The mistakes that have led the Conservatives towards annihilation, and Labour copying them

 

Despite what you read, we have been here before. In the 2019 European Election, Farage and his Brexit party won over 30% of votes, with Labour on 14% and the Conservatives 9%. That directly led to the Conservatives adopting populism by electing Johnson as its leader. The Conservatives under Johnson ticked most of the boxes that define right wing populism: an all powerful leader, endemic lying, attacks on our pluralist democracy (e.g. suspending parliament), sidelining expertise (the second and third Covid waves), culture wars, corruption and so on. The one box he didn’t tick was reducing immigration, which is one reason the Conservatives lost big in 2024 and why Reform has now taken their place. [1]

To some extent the elections last week told us what we already knew, which is that both the two main traditional parties are very unpopular. It emphasised this unpopularity, however, because both Labour and Conservatives underperformed their current national polling as many of their voters didn’t bother to turn up. As the Liberal Democrats and the Greens also did very well, last week was about Labour and Conservative unpopularity more than the popularity of Reform.

If last week’s vote shares were repeated in a general election Ben Ansell calculates that Reform might win an outright majority, but with a bit of tactical voting a Labour/LibDem coalition is more likely. But neither result is that surprising when you see that the same calculations give the Conservatives just 10-20 seats. The Conservatives are in annihilation territory, with Reform taking their place.

Reform gets most of its voters from the Conservatives, and Farage sees the future of Reform as replacing them, so it is instructive to see why the Conservatives have so far utterly failed to stem the Reform tide. Under Sunak and Badenoch their line seems to have been: we agree with Farage on the key socially conservative issues and their importance, which is why you shouldn’t vote for him. It was Farage who first popularised the issue of what he termed an ‘invasion’ of small boats, and the Conservatives who invented a crackpot scheme to deal with them.

By adopting largely the same rhetoric of Farage on asylum and immigration, but failing to change things, the Conservative government set themselves up to lose large numbers of votes to Reform. Worse still, by adopting the language of Farage they alienated those Conservative voters who were economically right wing but socially liberal, and so in the General Election they lost a large number of seats to the Liberal Democrats.

There seems little chance that Badenoch will change this failed strategy, but equally there seems little chance that the strategy will suddenly come good. Put simply, their record on both immigration and asylum will over the next few years weigh more heavily with voters than their Farage-like rhetoric. So why would a voter who really cared about these issues vote for the Conservatives rather than Reform?

On the other hand, the success of the Liberal Democrats has a less secure foundation. If the Conservative party moved away from trying to beat Farage on socially conservative rhetoric and policies, and instead started to sound a little more liberal and less populist, then there is the potential to squeeze the LibDem vote in a general election. The Conservatives' not unreasonable argument would be that voting LibDem would keep Labour in power, because the Liberal Democrats are clearly not against cooperating with a minority Labour government while Reform could not.

To make that transformation the Conservatives would need a new leader, and here they have a problem. James Cleverly is the obvious alternative leader to achieve such a switch, but while a ballot of MPs might put him first, his main rival Robert Jenrick is far more popular with Tory members. These members, who are largely sympathetic to Farage and his agenda, have the final say in choosing a leader and will not want to choose someone who sounds more liberal.

The Conservatives seem to be hoping that over the next few years Farage and Reform lose some of their current appeal. That could occur if Reform makes a mess of running some councils and that gets media coverage, but would that coverage ever be extensive enough to influence predominantly low information Reform voters? Is there any other reason why the media might start subjecting Farage and Reform to proper scrutiny, when they have largely avoided doing so until now. The right wing press is increasingly acting as the media arm of Reform rather than the Conservative party.

Equally it is quite possible that, with more Reform politicians at the local level, we will see more internal dissent within the party. But that has happened already, and it doesn’t seem to have done Reform any harm at all. This is partly about media coverage, but it is also about the nature of a populist party where the leader is king, and unlike the Conservatives there is no means for the king to be deposed.

It is therefore not obvious why what happened to the Conservatives last week will not continue to happen over the next few years, and they will be facing wipe-out at the next general election. For this reason they will be desperate to do some kind of deal with Reform, but equally there is no obvious reason why Farage should cooperate. The final card Conservative MPs have is to offer Farage a merger that included his leadership of their party, which takes us back to those 2019 European election results. Conservative MPs dealt with that existential crisis by giving the leadership to their own right wing populist, when most MPs knew full well that he would be a terrible Prime Minister.

The possible death of the Conservative party is such a momentous milestone in UK politics that you would think the other main traditional UK party, Labour, would be doing everything they could not to make the same mistakes. Yet incredibly Labour seem to have decided to follow much the same strategy that failed the Conservative government so badly. They too are employing rhetoric and making policy that says Farage is right about small boats and immigration. This is alienating parts of their core vote just as the Conservatives alienated its southern heartlands.

The only way a Labour government can avoid a similar fate to the previous Conservative government is by having a really good (in the eyes of social conservatives) record on immigration and asylum. A record that was Farage proof. To see why that is very unlikely to happen, they just need to remember Cameron’s immigration targets.

What Labour, the Conservatives and Reform will not admit is that measures to directly reduce immigration have clear economic costs. If you stop granting visas during a period, like now, of low unemployment you create labour shortages that will reduce output in the short term, and may move jobs, output and therefore income overseas in the longer term. If you stop overseas students going to UK universities you will bankrupt some (with big losses to the local economy) and require government money to help others out. That is on top of the fact that cutting immigration makes the public finances worse. [2]

There was a reason why Cameron didn’t try to hit his targets for immigration. But the fact that he had targets which he missed played into Farage’s hands, who blamed free movement under the EU. Is Labour really prepared to reduce real incomes and growth to hit low levels of immigration? Even if they did, small boat numbers are largely governed by events overseas over which the UK government has almost no control. By mimicking Farage on these issues they are laying the ground for their failure in the eyes of voters.

Will Labour see sense on this? The FT’s George Parker writes: “Morgan McSweeney, Starmer’s chief of staff, will pore over the results on Friday and is likely to conclude that he is right to pursue a “Blue Labour” strategy to address the populist threat — a policy which is already starting to be deployed.” Parker is probably right, unfortunately, but hasn’t this strategy already been deployed since Labour were elected, and for some time before that as well? Are last week’s results more a comment on the failure of that policy?

Or George Eaton in the New Statesman: “expect an increasing number of MPs to demand a “reset” – greater action to reduce immigration (one of the defining issues in Runcorn) and an avoidance of further austerity measures.” Except as any Labour MP should know reducing immigration will increase the need for austerity measures given Labour's fiscal rules, or do these MPs believe the Reform party politicians who falsely say the opposite?

And this, suggesting Labour’s unpopularity is all the fault of Ed Miliband and trying to save the planet! And this. Many Labour ministers, MPs and advisors seemed to have learnt nothing from the demise of the Conservative party.

As I have argued before, it would be far better if Labour started developing a more distinctive line on immigration issues, which didn’t just parrot Farage. Crucially they need to start relating immigration to the jobs immigrants do, and start talking about the causes of high UK immigration at the same time as showing why crude targets are either pointless or damaging. On asylum they need to talk about international fairness and establish safe routes. As yet there is no sign of any of those things happening. [3]

[1] Even earlier, right wing populism achieved its first majority win in the UK with the Brexit referendum.

[2] Migrants tend to be young, so pay taxes but put below average demand on public services. In the short term it is what the OBR does that matters, and here is their analysis.

[3] Unfortunately the Labour government is not just copying Conservative strategy on immigration and Reform, it is in danger of effectively doing so on growth and public services too. In the General Election the Conservatives lost so badly not just (or even mainly) because of immigration but because living standards were stagnant and public services had been run into the ground. There is some evidence that, in terms of losing voters to Reform in Runcorn at least, these issues mattered more than immigration.

On growth and public services Labour wants to do much better than the Conservatives, but they have not as yet put the resources in place to do so. Joining the EU’s customs union and harmonisation of standards would lead to significantly higher growth quite quickly, but Labour are moving much more slowly because they don’t want to upset social conservatives. By pretending they can make Brexit work they are not using one of their strongest weapons against the man who championed it during the referendum.

On public services Labour have stopped the ridiculous additional cuts the Conservative government had pencilled in, but they haven’t raised taxes enough to significantly improve service provision compared to levels they inherited. Hence their very unpopular decisions to end the winter fuel allowance and cut disability benefits. As I note here, planned total current public spending in four years time is slightly below the level it was at the end of the previous Conservative government.

Labour say that they have taken unpopular decisions to enable improvements that will come good over the next few years. If they believe that then they are in serious danger of deluding themselves. The reality is that they have taken unpopular decisions for very little money, so the big danger is that voters will not see future benefits and will decide that a Labour government is little better than a Conservative one, and vote for something different.

Why the Conservative stance on immigration made a Hard Brexit inevitable

 

In a recent post I discussed the UKIP insurgency, and argued that its main source was a contradiction within the strategy of the Conservative party that began soon after New Labour’s election victory. The Conservative opposition, together with their allies in the press, increasingly focused on the alleged dangers of high immigration. In part as a result, immigration increased in importance as an electoral issue from almost nowhere in 1997 to become one of the top three issues four years later.

The contradiction was that while it was easy to talk, as William Hague did in 2001, about the UK becoming a “foreign land”, the Conservative party never had any real plans to seriously reduce levels of immigration. Focusing on high levels of immigration was a tactic for defeating a Labour government rather than a policy for government. Despite appointing a minister to the Home Office, Theresa May, who was dedicated to fulfilling pre-election promises to significantly reduce immigration, Cameron’s government found it impossible to do so without inflicting damage to the economy, something they were not prepared to do.

One of the comments on that earlier post asked why I focused on immigration, rather than talking about social conservative values more generally. It is the interaction between the social and economic that is crucial here. Immigration was powerful as a campaigning issue because it could be related to economic as well as social issues (stealing our jobs or benefits etc), and likewise doing something about it had economic consequences. In this way it is very similar to national sovereignty and Brexit, but quite different from issues like gay marriage [1]

Perhaps a Prime Minister and Chancellor who were more strategic and less focused on short term political tactics [2] could have managed a transition from an opposition campaigning to bring immigration down to a government that ignored the issue without igniting support for a more socially conservative party (UKIP). However that became impossible when the government's core policy was austerity. In that sense, the rise in UKIP was inevitable. With the threat from UKIP firmly established, it became inevitable that Cameron would make the concession that UKIP and the right wing press most wanted, which was a referendum on EU membership.

Furthermore, while it was far from inevitable that Cameron would lose that referendum, victory would not have laid the issue to rest as he hoped it would, because UKIP, the right wing press and some of his MPs would have refused to let it do so. Perhaps a lucky chance decline in immigration coupled with an improving economy and ample public service provision after a Remain victory could have reduced the popular interest in the issue, but that was not going to happen when the Conservatives’ main economic policy was to shrink the state and reduce taxes. [3]

This rather long prelude tells us that ending free movement was bound to be part of any Brexit deal the Conservative party would negotiate. This is clear from reading Tim Bale’s invaluable book “The Conservative Party after Brexit: turmoil and transformation”, which is an invaluable source for anyone analysing Conservative party politics from 2016 until today. It was not just that the minister tasked with reducing immigration became Prime Minister, but also any Brexit deal that allowed free movement to continue would have allowed Farage and the right wing press to undermine the party in exactly the way they did anyway, except more so.

The first part of the book deals with May’s attempts to first formulate a Brexit plan, and then try and convince the Conservative party to back it. Her plan was essentially to stay in the EU’s Customs Union but leave the Single Market. She failed to get parliament to approve that plan, time and again, and that failure led to disaster in the European Elections. Her position had become untenable, and Johnson took her place.

What is remarkable about that period is how a minority of Conservative MPs, the ironically named European Research Group (ERG), seemed to be able to dictate the form that Brexit took. Why were the majority of parliament’s MPs not able to exert their voting power and achieve a softer Brexit? To see why that was never going to work, it is easiest to imagine the following counterfactual.

Suppose that someone other than May had been elected Conservative Party leader after Cameron resigned, and that they had concluded that such a close referendum result meant that national unity should be placed above party unity. They formulated a plan that amounted to the UK leaving the EU but staying in the EU Single Market and Customs Union: a soft Brexit. They sought and got the agreement of Labour  leadership and enough Labour MPs to support that plan, and parliament agreed to start the negotiation process with the EU on that basis.

During that process, the ERG, the right wing press, Farage and party members would have been in even greater uproar than we saw under May. Farage would have kept pointing out, correctly, that the Brexit vote was a vote against high immigration and this soft Brexit would do nothing to control immigration. Just as happened under May but more so, Brexit voters would have felt betrayed and deserted the Conservative party. Enough Conservative MPs, in fear of losing their jobs in 2020, would side with the ERG and threaten to depose their leader (as they have since done repeatedly). The PM, in an effort to save their job, would have been forced to revise their proposals to appease the ERG and voters.

If this counterfactual sounds pretty close to what happened under May anyway, that is because the fundamental reason why parliament could not exert its authority is the same. Too many Conservative MPs would have feared a substantial election defeat would follow any softer Brexit because of the power of Farage and the right wing press.

So just as Cameron had conceded a referendum in an effort to maintain party unity and power, the same forces ensured that we would have a hard Brexit. Anything else would have meant a strong third party on the (socially conservative) right, and therefore a Labour victory. This is one of the features of a FPTP system, which penalises having more than one party in any particular policy space.

A more favourable counterfactual to achieving her own, slightly softer Brexit was the one May herself chose, which was to get a larger majority in a General Election. If she had won that large majority, she might have been able to pass a Brexit deal that effectively stayed in the EU Customs Union. While Farage, the ERG and right wing press could attract votes away from the Conservatives because of free movement or not getting Brexit done, doing so over our ability to set tariffs would have been harder. Of course in reality she got the opposite of a larger majority.

The only other possible route I can see to a slightly softer Brexit (staying in the Customs Union but not the Single Market), other than a large May majority in 2017, is a variant of the previous counterfactual, where the new leader who put national unity above party unity and as a result had got agreement from the opposition at the beginning of the process for such a deal. Of course May did try to get agreement with Labour, but as a last resort by which time the momentum behind a second referendum was too strong. The reason why this counterfactual might have worked while something similar involving staying in the Single Market would not is that opponents of that deal might have found it hard to gain many votes on the issue of setting our own tariffs. Yet even if you believe this counterfactual was possible, you need to ask whether the Conservative party could have produced such a leader from their ranks, whether they would have been elected by their MPs and, most crucially, whether they could have disguised their intentions from the membership in the final leadership vote.

This is how under FPTP a minority can dictate to the majority. The minority need the following ingredients:

1. An issue that was a key reason why the party was elected, or a referendum result, but on which the party is failing to deliver (e.g. immigration,Brexit)

2. An insurgent party and a media that can highlight that failure and take a large number of votes from the governing party as a result

3. Enough MPs from the governing party who worry more about losing power (as a result of votes lost to the insurgent) than the policy issues involved, and are willing and able to side with the minority to reject their leader.

Under these conditions, the critical majority moves from MPs in parliament to MPs in the governing party, and the critical motivation moves from the issue involved to the need to retain power. Under a PR type system this possibility would be much less likely to arise, because if the governing party plus the insurgent party got the majority of votes they would have the majority of MPs, so power could be retained albeit shared. Under FPTP a majority of votes can lead to a minority of seats if the vote is split, so power is lost.

This is how the referendum result in 2016 led in just three years to the effective takeover of the Conservative party by Brexiters in 2019, and the election of a PM who anyone with any knowledge of him knew would be totally unsuited to that role. (And which was tragically demonstrated very quickly with the arrival of Covid.) The Conservative party appointed as the only person who could get them out of the Brexit hole they were in, the man who had been the person who put them in that hole in the first place. An electoral system that was supposed to marginalise the political extremes had put one in charge. [4] A group, as Tim Bale notes, that one rebel Tory described as “a narrow sect who wouldn’t be out of place in a Muppet version of The Handmaid’s Tale”, was allowed to take over the UK government.

[1] Cameron, unlike his predecessors, tried to soften his party’s socially conservative image in some of these areas.

[2] To quote Tim Bale from his book mentioned later in the main text: “I’m also increasingly persuaded that those individuals, and therefore parties as a whole, are as much tactical and reactive as they are strategic and proactive – actors, in other words, with incredibly short time horizons”

[3] As the party today looks forward to opposition, you can see the same contradictions playing out. Brexit has not led to lower immigration, because the economic costs of achieving that are too great. European migrants have been replaced by non-European migrants. While some Conservative politicians understand that there is a trade-off between getting lower taxes and lower immigration, others do not, or pretend not to for the sake of their next leadership election.

[4] Johnson, or those advising him, had the sense to realise that selling Brexit would require a limited and then only partial reversal of austerity. When it became clear that required large tax increases many Conservative MPs were deeply unhappy, which is one reason that Johnson was succeeded by Truss. The extent to which Johnson believed in a larger state is questionable. Tim Bale writes:

“Johnson and Sunak – the latter especially – were no different [to most Tory MPs], prepared to take action in order to prevent the economy falling of a cliff but damned if they were going to do more than the minimum required to keep so-called ‘Red Wall’ voters (and indeed voters in general) onside once the pressure was off.”

While the current leadership may be simply reaping the fruit sowed by Osborne in terms of the size of the state and the state of the public services, in terms of their attitude to civil liberties, asylum, deregulation, accountability, a pluralist democracy, privatisation, corruption, and Brexit itself, Johnson and his successors have led the most right wing administration since WWII.

Are there turning points in recent UK history?

This post follows on from my post two weeks ago, where I argued that there was a degree of inevitability that led us to governments led by Boris Johnson and Donald Trump. To summarise that argument, it is that right wing neoliberal governments in both countries have pursued policies that benefit the few rather than the many, and so to win elections they have pushed socially conservative ideas. But that push has been limited by a knowledge that some socially conservative policies can damage business interests: so in the US immigration control was not on the agenda and in the UK targets were missed.

However neoliberalism also encouraged and legitimised wealthy individuals to meddle in politics, and some chose to push for even greater redistribution and less regulations. They could achieve this by radicalising the right wing voter base (the US Tea Party) and in the UK by pursuing Brexit, in both cases in effect taking over the main right wing party. FPTP and the two party system were critical in both cases, because more moderate right wing politicians were unable to ignore this threat from the right. If that brief summary sounds unconvincing, please read the post in full.

The title of that post had a ‘can’ rather than a ‘will’, because I remain unsure whether neoliberalism in its original Reagan/Thatcher form was bound to end this way (an issue I initially explored here). I explore this issue further in this post. Were there points over the last forty years when some people could have done something different to avoid ending up with a populist plutocracy? I’m going to restrict myself to the UK here, because my knowledge of the US is less, but I would be very interested in thoughts about possible turning points in the US.

I’m going to take the emergence of neoliberalism in the UK as given. Both Thatcher and Reagan cut higher rate taxes, so I think it is also given that these governments both encouraged and legitimised the importance of money in politics. It is possible to imagine a form of neoliberalism that sees challenging monopoly power as part of its ideology (ordoliberalism?), but that never seemed a strong part of the neoliberalism of Thatcher and Reagan.

It is possible in theory to conceive of a neoliberal government that might avoid the temptation to exploit social conservatism as an election winning device, but hard to imagine a government in the Thatcher/Reagan tradition doing so. Power is everything for these governments, and attracting left wing socially conservative voters by pushing socially conservative policies and rhetoric is too tempting (and effective). It also chimes well with some traditional party members of the hanging and flogging variety.

As a result, I think a turning point has to involve the final stage of the process I described in my earlier post, which in the UK involved the takeover of the Conservative party by Brexiters. Could this have been avoided in the UK at some turning point in history? We can start from the present and go backwards through time.

The threat from UKIP

It is often suggested in the UK that if May had been prepared to do a deal with Corbyn for a much softer Brexit then Johnson/Gove/Cummings would not be in power today. Was the turning point the attempt by May to define a Brexit that pleased most of the Conservative party (together with her antagonism to immigration)? To discuss this and some of the other potential turning points we need to talk about UKIP.

UKIP was the key ingredient in taking over the Conservative party. It posed a constant perceived threat to the Conservative’s ability to win a general election. As we noted above, the electoral strategy of the main right wing party in both the US and UK was to capture the left wing socially conservative voter. UKIP threatened to undercut that strategy by winning those voters themselves, along with socially conservative Tory voters.

Thus any Brexit settlement that could have been credibly described by Farage as not a true Brexit would have kept the UKIP threat alive. May and most of the Conservative party understood that, which is one of the reasons why she tried so hard to reach an accommodation with the ERG group. (Another with that she hated the idea of potentially splitting the party.) So any soft Brexit deal was an existential threat to the Conservatives retaining power.

Many people might see the EU referendum's narrow result as a turning point, but again I’m not so sure. A close defeat would not have shut Brexiters up, but encouraged them. Every new development in the EU would become an excuse to ask the question again. Could a Conservative Prime Minister refuse another referendum? To answer that we need to look at another possible turning point.

Is this all Cameron’s fault for allowing an EU referendum in the first place? Suppose he had stood firm in 2013, and said there would be no EU referendum. Partly because he had put in place immigration targets that he had no intention of sacrificing the economy to hit, UKIP’s strength would have grown, and his 2015 general election victory would have been put in doubt. It may be a contradiction in terms to suggest a neoliberal PM would stand by principle even though it could cost them power: the last Conservative PM who did that was Edward Heath, which was one reason I talked about Enoch Powell in the earlier post. Cameron could have avoided setting the rules of the referendum in such a favourable way to Brexit, but then we go back to what would have happened if Brexit had narrowly been defeated.

Austerity

I have long thought a more credible candidate for a turning point was 2008-10, the period between where the idea of austerity was born in the mind of George Osborne to when it began to be implemented by him. Austerity is important because it laid a good deal of the ground work for UKIP and Brexit. After austerity, immigration could be blamed for declining access to public services. It delayed and dampened the recovery from the 2009 recession, which intensified the feeling among many that life was getting worse and looking for something to blame.

I still don’t know whether in 2008 Osborne developed the idea of austerity because it was a way of shrinking the state, or because he guessed it would be a good election tactic, and whether he was ignorant of the macroeconomic damage that policy would do. Probably all three were true. Yet for 2008 to be a turning point you have to believe that a Conservative Shadow Chancellor, seeing the opportunity to win the next election and shrink the state at the same time, would forsake that opportunity.

A more credible candidate for turning point are some key individuals that made austerity a vote winner. While the Treasury traditionally tries to control spending, it should have known that basic macroeconomic theory and past UK experience says you don’t cut during a recovery, and especially not when interest rates are at the lower bound. Crucially, it persuaded Darling that austerity should begin when the recovery began, which gave a green light to both Osborne and mediamacro. The same applies to Mervyn King. Both of them persuaded the Liberal Democrats to drop their manifesto plans and endorse Osborne’s by telling the lie that markets were about to panic.

Both were necessary but not sufficient to stop austerity being a vote winner. The third group of “guilty men” were the political commentators in the broadcast media who ignored basic macroeconomics, and their economic correspondents who should have known better but kept quiet. As Mike Berry writes

“However as the analysis [shows] in 2009 when the deficit became a major political issue there were no sources - outside of Labour - who were given space to put the Keynesian view in comparison to a range of sources who put the case for a faster pace of fiscal consolidation.”

To justify this period being a turning point you have to believe the following. After the failure of Osborne’s focus on the deficit in 2010, Gordon Brown retained power and presided over a normal recovery from the 2009 recession. By the time fiscal consolidation began in 2013, real wages were already increasing and investment growth was strong. Interest rates had risen with the recovery, and so could be cut to soften the macroeconomic impact of (more modest) austerity. The Conservative Prime Minister elected in 2015 did promise an EU referendum in the following term, but by 2022 when it that referendum came immigration was no longer such a major issue and, despite the support of some of the Tory press, the Leave side was unable to get close to 40% of the vote. After that, voters lost interest in the issue and in the politicians that promoted Brexit.

I don’t know if I believe that, but I would note that far right wing populism often does best when economic hard times persist (e.g. de Bromhead, Eichengreen and O'Rourke generally and more particularly Galofré-Vilà et al who look at the impact of austerity in 1930s Germany). And for those who think support for the far right can only increase, see Germany and Austria today, where the far right is in retreat (odd this is hardly reported in the press).

If austerity was a turning point, then those who could have done something to avoid our slide to autocratic and incompetent plutocracy were not the politicians, but public figures who should have followed the science but instead decided to sell snake oil to the UK public.

 

Why neoliberalism can end in autocratic, populist and incompetent plutocracy

 

Is it a coincidence that the two countries that first championed neoliberalism (under Thatcher and Reagan), should end up with autocratic, populist and incompetent leaders (Johnson and Trump) in what is best described as a plutocracy? The thoughts below are, to use a phrase that Philip Mirowski once used about something I wrote, untutored, so comments via twitter (or DMs, or emails) will be gratefully received.

Before addressing that question, there will be some who will think I am exaggerating. Both countries are still democracies after all. But being a democracy did not stop both Johnson and Trump being elected. Both leaders are undoubtedly autocratic, in the sense that they or a tiny group around them wield far more power than their predecessors did, and they spend considerable resources trying to destroy the obstacles a pluralistic democracy puts in their way. Both leaders are populist in the sense that they either describe their own policy agenda as the ‘will of the people’, or suggest their opponents should be locked up. Both employ crude nationalism at any opportunity.

I suspect in most cases populism generates incompetence. Take Brexit for example. Brexit makes no sense on many grounds. Besides the economic hit, it reduces sovereignty to autarky by ignoring the gains to cooperation. One illustration of this is how it has reduced the UK’s influence on world events. Such policies repel intelligence and the open minded, and promote the mediocre and yes men (or women). Just look at the UK cabinet today, or the type of people that advise Trump.

What about plutocracy? The US has always had elements of plutocracy built in because money plays a huge role in all forms of election. That has got worse in recent years. The result is that the Republican party is now the party of wealthy donors, and it is noticeable that the first major legislation that Trump passed was to give large tax breaks to the very wealthy.

In the past money has been less influential on UK elections, largely because of strict election laws. However these laws have not kept pace with social media. The group that provides 80% of Conservative party funds is called the Leaders group, and they meet regularly with senior politicians. Recently some large coronavirus related contracts have been given to companies that donate to the Conservative party, or who have close connections to Conservative politicians. When the recent ‘rule of six’ for coronavirus mitigation came into effect, ministers called a special meeting just to ensure grouse shooting parties were exempt. Little attempt has been made to close UK tax havens. Like the US, what we are seeing today in the UK is not completely new, but its scale has intensified and the government’s embarrassment about it has decreased.

It is important to say that being a plutocracy does not, in these cases, imply that the government is really run by some kind of committee of all those with wealth. The impossibility of such a thing illustrates that plutocracies can be quite selective in the forms of wealth they favour.. To talk about the power of ‘capital’ or even 'financial capital' is misleading for this reason. In the UK those who run large hedge funds are particularly influential, and under Johnson and Trump most of those businesses involved in international trade are ignored and policies are directed against them.

There is a more basic reason for describing the UK and US as plutocracies, and that is by analysing how we got here. The place to start is neoliberalism. Neoliberalism eulogizes the market. In the past I’ve characterised the ideology as what you might believe if you did Econ 101 (a first year course) and skipped some of the lectures on market imperfections. However an ideal market for any economist involves competition, and as any student doing Econ 101 would know, any form of imperfect competition takes you away from that ideal. However neoliberalism in practice has become increasingly relaxed about monopoly power. Colin Crouch distinguishes between what he calls market-neoliberals and monopoly-neoliberals.

Why neoliberals use social conservatism as a vote winner

Neoliberalism's success owes a great deal to it being a very attractive ideology for the wealthy, and that in turn helps explain why it has been increasingly relaxed about monopoly. Wealthy funders of think tanks that promote neoliberalism, like the IEA in the UK, will not look kindly on the think tank suggesting their monopoly should be broken up. This is an illustration of how neoliberalism has increasingly adapted as an ideology to serve the interests of wealthy individuals. It is no accident that under neoliberalism the relative incomes of the 1% and 0.1% have taken off, which greatly increases both the ability and incentive for the wealthly to meddle in politics.

The obvious problem with an ideology championed and reinterpreted by the wealthy is that it won’t be very popular with a majority of the 99%. Neoliberal ideology pretends that the huge salaries of CEOs reflect what they add to their firms and the economy, but in reality high CEO pay means that everyone else gets less of the cake. Wars on red tape are fine for businesses, but they come unstuck when a building goes up in flames or a financial system collapses. While initially Reagan and Thatcher were able to win elections (with Thatcher, in part by giving bits of the state away at bargain prices), being at the right of the economic spectrum will eventually have a cost.

The way round that problem that the political right has adopted in both the US and UK is to appeal to social conservatives. In the US the obvious way to do that was through race, while in the UK the main route has been immigration. In an important sense this appeal to social conservatives is quite false: many right wing politicians are liberal in some of their social views, and they depend on immigrants to wait on them in restaurants or clean their houses. It is an electoral tactic to win over left wing social conservatives for a right wing party, but not one most neoliberal governments would want to carry through to the extent of damaging the economy. . .

Sometimes the interaction between social conservatism and right wing goals can be positively helpful. A clear case is austerity in the UK. Whatever its initial motivation, austerity became a means of shrinking the state and thereby releasing more resources for the private sector, and in particular the wealthy. Austerity has strong negative effects on the 99%, but these can be (falsely) blamed on immigrants taking away resources from the indigenous population.

However the major party of the right in both countries knows that taken too far this social conservatism can have negative effects. Before Trump, immigration was not politicized in the US to the same extent as the UK, because immigrants are useful for sectors of US business. In the UK the Conservatives set targets for immigrants, but were never prepared to suffer major economic damage to achieve those targets. In that sense the shift to social conservatism was a partial deceit, which was in danger of being found out.

The transition to populism

How do we get from here to populism? The key I think is that modest and insincere appeals to social conservatism can be undercut by those who are more socially conservative, and these insurgencies can be backed by extremely wealthy individuals who think they can get something out of it by promoting it or aligning with it. These individuals can include media barons. In the UK this took the form of UKIP, and in the US by the tea party (financed and promoted by the Koch brothers) pushing more right wing/socially conservative candidates in primaries. For example the tea party’s anti-regulation/anti-tax stance fitted nicely with the interests of big tobacco. The tea party could take over the Republicans through primaries where their candidates could appeal to core voters, spend a lot on advertising, and even get right-wing media support. 

Trump in the US was the final step in such an insurgency. He was very much an outsider in terms of the traditional Republican party, but he had his own resources to launch his campaign. He appealed to social conservative left wing voters because of his position on immigration and trade, and mobilised apathetic voters through his populist rhetoric, enhanced by his racist views. Weakened by the tea party, the Republican party was not able to stop him becoming the Republican candidate.

In the UK a populist take over of the Conservative party worked through opposition to the EU. UKIP gained popularity because the Conservatives actions on immigration did not match their rhetoric for reasons already discussed. UKIPs leader, Nigel Farage was, like Trump, a populist who had no qualms supporting the right wing fringe parties of Europe. But the absence of primaries in the UK meant he had no way to beat the FPTP system. Why did some wealthy individuals back Farage? UKIP was founded not as an anti-immigration party, but an anti-EU party, and some wealthy individuals were anti-EU. David Cameron agreed to a referendum on UK membership because of UKIP’s threat to steal Conservative votes and MPs. EU membership was hardly a major issue among voters before the referendum, but as the referendum approached voters had to make up their minds.

Probably the most crucial wealthy individuals that had an interest in Brexit were media barons. The Tory press, who had much of the daily English newspaper readership, had for some time attacked the EU. It was Johnson who first started writing largely made-up or wildly exaggerated stories about decisions made in the EU that might impact on the UK. These powerful newspaper owners essentially groomed their readers to have unfavourable opinions about the EU.

This press had a strong influence on Conservative party members, who became more Eurosceptic, and some younger neoliberal Conservative MPs began championing the Brexit cause. The motive force was similar I suspect to those who controlled newspapers: a belief the EU was preventing the UK becoming a low regulation neoliberal exemplar. When the press successfully suggested that Freedom of Movement was the reason immigration targets had not been hit a referendum victory became a possibility. (The suggestion was of course false, and after Brexit EU migrants were essentially replaced with non-EU migrants.)

The Leave campaign and Trump were similar in many ways, and one was that both lied without shame, and the media in both countries failed to attack those lies sufficiently. Once the Brexiters had their narrow referendum victory, they started talking about the ‘will of the people’ in true populist fashion. Because the Brexiters hadn’t put forward a coherent route map of how to leave, chaos followed the referendum vote and UKIP continued to attract voters. Eventually the leaders of the Leave campaign were invited to take over the Conservative party. Equally Trump gets very little opposition from Republicans in Congress.

How can those at the extreme of the social values and economic policy spectrum win an election? One pedantic answer is they didn’t: Clinton got more votes than Trump, and a much better campaign filled with lies gave Leave a one-off boost that they haven’t enjoyed since. A more substantive answer for the UK is that Labour find it difficult to occupy the centre ground on social issues, as their members tend to be at the other extreme, and the media tries to ensure social issues are dominant in the campaign. (I also have the feeling that in elections many better off socially liberal voters are unlikely ever to vote Labour.) In the US there is an ongoing debate about whether Trump won because of race or because his economic populism appealed to the working class, but when the racially prejudiced and the religious vote get you at least a third of the electorate it is not too surprising that outlandish (populist) promises promoted in the media can get someone elected for the first time.

The lessons of the 1930s were forgotten

Is this symmetrical? Could politicians who are strongly left wing and socially liberal take over the party of the left and win? Recent events suggest it is more difficult, but it is important to understand why. The overtly biased right wing media is an important factor here for the obvious reasons. However I think among the well paid political commentators in the less partisan media, and among the Democrat or Labour machine, there is a deep aversion to the left. It is often justified with ‘middle ground’ logic (used extensively for example when it looked like Sanders could win the Democrat primary), but post-war US history and events more than a generation ago in the UK may play a role.

There once was a similar aversion to the extreme right, for obvious historical reasons. In 1968 Enoch Powell gave a speech where he talked about the rivers of blood that would result from what we now call the Windrush generation. The Conservative Prime Minister Edward Heath sacked him from the cabinet after the speech. I cannot help but think that if he had been active in politics ten years ago and had given s similar speech about Muslim immigration, he would not have suffered the same fate. Indeed I suspect he would be appearing frequently on Question Time and would be a leading Brexiter, and perhaps even Prime Minister. History also shows us the danger of using racial or religious minorities as scapegoats for economic misfortune and declining national influence.

Did things have to go this way? Is neoliberalism doomed to degenerate into the populism we see today. Of course both Trump and the Leave campaign could easily have lost. Yet neoliberalism not only increases inequality, but it enables and even encourages wealthy individuals to influence politics. Once the main neoliberal right wing party starts using social conservatism as a way of distracting from their right wing policies, wealthy individuals (including those that own parts of the media) can use more hardline populist views to promote their goals, and have a strong chance of becoming successful insurgents. FPTP and the two party system is a necessary condition for the extreme right to take over a more moderate right wing party and still win an election.

Once this has happened, it is difficult to see how either right wing party returns to its former self. In both countries a radicalised party membership, well funded by wealthy individuals and maintained in part by sections of the media, can continue to outvote more moderate conservatives. I argue here that what could change things is successive electoral defeats, but only where centre-left governments change some of the conditions that allowed populist governments to win.

On the other hand populist autocrats hate media criticism, or opposition coming from the legal system. The longer these populists remain in power, the greater is the danger to the independent media and judiciary. Right now in the US we are on a knife edge: if Trump decides to declare victory before postal votes are counted, will loyal Republican judges override democracy? In the UK the Conservative party is already putting strong pressure on the BBC, and has suggested abolishing the electoral commission. They have four more years to go further.

Was the Remain campaign always doomed?

In hindsight it is tempting to say that Remainers should have set their sights on something close to a BINO type deal (UK remaining part of the Single Market (SM) and Customs Union (CU)) rather than campaigning for Remain, and some have already suggested that. Is that a reasonable conclusion in the light of Remain’s defeat in December 2019?

In mid May it all looked so different. I wrote

“It seems odd writing that Brexit is on its deathbed, in a coma but with no chance of recovery, when a year ago the Remain cause seemed hopeless. The thing everyone under estimated was the way Brexiters themselves would effectively kill Brexit.”

The essential problem was that a significant section of Conservative MPs (and Farage) wanted no shared sovereignty with the EU (no ties to common standards etc), while another part of the party didn’t like the implications of this hard Brexit for UK business. So how did Brexit move from its deathbed to become a certainty within just 7 months? What mistake did I make, and could it have been foreseen?

I was right about the prospects for Brexit under May. May was going nowhere because there was no way to avoid a hard border in Northern Ireland with any UK wide deal acceptable to the Brexiters, and both May, the DUP and many Conservative MPs seemed adamant that a border in the Irish Sea was not on. A lot of this was already apparent to me a year and a half earlier.

It is easy to say that a new Prime Minister made all the difference, but that isn’t enough. In May I did write “A Conservative party committed to No Deal is the only way the Tories have to neutralise Farage.” I could have added that many Tory MPs would be unhappy with that, which is why that path was not sufficient for Johnson.

What he did would have been hard to anticipate in May. I think Johnson got there through trial and error rather than having some master plan when he was elected. He had to convince both Farage and the Brexiters that he would go for no trade deal rather than anything that ties the UK to the EU, yet convince everyone else that he really was going for a deal. The way he achieved that was to agree to the EU’s original proposal for a border in the Irish Sea, but also by committing not to extend the transition period beyond a year.

The other key ingredient was the devastating Conservative result in the European elections. Not only did it ensure May’s departure, but it also became clear to Tory MPs that they risked disaster at a General Election if they didn’t get Brexit done. So they rejoiced when Johnson got the deal that Johnson had said earlier was something he couldn't possibly agree to. They didn’t ask questions when Johnson refused to extend the transition period, even though they knew full well no trade deal worth anything could be done with the EU within a year when the UK didn’t want a level playing field. 

Equally Brexiters and subsequently Farage were persuaded that Johnson would stick to his pledge for no extension of the transition period, because to question it was to put Brexit at risk. Both sides heard what they wanted to hear from someone they knew was the least trustworthy politician in the UK. Now we have seen all this happen it is easy to imagine it, but in the first half on 2019 you would have been almost clairvoyant to see all that detail. As a result, Remainers optimism at the time was not unjustified given the information we had, and so compromises were less likely.

What you could have done was be pessimistic at a more general level. Many hoped that after the vote public opinion would gradually lose faith in Brexit, but that happened only to a small degree. If you believe as I do that the Brexit vote was the product of Brexit press propaganda coupled with BBC disinterest in informing viewers about reality, then why would people change their mind? As a result of solid Brexit support, the fate of the Conservative party became linked to getting Brexit done, so the party had to find a way.

Of course Remain could have won the General Election, and a failure by the Conservatives to get an overall majority would have meant the end of Brexit. Ironically Corbyn both created the conditions that allowed Remain to be optimistic (Labour’s victorious defeat in 2017 and the consequent DUP veto) but they also helped create the conditions for a Conservative victory. Labour’s performance in 2017 changed the Brexit political dynamic, but the last people to understand that were the Labour leadership. I wrote in January that Labour’s refusal to oppose Brexit is becoming a historic error, and events in the first half of 2019 proved that was correct. [1]

Johnson’s victory did not just depend only on the Remain vote being split. During the election period Labour clawed back a lot of the votes they had lost to the LibDems, but the LibDem and Green vote was still 50% up on 2017 levels. Corbyn was very unpopular among many of the kind of traditional Labour voters who had voted Leave: the media gave us two more years of negative coverage of Labour, and Corbyn’s past was a gift in that respect. But a detailed assessment of why Labour lost is for another time.

There was another sense that fence sitting by Labour did not help Remain. I noted above that public opinions about Brexit did not change significantly after the referendum vote, but we will never know if that was inevitable. The way broadcast media work is to cover what the two main parties say, even on an issue like Brexit. Corbyn’s stance after the vote meant that Labour felt unable to attack Brexit rather than the government’s handling of it.

There is a counterfactual history where Labour MPs played things better (i.e waited until the beginning of 2017) to provoke a leadership election, Corbyn lost that vote and his successor campaigned against Brexit. This gave Labour a poll bounce that dissuaded May from holding an election, allowing Labour to campaign against Brexit for the next three years. It might have not worked out that way, but we know for certain Corbyn as leader did not work out.

To sum up, I don’t think I and other Remainers were being unrealistic in aiming for a Remain outcome. But I do think we have to be realistic about the next five years. It is just possible that Brexit will lead to the next five years being obviously terrible, and that public opinion will move against the whole project. If that is the case opposition parties, and particularly Labour, should not be afraid the join the dots and make that case. More likely, however, is that things continue as they have been over the last three years. Not good at all, but not bad enough for anyone to change their beliefs about Brexit.

If the lessons of austerity and the last three years carry over, the more some talk up impending disaster, the more poor performance will be portrayed as the vindication of Brexit. The reality is that powerful forces have imposed a policy on half the population that do not want it. It is rare that we see a government implement a policy that all experts say will do the UK serious economic and political harm, which is why those overseas who are not on the extreme right or left think we are utterly stupid. At least those that have fought this policy all the way can hold our heads up high and say we did all we could to stop it.

[1] There are some who still insist that Labour’s eventual adoption of a People Vote in all circumstances was a ‘suicide note’, but Labour’s policy before then would have been much more disastrous. You may discount the European elections, but polls both before and after that had Labour around 25% and the LibDems touching 20%. Labour’s 2017 result had created the political dynamic of strengthening Remain, creating a political vacuum that Labour didn’t fill so the LibDems did. Labour would always have clawed back some of the voters who chose LibDem during the election period, but in the absence of a commitment to a Public Vote their final percentage would have been well below the 32% they actually achieved. That is because Leavers would not have come flocking to them, because the lure of 'getting Brexit done' was too great.

Some thoughts on Labour's campaign

The importance of this election cannot be overstated. Voters have a choice between re-electing a government that since 2010 has done untold damage to this country and which will be led by someone totally unsuited to be Prime Minister, or giving a minority Labour government a chance to do better for a few years. The fact that the polls suggest the public want more of the same illustrates how close we are to becoming an authoritarian, populist (in the Jan-Werner Müller sense) right wing state where it becomes very difficult for any opposition to break through.

This post looks at some key aspects of Labour's campaign so far, in I hope a helpful fashion.

Tax and spend

One of the dangers Labour faces is that they appear to be promising too much. Voters are skeptical of manifesto promises at the best of times, even though evidence suggests that in the past most manifesto pledges are fulfilled. If you promise so much it is possible voters will just not believe you can do all this.

In contrast the Tory manifesto is positively frugal. But there is a reason for this, and neither Labour nor the Liberal Democrats have emphasized enough why that is. Labour are not used to trumpeting the results of IFS election analysis, but on this occasion they really should. That analysis shows that one economic issue alone dominates the future of the public finances: Brexit. Here is the key chart

What this chart shows is that all these give-aways do not come close to matching the amount of tax we will lose if Johnson keeps his pledge not to extend the transition period. The reason the Tory manifesto is frugal is they cannot afford to do anything with any fiscal cost and implement a hard or no deal Brexit. Both Labour and the Liberal Democrats can afford much more, because they are not planning a hard Brexit. 

Perhaps Labour and the Liberal Democrats are reluctant to talk about this because it is going over ground covered in the referendum, and most Leavers just do not believe the economic consequences of Brexit will be negative. Yet the IFS has considerable credibility, particularly in the media. Furthermore the sparse Tory manifesto is a tactic admission that, whatever they say, the Tories believe the economy will take a hit from Brexit. Labour and the Liberal Democrats should make more of this. 

Protecting minorities

Labour should not just be defensive on charges of antisemitism. These attacks on Labour over the small amount of antisemitism among members distract not only from the more extensive racism in the Tory party and its actions, as Jonathan Lis describes so clearly here. It also distracts from the rise of right wing hate-crime. That the problem is growing is pretty clear. Attacks mostly involve race and sexual orientation, but it includes attacks based on religion: mainly Muslims but also Jews. Commenting on the steady rise in ethnic or religious hate crimes Dr Chris Allen said:

“The statistics show that for the third year in succession, religiously motivated hate crimes have not only increased in number but have again reached record levels. While some try to explain this as a result of better reporting procedures, doing so is over simplistic. From our research at the Centre for Hate Studies, one cannot underestimate the impact of Brexit and the divisive rhetoric employed by politicians and others in the public spaces. Affording permission to hate a whole range of ‘Others’ – especially Muslims and immigrants – it is likely that the upward trajectory of hate crimes numbers will continue for the foreseeable future.”

The police say that the alt-right is the fastest growing terrorist threat in the UK. A third of all terror plots to kill in Britain since 2017 – seven out of 22 – were by those driven by extreme-right causes.There is nothing comparable on the left. One Labour MP was tragically killed by a far-right terrorist during the Brexit campaign, and at least one serious plot against another has subsequently been foiled. The alt-right is well organised at an international level

What has that got to do with this election? The rise of the far right did not come from out of the blue. Campaigns against immigration, and particularly for Brexit, have encouraged racists into the open. So has over the top language used by Brexiters. It has mainstreamed xenophobia, and maxed out on crude nationalism. The media, particularly the right wing media, are happy to give a voice to anti-Muslim writers.

What will the current government, if it wins this election, do when Brexit does not lead to any improvement in people’s lives, and indeed makes them worse? The Tory manifesto has virtually nothing about redistributing opportunities in a more equal way across the country, and Brexit will not help. If the recent past is anything to go by, they will blame immigrants even more than they do now, which will only increase the threat from the far right.

Scotland

Do you remember pictures of Ed Miliband in Alex Salmond’s pocket? These came from the Tories towards the end of the 2015 election, when it became clear that Labour could only win with the SNP’s help. It wasn’t repeated in 2017, in part I suspect because no one on the Tory side believed Labour would do anywhere near well enough to make that attack line effective. I suspect they will not make the same mistake this time around.

The Tory attack was credited by some as helping Cameron get his majority, although I have no idea how true that is. But if Labour is attacked along these lines in a serious way in the final days of the campaign, what should they do? They shouldn’t do what they have done so far, and just say they will not do any deals. This doesn’t work because voters believe maths more than they believe politicians, and they remember the 2010 Coalition talks and the Tory give-away to the DUP.

What Labour should do instead is dig out one of the quotes where Sturgeon has ruled out allowing the Tories back into government and repeat it endlessly. If any interviewer asks why that is relevant simply point out in the most tactful way that the SNP only has bargaining power over Labour if they are prepared to put the Tories in power instead, and they have ruled that out because it would be political suicide for them. Not putting the Tories in power means they have no leverage over Labour.

The last week

The SNP (and of course antisemitism and law & order) are going to be part of the Tory’s lines to take in the final week, and they are likely to throw in a letter from business leaders if they can find enough willing to sign it despite Brexit. What should Labour emphasise? There is an embarrassment of riches to choose from. They could talk about

Revitalising the economy with public investment directed at the regions

Building more social housing

A Final Say on Brexit

Nationalisation and Free Broadband

Education

Revitalising bus services

A Green New Deal

Saving the NHS

And probably much more that I have forgotten about. Talk about them all and there is a danger nothing really hits home. More than ever before there will be an intense battle between the two major parties to get the media to talk about the topic they want talked about. In 2015 the media chose the SNP rather than the NHS which Miliband wanted to be the focus. In hindsight that represented terrible judgement by the media, but importance isn’t their key consideration.

What works best in getting airtime is to present something new. It could be a letter on the Tories climate change policy like this. It could be a new statistic on poor health service performance which should not be hard to find, or some gaffe by a senior Tory (like this). They can always use this. These are also the two obvious issues to focus on in the final day or two.

On climate change you can say that we cannot waste another five years before we take serious action. This is aimed, above all, at getting out Labour’s core younger vote. The NHS will have much greater resonance with the Tory core vote, and might discourage these voters from voting at all. On the morning of the election the newspapers most elderly people read will be full of scare stories about Corbyn, so Labour needs concerns about the safety of the NHS under Johnson, Trump and Brexit to counteract that.