Why is no one talking about the angry Remainers?

I would not normally write this kind of post, but I couldn’t find anything on this by searching so I wrote it myself.

One very good answer to the question posed by the title would be if they did not exist, or more specifically that they might make a lot of noise in certain circles but in electoral terms do not amount to much. The main evidence we have that might raise doubt about this explanation is a series of remarkable by-election results for the Liberal Democrats. Everyone knows about Richmond, and earlier they had done very well at Witney, but their gain in vote was much more modest at Sleaford. What is less known is their steady success since the referendum in council by-elections. Each council by-election involves small numbers compared to Westminster seats, but there have been many more. What is interesting at this level is that the LibDems have been winning seats from both Labour and Conservatives, and in both Remain and Leave areas.

So why are political commentators continuing to talk about the UKIP threat to Labour much more than the LibDem threat to both main parties. Part of the answer is I’m sure the importance of the Brexit tabloids in influencing the Westminster bubble. But I think there is also some legitimate caution in not reading too much into these by-election results. First, the national polls have shown much more modest gains for the LibDems. Second, the power of the LibDem by-election machine is well known, and those with long memories know that spectacular by-election victories can come to nothing when we move to a general election. This would also help explain the non-uniform nature of the victories: for nearly every success you can find a relative failure.

While all that justifies caution, it does not provide any evidence against the angry Remainer idea. Nor does the fact that victories have happened in Leave constituencies, for two reasons. First, even if a constituency voted 60% for Leave, that still leaves 40% who voted Remain, and council elections in particular are where genuine anger is likely to motivate people to vote when the turnout is typically low. Second, quite a few people may have voted Leave but do not want a Hard Brexit.

The first factor may also help explain the discrepancy between local election results and the small movement in the LibDem’s national poll ratings. But, for Remainers, there may be a potentially more optimistic explanation. Responding to opinion polls may involve little thought. In an election people can read election leaflets, and they may think more before casting their vote. If so, local election results could be what economists would call a leading indicator of national polls in this particular case.

However, I say potentially because there is a less optimistic interpretation. In individual local elections the national media is not in election mode, and so local election literature may be unusually persuasive. In a national election, as we saw with the referendum itself, the broadcast media allows itself to be influenced by the pro-Brexit press. The LibDems may also be given little airtime as a small party, so there will be an automatic Leave bias.

For reasons like this, I’m afraid I find the outlook for Remainers like myself pretty grim. I can see one possible way of avoiding leaving the EU, but it requires a number of things to all work out. First, the march on 25th March is really, really big. Second, the LibDems make very large gains in the local elections in May. The combination of these two events could put the idea of the angry Remainer on the map. It might start encouraging some psephologists to speculate on which politicians would be vulnerable to a LibDem surge.

Third, the Brexit negotiations have to be seen as going badly. If ministers start blaming the EU for their intransigence, that is a good sign. Fourth, Labour keep Corbyn as leader. Fifth, it becomes clear that Article 50 can be revoked. Sixth, a run of polls have clear majorities for Remain over Leave. All that might just start making enough MPs seriously worried about keeping their own seats that they finally get the courage, and by some means a way, to vote to stay in the EU, or to call a second referendum. I have not tried to work out the probability of all those things happening, but as a fictional dwarf once said: “Certainty of death. Small chance of success. What are we waiting for?”

For those pining for a more macro post, the next one will be on the Bank of England's forecasts

Ukipanic

After Thursday’s UK by-elections, we have had a huge amount of ‘Oh God, what will it all mean, will politics ever be the same again’ speculation. As Labour nearly lost one of its safe seats, they as well as the Conservatives are trying hard not to panic. Some writers have optimistically coupled this result with the Scottish referendum turnout to suggest there is a new engagement in politics (but not of the conventional kind) and a search for ‘political identity’. Others have more pessimistically drawn parallels with the rise of fascism. (Are these two contradictory?)

If you see everything in terms of a left-right spectrum, then UKIP’s popularity seems to indicate a dramatic shift to the right. Here is the share of the popular vote gained in elections since 1945, but ending with an average of current polls.

If we place the LibDems as somewhere near the centre of this spectrum, then we have a fairly even balance between parties of the right and left - until now. So has there been a sharp movement to the right among the electorate? UKIP policies are clearly to the right of the Conservatives. But it may be a mistake to confuse the party and its policies with the views of those currently voting for them. Here is Owen Jones noting how UKIP voters tend to want to renationalise the railways and energy companies, increase the minimum wage substantially, and keep the NHS within the public sector.

Perhaps we should see UKIP as an anti-Europe party, something outside the left-right spectrum? Again the party is not the same as its supporters. Only a quarter of UKIP voters in this survey said resolving Britain’s future relations with the European Union is one of the three most important issues currently facing the country. Conservative MPs may be switching to UKIP because of Europe, but it is not clear that UKIP voters are.

Before leaving this chart, we should note that the rise in UKIP is not the only recent dramatic change. The other is the decline of the LibDem vote. In the by-election where Labour only just retained their seat, we actually saw Labour keep its 2010 share of the vote. The gain in UKIP’s share was accounted for by a roughly equal decline in the share of the Conservatives and LibDems. As many Conservatives will have been voting tactically, we once again see an apparent shift from LibDem to UKIP.

Now we know that around half of UKIP voters used to vote Conservative, not LibDem. We also know that a significant number of ex-LibDem voters (about a third?) have moved to Labour, as we might have expected as a result of forming a coalition with the Conservatives. But about 20% of UKIP voters who voted for another party in 2010 are ex-LibDem voters - that is about half a million voters. (The equivalent number for Labour is 15%) Anyone familiar with LibDem policies would be surprised the figure is this high: UKIP wants to leave Europe, but the LibDems have always been the most pro-Europe party. However this may be making the same mistake again: assuming that voters’ views map to party policies.

Here is an alternative idea that might be part (and only part) of the story. (It is far from original - see Adam Lent for example.) An important underlying trend since perhaps the 1960s is the rise of the disaffected voter. These are voters with no strong ideological affiliations, and with little interest or knowledge of politics. What they do feel strongly about, however, is that politicians in power do not represent their views or interests, and that ‘they are all as bad as each other’. What will attract these voters are politicians who are not part of the ‘Westminster elite’, because they are untainted by government. This is not a peculiar UK phenomenon - not being part ‘of Washington’ is a constant appeal in the US. This, rather than policies, may be the key factor for these voters.

The emergence of this group could explain some part of the rise in the LibDem vote since the 1970s. By joining the coalition after the 2010 election the LibDems not only lost their more left leaning supporters, they also lost the support of the disaffected voter, because they were now part of government. Very quickly their image changed from plucky outsiders to part of the Westminster establishment, and they could no longer be the party of the disaffected voter. But neither could Labour, who not only had been recently in government, but continued to behave as they did in government. The disaffected voter needed somewhere to go, and for some UKIP became their home.

Of course a large part of UKIP’s support is from disgruntled Conservatives. But if that was the complete story, UKIP’s rise would only be a problem for the Conservatives, and Labour would be quietly encouraging UKIP. This is clearly not the case. If this idea of the disaffected voter sounds similar to the old idea of the protest vote, that is partly true, but with an important difference. Protest votes are generally assumed to melt away come general elections, but this will not be true of the disaffected voter. For that reason, expecting UKIP to fade away may be naive. 

By now you are probably screaming: what about immigration! I think immigration is the kind of the issue that the disaffected voter would focus on. But this post is already too long so my thoughts will have to wait, although I think Chris Dillow is on the right track.  

The mythical debt crisis

A constant refrain, from both the Conservative and LibDem party conferences, is how the current government saved the country from a crisis. Here is Osborne: “Four years ago, our economy was in crisis, our country was on the floor.” Or LibDem Danny Alexander: “We’ve seen the economy through its darkest hour ..” Now someone from outside the UK would immediately think Osborne and Alexander had got their counting wrong: the Great Recession was in 2009, which was five not four years ago. But of course they do not mean that little old crisis - they are talking about the Great Government Debt crisis. The only problem is that this debt crisis is as mythical as the unicorn.

The real crisis was the Great Recession. And if any politicians can claim to have saved the country from that crisis, it is Labour's Gordon Brown and Alistair Darling. They introduced stimulus measures (opposed by Conservatives) that helped arrest the decline in GDP. By 2010, which is when Osborne took over, the economy was growing by nearly 2%.

But surely there was a debt crisis in 2010? Indeed there was, in other countries. Crucially, these were countries that could not print their own currencies. This became apparent when interest rates on Greek debt went through the roof. Interest rates on UK and US government debt after the recession stayed well below levels observed before the recession. UK and US governments never had any problems raising money, for the simple reason that there was never any chance they would default.

So wrong time, wrong country, but also maybe wrong people. Consumers and firms in the US and UK did feel they had borrowed too much, or wanted to save more, as a result of the financial crisis. The personal savings ratio in both countries rose substantially, and stayed high for a number of years. But people need something to save, like government debt. Which is one reason why interest rates on UK and US government debt stayed low: although the supply of that debt increased, the demand for it was increasing even faster.

So why do we not hear Labour claiming that they saved us from a crisis - at least their crisis was real! Why do claims that the current government saved us from an entirely mythical crisis generally go unchallenged? Such claims are the equivalent to the Republican Congress claiming they saved the US economy. Welcome to the strange world of mediamacro. What the media should be doing, the next time this government claims it saved us from the Great Government Debt crisis, is to borrow a phrase from Jim Royle: crisis my arse!