"Conventional wisdom holds that governments that deliver economic prosperity tend to secure re-election whereas those associated with economic failure tend to lose office." Discussed in respect to the 2001 general election.

“Conventional wisdom holds that governments that deliver economic prosperity tend to secure re-election whereas those associated with economic failure tend to lose office.” (Sanders and Brynin). Given that the 1997 General Election was held after a prolonged period of economic recovery in Britain, how can one explain the outcome? What does it tell us about the value of perspectives that link economic prosperity or failure with election outcomes? Briefly consider your findings in the light of the 2001 general election. (You will be given credit for discussing the methodological problems that arise in this type of analysis.)

"It’s the economy stupid" is the famous response (ever since Bill Clinton coined it in his 1992 election campaign) to people who ask what matters in an election. It is certainly true to say that there is a lot of evidence from electoral research that voters’ choices are conditioned heavily by economic conditions and by their view of the ability of competing parties to manage those conditions. However, as this essay will show it is people’s perception of the economy and how the parties can manage it, rather than the actual economic prosperity of the country, that affects how people vote. It can also be argued how far other factors affect voting choice, especially in the post 1997 election period.

Ever since the explanatory power of social class seems to have diminished, and the debate has raged on the extent to which newer areas such as geography can explain variance in British voting, one particular theory-economic voting-has recently gained favour in psychological circles. Most of the focus for these studies has concentrated upon personal economic expectations; however as the 1992 and 1997 elections show the basis for economic voting seems to lie in the economic credibility of the political parties.

In 1992 Labour had a clear lead on most of the issues that dominated the election, having in-built advantages on the social agenda of education policy, the NHS and unemployment. The Conservatives only led on economic issues, such as income tax policy. Despite this apparent imbalance, the Conservatives were able to cash in on their one policy advantage in 1992 and designed their main campaign issue around the issue of taxation. Despite apparently unfavourable economic conditions in 1992, the heartland of Conservative support-the service sector based electorate in the South of England-failed to turn against the Conservatives. Choosing to absolve the Major government blame for the new recession, the electorate (particularly the South) was likely to rate the Conservatives as the best party to deal with the economy. Voters trusted the Conservatives to take them out of the recession, whereas the Labour party had not reformed itself enough to rid itself of its bad economic reputation, and the fear people had of ‘tax, spend and waste,’ that they believed might occur under Labour. This economic competence question was a key feature of most explanations of the 1992 election.

If the issue of economic management was the key reason why the Conservatives were victorious in 1992, it was crucial to their defeat in 1997. Labours most difficult obstacle to overtake the Conservative reputation was over the issue of taxation. Objectively, the Conservatives were on weak ground, because while they had sharply cut rates of taxation for the highest earners, they had failed to deliver a lighter tax burden for the key groups of targeted voters. Indeed, after the general election of 1992 the tax burden rose. Labours problem partly lay in the fact that a powerful and hostile tabloid press reinforced the popular perception of the Conservatives as the more economically competent and prudent party. This problem was solved for the party soon after the 1992 general election: the catastrophe of “Black Wednesday” (when the government was humiliatingly obliged to withdraw from the European Exchange Rate Mechanism in September 1992) destroyed the Conservatives’ reputation for superior economic competence. On taxation, the second Major administration created a window of opportunity for Labour after 1992. Forced by economic circumstances to raise taxes, the Conservatives found that they had destroyed their reputation in the eyes of the voters as the low tax party.

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Previous post-war financial and economic disasters (the sterling crises of 1947 and 1967-68, and the IMF loan of 1976-78) had been associated with Labour in office. The ERM crisis not only made a mockery of Conservative pledges to cut tax “year on year”, it was the most serous economic disaster presided over by a Conservative government since the war. Since 1952, GALLUP has asked the public which party was best equipped to handle Britain’s economy. Until September 1992 (with one single exception-during the poll tax protests of 1990) the Conservatives were comfortably ahead of Labour on this question. This decisive lead was wiped out immediately after the ERM crisis. In an instant, the basis of successive Conservative electoral victories had been undermined. According to Anthony King, the ERM crisis ‘destroyed almost instantly a stable, reliable, economic reputation which had taken generations, even centuries, to gain.’ Gordon Brown, the shadow Chancellor, took the opportunity to announce gleefully to the Commons that the government had, ‘lost all claims to economic competence and credibility.’ The Conservatives failure to redress the question of economic competence robbed them of the potential advantage from other economic indicators that would normally have been considered good news for an incumbent government. Hence, falling unemployment, manageable inflation, a more favourable balance of payments and an upturn in the housing market could not save the Conservatives in 1997. According to the conventional rules of behavioural patterns in elections, this economic prosperity should have been enough to secure the Conservatives re-election, however as we know, this was not the case. One of the reasons for this, that was not the case in 1992, is the fact that by 1997, Labour was seen as a credible alternative to the crisis-ridden Conservative party. Voters at last, had a proper choice, because the opposition party were now a reasonable alternative, especially over the issue of economic competence, and many voters felt that after 18 years of Conservative rule it was time for a change. Labour had ditched Clause 4, its commitment to a socialist agenda, and adopted a more ‘conservative’ economic policy, designed to appeal to the middle classes who had become disillusioned with the Tories, but still mistrusted socialist aims which had frequently previously led to economic crisis.

What made the Conservatives loss in 1997 so spectacular, bringing about a complete re-alignment of the electorate, was not simply the issue of loss of economic competence, but the scale of electoral dissatisfaction with other issues. There is strong evidence that other factors such as leadership, health, education, a parties’ stance on crime and sleaze all have a part to play, not just since 1992, but in all elections. In a MORI poll before the 2001, when the question was asked, ‘Which, if any, of these issues, do you think will be very important to you in helping you decide which party to vote for?,’ taxation and managing the economy came fifth (37%) and sixth (31%) to pensions (40%), law and order (50%), education (62%) and health care (73%). Another explanation for the Conservative losing the 1997 general election was due to the Conservatives poor reputation for economic management being extended to the political sphere in 1994 by a steady stream of ‘sleaze’ stories about the sexual peccadilloes of certain Conservative MPs (this form the party which claimed to stand for ‘family values’) and the questionable financial practices of others (Dunleavy et al., 1995). In a Gallup post-election survey, four-fifths of labour voters identified the Conservatives’ sleaze and corruption as being an important factor in their voting decisions. Although Labour have received their fair share of sleaze related media reporting since gaining office in 1997, the difference is that by 2001 MORI polls found that the majority found both parties as sleazy as each other, contrasted with the relatively sleaze-less Labour in 1997 compared to the sleaze-rife Conservatives.

The governments overall management reputation was further impaired by the widespread sense among voters that the Conservatives were increasingly a party torn by division and internal strife. Baker et al, 1994, argues that the Conservative Party were, ‘divided top to bottom over Europe, not so much over left versus right issues as over sovereignty versus independence issues.’ Despite two backbench rebellions over Maastricht related issues, the Maastricht treaty was ratified in Parliament with the help of the opposition. But divisions were growing deeper and all the more evident. The Cabinet were not united with Rifkind (the foreign secretary) suggesting the Cabinet was hostile to Europe, which was instantly dismissed by Clarke as a ‘slip of the tongue.’ Major’s frustration with the Euro sceptics in his cabinet became very public when he referred to them as ‘bastards’in a taped interview with an ITN journalist. Portillo also openly attacked Maastricht in a speech at the 1994 Party conference and Major failed to silence eight rebels by removing their whip. Major had to eventually reinstate them, due to his tiny majority, which was a humiliating climb-down and once again portrayed him as weak. In May 1992, two-thirds of the electorate considered the Conservatives to be a united party. However by June 1993, this figure had fallen to under a fifth, and the Conservatives have still failed to recover from this label.

By contrast, Labour under Blair was making stark progress. Blair was an authoritative, strong leader in control of a united party. In the same Gallup survey in 1997, 93% of Labour voters considered Blair’s leadership strength to have been either very or fairly important in their decision to vote Labour-complementing the 67% who thought that Majors weakness was important. This issue was also a factor in the 1992 election campaign with Major being the new fresh Conservative leader that people were far more likely to trust and vote for over the unpopular Labour leader Neil Kinnock.

However, trying to analyse election results and measure the variables that affect voting, is not an easy process. It is not simply a case of asking people how important certain issues, including economic prosperity are to them and coming up with the answer as to why people vote the way they do. Often people may say one thing and then vote differently, people change their minds or don’t vote due to the issues they find most important, but vote according to which leader they prefer or which party they trust the most. People can also be reluctant to tell a stranger their political views, or inclined to give what they think is the ‘correct’ answer rather than their real feelings. Even more significant is the fact that, according to MORI polls, as many as 15% of people still hasn’t decided which way to vote on the eve of an election. Finding out people’s views is a difficult research process and the advantages and uses of polls and other research methods have long been debated. Including issues other whether to use face-to face interviews, postal questionnaires, internet interviews or telephone interviews. There is also an issue over what questions to ask, how to ask them and how to come up with representative samples. So, as you can see, polling and research into opinions and trends is far from simple.

The survey data perspective focus primarily on what goes on inside the voters head; on the various factors, both conscious and unconscious, both explicit and implicit, that enter into the voter’s decision to vote in a particular way. A crucial feature of survey based individual-level data is that it allows direct testing of the importance of different variables on the probability that observable individual voters will support party A rather than party B. Opinion polls provide understanding, analysis and tracking of the behaviour, knowledge, opinions, attitudes and values of the public. By measuring this , within the limits of the science of sampling and the art of asking questions, surveys can determine what people do and what they think. However opinion survey evidence always needs to be treated with caution especially due to the snapshot character of polls, and the fact that they display only a cross-section of voters’ views on one particular day, and give no definite predictions for the future. This remains the major limitation of all survey based individual level data.

Although they have limitations, opinion polls are important in determining why people vote, as they provide the data foundations for a second stream of academic models, the aggregate model approach (or the economic model of voting). How people see the economy as faring (subjective economic perceptions) has been seen as pivotal in explaining government support in several aggregate analyses (Sanders, 1991, 1995; Niemi et al., 1996). Economic models of voting try to match economic indicators to party success. These indicators include unemployment rates, house prices, wage rates, economic growth and balance of payments. While individual-level approaches base their explanations of vote preference on the characteristics of different voters (or groups of voters), aggregate-level analyses look at how the overall balance of party support changes over time. These models have tended to focus on the condition of the objective economy; on changes in economic perceptions (the “subjective” economy); and on the impact of “significant political events” such as Britain’s exit from the ERM in September 1992.

The major strength of aggregate time-series analysis is that it allows the analyst to track the movements in any pair of variables very carefully in order to establish the character of the connection between them. This model can argue that an observed correlation between government popularity and aggregate personal economic expectations (of the sort described in figure 3.1, see references), provides empirical support for the claim that the average voter is more inclined to support the incumbent party when s/he is more optimistic about her/his personal financial prospects. The theoretical underpinning of this claim is that an economically optimistic voter is more likely in these circumstances to want to preserve the political status quo that produced her/his initial optimism.

What an aggregate correlation between optimism and government support cannot show is whether the optimistic individuals are also the ones who support the government (while the pessimists back opposition). Only checks with individual-level analyses can reveal this sort of information. Looking at Figure 3.1 it is clear that the Conservatives’ popularity in government was closely linked to personal economic expectations most of the time, but that in two periods, 1985-6 and from late 1992 onwards, Tory support was much lower than would have been expected given people’s views of the economy. Critics argue that if such political ‘shocks’ (Westland affair and the exit from the ERM) can make these big (and in 1992-7 long lasting) changes in the relationships between such previously connected variables as perceptions of economic trends and government popularity, how useful and accurate are such models.

There is much debate as to how strong the relationship, between economic optimism and party support, is today. In the 80’s there was a very clear correlation between MORI’s EOI and voting intention figures, and David Sanders was able to produce powerfully predictive models using economic data. However, since then this relationship has become much weaker. Between the 1997 election and March 2001, the relationship between EOI and voting intention in MORI’s polls was only weak: the r2 co-efficient, which measures how closely two variables are correlated, was 0.071 meaning that only 7.1% of the variation in Labour’s lead can be attributed to changes in economic optimism. However, in the case of 2001, it could be that other issues were simply more important to the voter. Unemployment was extremely low and the economy generally seemed to be in good shape, so it is natural that the public were more concerned about issues where they were dissatisfied with government opinion than where they were not. Therefore governments cannot necessarily afford to be complacent about the electoral effects of an economic downturn, but while the economy remains reasonably healthy, it will not be a decisive election issue.

In conclusion, it is clear that the economy is an important issue to voters, but it is also clear that is not the only issue. Often it is not the state the economy is in but the confidence voters have in the parties managing it that affects their views of economic competence. For example John Major was re-elected during a recession in 1992, but then lost during the economic boom of 1997 because the party lost their reputation of ‘the party of the economy’, that they had, had in 1992. But the issue of economic competence cannot be seen in isolation. As this essay has shown, party leadership, sleaze, the desire for a change and the importance of other issues such as the NHS, education and crime all have an impact on how a voter will vote. The main issue over how someone will vote seems to be whether the opposition is a viable alternative. If they are then the election is contested on issues such as the economy and public services, but if a leader doesn’t have credibility or a party is divided, the governing party will probably win, even without economic prosperity.

References

Developments in British Politics 5, Patrick Dunleavy, Andrew Gamble, Ian Holiday and Gillian Peele (figure 3.1, p.63)

Explaining Labour Second Landslide, Robert Worcester & Roger Mortimer

The British General Election of 2001, David Butler and Dennis Kavanagh