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The next election’s not looking easy for the Tories

Cameron's StepsWith 19 months to go, it’s hard to see how the Tories can pull off a win in May 2015. There are at least 6 reasons which argue strongly against it. First, though the polls currently are showing a Labour lead nationally of from O to 5%, the Labour lead in the marginals where the overall result will be disproportionately decided is very much greater.

Second, there is the demographic tilt: in the Home Counties and the south-east the Tory party piles up huge majorities of up to 25,000 or more, while the Labour vote is more evenly spread. As a consequence the Tories need to have a 7% poll lead over Labour to get an overall majority, while Labour only needs a 1% lead over the Tories to win a majority over all other parties. It is a very tall order for the Tories to overcome a hurdle of this magnitude.

Third, there’s the fact that black and Asian voters are statistically more likely to vote Labour. This section of the population continues to increase faster in numbers than the white population, and there are scores of marginal seats where that factor could be influential in determining the result.

Fourth, a great deal of the fiscal austerity is back-end loaded and is still to come. There is as much as £40bn of cuts awaiting the victims of this prolonged impoverishment before 2015, and whilst it is remarkable that there has not so far been the unrest and riots that might have been expected, it is hard to see this continuing for another year and a half without an explosion. No-one foresaw the poll tax riots that put paid to Thatcher, and the same may well apply again.

Fifth, there’s the ‘recovery’ which might be thought to be the Tories’ strongest card. But two factors suggest otherwise. If the recovery was really gathering pace as the Tory tabloids continually boast, one would expect the quarterly growth rate to be slowly but steadily rising. But it isn’t: according to the NIESR the 3rd quarter growth fell slightly compared with the 2nd quarter and, more concerning still, the ONS showed manufacturers’ output fell 1.2% against forecasts of a 0.4% rise.

The other factor is even more crucial. In 2010 the OBR thought that real business investment, after falling by a stunning 24% during the recession, would return to pre-crisis levels by mid 2013. Instead it has dropped by another 10%. That is very disturbing for Osborne, and suggests the recovery is very fragile and may well peter out by mid 2015.

One further uncertainty which could turn toxic quite quickly lies in the warning given today by Paul Tucker in his valedictory report to the Bank of England. He cautioned that the world today is at a similar stage to 2004 when investors were searching for higher yields after the Fed interest rate cuts. He points out, very presciently, that after a long period of interest rates on the floor, dangerous levels of leverage may be building up in poorly regulated sectors of the financial system, i.e. hedge funds and other non-bank institutions. If that were to blow, with a second financial crash in the ripple after the first 5 years before, the Tory goose would be well and truly cooked.

3 Comments

  1. Robert says:

    It’s going to take a lot to get me back to the voting booth to be honest Hammering down on welfare or sending me on work details it all basically the same.

    We disabled are the new Jews of the EU.

  2. Trevor says:

    It’s ok surmising a Labour victory but what do they intend to do when elected. By the utterances so far then not much different than the Tories. We need to be pushing hard for real alternative policies and not ones that paved the way for a Tory return down the line. The average voter has been let down by Labour time and again !

  3. Jon Williams says:

    I always thought by voting for a candidate in an election, whether it’s a main stream party, one issue candidate or spoilt ballot, you can pass comment on day to day political issues with the knowledge you have at least tried to make a difference by participating in democracy.

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