In the middle of the beginning of what looks like it will be a pretty trying election campaign, I thought it might be worth passing on the thoughts of Lord Strathclyde – one of the 90 elected, but hereditary peers left in the House of Lords.
He spoke just before me at a JP Morgan conference last week and made a few interesting points. The first, amid all the apparent chaos, is the stability of voting intentions for the two main parties.
Between them they still have some 70% of the vote and they have been polling at about half of that each for many months. Under normal circumstances you would have expected at least a post-Budget swing towards the incumbents. That hasn’t happened. Why? Lord S offered a few reasons.
The first is that fixed-term parliaments are really boring: we have known for four years when the election is so have had none of the suspense of guessing and second guessing dates.
The second is that there is a “general lack of discontent”. Elections are about two things – “time for a change” or “the status quo is fine – stop the other guys getting in and wrecking things again.”
Lack of widespread pain means this election isn’t about the first. But, unusually for the UK, it can’t be about the second either: “if the coalition was standing, it would win”. But it isn’t. That confuses matters for voters.
The final reason is much mentioned: to the ordinary voter, our three party leaders are more or less the same person – middle-aged, upper-middle class, male urbanites (note that the Labour leader is the only one who lives in a house expensive enough to be in line to be hit with the mansion tax). This makes it hard for people to engage.
We are putting together a report on the election and how investors should respond to the result. But according to Lord S, the “real risk” is that “the losers win”: that the Tories end up with more seats than Labour, but Labour manages to make Miliband prime minister by creating a ‘rainbow coalition’ with the smaller parties (the SNP in particular)*.
The other is that the Tories and the Lib Dems have another go at coalition. The risk here is that Nick Clegg’s party doesn’t fancy it much (they won’t); that a new leader is called for; and that as a result coalition two is very short term. Both of these results will make for a large dose of instability – something the debt ridden UK can really do without.
* Loose, issue driven coalitions are much more unstable than full ones. Lord S reckons this comes down to ministerial positions. In a real coalition, both parties have them and that gives the weaker party an incentive to keep the show on the road – everyone loves being a minister.