Category Archives: economics

economics, General elections

Why Labour are already at high risk of losing the next election

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By Stephen Fisher, 7th February 2025

The government is only seven months old. Nonetheless, opinion polls show that Labour support has dropped by massive 9 points from the modest 35 per cent of the GB vote they achieved at last year’s general election. Now Labour, Reform, and the Conservatives are roughly level pegging in the mid-20’s.

Some commentators have suggested we should not take opinion polling seriously so early in the election cycle. Afterall the next election does not need to be before August 2029. Plenty of time for things to change?

No. The combination of dire economic indicators, forecasts, and opinion polls, in light of British electoral history, suggests Labour are (perhaps unfairly) already at high risk of losing their majority at the next election. Once down heavily due to an economic crisis, governments rarely win elections; still less prime ministers.

Here are some reasons why Labour, and particularly Keir Starmer, should be seriously concerned.

No government has suffered even close to a 9-point drop from their general election share within their first year and gone on to win re-election.  Thatcher’s government dropped by 10 points within a year and a half of the 1979 election because of the 1980-1 recession. She was on course to lose the next election; only winning because of the Falklands war.

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2024 General Election, economics, Energy

How energy and economic crises cost the Conservatives the 2024 general election 

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By Stephen Fisher, 5th July 2024

Yesterday was the tenth time since 1922 that voters in Britain kicked out a government after an economic crisis. 

What was truly extraordinary is that since the 2019 election the Conservatives twice changed prime minister in an attempt to rescue themselves, each after an economic crisis, and then Rishi Sunak presided over a third economic crisis.

Governments tend to win elections, except after economic crises. That tendency now accounts for 20 of the last 28 elections. In a further three elections the government rescued themselves by changing prime minister after a crisis (dropping Lloyd George in 1922, dropping Eden after Suez, and dropping Thatcher after the 1990 recession). So, a combination of economic crises and political changes at the top can account for who governed after 23 of the last 28 elections, including all the elections since 1987. 

Yesterday’s election result fits a theory of UK elections I developed in this paper and summarised in this bloglast year, in which an economic crisis is defined to be a recession or a devaluation from a fixed exchange rate. The table below shows how all 28 elections since 1922 fit that pattern, or not. The blog discusses how the exceptions are either near misses of exceptional short-parliaments.

Table: Economic crises, post-crisis political changes of PM and government electoral fortunes since 1922

 Post-Crisis Political Change of PMGovernment wonGovernment lostTotal
No economic crisisNo10(1935, 1955, 1966, Oct 1974, 1987, 2001, 2005, 2015, 2017, 2019)3(1923, 1924, 1951) 13
     
     
Economic crisis since the last electionNo2(1950, 1983)10(1929, 1931, 1945, 1964, 1970, Feb 1974, 1979, 1997, 2010, 2024)12
     
 Yes3(1922, 1959, 1992)03
     
Total 151328 

Even though there have been post-crisis political changes of PM since 2019, the 2024 election is not listed in the bottom row because there was a recession (in 2023) after Sunak took office.

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2024 General Election, economics, Forecast updates, Methodology

ELECTION POLLS VERSUS THE UK ECONOMY: CONSERVATIVES WON’T CLOSE THE GAP

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Guest post by, John Kenny, University of East Anglia, and Michael S. Lewis-Beck, University of Iowa, 3rd July 2024.

            The snap election for the UK general election takes place tomorrow, with the vote intention polls, as aggregated by the BBC Poll Tracker, showing Labour with an 18 percentage point lead over the Conservatives. This gap indicates a serious Conservative loss. But are these vote intention data that accurate? The question seems worth asking, especially in the context of public opinion polling uncertainties surrounding this, and other previous, snap elections. (See the recent comprehensive review by Stegmaier, Jokinsky, and Lewis-Beck, 2023). An alternative to the vote intention approach to forecasting elections involves the use of structural models, in particular political economy models, which rest on the idea that political and economic fundamentals shape election outcomes. One such model, rolled out in 2001, forecast in advance of the contest the victory of the Labour party in that year (see Lewis-Beck, Nadeau, and Bélanger, 2004).  

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economics

The Dysfunctional Debate over Debt, Deficit and Macro Economic Policy

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by Stephen Fisher and Zach Ward-Perkins

This blog post counts as work in progress for a more thorough analysis of the issues of political debate and public understanding of macroeconomics. Comments very welcome.

There is a big choice at this election: between austere and austere-er; between cuts and £30bn or so more cuts. Even the so-called anti-austerity SNP turns out, according to the Institute for Fiscal Studies (IFS), to be offering similar spending plans to Labour, just over a longer and slower timescale. Why so? Continue reading The Dysfunctional Debate over Debt, Deficit and Macro Economic Policy →

economics, General elections, nationalism

Links between economics and nationalism at this election

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By Stephen Fisher

This is an edited version of a piece for The Cherwell.

As with any election, the one on May 7th is about lots of different issues and different things for different people. The factors that will affect the outcome are more numerous and varied still. Nonetheless many commentators are afflicted by a chronic temptation to try to define what particular elections are really all about.

Two main themes stand out this time: the economy and nationalism. The economic contest is between ideological positions on the size and role of the state as well as over competence in macro-economic management. For nationalism the relationships between Scotland and the UK and between the UK and EU are the main issues. Continue reading Links between economics and nationalism at this election →