Dr. Steven McCabe, Associate Professor, Birmingham City University
Wednesday’s announcement by the PM that the next general election is to take place on Thursday 4th July caught everyone by surprise (Fisher, Parker and Uddin, 2024).
Most commentators had believed Rishi Sunak was likely to ‘go long’ in calling a general election later this year, the date of 14th November having been widely touted.
After all, it was assumed, opinion polls were so dreadful he would wait in the hope his party would benefit from an uptick in the state of the UK economy.
This, Sunak and his advisors hoped, would narrow the gap Labour enjoyed over the Conservatives.
Indeed, there were signs Sunak’s fortunes were improving.
On Monday it was reported that the Tories have marginally narrowed the gap to Labour by 4% (Martin and Maidment, 2024).
According to the latest poll conducted by Ipsos at the end of the second week in May, and just after the Office for National Statistics (ONS) announced that the UK’s economy had improved by 0.6% in the first quarter of the year, meaning the country is out of the ‘technical recession’ it experienced in the last two quarters of 2023.
Labour stood on 41% and the Conservatives on 20%.
Labour’s lead when Ipsos conducted the poll in April was four per cent higher.
Pointedly, as Martin and Maidment claimed in the Tory-supporting Telegraph, Ipsos’ polling data was “good news” by the beleaguered PM and his team.
For completeness, support for the Liberal Democrats and Greens had according to Ipsos increased by two per cent (each on 11%), and Reform UK’s support had decreased by four percent to stand at nine per cent.
As well as considering the state of the major political parties, albeit on a survey of 1,008 people, Ipsos asked whether respondents thought the UK’s economy is likely to improve in the next.
33% of these 1,008 people thought it would, an increase of 12% on April, and 27% thought it would not and get worse (a decline of 15% on April. The remaining 40%, stated they thought the economy would remain the same or that they did not know.
In data that will provide no comfort for Sunak and his party, 78% of those polled by Ipsos stated they considered the government to have “done a poor job” and only 13% were willing to say it had “done a good job”.
Indeed, Ipsos’ survey indicates that there’s an appetite for change as 73% of those surveyed think it’s “time for a changeat the next general election” with only 18% agreeing with the statement presented that “the next election is not time for a change”.
Crucially, in terms of the popularity of the two key leaders, according to the latest Ipsos poll, Rishi Sunak’s personal rating has increased by one per cent among those satisfied with his performance but has declined by three per cent among those stating they’re dissatisfied.
32% of those polled by Ipsos stated they’re satisfied with the PM’s whereas 50% stated they are not.
This means Sunak’s has enjoys a net rating of minus 55.
Labour leader Sir Keir Starmer’s overall rating, on the other hand, is minus 18 which is an improvement from minus 31 when Ipsos conducted the same poll a year ago.
Thus, in calling an election at this time Sunak is taking what many, but notably eminent psephologist Sir john Curtice, see as a monumental task for him if he’s to win the general election or, at the very least, deprive Labour of a majority the party would need to form the next government (Mitchell, 2024).
As a consequence, we’re going to be hearing a lot about popularity, polls and, naturally policies and promises that will be made by all of political parties standing in the general election on 4th July in the next six weeks.
Sunak, in calling the general election, it would seem, calculates that current economic conditions offer his party the best chance of success.
Importantly, as economists contend, average wages have risen more quickly than inflation, the latter falling in recent months, and coupled with the cuts made to national insurance by chancellor Jeremy Hunt, as well as recent falls in energy prices, some, though not all, people may feel slightly better off.
However, there are warning signs of tough times ahead.
Importantly, on Tuesday, the Washington-based International Monetary Fund (IMF) in its annual Article IV report on the UK made a number of observations (Khan, 2024).
Delivering a summary of the contents of its latest the report, Ali Abbas, the IMF’s ‘UK mission chief’ stated that the UK’s economy was “approaching a soft landing” following the technical and, it may be said, reasonably mild recession in the second half of 2023.
As a consequence, the IMF had raised its forecast for the UK in 2024 from 0.5% to 0.7%.
Even better, the IMF has predicted the UK economy is likely to experience growth of 1.5% in 2025.
Undoubtedly with an eye to the announcement due on Wednesday by the Office for National Statistics (ONS) on the latest UK inflation figure, and which many analysts anticipated would be close to 2%, the Bank of England’s (BoE) target, Mr. Abbas indicated that there was potential for the base rate to be cut by the BoE Monetary Policy Committee from its present 5.25%.
However, that inflation is now 2.3%, a great deal lower than the 11.1% it stood at when Sunak became PM in October 2022, this was seen as disappointing and would, it many believed, mean that interest rate cuts in the coming months would be a great deal less likely.
As Inman reported on Wednesday prior to the PM’s general election announcement, “City analysts had forecast the annual increase in the cost of goods and services would fall to 2.1%, close to the Bank of England’s 2% target” (2024).
Intriguingly, some commentators on Wednesday morning speculated that Sunak, recognising that the possibility of much anticipated interest rate cuts were fading may have decided that his ‘window of opportunity’ was closing and calling a ‘snap’ general election was his best – perhaps least worst –option (Parker, Pickard and Fisher, 2024).
Moreover, they explained, as well as report, Sunak, who’s famously a ‘data wonk’ also recognised that the parlous state of finances meant the scope for tax cuts later in the year in a pre-election Autumn Statement had effectively disappeared(ibid).
Sunak will have been aware that in their report, the IMF argued the UK’s public finances were in such poor shape as to mean that additional tax cuts are unwise. Notably the IMF went as making clear their belief that the cuts to National Insurance made by the chancellor in recent months should not have occurred “given their significant cost”.
So, we’re into election mode.
The prize for the successful party, assuming there’s a clear majority following 4th July, to become the next government.
However, whichever party does indeed assume power, most likely to be Labour on the basis of opinion polls, will be confronted by challenges that are as great as any government has had to deal with since the Second World War.
The IMF in their analysis of the state of the UK economy stress that the next five years are going to be extremely difficult and the next administration will be required to dedicate significantly more finance on public services meaning “[the two main party’s] self-imposed target for falling debt as a share of national income will not be met[leading to] a gap of about 1% of UK gross domestic product (GDP), or £30bn a year” (Race, ibid).
In preparing for government, Labour’s Chief of Staff, Sue Gray has prepared an internal dossier of the challenges the party will be likely to face (Pickard, Fisher and Gross, 2024). In what represents a dreadful testament to the appalling state the country is in, the list includes bankrupt councils, public sector pay pressure the potential collapse of Thames Water, as well as overcrowding in prisons, the possibility of at least one university going bankrupt (ibid).
One of the greatest challenges the next government must try and deal with are the enormous waiting list for NHS procedures – believed to be approaching ten million – and the need to recruit additional staff.
There’s also the issue of the ongoing housing crisis, the fact that homelessness is the worst it’s ever been and the affordability of housing by the next generation has reached over ten times average annual salary in many parts of the country.
And, of course, there’s still the not insignificant matter of the many tens of thousands of migrants who arrive in Britan having travelled across the English Channel in small and horrifically dangerous boats.
As many ask, where will the vast amounts of money required to address all of these problems come from?
With resonance to what was claimed in the 2010 general election by Labour’s Liam Byrne, this time there really is no money left.
How, it may be asked, will Sunak convince people to continue to support the party that came to power in 2010 and, in coalition with the Liberal Democrats, implemented austerity that caused deep cuts to public services?
Though inflation has come down in recent months, due to influences outside Sunak’s control – despite what he may claim – most people feel are likely to feel worse off.
Aside from energy which has reduced in recent months, most bills won’t fall because the rate of inflation has fallen.
Families are having to dedicate more to pay for food and other essentials than they did at the time of the last general election.
Those paying mortgages whose fixed rate deals have expired, or will do so in coming months, are experiencing a hike in repayments that have/will really hurt their pockets.
It’s salutary to remember that interest rates were 0.1% as recently as the end of 2022.
That poverty and deprivation has risen alarmingly, and despite already being at worrying high levels following years of austerity imposed by the Conservative coalition government of 2010-2015 under PM David Cameron, can be seen in the fact that food banks and charities find it difficult to cope.
Most particularly, whenever people go to the polls to elect the next Parliament, do they believe that they are better off than when they last voted in December 2019.
The answer to that question is that a considerable number feel somewhat worse off.
The Guardian’s Senior political correspondent Peter Walker,believes that as well as Brexit, cuts and chaos, and the fact there’s been five prime ministers, seven chancellors, eight foreign secretaries and 16 housing ministers, it’s estimated the average Briton is “about £10,000 a year worse off in real terms than in 2010” (2024).
Whoever wins the next general election will be confronted with the most challenging set of economic and social challenges in living memory.
Unfortunately, as Robert Shrimsley, the FT’s Chief Political Commentator and Executive Director depressingly points out, we’re likely to experience what will be a “dispiriting campaign” (2024):
“What seems like a change election will feature few details of that change and very little time will be spent addressing the truly hard policy choices the victor will face. Both sides will present tax and spending plans that stretch credibility.”
Let’s hope whoever becomes PM after 4th July can ensure our collective prospects are considerably improved by the time we get to vote on who governs the UK in the general election that occurs after this one.
Steven’s latest chapter, ‘Boris Johnson, the green shopping trolley’, was recently published in Toxic News? Covering Climate Change, edited by Mair, Ryley and Beck and published by Bite-Sized Books, London. His next chapter, ‘When the Circus Leaves Town’, an examination of what’s likely to happen after the general election will be published in July.
References
Fisher, L., Parker, G. and Uddin, F. (2024), ‘How Rishi Sunak shocked Westminster with a snap general election’, Financial Times, 22nd May, https://www.ft.com/content/bfb032c6-89d4-40c6-9d80-255e15a77996, accessed 23rd May
Inman, P. (2024), ‘UK inflation falls by less than expected to 2.3%, reducing chance of June rate cut’, Guardian, 22nd May, https://www.theguardian.com/business/article/2024/may/22/uk-inflation-falls-bank-of-england-interest-rates, accessed 23rdMay
Khan, M. (2024), ‘Bank could cut interest rates three times this year, says IMF’, Times, 21st May, accessed 22nd May
Martin, D. and Maidment, J. (2024), Labour lead over Tories falls as economy recovers, Telegraph, 20th May, https://www.telegraph.co.uk/politics/2024/05/20/labour-poll-lead-falls-tories-general-election/, accessed 22nd May
Martin, D. (2024), ‘Poll: Sir Keir Starmer has better plan for the economy, voters say’, Telegraph, 21st May, https://www.telegraph.co.uk/politics/2024/05/21/voters-believe-keir-starmer-best-plan-uk-election-sunak/, accessed 22nd May
Mitchell, A. (2024), ‘Polling guru John Curtice’s general election prediction for ‘brave or foolhardy’ Rishi Sunak’, Independent, 22nd May, https://www.independent.co.uk/news/uk/politics/general-election-2024-prediction-poll-sunak-starmer-b2549737.html, accessed 23rd May
Parker, G., Pickard, J. and Fisher, L. (2024), ‘UK election speculation mounts as Rishi Sunak refuses to deny July poll’, Financial Times, 22nd May, https://www.ft.com/content/26cdc9a9-ec7c-4c97-893f-8f7ec461e8ad, accessed 23rd May
Pickard, J., Fisher, L. and Gross, A. (2024), ‘Labour faces series of crises if elected, internal dossier warns’, Financial Times, 21st May, https://www.ft.com/content/b95976ff-d861-4baf-a168-fd262b4e2f95, accessed 23rd May
Race, M. (2024), ‘Inflation rate falls to lowest in almost three years’, BBC Business News Website, 22nd May, https://www.bbc.co.uk/news/articles/c511m7jgyl3o, accessed 22nd May
Shrimsley, R. (2024), ‘A last gamble for a UK prime minister who has run out of road’, Financial Times, 22nd May, https://www.ft.com/content/030a044d-04b3-43b5-8927-34d06312a7f5, accessed 23rd May
Walker, P. (2024), ‘Tories’ 14 years in power will be remembered for Brexit, cuts and chaos’, Guadian, 23rd May, https://www.theguardian.com/politics/article/2024/may/23/tories-14-years-in-power-brexit-cuts-and-chaos, accessed 23rdMay
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