pension that I manage on.’ These were the words of a typical voter who had initially pledged to vote Conservative when she was reminded by Tory canvassers to vote Conservative last Thursday evening in a marginal constituency in Plymouth; later that night, the seat changed hands from Conservative to Labour. Many things went wrong for the Prime Minister and the Conservative Party in this election — so what are the lessons that can be take from this voter’s change of heart?
Presidents, partisan advantage, and the focus on a single question
It is dangerous to frame an election around the personality of a party leader in a Parliamentary system that is based on parties, rather than one in which a president is elected on a national ballot. It is also difficult to set an agenda focused on a single issue. The hint is in the word ‘general’ election. That Winston Churchill’s ‘Help Him Finish the Job’ slogan foundered badly in 1945 continues to offer lessons for parties to this day — whether in relation to Brexit, who governs Britain, or the finishing of the war with Japan.
A constitutionally unnecessary election can easily come unstuck. Harold Wilson learnt that painful lesson in 1970, as did Edward Heath in 1974. An interesting feature of the 2017 election result is that, as the UK leaves the EU, a divided Labour Party — which has shifted radically to the left, and was perceived as unelectable — has deprived an incumbent Conservative government of its majority, despite its perceived deficiencies, and the suggestions of the opinion polls.
The revival of the two-party duopoly
This symmetry extends to a significant change in the character of political competition. The Liberal revival marked 1974 as the start of the breakdown of the post-war ‘two-party duopoly’. 2017 marks the reassertion of it. February 1974 was the moment when nationalist and separatist parties made their mark on the politics of Scotland and Wales. 2017 has been distinguished by the revival of the two main parties across Great Britain. Parties that have aggravated the centrifugal dynamics of UK politics in the past — nationalist parties, and parties such as the Liberal Democrats and the Greens in England — have have had much less traction this time round.
The Union
The Union is safe, but changed. A Conservative government will have to respond to a centre-right agenda from Northern Ireland, and from its own MPs in Scotland. Concurrently, Conservative MPs in the regions will try to hunt in packs, piggybacking on special arrangements made to accommodate sensitives in Northern Ireland and Scotland. But the centre of gravity, where the trade-offs will be made, will remain the imperial parliament at Westminster.
The locus of power within a shifting constitutional context
There will be a change in the location of power within the UK’s constitutional institutions. Parliament has been strengthened at the expensive of the executive, which was, without a single party majority, a likely result — given that Brexit will involve what Erskine May would have described as a succession of ‘first class’ constitutional measures. The Prime Minister’s role within the Cabinet will be constrained, and will return to something more similar to Bagehot’s primus inter pares.
The polarised character of the revived two-party competition over fundamental policy choices
In 2015, the Conservative Party was nationally competitive in a general election for the first time since 1992. In 2017, after the eclipse of New Labour and the Great Recession, Labour has demonstrated that it can be competitive on a left-wing democratic socialist manifesto.
We have now returned to a political argument over what Oliver Cromwell would have called the ‘fundamentals’, rather than the circumstantials’. There is a political market for Labour’s agenda. This was plain in 2015, exemplified not least by the performance of the Green Party. Jeremy Corbyn tapped into that in his Labour leadership campaigns, and his election manifesto. There is a now a greater polarisation between the two main political parties than at any time since the mid-1980s. The electorate are being offered a genuine choice.
A volatile electorate
Since Labour lost the 1959 election — and Anthony Crosland posed the rhetorical question that asked whether Labour could win — there have, periodically, been suggestions that either the Labour Party or the Conservative Party were facing a structural obstacle that made victory impossible. These suggestions — which are of a sort of fundamental secular trend that claims to yield electoral results regardless of events — are misleading.
The electorate is volatile. That volatility has been evident since the 2008 Great Recession, and has been amplified by the 2014 Scottish independence referendum, and the 2016 EU referendum. There will probably now be more frequent changes of government, and the context will be one of greater competition between the two main parties, in which they contend over a wider set of fundamental economic and social differences.
A substantial economic analysis
The Conservative Party needs to show that it can be an effective centre-right people’s party. This means combing popular economic policies with economic realism and an agenda to improve the efficiency of the economy’s supply performance. This is a much bigger matter than managing the budget balance. Moreover, the agenda has to be framed in a cogent and coherent narrative, which can be easily explained. That requires a forensic analysis of the way in which a market economy can deliver the economic growth that provides a tax base to fund the social services we need. Economic success is about calibrating competitive markets, and getting tax and the structure of other incentives right. Flexible product and labour markets are central to economic success, whereas clumsy and expensive regulation impedes an economy’s supply performance.
Since 1997, a succession of measures have hindered the economy. The tax system has become complex, and the income tax regime — as a result of measures taken by Gordon Brown, Alistair Darling, and George Osborne — has come to resemble a Manhattan skyline of marginal tax rates, which have no bearing on a taxpayer’s place in the earnings distribution.
Over the last two years, Jeremy Corbyn has demonstrated that politics informed by a combination of passion and principle can be both compelling and attractive. In the 1970s and 1980s, Margaret Thatcher and Ronald Reagan illustrated that, and, over the last two years, Senator Bernie Sanders and Jeremy Corbyn have shown it again. Once again, the public has shown an appetite for political argument that turns on first principles — as demonstrated in the EU referendum. A modern conservative agenda cannot rely on glib and superficial evasions of the big questions that are central to contemporary economic and social decisions.
A cogent agenda combined with astute political judgement
Conservative leaders who have won decisively in the past — Winston Churchill in 1951, Edward Heath in 1970, and Margaret Thatcher in 1979 — have offered a cogent agenda. The ‘Bonfire of Controls’, the Selsdon Park Manifesto, and ‘The Right Approach to the Economy’ all had a natural, reforming, centre-right economic agenda. They also offered attractive popular proposals, such as the house building programme of the 1950s, and the council house sales of the 1980s — and they were infused with a dose of political realism. Churchill did not propose to undo the post-war welfare state. And Mrs Thatcher accepted that she had to ‘honour’ the recommendations of the Clegg inquiry into public-sector pay following the winter of discontent: in the 1983 budget, she increased the MIRAS mortgage tax interest relief from £25,000 to £30,000, even when she was ahead in the opinion polls.
The handicap of the March Budget, and of the Conservative manifesto proposals
The budget ahead of this election contained a contentious increase in national insurance contributions for the self-employed. The election was called at a time when a controversial increase in business rate bills was being applied to London and the south of England. The manifesto contained a series of public-spending control measures, which were principally directed at transfer payments to older households. Given the relative generosity of the UK’s basic state pension, the prosed changes to the triple lock and winter fuel payments were not only politically maladroit, they were probably also unsustainable in the medium term, in policy terms.
The proposal to extend the means-testing regime for home helps to include a charge of the assets of a person’s house — albeit matched by an increase in the protection of assets remaining in a house from £23,000 to £100,000, for people requiring residential care — was bound to set off a visceral reaction among elderly home owners and their families. And it did.
A bold agenda on social care, which would change the political weather for the centre right
Britain has an aging population, and dysfunctional funding arrangements for social care. This arises from the combination of a toxic charging regime for ‘self-funders’; the underfunding of publically provided social care; an incoherent interaction between the health service and social services departments, which results from medical care that is freely provided, and social care that is expensively means tested; and the manner in which NHS acute services absorb a disproportionate share of resources, compared with the money spent on long-term chronic conditions associated with older and disabled people, such as the management of diabetic ulcers, mobility, and intellectual impairment from mental health to dementia.
As well as an economic narrative, the Conservative Party has offered reassurance that it can be trusted on the welfare state. Ending the charging regime for social care offers the Conservative Party an opportunity to change the political weather. Moreover, as the Sutherland Royal Commission has demonstrated, this is a necessary precondition for a care system that works.
Brexit offers a further lesson
Since July last year, all government departments have been occupied by Brexit. Whitehall commentators have had serious concerns about the capacity to handle the negotiations to exit the EU. In that context, it was difficult for ministers to marshal a comprehensive set of proposals for a full manifesto, let alone to road test them before they went on political sale. Policy Exchange recognises that there is much more to policy than Brexit. Yet one lesson we could take from this election might be that the government currently has to concentrate on completing the most important set of official transactions since 1972, and should recognise the constraint of Brexit on policy development for the time being.