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How Putin has impacted the next UK election

by | Sep 15, 2022

The Economist

How Putin has impacted the next UK election

by | Sep 15, 2022

Now, whatever one may believe concerning his past attempts to ‘subvert parliamentary elections’, it can be assured that Putin has affected how the UK next go to the polls. For, by invading Ukraine, Putin has had an impact on the UK’s political landscape. He has, after all, made canvassing to win votes on their traditional policies very tough for a range of political parties within the UK.

For one, Putin has made campaigning on a ‘green ticket’ draining, in contrast with the energy of those making the case for home-sourced fossil fuels and nuclear power. He has also made arguing against a nuclear deterrent and/or reduced military spending an extremely combative experience on the doorstep and the campaigning stump in general.

Putin has also acted in a way not to illustrate unity across the EU, but accentuate differences within it – and these are fissures that are likely to widen the longer energy prices remain elevated.

Russia’s invasion of Ukraine has also made the UK’s defensive unity all the more important, something hardly in keeping with the dissolution of the UK.

As to which of the UK parties Putin has inadvertently/accidentally acted against, the answer is easy – all but the Tories.

Despite all its present challenges, the Conservative party can confidently campaign in 2024 in a largely ‘old style’ way which Labour, the Lib Dems, the Greens and the SNP simply cannot. Cannot, that is, without a sea-change in their manifestos. I make this claim because the parties in Westminster outside of Government cannot possibly rely upon their ‘old-policy-promise’ narratives.

“The reality is that whilst all parties have staunch loyalists, who would never bring themselves to vote any other way, British elections have invariably been decided by swings”

Not only do the past manifestos of Labour, the Lib Dems, the Greens and the SNP contain elements that will hardly warm to those who last voted Conservative, they include pledges that make it difficult holding onto all but their most ardent supporters of the past. The reality is that whilst all parties have staunch loyalists, who would never bring themselves to vote any other way, British elections have invariably been decided by swings. This said, one could point to the Scottish Nationalists as being the most ‘Marmite’ of the mainland parties. One wonders, however, what happens, if as is likely, Westminster – read England – rapidly pursues a productive energy programme involving fracking and nuclear, whereas Holyrood holds back? What happens, that is, to support for the SNP-Green Alliance? Against this backdrop the UK might witness a rise in nationalist sentiment. I, for one, think not. We could of course see SNP support in Westminster hold up, but compromised in Holyrood. Here, again, I think not. My assertion is that Ukraine has brought forward the high-water mark of Scottish nationalism and so accelerated the arrival of ‘peak-SNP’.

Now, it was inconceivable the new PM and her new chancellor did not initiate measures designed to best protect households from ‘sharp spikes’ in energy prices, and these can hardly work against the ‘new Government’ when it seeks proper electoral validation.

Suppose, instead, the UK economy continues to face elevated energy and food cost pressures. If this is indeed the case, the chances are adverse geopolitical events would have only worsened, making the ‘Cold War’ all the colder. Again, parties associated with being jointly ‘strong on green’ and ‘weak on defence’ issues would hardly win in a popular vote.

There is always the chance that fiscal efforts to mitigate cost shocks work in such a way that the UK is shocked in other adverse ways. True, this would hardly help Truss. No less true is that it would leave those looking to come to power having to explain how they might fix things any better than the incumbent had failed to, despite throwing the proverbial ‘fiscal kitchen sink’ at the challenges.

Let me turn to consider that the Conservatives are forced out of office by a coalition, because they fail to win a majority. I will begin by dismissing any prospect of a pre-election non-compete pact to freeze out the Tories. To be clear, I accept there could well be such piecemeal pacts in the handful of ad hoc by-elections that arise for all sorts of reasons ahead of May 2024. What I am maintaining is that if we apply game theory to the next general election, a constituency ‘carve-up’ between Labour and the Lib Dems to ensure they enter government in a coalition ‘agreed in advance’ may be discussed, but will fail to happen.

For all the similarities separated only by semantics between Labour and Lib Dem ‘statements of intent’, there is a huge substantive one – the UK returning to the EU. Whilst the latter is near certain to be a commitment in the Lib Dem manifesto, it would be inconceivable in the Labour equivalent. One could point to a number of other areas where there will remain (sic) manifest differences between Labour and the Lib Dems come 2024. So, even if the leaders of the two main opposition unionist parties do find a sizeable enough number of constituencies to tactically collude in, there is every chance sufficient grass roots members who have been told to stand aside will rebel and fight all the same.

Now, I am in no way claiming Labour and the Lib Dems do not emerge from the next election as coalition partners. I am merely arguing the outcome of the election will not be decided by collusion in advance.

“In the event the UK economy ‘pleasantly surprises’ – as I am convinced it will – the incumbent will be electorally favoured thanks to the adage, ‘It’s the economy, stupid'”

What then of a collation post the election? Well, this brings us back to the ‘post Ukraine’ dilemmas confronting Labour, the Lib Dems, the SNP and the Greens. What precise stances would these parties take in their parliamentary campaigns on the issues of energy security, defence commitment and links with the EU? The reality is that in the wake of Ukraine, the policies they have long stood on have lost a degree of popular appeal, the degree only growing if the economy worsens. Here, then, is a political paradox. If the economy weakens into the election, then rather than make the opposition more attractive, the causes of this weakness will make opposition policies all the less so. In the event the UK economy ‘pleasantly surprises’ – as I am convinced it will – the incumbent will be electorally favoured thanks to the adage, “It’s the economy, stupid”.

One cannot psephologise on a particular party’s prospects at the next general election without considering the new leadership at the top of the Tories. We can be in no doubt that having entered No 10, the new PM will dial up the combative tone directed at Putin. I suspect this will be part of a wholesale policy approach which plays to populism; doing so in a way where budgetary responsibility is, if not abandoned, given very short shrift. Be in no doubt the moment this new PM becomes as such, she has deemed the electoral race to have begun in earnest. This is precisely how Johnson acted when he was installed as leader in July 2019, ex-a general election, and so too his predecessor in July 2016, as well as Gordon Brown – June 2007 – and John Major – November 1990.  As we know, two of these would go on and earn manageably secure elected mandates as PM. For her part, May would need a Confidence and Supply arrangement with the DUP, whilst Brown would lose out to a Coalition. I have, of course, not mentioned James Callaghan, who in April 1976 entered No 10 with the UK suffering an energy crisis, alarmingly high inflation, widespread strike action, recession fears, the pound being unloved and engaged in a Cold War with Moscow. Since this sounds ‘so eerily familiar’, I suspect his failure in May 1979 will be most cited as the reference for what electorally awaits the new PM. 

So, to those who fear Putin will try to influence the next election, my response is this: he already has. And to those convinced the incumbent party cannot possibly retain power, my reply is this: if the opposition do not offer winning polices, the sitting party will sit pretty, however uncomfortably or underserved.

About Savvas Savouri

About Savvas Savouri

Savvas has evenly divided his 33 year career in commercial finance between the Sell and Buy sides; the last 16 years as a Partner and Chief Economist at Toscafund. In the three years ahead of joining Tosca, Sav ran QuantMetriks, an independent advisory business he founded, utilising the global quant economics modelled launched in 1996. QM had been developed across a number of investment banks: from Credit Lyonnais, through Commerzbank & Lazard. Prior to entering ‘The City’ Sav earned Batchelor,  Masters and Doctoral degrees from the LSE, where he subsequently taught. He lectured over 1989-90 at The Institute of Statistics & Economics, University of Oxford, & was a visiting lecturer at Greenwich University 1990 & Moscow University, 1998. His work has been published in peer reviewed journals, including Economic Policy (1990), the Scottish Journal (1992) of Political Economy and Economic Journal (1992) as well as contributing chapters to a number of books covering empirical economics and econometrics. 

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