Will unemployment sink the coalition?

Why Cameron can't ignore the electoral consequences of rising joblessness.

In February 2012 unemployment reached 8.4 per cent of the workforce, or 2.67 million people, according to the Office of National Statistics. The jobless total increased by 48,000 over the previous quarter, and with current polices it is only a matter of time before it reaches 3 million. On the other hand, this does not appear to be helping Labour very much, with a YouGov poll in the Sun earlier this month putting the Conservatives on 40 per cent in voting intentions compared with 38 per cent for Labour. From the 1950s to the 1980s governments ran scared of unemployment since it appeared toxic to the re-election chances of an incumbent party. In these years it appeared that a governing party would be rewarded in the polls if unemployment fell and punished if it rose. So what has happened to this relationship and can the coalition safely ignore the electoral consequences of rising unemployment? There are good reasons to think not, and there is a real chance that this issue will sink the coalition government at the next election in May 2015.

There were seventeen general elections between the first fully peacetime election in 1950 and the most recent one in 2010. The chart below shows the relationship between vote shares for the governing party and unemployment in the election year. The diamonds represent the elections and the striking feature is the strong negative relationship between unemployment and votes for the governing party, particularly in fourteen of the seventeen elections. In each of the fourteen elections the governing party, whether Labour or the Conservatives, took a big hit in their vote share if unemployment grew on their watch. This was most apparent in 2010 when unemployment reached 2.4 million under Labour and the party achieved the lowest vote share of any government in the era of mass democratic politics.

Unemployment and Votes for the Governing Party 1950-2010

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So what happened in the cluster of three elections in the chart which do not appear to fit the pattern? These were the elections in the Thatcher era between 1983 and 1992. Unemployment grew rapidly after the Conservatives won the 1979 election when the Thatcher government started to make rapid cuts in public spending and introduced very deflationary monetarist policies. As a consequence Conservative support in the polls started to decline rather rapidly and it is fairly clear that they would have lost the 1983 election were it not for four key factors. The first factor was Labour's split in 1981 which gave birth to the Social Democratic Party and greatly weakened the party electorally, since voters dislike a divided party. The second was the Falklands war in which the Conservatives managed to snatch victory from the jaws of defeat and this raised their support dramatically overnight. The third was Michael Foot who may have been admired by many Labour Party members, but was very unpopular with the voters. Finally, there was the Labour manifesto of 1983 famously dubbed 'the longest suicide note in history' and this damaged support even more. Cumulatively this combination of factors put paid to the party's chances and served to protect the Conservatives from the consequences of their economic policies.

Once Mrs Thatcher had got over the hurdle of the 1983 election and more than 3 million unemployed, joblessness started to slowly decline and fell to 2.8 million by 1987 and to 2.7 million by 1992. As a result the Conservatives could claim that their policies were slowly but surely working, a claim which was successful as voters forgot what had happened in the early eighties. The key point here is that the relatively strong relationship between unemployment and votes for the governing party was overridden by a very unusual set of events in 1983. These events were rare by historical standards, since major British political parties do not split very often, and it is not very common for the country to win a short, sharp, legitimate war. This means that if events are momentous enough and produce sufficient cumulative bad news for the main opposition party, the impact of unemployment on voting is going to be greatly weakened. But as 1983 demonstrated it takes a great deal for this to happen.

So the key question is what are the chances of the coalition government repeating this and being insulated from the consequences of its economic policies in 2015? At the moment the chances look pretty slim. Unlike in the early eighties Labour is a united party despite the grumbling about Ed Miliband's leadership, and he is unlikely to face a leadership challenge in the present Parliament. Actually his popularity and that of the Labour Party is likely to increase as it becomes more and more apparent to the voters that Labour has been right about the economy and the Conservatives have got it wrong. The party will receive an additional boost if as seems likely Barack Obama is re-elected President of the United States. This is because the US economic strategy under Obama has been much closer to that advocated by Labour than to the government, and unlike Britain the early signs of a recovery in the US economy are now emerging. Overall the Labour Party has a very good story to tell about the economy in the run-up to 2015.

Events in the Eurozone are currently conspiring against the government. Even if the coalition were pursuing a growth strategy, it would largely be stymied by the Eurozone crisis. As is widely recognized the Euro bailout is all austerity and no prosperity so it is very likely to fail. Moreover the one success the government can claim, low borrowing costs in international financial markets, will be undermined if Britain loses its AAA credit rating as the deficit continues to rise. It may sound a bit far-fetched but I would not rule out a Labour landslide victory in 2015 if things go on as they are.

Paul Whiteley is Professor of Government at the University of Essex and Co-Director of the British Election Study.

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Lord Empey: Northern Ireland likely to be without government for a year

The former UUP leader says Gerry Adams is now in "complete control" of Sinn Fein and no longer wants to be "trapped" by the Good Friday Agreement

The death of Martin McGuinness has made a devolution settlement in Northern Ireland even more unlikely and has left Gerry Adams in "complete control" of Sinn Fein, the former Ulster Unionist leader Reg Empey has said.

In a wide-ranging interview with the New Statesman on the day of McGuinness’ death, the UUP peer claimed his absence would leave a vacuum that would allow Adams, the Sinn Fein president, to consolidate his hold over the party and dictate the trajectory of the crucial negotiations to come. Sinn Fein have since pulled out of power-sharing talks, leaving Northern Ireland facing the prospect of direct rule from Westminster or a third election in the space of a year. 

Empey, who led the UUP between and 2005 and 2010 and was briefly acting first minister in 2001, went on to suggest that, “as things stand”, Northern Ireland is unlikely to see a return to fully devolved government before the inquiry into the Renewable Heat Incentive scheme is complete -  a process which could take up to a year to complete.

“Adams is now in complete control of Sinn Fein,” he said, adding that it remained unclear whether McGuinness’ successor Michelle O’Neill would be “allowed to plough an independent furrow”. “He has no equal within the organisation. He is in total command of Sinn Fein, and that is the way it is. I think he’s even more powerful today than he was before Martin died – by virtue of there just being nobody there.”

Asked what impact the passing of McGuinness, the former deputy first minister and leader of Sinn Fein in the north, would have on the chances of a devolution settlement, Empey, a member of the UUP’s Good Friday Agreement negotiating delegation, said: “I don’t think it’ll be positive – because, for all his faults, Martin was committed to making the institutions work. I don’t think Gerry Adams is as committed.

Empey added that he believed Adams did not want to work within the constitutional framework of the Good Friday Agreement. In a rebuke to nationalist claims that neither Northern Ireland secretary James Brokenshire nor Theresa May can act as honest or neutral brokers in power-sharing negotiations given their reliance on the DUP’s eight MPs, he said: “They’re not neutral. And they’re not supposed to be neutral.

“I don’t expect a prime minister or a secretary of state to be neutral. Brokenshire isn’t sitting wearing a hat with ostrich feathers – he’s not a governor, he’s a party politician who believes in the union. The language Sinn Fein uses makes it sound like they’re running a UN mandate... Gerry can go and shout at the British government all he likes. He doesn’t want to be trapped in the constitutional framework of the Belfast Agreement. He wants to move the debate outside those parameters, and he sees Brexit as a chance to mobilise opinion in the republic, and to be seen standing up for Irish interests.”

Empey went on to suggest that Adams, who he suggested exerted a “disruptive” influence on power-sharing talks, “might very well say” Sinn Fein were “’[taking a hard line] for Martin’s memory’” and added that he had been “hypocritical” in his approach.

“He’ll use all of that,” he said. “Republicans have always used people’s deaths to move the cause forward. The hunger strikers are the obvious example. They were effectively sacrificed to build up the base and energise people. But he still has to come to terms with the rest of us.”

Empey’s frank assessment of Sinn Fein’s likely approach to negotiations will cast yet more doubt on the prospect that devolved government might be salvaged before Monday’s deadline. Though he admitted Adams had demanded nothing unionists “should die in a ditch for”, he suggested neither party was likely to cede ground. “If Sinn Fein were to back down they would get hammered,” he said. “If Foster backs down the DUP would get hammered. So I think we’ve got ourselves a catch 22: they’ve both painted themselves into their respective corners.”

In addition, Empey accused DUP leader Arlene Foster of squandering the “dream scenario” unionist parties won at last year’s assembly election with a “disastrous” campaign, but added he did not believe she would resign despite repeated Sinn Fein demands for her to do so.

 “It’s very difficult to see how she’s turned that from being at the top of Mount Everest to being under five miles of water – because that’s where she is,” he said. “She no longer controls the institutions. Martin McGuinness effectively wrote her resignation letter for her. And it’s very difficult to see a way forward. The idea that she could stand down as first minister candidate and stay on as party leader is one option. But she could’ve done that for a few weeks before Christmas and we wouldn’t be here! She’s basically taken unionism from the top to the bottom – in less than a year”.

Though Foster has expressed regret over the tone of the DUP’s much-criticised election campaign and has been widely praised for her decision to attend Martin McGuinness’ funeral yesterday, she remains unlikely to step down, despite coded invitations for her to do so from several members of her own party.

The historically poor result for unionism she oversaw has led to calls from leading loyalists for the DUP and UUP – who lost 10 and eight seats respectively – to pursue a merger or electoral alliance, which Empey dismissed outright.

“The idea that you can weld all unionists together into a solid mass under a single leadership – I would struggle to see how that would actually work in practice. Can you cooperate at a certain level? I don’t doubt that that’s possible, especially with seats here. Trying to amalgamate everybody? I remain to be convinced that that should be the case.”

Accusing the DUP of having “led unionism into a valley”, and of “lashing out”, he added: “They’ll never absorb all of our votes. They can try as hard as they like, but they’d end up with fewer than they have now.”

Patrick Maguire writes about politics and is the 2016 winner of the Anthony Howard Award.