Voters felt sqeezed, anxious and uninspired by Labour’s offer. The new generation must now provide opportunity and security for middle and low income voters in the post-recession tough times
The 2010 election brought an end to the New Labour era. Its ascendancy spanned sixteen years and three successive election victories. New Labour in government significantly raised investment in the public services, grew the economy and made Britain a more socially progressive country. With the passage of time though, political decay and voter discontent brought its ascendancy to a close. Understanding that defeat is the first step to winning in the future. Policy Network’s Southern Discomfort Again and Demos’ Open Left’s extensive voters’ survey provide pointers to why voters turned their backs on Labour in 2010.
An electorate that had grown tired of Labour
The cumulative impact of accusations of sleaze, the leadership “pyscho drama”, divisions and resignations took a heavy toll. The Open Left survey shows vote switchers rating Labour very negatively on competence, trust, in/out of touch and unity. At the election the onus was on the Party to make the case “against” change – it proved impossible. Voters had turned off listening and were bored with New Labour. Gordon didn’t “click” with many voters and was regarded as the past, not the future. The party machine was hollowed out. The parliamentary expenses “scandal” powerfully fuelled disenchantment among an electorate that has journeyed from deference to contempt without finding a happy medium in between. And Labour as the “establishment” inevitably absorbed much of the odium.
Nevertheless, the new Coalition government faces formidable challenges. Entering it brings the Liberal Democrats significant strategic opportunities, but daunting electoral risks. It now has a record to defend and is breaching voter “trust” on issues such as tuition fees. And although for now many voters are giving the Conservatives the benefit of the doubt, its muted advance in their election vote share underscores much of the electorates continuing unease with the Party. Used wisely opposition provides an opportunity for Labour to renew. The pendulum will swing back to Labour, but how far?
Labour faces a challenging electoral terrain
Over the past forty years the make up of the electorate has changed and two-party dominance of it has ended. The traditional working class (C2s and DEs) has shrunk from two-thirds of population to a bit over 40 per cent now. The “middle class” electorate (ABC1s) has expanded. It is now the majority. High paid professionals (ABs) are a quarter of the electorate.
This changing social structure is not automatically inimical to Labour. First, class and political allegiance are no longer synonymous. Values, views and geographical location also shape allegiances. So while Labour support in the shrinking traditional working class has weakened, it along with the Liberal Democrats now contests to an extent the Conservatives’ once near total dominance of the professional middle class and white collar voters.
Second, the new middle class majority is not a homogenous, affluent and contented block. White collar middling income voters, like the skilled working class, aren’t “have nots”, but neither are they “have lots”. They have mortgage payments to make and family budgets that are stretched. Most send their children to state schools. And they rely on the NHS. They are less likely than skilled working voters to see themselves as natural Labour supporters, but are open to persuasion to vote Labour. And to win, Labour needs to get their support.
Labour and the Conservatives had a combined 90 per cent share of the vote in 1970, but only a two-thirds share in 2010. Labour lost lost office in 1970 with a 43 per cent vote share and the support of 12.1 million voters. In the subsequent four decades and ten elections it only polled over 40 per cent on two occasions (1997 and 2001). And the circumstances of those two elections are probably unique: Tony Blair’s charisma and voter reach, the deep unease in large parts of the electorate at the impact of the Thatcher years and the Conservatives inwardness. Equally, the Conservatives in the 1980s never matched Heath’s winning 1970 46 per cent vote share and their 2010 share was lower than they polled in all but four post-war elections. In terms of seats the electoral system has flattered the two party’s real strength. In future it may well not. There are likely to be more Coalitions in the future. The ”winning post” for getting into government will be different from the past.
The squeezed middle
The New Labour ascendancy was built on an ability to win support across all social classes and especially “middle income voters”. The revisiting of middle income voters’ “discomfort” with Labour by Giles Radice and Patrick Diamond finds negative views on the Party (seen as “close” only to immigrants, unions and benefit claimants) and its record in government (much of the investment in public services was wasted and doubting Labour’s economic competence). Compared to the 1992 “Southern Discomfort” they also detect a darker mood among voters, with optimism about the future giving way to pessimism and aspirations for improvement and opportunity replaced by a sense of insecurity.
The economy under Labour before the financial crisis had performed well. GDP and productivity growth was sustained and outperformed other G7 economies. Employment levels were high, but inflation was kept low. These were significant achievements and won plaudits from many commentators. But the economy as experienced by many households became less good as Labour’s time in office progressed.
Living standards grew strongly in Labour’s first term (more than 3 per cent a year), but after 2001 growth in the economy slowed and with it the growth in earnings (down to just 0.7 per cent after 2005). Household budgets were sharply impacted by rising petrol, energy and commodity prices. The tax take also increased. Then as the downturn took hold short-time working and pay freezes became widespread. The downturn would have been much worse but for the actions of the government, however the depth of the downturn – the economy is a tenth smaller today than had trend growth continued – meant a squeeze on incomes was inevitable.
The impact of slowing growth followed by contraction was intertwined with structural changes that impacted on security and opportunity for middle income earners and others. First, a “risk shift”. In the private sector many employers have both ended final salary pensions and reduced their contributions to defined contribution ones. Outsourcing, temporary and agency work have become more common as employers seek to match flows in demand with the size of their workforce. Second, the number of blue collar middle income jobs in manufacturing continued to fall. While the number of jobs in the economy has grown, the new opportunities have been for low and high paid jobs. This is a trend that looks to be common to advanced market economies regardless of levels of unionisation, prevalence of collective bargaining or welfare system. The growing application of new business processes, automation and IT appears to be a significant part of the explanation of these lost middle income job opportunities. There is little prospect of many of them returning.
Given what happened to the economy, voter discontent is unsurprising. And with their own incomes squeezed, middle income voters become a lot less “relaxed” both about the earnings of those at the top and benefits going to some at the bottom. Although Labour had redistributed down from the top and took steps to ensure those with broadest shoulders contributed more through the new top rate and the bankers’ bonus levy, it struggled with the politics of this discontent. Mindful of the traps it fell into in the 1980s of looking to be against aspiration, it ended up being unsatisfactorily muted in responding to a shifting public mood. In all on the economy, a government that had been in a politically more robust state might have got more credit for its actions, as it was voters just concluded it was time for change. And Labour’s reputation for economic competence has been diminished.
Anxious about the arrival of strangers
Immigration added to the mix of voter discontent and insecurity. The polling shows clear voter unease over immigration, especially among working class voters. The evidence is less clear on its impact on the election result. Public anxiety about immigration isn’t new. It has been an issue for decades as shown by the impact of Enoch Powell in the late 1960s/early 1970s and Mrs.Thatcher’s comments on “swamping” in 1979. In the focus groups for the original “Southern Comfort” it loomed large.
Under Labour there was a very significant increase in immigration and this no doubt heightened anxiety. The Economist describes the 5.6 million people coming to the country for a year or more as “the biggest influx” ever seen. It was a total significantly swollen by people from eastern Europe exercising their new EU free movement rights. Numbers that had never been expected by the Government. And while these extra people helped keep the economy growing for longer and filled jobs others wouldn’t do, it must clearly have been an impacts on the wages of some, housing/public services in some areas, as well as peoples’ sense of identity and community. The Mrs Duffy incident notwithstanding, it is unfair though to say that the Government “didn’t get it”. Gordon Brown introduced the “points based” system and Tony Blair put considerable effort into tackling bogus aslyum claims.
Immigration’s electoral impact though is unclear. Demos’ Open Left figures show Labour switchers holding somewhat more negative views on immigration than Labour voters. But the gap isn’t large. The bigger divide is between Conservative voters and the rest. For the future, it is unlikely Britain will see a repeat of recent immigration levels. The issue’s salience will decline, but, as recent developments in the rest of Europe show, it isn’t going to go away.
Health and schools
In 1997 more investment in schools and hospitals was a strong mobiliser of support for Labour. In 2010 it wasn’t.
In real terms under the Labour government spending on the NHS more than doubled and on education rose by 80%. The statistics show more doctors and nurses and teachers and teaching assistants. New hospitals, health centres and schools are visible around the country. The voters got the extra investment they wanted. It cut waiting lists and times with the result they weren’t an issue in 2010: patient gets operation doesn’t have the same potency as patient doesn’t. And the Conservatives in 2010 cleaved close to Labour on NHS and school spending. Voters therefore didn’t see them as a threat to the NHS and schools.
In fact “Southern Discomfort” suggests a Labour vulnerability on public services. Three quarters of voters believe “a lot” or “most” of the extra money was wasted. The way the question was asked probably illicited an overly stark view of opinion. The reality is that services were improved, but there was and is “some” waste. And that is probably what most people think and have experienced. With their own incomes squeezed they are less tolerant of any waste of their taxes.
In 2010 voters wanted change. They had lost confidence in New Labour. And they were discontented over the squeeze on their living standards and felt less secure. There was widespread anxiety about the future prospects of their children and grandchildren. Labour had improved their public services, but voters don’t do gratitude for past services rendered. The baton now passes to “new generation” Labour. The pressing task is to develop a programme for opportunity and security for middle and low income voters in the post-recession, but probably tough, times ahead and to rebuild Labour’s standing on economic competence.
Geoffrey Norris was a special adviser to Tony Blair, Gordon Brown and Peter Mandelson during the Labour government, 1997-2010