Election Week 2
Labour still likely win
Following the second full week of the general election campaign, our views are below. We will be sending this as a weekly product until the next Cabinet is appointed.
Our view:
The Conservatives: need a miracle, and so far, they have not found one. PM Sunak performed well in the 4 June leadership debates, amplifying a message of potential Labour tax rises, but his performance is unlikely to shift polls materially in the Conservatives’ direction. Although PM Sunak adopted a more aggressive footing during the debate, there was less follow on than necessary, as he and other world leaders celebrated the 80th anniversary of D-Day and more or less paused the campaign. Many voters, especially Reform supporters, dislike Sunak, further hurting the Conservatives’ polling momentum. Many Conservative MPs have decided to let Sunak be the face of the Conservatives’ likely loss as they prepare for a stint in opposition and angle for political advantage in the post-Sunak era.
The Labour Party: continues to share few details about its policy proposals, but they are likely to be more interventionist in the economy, to raise taxes, and to increase spending. In return, they have positioned themselves as the party of stability and competence, while also casting doubt on the integrity of PM Sunak, which few Conservative allies are rallying to dispute because there is little political benefit for them. Labour is currently predicted to win a decent working majority, but their relationship with business will come under almost immediate pressure once they present their legislative agenda. Starmer performed well in the debate, giving away little in the way of soundbites for Conservative attack ads, while also interrupting Sunak repeatedly during the PM’s attempt to create his own soundbites for social media, an underreported but hugely useful tactic during the debate.
Minor parties, namely the Liberal Democrats, the Scottish National Party (SNP), and Reform UK: have been less able to get media cut through about their policy proposals. The Liberal Democrats and Reform are likely to eat into the two main parties’ vote shares and potentially increase their number of seats in Parliament, especially now that Nigel Farage has declared his candidacy to become an MP and leader of Reform UK. The SNP is attempting to mitigate its losses to Labour in Scotland.
Our broader views:
The Conservatives need a miracle to win the election. They are unlikely to find one.
The Conservatives have struggled in the election campaign PM Sunak called. After a bumpy start to the campaign, PM Sunak had a week of agenda-setting policy announcements, before losing momentum ahead of Tuesday 4 June’s leadership debate against leader of the Labour Party, Sir Keir Starmer. Shortly ahead of the debate, perennial Conservative Party bugbear, Nigel Farage, announced that he would be standing to become an MP as leader of Reform UK, the anti-immigration party eating into the Conservatives’ vote share in many of the seats it needs to win against Labour. Farage’s profile will likely increase visibility and credibility of Reform for voters, further hurting the Conservatives’ polling momentum and support, but helping Labour.
PM Sunak has largely fronted the Conservatives’ election campaign, limiting its effectiveness. Most voters, including a majority of Leave voters who make up Reform UK’s support, dislike Sunak, while many Conservative MPs felt displeased that Sunak called an election without consulting them and while the party was over twenty points behind in the polls. With many Conservative MPs expected to lose their seats, there has not been a groundswell of support for the campaign from its internal machinery, limiting the effectiveness of its messaging cut through and grassroots support. Most Conservative candidates have adopted a personal approach to the campaign, rather than falling in behind the party, further limiting the party’s appeal.
The Conservatives have focused on attacking Labour’s “lack of plan,” capitalising on the fact that Labour has been relatively silent on how it intends to govern. With fiscal consolidation a necessity after the election, Labour will likely raise taxes, a point which Sunak made clear in the leaders’ debate on 4 June via his potentially spurious “£2,000 tax rise.” Sunak’s claim consumed much of political and economic Twitter in the days after while the campaign was on pause for D-Day celebrations, likely putting “Labour” and “tax” on voters’ radar. Sunak has, however, brought taxes to their highest level in post-war history, while also overseeing record waiting lists for medical care, so many voters are unlikely to support Labour for want of a credible alternative.
Labour will likely win through their campaign of “we’re not the Conservatives” and “we’ll let you know our plan after”
Labour has been relatively sparse on detail of how they intend to govern. For some issues, such as support for Ukraine, Labour will likely maintain the status quo if they come to power. In other areas, such as labour market regulation and energy policy, they will likely bring in substantial changes, such as stronger employment rights for workers and trade unions and tightening of investment incentives for the North Sea. The party’s manifesto is set to be published on Thursday 13 June, which will provide more detail for how it plans to govern, but on the above core policy areas, the direction of travel has remained relatively clear.
Labour has managed to become the party of business, but this relationship will likely soften after Labour wins. Labour’s leadership has been excessively careful to keep public-facing support of the business community onside, even as it has had to soften several policy proposals due to business criticism. The business community as a whole, however, has been firmly pro-Labour since the polls consistently widened, with an eye towards influencing policy when Labour comes to power. Once in power, Labour will likely come into conflict with much of the business community as the party tends to be much more sensitive to its own internal influencers amongst its MPs, advisors, and trade union communities. These officials tend to exert outsized influence over Labour Party policy and have little private sector or government experience. There will likely be mistakes early in Labour’s governance, which could soften business support for the party, especially once it outlines its initial legislative agenda, which will likely be more interventionist with tighter regulations and higher taxes.
Minor parties will continue to struggle with media attention, but will likely pick up seats at the election
The centrist Liberal Democrats, pro-Scottish independence SNP, environmentalist Greens, and the anti-immigration Reform UK have struggled to make their policy priorities known. This is unlikely to affect their vote share, given the stability of Labour’s support, and voter disaffection with the Conservatives. Although Labour is expected to attain a sizeable majority, many smaller parties (excluding the SNP) are expected to gain seats, probably at the expense of the ruling Conservatives. A more fragmented Parliament could lead to a more diverse set of legislation tabled over its multi-year course as MPs from more parties are able to shape the debate in their interests and because the next government will likely pilfer popular policy proposals from the smaller political parties’ manifestoes.
What to look for next:
What is in the manifestoes
Labour’s manifesto is meant to be published on 13 June and will contain their governing policy platform. The more expansive it is, the more vulnerable they will be to Conservative attacks, but the better business will be able to prepare for a potential change in government
Whether the polls begin to narrow
If the Conservatives’ “£2,000 tax rise” or Nigel Farage’s announcement to run to be an MP as leader of Reform have a discernible impact on the polls.
Whether Labour is able to move the Twitter and paper-based media debate on from “£2,000 in tax rises” to areas they perform better in.
Labour has struggled to control the media narrative, but this has had little effect on its polling numbers so far. If this begins to change, Labour will have to become more aggressive and control the initiative.