It was Clare Booth Luce, the witty and glamorous wife of the publisher of Time magazine, who coined the phrase that no good deed goes unpunished. It is all you need to know about British politics today.
The UK had the best performing of the G7 economies last year, with a real GDP growth rate of 2.6%. In 2009, the last full year of Labour government, the figure was -4.3%. The coalition formed five years ago by Conservative leader David Cameron and the Liberal Democrat leader Nick Clegg inherited an almighty mess from Gordon Brown, who had presided over feckless public sector expansion and reckless disregard for bank leverage and mismanagement. Five years ago, according to the Bank for International Settlements, the UK’s fiscal and financial trajectories were the worst in Europe.
Since then, confounding the doom-laden prophecies of Paul Krugman, Martin Wolf, Robert Skidelsky and the entire left-wing media, there has been a remarkable turnaround. More than 1.9 million jobs have been created since May 2010. UK unemployment is 5.6%, roughly half the rates in Italy and France. Weekly earnings are up by more than 8%; in the private sector, the figure is above 10% Meanwhile, inflation is below 2% and falling. Retail price inflation is currently running at 0.9% year on year.
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The government’s policy of fiscal stabilization, derided by Keynesians as ‘austerity,’ has in fact been a success, even if the extent of deficit reduction fell short of Chancellor George Osborne’s original goal.
According to the International Monetary Fund, the government’s deficit has been halved from 11% to 5.7%; the structural deficit more than halved from 10% to 4.2%. The national debt has been stabilized at roughly the same level relative to GDP as that of the United States.
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Few governments since 1945 have achieved comparable economic results from such a difficult starting point. If democracy were a just system, the Conservatives would be looking forward to a resounding election victory and a return to one-party majority rule.
But, as they say in London, chance would be a fine thing. Not for the first time in British history – it happened in 1945, 1964, 1974 and 1997 – the electorate feels that, after doing what had to be done under the Conservatives, it can now indulge itself with a flutter on Labour, which remains, incorrigibly, the party that promises to spend more on the welfare state by taxing the rich.
The 1992 General Election, which this contest in some ways resembles, ended with all national opinion polls picking up a late swing to the Conservatives (though almost all of them still had Labour ahead).
This election has seen no such trend. In fact, the most recent polls have on the whole moved away from the Conservatives, and towards Ed Miliband’s Labour Party. If we take the Conservative lead in the penultimate surveys from each pollster as our baseline, and then look at the swing to Labour in each, we can see a fairly consistent pattern: Ipsos MORI, Populus, Panelbase, Opinium, YouGov and TNS showed no movement at all in their last polls, while all but Survation showed swings to Labour of either 2% (Lord Ashcroft and ICM) or 1.5% (ComRes and BMG).
The Prime Minister’s remaining hopes of re-election must therefore rest on three key facts not visible in most polls: that the Conservatives are ahead on leadership and the economy; that Labour depends on younger and poorer voters actually to turn out; and that a bias towards Labour seems to have become established in the opinion polls themselves over the last two years.
Let’s take these one at a time. First, both Miliband and his party have made gains in this campaign, one reason why its result still seems in doubt. But they are still behind: Mr Miliband and his Shadow Chancellor, Ed Balls, may have eroded the Conservatives’ advantage of 19% (in Opinium data from February) to 14% at the end of April, but that is still a substantial deficit. Miliband still trails Mr Cameron on the question of ‘who would be the best Prime Minister’ by 51% to 32%. No Opposition has ever won an election while trailing on both economic competence and leadership.
Secondly, as ComRes reports, the proportion of 18-24 year olds who say that they will “definitely” vote has risen from 36% to 56% across the campaign, while the same figure for 25-34 year olds has leapt from 46% to 71%. It seems doubtful that younger voters will turn out in these numbers, in a country that in 2010 reported the highest disparity between younger and older voting rates in the OECD. Given that Labour leads the Conservatives among these voters by 5%, as opposed to their massive 18% deficit among voters aged over 65, Mr. Miliband desperately needs younger people to turn out for him: if they do not, Labour’s actual voting tallies will badly trail their polling figures.
All of this helps to explain why Labour has underperformed its polls in every single electoral contest over the last two years: it is more than likely that a similar pattern will emerge as the results unfold, despite the higher turnout and more “representative” electorate that is natural at a General Election.
The polls need to have been overstating Labour’s position by between two to three percentage points for Mr Cameron to remain in No. 10 Downing Street: right on the edge of their systematic bias. The good news for the Tories is that a total of sixteen recent polls that had subsequent “real world” votes to judge them by overstated Labour’s position against the Conservatives by, on average, 4.7%. True, ten of those were surveys of hard-to-measure by-elections in individual seats. But the six final polls taken of the nationwide elections to the European Parliament last year overstated Labour’s position by nearly 3.5%.
Anything approaching such an error today will see Mr Cameron’s party on 290 seats or more – enough to go on governing with a renewed coalition the Liberal Democrats, assuming that the Lib Dem leader Nick Clegg retains his seat.
The alternative – if the polls turn out to be about right – is a Labour-led government that will require SNP votes to function. For, even if the Guardian’s projection proves correct, and Labour and the Tories each win 273, and even if the Lib Dems lose Clegg and defect to Labour, Miliband will still need SNP support to pass a Queen’s Speech.
My prediction is as follows: Conservatives 287, Labour 261, SNP 50, Liberal Democrats 26, DUP 9, UKIP 2, Green 1. Obviously, such a very close result could easily go the other way, with just one or two hundred votes in two or three English marginal seats capable of tipping the result in Mr. Miliband’s favour. But if by some fluke I am exactly right, Mr. Cameron will have a majority for a Queen’s Speech of just four, and then only if UKIP vote for him to continue as Prime Minister. With some Conservative MPs expressing unease at such a scenario, and the Liberal Democrats already restive about endorsing a referendum on EU membership, such a slender victory would provide only the shakiest of foundations for a new coalition. Indeed, victory could turn into defeat in a matter of days.
The United Kingdom, where the two-party system was born, has entered a new era of continental-style multi-party politics. The first great paradox of this new era could be the emergence, faute de mieux, of a minority Labour government dependent on the support of a nationalist party pledged to dismantle the United Kingdom itself. This would be a deeply ironic result, give the government’s seemingly decisive victory over the SNP in last September’s referendum on Scottish independence.
As I said, no good deed goes unpunished.
Niall Ferguson is the Laurence A. Tisch Professor of History at Harvard University and author of, most recently, The Great Degeneration (Penguin).