Reliving 1992

It’s getting close. The election is soon, and the gap between the two main parties is narrow. Various opinion polls give the Conservatives a slim majority over Labour. In some cases it’s just two percentage points. For the Conservatives, a two point lead is not enough for an overall majority. It may not even win them more seats than Labour.

Labour could be in a position to form a minority/coalition government despite polling fewer votes than the Conservatives. This is because Labour dominates in urban constituencies with smaller electorates. So the seats it wins are often secured with fewer votes. It’s a real possibility the Conservatives could win more votes but fewer seats in the forthcoming election. Indeed, in 2005, in England, that’s just what happened.

As an aside, the Liberal Democrats are wrestling with the conundrum of a hung parliament in which Labour secures more seats and the Conservatives, more votes. They say the party with the strongest mandate has the right to govern. But Nick Clegg won’t say whether that means the party with most seats or the most votes. It leaves him some wriggle room.

Election day, 1992

So the Conservatives are ahead in the opinion polls, but each party has all to play for. It reminds me of 1992 and there are a number of similar features.

  • In 1992, the Conservatives had been in office for 13 years. Margaret Thatcher, an inspirational but controversial figure had led her party to three comfortable majorities before losing favour with the country and her own party. She stood aside mid-term to be replaced by her Chancellor, John Major.
  • Now in 2010, Labour has been in office for 13 years. Tony Blair, an inspirational but controversial figure led his party to three comfortable majorities before losing favour with the country and his own party. He stood aside mid-term to be replaced by his Chancellor, Gordon Brown.
  • In 1992, Labour has been 13 years in opposition. In the early years it  swung sharply to the left and suffered for it in successive elections. But the latest leader, Neil Kinnock, had worked hard to change the party and its brand. By 1992, it had been mainly ahead in the opinion polls for several years.
  • Now in 2010, the Conservatives have been 13 years in opposition. In the early years they swung sharply to the right and suffered for it in successive elections. But the latest leader, David Cameron, has worked hard to change the party and its brand. Now it has been mainly ahead in the opinion polls for several years.
  • In 1992, the Conservative had won three general elections. When they first came to power, they succeeded a highly unpopular and mistrusted Labour government. Margaret Thatcher was re-elected twice, remaining undefeated in the country. She called each of her elections after four years. Her successor waited until the last practical moment: five years.
  • Now in 2010, Labour has won three general elections. When it first came to power, it succeeded a highly unpopular and mistrusted Conservative government. Tony Blair was re-elected twice, remaining undefeated in the country. He called each of his elections after four years. His successor waited until the last practical moment: five years.
  • In 1992, the economy was in recovery from a nasty recession, but Black Wednesday lay ahead.
  • Now in 2010, the economy is in recovery from an even nastier recession, but I have no doubt further challenges lie ahead.

Of course, there are some differences too. For example:

  • In 1992, the incumbent Prime Minister was still relatively new to the voters. He’d served as Foreign Secretary for four months, Chancellor for 13 months and Prime Minister for 18 months before election day.
  • Now in 2010, the incumbent has served 18 years at the highest levels of opposition or government. Mr Brown is well-known.
  • In 1992, interest rates were 10% (on election day). They had fallen steadily from a peak of 15% in 1989.
  • Now in 2010, interest rates are just 0.5%. That is as low as they have ever been.

But there is another critical similarity:

  • In 1992, the incumbent party won a late surge in support.
  • Now in 2010, that is happening again.

In 1992, the incumbent party won.

Politics was not well-served by the re-election of the Conservatives in 1992. They were tolerated, not loved, but the voters couldn’t face the prospect of Labour returning to power. Five years on and the governing party was about as popular as a rat at a hen do.

It has taken many years and a substantial change in tone and focus for voters to come to terms with the Conservatives again. But that last term in office did them great harm. Labour is tolerated, not loved, but the voters are very nervous about the Conservatives returning to power.

Now in 2010?

Against expectations, Labour could remain in government until 2015. If that happens, I predict a landslide the other way, just like 1997. 18 years in government is a very long time. By 2015, it will be a very tired government.

In any case, the next five years are going to be very difficult. The next government will have some very tough economic decisions to take. It cannot risk the politics of popularity. It must govern in the national interest.

For the next government, Labour or Conservative, the election of 2014/15 is going to be very tough indeed.

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Who do cider drinkers vote for?

I was impressed by Alistair Darling’s budget on Wednesday. Politically, it was hard to fault. Economically, he played it safe and didn’t upset the markets.

Evidently the Budget deficit needs to be tackled. Otherwise the credit ratings agencies will become tetchy and credit will be harder to come by. The big question is: how soon should the deficit be reduced? Are savage cuts the way forward? Or do we simply need to make a start? The main parties are divided on the issue and so are economists. But the political gap has closed a bit. Nick Clegg is no longer calling for savage cuts and the Conservatives’ tone was much more hawkish several months ago.

The government plans to halve the deficit in four years, despite European Commission encouragement to act quicker. Their argument is that to cut quicker would harm the economy still further.

There were no great economic revelations in the Budget. The big decisions, the painful ones especially, will come later. That political judgement was straightforward. But aside from that, Mr Darling played a dextrous hand.

Among his cards, the decision to grant a two year stamp duty holiday to first-time buyers of homes up to £250,000 (neglecting a nod of courtesy to the opposite benches for the idea). It’s paid for by an increase in stamp duty on £1m homes. Not for two years, but permanently. I can’t imagine this will cost Labour too many votes.

And this one’s inspirational: a tiny increase on a pint of beer (2%) alongside a much larger increase in cider (10% above inflation). Beer drinkers will feel they got off lightly. Who do beer drinkers vote for? Probably any and every party (though traditionally Labour!) Meanwhile, who do cider drinkers vote for? Here’s a clue:

Cider duty up - costly for Labour?

Cider duty up - costly for Labour?