Preparing for Government

With the Tories in disarray Labour need to start laying the ground for radical reforms

The bulk of this post is about Labour but first a quick update on the Tory leadership race. Rishi Sunak has met the threshold of 100 nominations comfortably and will be the leading candidate amongst MPs by a distance. Boris Johnson is still short of the threshold and hasn’t definitely decided to put his name forward. The two men met last night, but as yet no one knows if they agreed anything. Penny Mordaunt is also running but is well short of the threshold and won’t make it to the final two unless Johnson drops out. There are three scenarios in order of likelihood:

1.       Boris Johnson drops out, no else gets to 100 nominations, and Sunak is crowned on Monday (though as far as I can tell he wouldn’t technically become Prime Minister until the end of the week.) Johnson is not someone who likes losing so unless it’s certain he will get 100 I think he will drop out rather than risk it. Even if he does have the nominations he may decide to back off, given the lack of support from the Tory press, and the ongoing privileges committee investigation into whether he misled Parliament.

2.       Johnson decides to stand and gets the nominations, albeit in a distant second place, and pushes it to a membership vote. There seems to be a widespread belief that Johnson would win this comfortably, and clearly he still has a base of support in the party. But I wouldn’t write off Sunak in this scenario. Members I’ve spoken to are much more risk averse than they were in the summer. Last week YouGov asked members if they thought different alternatives would be preferable to Truss (before she resigned). Sunak got 60 good / 36 bad; Johnson 63 good / 35 bad. And YouGov has a record of overstating Johnson’s popularity amongst members. The fact the Telegraph isn’t supporting Johnson this time is indicative of the change in mood. Moreover, the market reaction to a Johnson comeback has already been negative. If a group of MPs were to say they’d consider triggering an election if he won that would also weigh on members’ minds.

3.       Johnson drops out, perhaps later today, allowing Mordaunt to get nominated as the “anyone but Sunak” candidate. If that happens she might pull out in return for a big job at that point or may push it to a vote. I think that membership vote could go either way but Sunak would have the overwhelming support of the party establishment so would probably win.  

So there are more routes to Sunak becoming PM and he is rightly strong favourite. But there remain routes for others too. I am on holiday next week and have promised not to write anything so the next post from me will be next weekend and will assess the consequences of the outcome, whatever it is.

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On to Labour. If, 18 months ago, someone had suggested publicly they might win a landslide (100+ majority) at the next election, they would have been laughed out of the room. Back in May 2021, basking in the success of the vaccine rollout, the Tories had a comfortable poll lead, peaking at 18pts with YouGov. Pressure was growing on Keir Starmer whose ratings trailed Boris Johnson by a distance, especially after Labour lost Hartlepool, only the second time a government had gained a seat in a by-election in forty years. The local elections, which took place the same day, were also dreadful, with a net loss of over 300 councillors.

Depressed Labour MPs were wondering if there was any way to stop a record fifth Conservative victory in 2024. But over that summer the vaccine bounce started to fade and then, in October, Boris Johnson decided to self-immolate, first by attempting to defend the indefensible behaviour of Owen Paterson and then repeatedly lying about Downing Street parties. Even at that point it looked like the best Labour could hope for was a hung parliament. My suggestion in February, as Labour established a 10pt poll lead, that they could even win a majority, let alone a landslide, was treated with some scepticism.

This was understandable. To get a majority of one Labour would need a swing in votes comparable to 1997, and Starmer is no Tony Blair. Moreover, unlike Blair, he would not be able to rely on 50 Scottish seats, now held by the SNP. But since then we’ve seen the astonishing collapse of the Government, which has dramatically accelerated since Liz Truss’s disastrous budget. Labour’s poll lead now averages around 30pts, which is comparable to the leads Labour regularly got before the 1997 election, except now polling methodologies are significantly less favourable to them.

Moreover, back in the 90s, while John Major was beset with all sorts of scandals and rows over Europe, his Government did manage to grow the economy by more than 2.5% every year from 1993-97. By the election they were leading Labour on that issue. Given how much economic pain is on the way over the next year or two it’s hard to believe the same will be true in 2024. Labour currently has the biggest lead they’ve ever recorded on the economy.

Turning current polling numbers into seat projections produces results that look absurd. My favourite model, Britain Predicts, is currently showing a Labour majority of 368, with the Conservatives winning 41 seats.