Photograph: Molly Darlington/Reuters
This week’s local government elections take place against the backdrop of a deepening cost of living crisis. Inflation is at its highest level in three decades, and the worst is yet to come. With wages struggling to keep pace with rising prices, living standards are being eroded fast.
Throw in Partygate and the fact that it is mid-term for the current parliament, and all the conditions are in place for voters to give the government a proper kicking. The Conservatives expect to perform terribly, with good reason.
Arguably, though, the elections matter just as much – if not more – for the opposition parties than they do for the Tories. They will be a test of whether the Liberal Democrats can win in suburbia and in the south-west of England, and whether the Green party can translate public concern about the climate emergency into votes.
For Labour the stakes are even higher, because it needs to show it is on course to avoid a fifth successive general election defeat. The fact that the government is in such serious trouble puts added pressure on Keir Starmer to do well.
There are reasons why Labour’s gains could be limited. The seats being fought were last contested in 2018, when the Tories did badly. Much of the action in England will be in London and the other metropolitan cities, which are already Labour strongholds.
That said, in the past there has been a strong link between living standards and voting patterns. In the late 1970s, when Britain was also struggling with stagflation, the Tory opposition posted impressive byelection victories in what had been considered safe Labour seats and took control of the Greater London council. Margaret Thatcher’s victory at the 1979 general election was only partly due to the winter of discontent; the strikes followed a period in which the real level of wages had been squeezed by the Labour government’s pay policy.
Many people in Britain are once again getting poorer, not because of a 1970s statutory incomes policy but because of a cocktail of factors: rising energy costs, dearer food, higher taxes, rising interest rates, less generous social security. Less than two months after delivering his underwhelming spring statement, Rishi Sunak, is under pressure to come up with yet another mini-budget to help struggling households make ends meet.
The government’s problems are compounded by two other factors: it has been in power for 12 years, during which time which economic performance has been poor; and its support to the economy during the pandemic provided voters with the impression that there was nothing the state couldn’t do in an emergency provided it had the political will. Both factors should be helpful to Labour.
To those who argue that Labour should be streets ahead in the opinion polls rather than enjoying modest single-digit leads, Starmer’s argument is that things look a lot better than they did when he took over as leader two years ago and that the path to victory at the next general election is a work in progress. This week’s elections will be a test of whether there is any substance to this claim. There is plenty of evidence that voters are fed up with the government; not so much that they are wildly enthusiastic about Labour.
There is still time for Starmer to cut through with the public. There looks like being a second surge in energy prices in the autumn, which will mean the cost of living crisis will rumble on. Sunak may eventually filch Labour’s plan for a windfall tax on North Sea energy companies and that will allow Starmer both to say “we told you so” and rebut the claim that he lacks concrete policies. Rachel Reeves looks like a chancellor in waiting.
Governments sometimes cling on to power in tough economic times. That was the case in 1992, an election that followed a deep recession in which unemployment reached three million and a record number of people had their homes repossessed. Voters were worried that Labour would put up their taxes and raise the cost of their mortgages. They didn’t trust Neil Kinnock with the economy, and it is possible that they will come to the same conclusion about Starmer.
Like Kinnock, Starmer faces the difficulty of tacking back towards the centre without making the party seem dull. Labour tends to perform best when it makes people feel upbeat about the future, and the country could do with some sunny optimism right now.
Equally, it is possible that economic factors don’t influence elections in the way they once did. Thatcher and Tony Blair were at their most popular when living standards were rising strongly but the old patterns may be breaking down in an era of culture wars. Given that people are being faced with the choice of whether to heat their homes or eat this looks improbable. The economy still matters a lot.
So here’s the position. Britain has high inflation and may soon be in recession. A prolonged war in Ukraine means energy costs will remain high. The economy is riddled with structural weaknesses, from low productivity to creaking infrastructure. The Conservative party’s reputation for economic management and low taxation lies in tatters. Brexit, the issue that dominated the last election, is not going to swing the next one. The prime minister has been fined by Scotland Yard for breaking his own lockdown rules.
In football this would be the equivalent of a striker standing two yards from goal with a foot on the ball and defenders nowhere in sight. Frankly, if Labour can’t smash the ball into the net now, then there is really only one question to ask: when on earth is it likely to do so?
Larry Elliott is the Guardian’s economics editor
