What should have happened
The commentariat’s view was blazed across the media: the Tories lost the local election badly. But did they?
As the REC team has said many times, local elections and by-elections are essentially protest votes; the sitting government gets caned, the opposition parties run riot. The only real significance of the result is if the government does better or the opposition does worse than they should; more about that later. But this local election really should have been the mother of all protest votes:
14 years in power, midway through its fourth parliamentary term
partygate chaos and the implosion of Trussonomics still ringing in everyone's ears
inflation rampant, mortgages costs spiralling, food prices surging
in the middle of a cost of living crisis
the economy teetering on recession
the NHS imploding
the public sector largely on strike
no one in government yet nailing those elusive Brexit benefits
trailing in the polls for some time
So the Tories should really have been punished in perhaps the most emphatic and historic manner. This local election should have been the protest vote to end all protest votes.
What actually did happen
Now the dust has settled, what is therefore quite surprising with the awful backdrop laid out above, is that this was in effect just a standard local election. Sure, the government lost a large number of councillor seats and a good few councils, but on a par with previous poor election performances for long standing governments of both political persuasions. Let’s look at the individual parties’ performances:
Conservatives – Their pre-election spin was that they could lose 1000 seats, clearly thinking they would lose less – we now know their thinking was around 700. In the end, they did lose a 1000-odd councillor seats; predictably bad, but not in the least historic. Less than May lost in 2019. Fewer than Blair lost in 1999. Almost the same number that Major lost in 1991. Although no election is directly comparable, what did those sitting governments then go on to do? They all won the next general election. So no historic biggie here, really. And the Tories lucked out with wall to wall Coronation news swamping out the usual bitterly painful post-election weekend media dissection.
Labour – Their low-ball spin was that they’d struggle to win 400 seats and in the final tally they picked up 500-odd councillors. At this point in the electoral cycle with the torrid backdrop laid out above, that’s pretty dire. Most experts were expecting around 750. They should and need to be doing much better if they have a hope of convincingly winning the next general election. As polling expert Sir John Curtice pointed out, Labour appears to be benefiting mainly from a fall in the Tory vote share rather than an increase in its own.
Lib Dems – Defending seats last elected in such a good year for them in 2019, they could have faltered. In fact they did quite well, bagging just over 400 councillor seats. But they tend to overperform in local election protest votes and then underperform in the following general elections, so what does this performance really mean? They are still languishing at around 8-10% in the polls nationally. Unless they make a significant step forward in the national polls, this result will be just another standard Lib Dem mid-term protest vote.
SNP – The dog that did not bark as there were no local elections in Scotland. And right now, thank God for that if you are a Nat! But will their post-Sturgeon implosion help Labour win more significant numbers of Scottish MP seats at the next general election? Or will they stabilise and retain their dominance albeit nibbled around the edges by Labour and the Lib Dems? What would be the impact of another member of the Sturgeon family being arrested? Or charges being laid before the next general election?
Independents – An interesting result for them. They were predicted to do well and hoover up protest votes and thus councillor seats. There were some big advances by independents – in South Kesteven for example, where the number of independent councillors doubled – but they went backwards overall, losing around 100 seats which was not what was widely predicted.
Greens – Standard stuff. They did win some headlines for winning their first council outright, Mid Suffolk, but the only council they ran prior to the election, Brighton, they lost, with their seat total crashing down to a mere seven. Overall, they won almost 250 councillor berths and proclaimed they are on the march. They aren’t. Come the general election, they will be an insignificance as ever.
NOC – The big winner. A considerable number of councils disappeared into no overall control. Let the horse-trading commence. It won’t lead to stable council leadership, well run local authorities or swiftly delivered local plans. It never does.
Looking towards the general election
We said in our previous blog post on the morning after the local election that our clients, fellow consultants and friends should not worry too much about councillor seat numbers or councils switching control – unless of course you have a project directly affected by these, in which case you need to call us ASAP!
The measures we told you to focus on were polling gurus Sir John Curtice’s project national share of the vote (PNS) calculated for the BBC and Professors Colin Rallings and Michael Thrasher’s national equivalent vote share (NEV) calculated for Sky News. As the names suggests, these use the local election results to estimate what each parties’ vote share would have been at a nationwide general election. So on these measures, how did things go?
Tricky news for Labour here. The PNS stood at 9 points for Labour and the NEV was in the end revised down to a 7 point lead for Labour. Some context: in 1996, the Labour lead on NEV was 14 and in 2009 the Conservative’s NEV lead was 13. Labour desperately needed to be in double figures.
As the REC team has been saying for some time, we are firmly in hung parliament territory right now. Labour have not and are not showing any signs of breaking through, and things most likely will only tighten for them in the next 12-18 months in the run up to the general election. The Tories have some hope – albeit limited – that if the polls keep moving in their favour as they continue to deliver competent government and with the cost of living crisis subsiding and inflation falling, then they could still be in the game. Just about.
So, what could affect the electoral maths of the next general election? A few things:
The SNP situation, which could help Labour quite a bit
Tory voters who are currently on strike or voted in this local election for protest parties coming back to the fold as they tend to at general elections
The Lib Dems steadily improving their national polling to make them numerically relevant in a hung parliament scenario, like in 2010
Budgets, potentially three of them before the next general election, allowing the Tories to reach into voters’ hearts through their wallets
‘Stop the boats’; how will that play out?
It is impossible to know right now how much any of these will move the dial, if at all.
As The Times reported: “Labour strategists are convinced that the negative ads they used to target Sunak’s record during the local election campaign were a success. Instead of following the Tory local election campaign ‘grid’ the political agenda was dominated for days by a row about whether the prime minister thought paedophiles should be jailed. Labour was, as one source puts it “holding the mike” (sic). That may be true, but these results show that just holding the mike is not enough. You have to have something to say.” And therein lies Starmer’s problem.
Tories’ housebuilding conundrum
However, the Tories have a fundamental philosophical problem that we in the property industry need to watch with close scrutiny over the coming months. This election publicly showed how vulnerable they are to Labour in the red wall, and the Lib Dems in the blue wall. Housebuilding is at the centre of this.
Right now there is aggressive debate raging in the Tory party about which way to turn. Michael Gove's very negative new NPPF was not published in April as planned. Number 10 and the Treasury were apparently not consulted on the final 22 December 2022 draft and are locked in fevered debate with DLUC about its contents. It is a profoundly anti-growth document just when the Tories need growth.
The question is what do the post-Brexit Tories want to be? Do they want to compete with the Lib Dems in the blue wall and be anti-development, beating up the property industry as Michael Gove has been doing for months now? Or do they want to directly take on Labour’s warm words to the red wall and be pro-development, building affordable housing for those at the lower end of the socio-economic scale (the new Tory voters) and new private homes funded through help to buy type schemes, so they have some sort of retail offer to the under 40s frozen out of home ownership unless a relative dies?
This debate was exposed in all its bitter glory in the aftermath of this local election. On the one hand, in Medway, Rochester Tory MP Kelly Tolhurst blamed “unrealistic housing targets” for Labour’s victory, while in Broxbourne, fellow Tory MP Charles Walker put the Conservative resilience down to a more positive approach to housebuilding. Who is right and which wing of the party will win? Trying to be all things to all men was Boris’ strategy. It won’t work. ‘He who walks in the middle of the road gets hit from both sides’.
Implications for the property industry
So, in the run up to the next general election, the Tories are battling internally to decide their direction on development, and housebuilding in particular. Do they out Lib Dem the Lib Dems or not? Do not expect any good news here any time soon for any of us in the property industry.
And then on current trend we look to be headed towards a hung parliament. Hung parliaments are never pretty and don’t produce good government; think of Theresa May in 2017-19 or Harold Wilson in 1974. The Coalition of 2010-15 was highly unusual and probably will never be repeated. It is quite probable that the next potential hung parliament will be an altogether much messier affair than the stable Coalition era. Business and investor confidence will be affected. The economy will be impacted. Legislation sorely needed will not be passed. A second general election tends to follow quite quickly.
And whichever party wins in whatever permutation – small Labour majority, Labour minority, Lab-Lib Dem arrangement, Tory minority or even a small Tory majority – none of them look like they’ll be stable and long-lived, nor have the support to carry out the reforms we need right now, even if they had the political will.
Truth be told, there are very few positive signs on the political horizon.