I don’t like talking about opinion polls just after a general election. Unfortunately, the media stuffs them into one’s face. This has been particularly so during the recent Oldham and Saddleworth by-election, which Labour won. I treated that result with bored unconcern.
The Coalition has lost popularity since it came to power. There is no surprise here. Indeed, senior Conservatives and Liberal Democrats had urged their supporters to prepare for unpopularity.
Opinion polls are important at any time in a political cycle. Early in a Government’s administration, they are a useful guide to predicting by-elections and local authority elections.
The Conservative opinion poll rating has hardly changed at all. Their rolling average is 37.03, compared with their general election poll of 36.93%. The big change has been in the Lib Dem share of the vote, down 13% from 23.56%. 10.5% of those lost Lib Dem voters have swung to Labour. The latter now top the opinion poll ratings with 39.95%. If those swings were repeated on a uniform trend in a general election, Labour would be back in power, winning about 336 seats and a comfortable overall majority in the House of Commons.
We are, of course, in a period of austerity where unpopular measures being taken by the Government are beginning to bite hard. At the moment, the Conservative leadership is very unlikely to be unflustered by the drop in popularity. For the following reasons, they are likely to take them with a pinch of salt for the next couple of years, at least.
When the Conservatives came to power in 1979, they won 339 seats, 43.9% of the popular vote and a very comfortable overall commons majority. The legacy of the outgoing Labour administration was very high inflation, over taxation, poor industrial relations and the outlook of a nation whose economic prospects were spiralling downwards. Their most urgent priority was to bring down inflation. The minimum lending rate shot up. The exchange rate went up. Manufacturing production fell violently. Businesses were forced to make savings either through wage cuts or redundancies. If they did not succeed, they went bankrupt. Unemployment rocketed to more than 3 million. The recession of 1979 to 1981 was the worst that the country had suffered since the early 1930s.
The lost production which occurs during a recession always takes longer than the period of the recession to claw back. In that recession, the level of GDP did not return to its pre-recession high until about the time of the May 1983 General Election. There were multiple reasons why the Conservatives won that election by a landslide. Labour’s lurch to the far left was a very big factor. Back then, we were still fighting a cold war and we had just fought a conventional war in the Falkland Islands. The war exposed Michael Foot’s pacifism. However, just as big a reason for the Conservative victory was the return of the economic feel-good factor. Inflation had by then come down to below 4%. Correspondingly, interest rates had come down. Unemployment was falling and the economy was growing.
There are big differences between the fortunes of Mrs. Thatcher’s first administration and the prospects of this present coalition government. The obvious one is that this is a government of two parties. Another one is that this Government took power about 6 months after the end of a recession, meaning that the change of Government took place at different stages of the economic cycle. We have not yet reached the stage of full GDP recovery. That is not expected to occur until about late spring 2012. A general election in May 2015 will be approximately 3 years into full recovery. In terms of the relationship between economic cycles and political fortune, the 2015 election may be more comparable to the 1987 general election. By that time, the UK was 4 years into recovery. There was a new, more realistic, Labour leader. The Conservatives still won the election with a majority of more than 100 seats in the House of Commons.
It might not be as simple as that. It is not so easy for a Government of two parties to maintain discipline. The economic problems of this government are about controlling debt, rather than inflation. That is a longer-term problem requiring longer-lasting economic pain. The effects of the Government’s economic medicine – spending cuts and taxation increases – will still be felt in 2015. The budget deficit is not scheduled to be in balance until 2016 and new (almost certainly unpopular) measures will be needed to tackle the welfare time bomb.
2013 to mid 2014 is likely to be a crucial period. That is when you should see a start to a reversal in trends in the opinion polls. Until then, we can ignore them as national news. Certainly, I will.