Election week 5
Following the fifth full week of the general election campaign and ahead of next week’s polling day, our views are below. We will continue sending this as a weekly product until the next Cabinet is appointed, as well as in the immediate aftermath of next Thursday’s exit poll and Friday morning’s indicative results. Thank you for reading and please get in touch with any queries or comments.
Our view:
Labour will likely win the election with a large working majority. The party’s lead over the Conservatives has remained consistent, even as both parties have lost 4-5 percentage points over the past month, mainly to the benefit of Reform UK and the Liberal Democrats.
Labour will enter office with very little known about its true policy intentions, aside from in certain areas like North Sea energy policy. Although the strategic element of this reticence holds i.e. do nothing that hurts the party’s polling numbers ahead of the election, there is also likely an element of electorally unpopular policy positions baked into their governance plans.
The Conservative party will likely face an electoral rout, meaning Labour will have little incentive to pull back on its plans. This will likely look like higher taxes, higher inflation via higher taxes and public spending, higher interest rates to push down on inflation, reforms to make the labour market less flexible, and generally less friendly business policy positions, except for in certain favoured sectors like renewables, net zero, and creative industries.
Labour’s higher taxes and spending will be framed as the solution to “the problems that the Conservatives left for us,” which will hold because the Conservatives will likely find themselves in disarray after the election result and much of the media will be in a “honeymoon period” with Labour.
The Conservatives will likely enter a period of soul searching following the election. Rishi Sunak will likely immediately resign as party leader.
The Conservatives’ next cohort of MPs, i.e. the ones who will choose the candidate to become their next party leader, will probably be more right-wing and nationalistic than its current crop because those with the highest majorities i.e. the ones most likely to survive the election, tend to hold a similar set of beliefs and priorities as the anti-immigration Reform UK party. This, along with the average Conservative party member (who choose the leader from the two candidates put forward by MPs) being more right wing than the median voter, means the next leader of the Conservatives will likely be more nationalistic and right wing than its previous few leaders (further note to follow), adding a further disincentive for the Labour Party to pull back from its governance plans.
State of the polls
Source: The Economist
Our broader views:
Labour look ready for power as Conservatives pick the bones on their way out
The Labour Party have entered the final week of the election campaign looking like the next government, picking up numerous media and business endorsements. Throughout the campaign, the party has shown remarkable message discipline and avoided gaffes, even as PM Sunak spent several precious campaign days discussing how many members of his team and parliamentary party may have bet on the date or timing of the election, rather than the Conservatives’ relatively hollow claim that Labour will raise taxes. Although Labour is likely to raise taxes, rewrite the UK’s fiscal rules, and make the UK’s business climate less dynamic, Sunak’s ability to land those messages has been more or less absent. Numerous allegations of illegal gambling activity have hamstrung his campaign's messaging cut through while his own decisions to raise taxes to a post-war high have undermined his attacks. Most non-core Conservative voters seem to have abandoned the party, with multiple media outlets reporting that Conservative candidates running to be MPs have been turning away PM visits on the campaign trail, something we reported several weeks ago, while swing voters have told pollsters they plan to vote tactically.
Labour’s first 100 days will likely see Whitehall shake up
Starmer will likely spend his first week or so as PM appointing his Cabinet and junior ministers and probably creating and/or abolishing several government departments to reshape Whitehall. It is likely that much of the current shadow Cabinet will remain in post and any MPs with government or senior parliamentary experience will join the junior ministerial ranks. If Starmer does create or abolish any government departments, it will likely take a few months for them to get up and running effectively to enact his regulatory and legislative agenda.
The scale of Starmer’s ambition to reshape the UK’s politics and economy will be dictated by the size and composition of his parliamentary majority. With some pollsters predicting up to a 250 seat majority, Starmer will have ample leeway to enact most legislation he tables. The larger the majority, the more likely it is that he will table more controversial legislation early, in an effort to avoid consultation with businesses, his new MPs, and vested interests, and before he accumulates political baggage through missteps and internal fractures. Starmer has populated his inner sanctum with seasoned political operatives and former senior civil servants, likely indicating a move to harness the civil service in his efforts, rather than to work against it as many previous Conservative governments have done. With both the civil service and Parliament within his control, his scope to effect change will be large. With a large enough majority, he will also be able to move the Labour Party even more in his preferred direction, as he will be able to afford making internal enemies that disagree with his policy choices (further note on the future of the Labour Party to follow).
Although Labour MPs will have less of an incentive to follow all of Starmer’s policy plans immediately following the election, many will look at the chance of entering government as a reasonable price to pay for supporting policies they may disagree with i.e. Starmer’s stance on the Israel/Palestine conflict. That, coupled with a likely Conservative Party in disarray as Reform and the Liberal Democrats nip at its heels, means that Starmer will likely have strong parliamentary support to push through his initial legislative package, even if it is criticised by the media and business communities.
What to look for ahead of next Thursday:
Will the Conservatives’ vote share continue to slide ahead of polling day
A continued fall in support benefitting its two rivals on its right and left flanks, Reform and the Liberal Democrats, respectively, could mean outsized damage to the Conservatives’ eventual seat share. A smaller Conservative opposition will make Labour policy proposals more likely to become reality.
Whether Starmer or any high profile members of his team have any gaffes with “cut through”
Most voters tend to make their minds up in the final week of a campaign, outlining why the Conservatives’ gambling stories are so damaging. If Starmer or Labour have any similar gaffes, there could be an effect on Labour’s eventual result, although it would have to be a much larger and simpler issue than the Conservatives’ current “gamblegate.”
Which Pads and newcomers end up as Spads
As Starmer appoints his Cabinet, most of the incumbent MPs have political advisors (Pads) in place. They are the most likely candidates to become special advisors (Spads) upon entering government, but the new Secretaries of State will have larger budgets to employ more Spads, meaning new faces that shone during the election campaign will likely be taken on board.