If there is a realignment, liberalism must claim its place

A lot of early evaluation of last Thursday’s elections has written the obituary of the Labour party as the ‘Red Wall’ further fell to Johnson’s populist Tories. There is a strong sense that a realignment is taking place in British politics and if so, Liberalism needs to be part of it.

While the death of Labour is, I think, still premature, the implications of the realignment analysis should not be lost on Liberal Democrats preparing for the electoral battles of the decade ahead. Many commentators have confidently concluded that Keir Starmer’s party has lost relevance and cannot recover now that the Tories have been accepted as a credible alternative in places that were solid Labour. That is, Labour is trying to hold together a coalition of younger, metropolitan types with older working class voters and there is a clash of values.

This evaluation is far from conclusive. The elections took place during a national (and international) crisis, 4.2 million furloughs were being paid by the state on polling day, Johnson has taken the credit for a successful vaccine rollout, as Tim Farron pointed out, the electorate has tended to support incumbents in England, Scotland and Wales, plus in analysis of the 1247 key wards there was actually a small swing to Labour. Don’t forget, after the 1992 election, there was similar analysis that Britain now lived in a one-party state. And it really wasn’t that long ago that commentators were wondering if there could ever be a route again to the Conservatives commanding a majority. So let’s take care with apocalyptic predictions.

Nevertheless, what has happened is undeniable. Conservatives have been elected in places like Hartlepool where they had never featured before. The new MP for Hartlepool, Jill Mortimer, summed it up: ‘Labour have taken the people of Hartlepool for granted for too long.’. That, it seems, is true of large swathes of the Midlands and the North of England. Traditional ‘working class’ constituencies whose citizens, since the Brexit schism, now see Boris Johnson’s Tories as most effectively representing them. It is, some argue, a fundamental realignment. One person who believes that is Theresa’ May’s former Chief of Staff, Gavin Barwell, whose thoughtful appraisal judged that his own party had changed considerably. ‘Today’s Conservative Party,’ he tweeted, ‘believes in relatively high spending and relatively high taxes. That makes it a much harder opponent for Labour.’.

You will see the flaw in this logic. Just as New Labour took its core vote for granted for so long, as it pursued soft Tory voters in the South, the Johnson strategy risks taking for granted many of its own traditional voters in the South where Lib Dems are the main challengers. If it is to be considered as an electoral strategy, ‘levelling up’ means spending far more money in ‘Red Wall’ constituencies in the North of England – despite the inevitable pressure on public spending as the country counts the cost of the pandemic. This could prove unsustainable for a Conservative Party experiencing its own clash of values.

Consider that only three regions of the UK run fiscal surpluses. London, the southeast and the east of England are the only net contributors to tax in the UK. For how long will voters in the South, all but ignored by these changed Tories that Barwell describes, be content to vote for a party that wishes to use them as cash cows to shore up its own electoral support elsewhere? Given that many of these voters are also likely to be unimpressed by the cavalier populism of this government and less convinced of Brexit, there is an opportunity for Liberal Democrats to offer a serious alternative. But that requires two things. Firstly, a coherent liberal vision of economic and social liberalism addressing the issues that matter to mainstream voters, meaning electoral choice is values based. And secondly, a willingness of progressive parties to really work together – no more divide and conquer.

Tunbridge Wells might well be a foretaste of this, where on the night the Red Wall crumbled in the North, Lib Dems took council seats from the Conservatives in their ‘Blue Wall’. Local factors played their part of course but, in a sense, this is the point. Voters expect to be properly represented and those they elect to be on their side.

Liberal Democrats must be prepared for any realignment in British politics and liberal values ready to stake their claim.

* Stephen Barber is Professor of Global Affairs and a former Parliamentary Candidate

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32 Comments

  • Little Jackie Paper 10th May '21 - 4:04pm

    An interesting and thoughtful article. I don’t agree with all of this, but it is certainly food for thought.

    Thank you.

    ‘Consider that only three regions of the UK run fiscal surpluses. London, the southeast and the east of England are the only net contributors to tax in the UK.’ I’ve always taken ‘levelling up’ (never of course a defined term) as meaning that this situation is a bad thing and that other regions should also be in a position to contribute. We can argue about how to go about that and if it’s possible or even entirely desirable.

    I’ve never taken ‘levelling up’ as meaning that other regions will all start to look like the (prosperous parts of) the South East. Indeed I’ve kind of assumed that the non-prosperous parts of the SE would be ‘levelled up’ too.

    FPTP does have the effect of over-representing Labour in London, however looking at the Bailey/Kahn voting it does look like a non-trivial number of people in London are cleaving towards the ‘new’ Conservatives.

    But an interesting article.

  • Peer-reviewed research has estimated that between 2010-2013, work capability assessment was independently associated with an additional 590 suicides, 280,000 cases of self-reported ill health and 725,000 additional anti- depressant scripts. figures, (Westminster Hall, 24 April, 2019).

    Given the Lib. Dem. Party claims to speak up on the issue of human rights, what is the party’s response on this outcome (for which they bear some responsibility) ?

  • William Francis 10th May '21 - 4:38pm

    I am not so certain that Conservatives genuinely are in favour of higher taxation and spending.

    There own 2019 manifesto essentially promised a continuation of austerity in more areas of government, and their tax increases have been mainly come from a freeze on the tax free threshold and the lifetime pension pot allowance.

    Their own spending plans are heavy on pork barrel projects, but not on welfare spending, as seen with the free school meal controversy.

  • William Francis 10th May '21 - 4:41pm

    @David Raw

    Does this research cover the pre-2010 effects of work capability assessments?

    I mean to the best if my knowledge this was a New Labour policy.

  • Phil Beesley 10th May '21 - 5:51pm

    Stephen Barber: “Consider that only three regions of the UK run fiscal surpluses. London, the southeast and the east of England are the only net contributors to tax in the UK.”

    If all regions ran a fiscal surplus, the economy would be deflationary. In practice, at least one region should run a deficit.

    As a former Bank of England boss once observed, they don’t set the loan rates to suit the north east. That makes sense. A compromise is made such that loan rates work for the economy all over the UK.

    Does anyone seriously believe that all taxable money accounted in London/SE is generated in London/SE?

  • Ruth Bright 10th May '21 - 5:57pm

    Yes it was but the sanctions’ regime undoubtedly got harsher under the Conservative- Lib Dem coalition (Social Policy in a Cold Climate, Lupton, Burchardt et al 2016)

  • Steve Trevethan 10th May '21 - 6:13pm

    Might the influences of the Main Stream Media, not least the B.B.C., and the “deep state” be sufficiently relevant to require factoring in to predictions and policies?

  • ‘Consider that only three regions of the UK run fiscal surpluses. London, the southeast and the east of England are the only net contributors to tax in the UK.’

    It’s funny though, where I work (East Midlands) is where we make the money. The profits though are counted in London where there is nothing more than a plaque on a door.

    Is London really the net contributor it’s made out to be?

  • Peter Martin 10th May '21 - 6:26pm

    “Consider that only three regions of the UK run fiscal surpluses. London, the southeast and the east of England are the only net contributors to tax in the UK. For how long will voters in the South, all but ignored by these changed Tories that Barwell describes, be content to vote for a party that wishes to use them as cash cows to shore up its own electoral support elsewhere”

    This is completely the wrong way to look at the issue. In any common currency area there will be the richer area which put more into the pot than the less affluent ones. Money always gravitates to other money so the job of the central government has to be to push it back out to the regions again. Otherwise the population will all gravitate to the SE of England too and that’s not good for anyone.

    It’s no different in the USA. The richer states like New York, New Jersey and California are the net contributors. The less affluent ones like Mississippi and Kentucky are net recipients. It’s a normal state of affairs everywhere except the eurozone. The EU has yet to appreciate just what having a common currency entails.

  • Little Jackie Paper 10th May '21 - 6:46pm

    Peter Martin

    ‘The EU has yet to appreciate just what having a common currency entails.’

    They appreciate it full well. They just realise that they don’t have the optimum political zone needed to make it work.

  • @ William Francis Indeed it was, but, are you saying it was OK for the Liberal Democrats when in power to do nothing about this, to stand idly by when it was intensified on their watch ? Sounds like the parable of the man walking by on the other side.

    Please stop making disingenuous justifications, Mr Francis. “It wasn’t me, Sir. It wos a big boy wot dunnit”.

  • George Thomas 10th May '21 - 7:49pm

    “Does anyone seriously believe that all taxable money accounted in London/SE is generated in London/SE*?”

    *or by people born, brought up and continuing to reside in London/SE. Hasn’t the deal over the past 40’ish years been that investment mainly happens in London/SE which attracts people to live/work in this area and then money they raise is predominantly invested back into the area with some being spread around rest of the UK?

  • Adam: “It’s funny though, where I work (East Midlands) is where we make the money. The profits though are counted in London where there is nothing more than a plaque on a door.”

    This assumes that companies are ‘taxpayers’. There is a strong argument that companies are not taxpayers, rather, they are ‘tax collectors’. We know that taxes on companies account for a small proportion of the tax revenue – the bulk is taxation on individuals in one form or another. London alone represents ~11% of the UK population, add to this the south-east and east, it should not be surprising that most of the tax revenue comes from these regions.

  • John Marriott 10th May '21 - 8:55pm

    When it comes to paying more taxes, Labour left wingers like Richard Burgon are still basing their sums on only “the richest” paying more (Politics Live today). That’s surely where we are going wrong. We can follow the late Lord Healey’s example if we want and wait to hear “the pips squeak”. However, as I thought we were all in it together, wouldn’t it be fairer to start with the basic rate of Income Tax?

    As regards the ‘death’ of Labour, perhaps we should consult a spiritualist to see whether the late George Dangerfield, the author of “The Strange Death of Liberal England” (as recommended by my mentor and honorary Scotsman, Mr David Raw) , has anything to say on the subject. As far as any kind of political ‘death’ is concerned, those famous words of Mark Twain come to mind.

  • @ Rafi,

    There is a strong argument that companies are not taxpayers, rather, they are ‘tax collectors’.

    I agree that you’re right to some extent – although all employers (corporate and non-corporate) are tax collectors in that they aggregate amounts due and account for them to HMRC. But one of the interesting changes in the recent Budget pointed towards a very sizeable increase in corporation tax revenues over the next four years, as I noted here;

    https://www.libdemvoice.org/is-rishi-sunak-having-a-laffer-curve-67180.html

    That £85 billion represents about 13% of current tax revenues, so I would suggest that companies are taxpayers to an increasing extent. What tends to go unnoticed though is that the number of limited companies has risen sharply over a period of fifteen or so years, initially stemming from Gordon Brown’s flawed reforms to company taxation rates and then given further momentum by the move to shuffle employees off the books by “persuading” them to switch to contractor status, transferring most of the employment costs onto the employee as well as the risk.

  • Labour and the Lib Dem’s need to work together to carve out a future for the Centre/ Left. Labour have to go back to being Socialist or Thales can not be true to themselves and develop coherent policies the electorate understand, but at the same time they must get out of the Lib Dem’s way and let them target the ‘metropolitan elite’. Neither party could win alone, but both parties would spend more time in government than out of it.

  • Conservative majorities in the Shires are still pretty healthy. They can afford to drop a few votes in exchange for traditional labour seats in the North. In Theresa May’s 2017 election disaster, Conservatives polled 13,636,684 votes (42.6%). Boris Johnson’s stonking majority in 2019 was delivered with 13,941,086 (43.6%%), just 300,000 more votes.
    Regional tax yields mirror productivity levels https://www.cityam.com/ons-london-32-per-cent-more-productive-than-rest-of-uk/. London, with its finance dominated economy, far outstrips productivity levels in the rest of the UK and attracts a large element of foreign nationals to the city.
    At its simplest, labour productivity means the monetary value of what we produce – our output. Output could be measured a few different ways. You could divide output between the number of workers, or between the number of hours worked. The Office for National Statistics publishes statistics on both.
    A very basic measure of productivity is to divide an area’s output by the number of people who live there, what’s called ‘GVA per head‘ or ‘GDP per head’. This can give a rough approximation of productivity across a whole country, but it poses problems when it’s used to compare smaller areas like cities. If someone commutes into a city to work, they raise the city’s output but not its population. That makes the city seem more productive than it actually is.
    Labour productivity is generally seen to have more to do with things like infrastructure, education, management and technology. As the OECD puts it, “Productivity is about ‘working smarter’, rather than ‘working harder’.”
    The slow growth of UK productivity is a ‘puzzle’ that’s open to debate. But one thing we can be sure of. It’s not about the level of government spending and taxes. It is about how and where investment is directed within both the public and private sectors. Levelling up is part of that strategy. With improved productivity in regions outside London and the SE comes increased tax takes.

  • @ Mark Valladares

    Correct. Currently, as you have pointed out, corporation taxes account for ~13% of revenue and it is projected to rise as a proportion of total revenue.. and this merely underlines my point that the bulk of tax revenue is levied on individuals. Considering the demographics, with respect to numbers, disposable income, property values (Capital Gains & Inheritance tax) etc.. it should be no surprise that London and the South-East (and East) run fiscal surpluses! It is, of course, possible for all regions to be fiscally neutral.. whether this is desirable is entirely another matter.. but it is possible.

    For me, levelling-up needs to address income disparity which cannot be addressed by building a few shiny bridges in a handful of ‘favoured’ locations. The problems are structural and require a multi-pronged approach – both economic and social. This can only be done through a ‘liberal centrist’ vision, thus the crux of Stephen Barber’s article is absolutely correct – that liberalism must stake it’s claim in this re-alignment.

    I would, however, gently take issue with the notion of ‘progressive parties working together’ .. I will defer my dislike of the term progressive for another time.. but I must ask: has anyone met a momentum-type recently? .. Working together? .. Good luck with that.

  • Phil Beesley 11th May '21 - 1:04am

    Rafi Baig: “Currently, as you have pointed out, corporation taxes account for ~13% of revenue and it is projected to rise as a proportion of total revenue.. and this merely underlines my point that the bulk of tax revenue is levied on individuals.”

    That sounds right. Were I to be a street beggar, I’d expect to pay tilda thirteen percent in taxes. I’d pay VAT on almost everything — which has been temporarily cut. Most of the toilets are closed so it costs me to wash — walking around isn’t free. In case you haven’t noticed, the cost of common drugs like paracetamol has increased by a few pennies, and there were a few weeks last year when it was unobtainable.

    Perhaps it’s about taxing different people?

  • Peter Martin 11th May '21 - 7:09am

    @ Joe,

    “The slow growth of UK productivity is a ‘puzzle’ that’s open to debate. But one thing we can be sure of. It’s not about the level of government spending and taxes.”

    By your own admission, you’re puzzled by the “slow growth” in UK productivity. Some would say stagnation. This can only mean you don’t understand what is happening.
    But on the other hand you are claiming you understand it well enough to know that its nothing to do with levels of government spending and taxation.

    This is rather like someone saying they are puzzled that their engine won’t start. But they are “can be sure” it’s nothing to do with a flat battery or a lack of petrol in the tank.

  • Peter Martin 11th May '21 - 7:10am

    @ Joe,

    “The slow growth of UK productivity is a ‘puzzle’ that’s open to debate. But one thing we can be sure of. It’s not about the level of government spending and taxes.”

    By your own admission, you’re puzzled by the “slow growth” in UK productivity. Some would say stagnation. This can only mean you don’t understand what is happening.
    But on the other hand you are claiming you understand it well enough to know that its nothing to do with levels of government spending and taxation.

    This is rather like someone saying they are puzzled that their engine won’t start. But they are “can be sure” it’s nothing to do with a flat battery or a lack of petrol in the tank.

  • John Marriott 11th May '21 - 7:59am

    Well, Mr Martin, as they say, if something is worth saying, it’s worth saying twice! Are we in for another round of Martin v Bourke?

  • Peter Martin 11th May '21 - 10:19am

    @ John,

    Sorry about the duplication. I’m not sure how that happened.

    Look, I would like the Lib Dems to do better. You are capable of getting votes from the Tories that Labour can’t. The Tories themselves have shown that government deficits aren’t the problem that the Coalition government claimed they were at the time.

    The Lib Dems have the choice of repeating past mistakes as Joe is essentially advocating Lib Dems do. Or, you can have a rethink and come up with some new ideas.

  • Peter james Bodiam 11th May '21 - 10:22am

    As a former member of labour, green and libdems,we must all get together to form a strategy to get rid of Tories by standing down to let the most popular party have a clear run against the tories as in cheltenham where I live and libdem and labour both stood in gen. election and tory won. This is our only hope in first past the post elections. Please get together and fight tories.

  • Nonconformistradical 11th May '21 - 11:17am

    “Are we in for another round of Martin v Bourke?”
    Oh please no!

  • Peter Martin 11th May '21 - 12:12pm

    @ John @ Nonconformistradical

    Hopefully that won’t be necessary, providing Joe doesn’t start up on how we need to have a balanced Govt budget, albeit only over the business cycle and with some allowance for so-called capital spending.

  • Stephen Barber argues that the Conservative agenda for levelling-up, relatively high spending and relatively high taxes risks taking for granted many of its own traditional voters in the South. Mr Barber goes on to write ‘levelling up’ means spending far more money in ‘Red Wall’ constituencies in the North of England – despite the inevitable pressure on public spending as the country counts the cost of the pandemic. This could prove unsustainable for a Conservative Party experiencing its own clash of values. He then asks “For how long will voters in the South, all but ignored by these changed Tories that Barwell describes, be content to vote for a party that wishes to use them as cash cows to shore up its own electoral support elsewhere?”
    However, increased investment in areas of the North does not necessitate reallocation of resources from London and the Southeast. The majority of the investment that drives productivity and increased living standards is made within the private sector. Public sector investment is a foundation and primer for this investment. Something that Conservative Mayor’s like Ben Houchen seemed to have grasped and LibDems have long known. It is a long record of failure to bring in private investment that has left Labour floundering in these traditional industrial areas.
    With targetted productive investment comes jobs, higher incomes that service investment and the higher taxes that pay for public services.

  • @ John Marriott “Are we in for another round of Martin v Bourke ?” Are you sure that’s not Burke & Hare, John ?

    PS. ‘Until the pips squeak’ was Eric Geddes, a Minister in the Lloyd George Coalition, in the 1918 General Election talking about Germany.

    PPS Not sure about the Honorary Scotsman stuff. Gt Granddad was an undertaker in Dundee in 1922 when they defenestrated Churchill but WSC had made his own arrangements.

  • Geoffrey Dron 12th May '21 - 9:29am

    https://www.theguardian.com/commentisfree/2021/may/12/laws-protect-scams-enforcement-gutted#comment-149255784

    I suggest LDs might wish to investigate the issue of how cuts have affected the work of trading standards at a local level.

  • John Littler 15th May '21 - 4:26pm

    Exert from piece by Tony Blair in next New Statesman:

    The challenge facing Britain’s Labour and Liberal Democrat parties cannot be overstated. Political parties have no divine right to exist and progressive parties of the centre and centre left are facing marginalisation, even extinction, across the Western world. Where is the French Socialist Party of François Mitterrand or the German SPD of Willy Brandt? And dominant national parties can very quickly become small fringe parties under the hammer blows of poor leadership and social and economic change. Look at the Liberal Party of Asquith and Lloyd George, reduced from 397 to 43 seats in just 18 years in the early 20th century.
    Joe Biden’s victory in the United States apart, progressive politics across the globe is badly placed: four election defeats for the UK Labour Party and no one betting against a fifth; the German SPD placed behind a moderate Green Party; the French Socialists, who won the presidency in 2012, now polling at 11 per cent; the Italian left imploded and divided; the Spanish and Swedish socialists hanging on to power, but way below their earlier levels of support……………………..
    .
    .
    .
    .

    Progressive parties must modernise their economic message. They need a unifying social and cultural message as well. The Conservative parties of Western politics have adapted and adjusted. But by and large they’re finding a new economic and cultural coalition.

    Meanwhile, left parties are fracturing, Green parties are rising but rarely capable of winning power, and a whole generation of talent that is not Conservative can’t find a political home. For now, the Labour Party cannot fulfil its historic mission. Its limitations have been there from its inception, particularly its estrangement from Britain’s great Liberal tradition – Gladstone, Lloyd George, Keynes, Beveridge. Except for the period of New Labour, it has never succeeded in being in government more than six years; and the devastating cul-de-sac it went down over the past decade has made those limitations worse, possibly endemic………….continued

  • John Littler 15th May '21 - 4:27pm

    2)

    Progressive politicians open to the scale of the challenge and the change are to be found in the Labour Party, in the Lib Dems and in the ranks of the politically homeless. Without the diverting drama of speculation around new political parties, we need a new progressive movement; a new progressive agenda; and the construction of a new governing coalition.

    The construction of this new progressive movement should start with an open dialogue between like-minded Labour and Lib Dem members and the non-aligned. Otherwise, we will be in the dreary business of fighting with a cause which is unclear, our hands tied behind our back, on a ground we didn’t choose in a battle we can’t win, against a foe which doesn’t deserve to triumph; and hoping that another defeat will bring the clarity of purpose we should embrace now. It won’t. 

    Tony Blair

    This piece appears in the forthcoming issue of the New Statesman magazine

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