On this special edition of Voternomics, we discuss the possible reasoning behind the Conservative’s decision to gamble on an earlier-than-expected vote.
Welcome to Vota Nomics, where politics and markets collide, and especially today it is Wednesday, the twenty second and May, and we've just in the last few minutes heard Prime Minister Richie Sunak announced in the pouring rain a general election will be held in the UK, haven't we Adrian, haven't we Stephanie.
So we have gathered gathered, thanks Kenny, to talk about it briefly before also recording this week's regular episode. But we felt like there were things to say, There.
Were and wasn't that tricky for him in the pouring rain? With things can only get better blurring for I'd say eighty percent of it right.
Which as you and you're sitting there as like former broadcast hands, you sit there thinking, okay, so it's very hard to have a clip on the main news. And yes, he's looking more and more wet, especially when he turned round. And I guess the more sort of fundamental thing is, which I'm sure everybody will you know, it's hard to resist the sort of metaphor that this has been a prime minister who has had to just carry on as quite a lot of things were falling about, you know, quite a lot of noises off but also just many things kind of falling apart behind him. I mean even that song. When you look back to ninety seven, you know, ninety seven the idea that things could only get better was much less resonant than now. Funnily enough, because you actually had quite a strong economy that the labor then inherited. Now labor do have this quite strong line which I think resonates with voters, which is nothing's got better since twenty ten. Or name a public service that has actually got better. Now, that's of course also you know COVID, many many things have combined to that is not just down to the Conservatives, but it is, it is quite resonant.
I think that's true to some extent. But in nineteen ninety seven, labor had a vision of the future. They had a story to tell about the future, and Kirs Starmer has not told a story about the future. What we're going to have is an election which is really about fourteen years of Tory miss. It will be an election about the Tories in which I think people will vote against. The tour is not in favor of Starmer. They don't know what someone but what labor.
But even things can only get better? Is a very negative message, right. That's why it feels resident because it's like, oh, there has to be something better than this, not really knowing what the something.
Is in that sense. But they did have we did have new Labor and it did have an agenda. And we don't have new Labor. We have a Labor party that's better than Corbyn's party.
So just to be for a second, I mean they will be. They will be inside number ten right now. I would imagine, thinking back to when I was in the Treasury with issue, they will be furious that it is as you alluded to at the top of their stuff. It's really you know, you do these moments outside to get the clip for the news at the six o'clock news, which is what in sort of forty minutes whenever, and then the ten o'clock news, which will be watched by many millions of people. So firstly, you're trying to set your narrative immediately, and I don't I really There was a long period at the top of Rishi's un next comments that were about COVID, which we can discuss in a second, because I thought that was an interesting strategic choice to go in on that at rather than inflation, for instance, which is today's today's peg for one assumes this decision. So firstly, there's very there's not a clip, so it's very difficult I think for them to be able to set what they would like the narrative to be.
Although, funnily enough, without dwelling too much on it, the new that the music actually faded just as he turned to the challenge, making a similar point to Adrian on labor. So in that sense, you know, maybe that will be the clip of him sort of throwing down the gortlant to to labor. And but you know, I think you're right.
There's no good clip.
I don't.
It all seems to be all too apt about this, this this government and Snaxt period in power. It's just been a series of problems.
Should we dwell a little bit on this time in question? Because until quite recently, although there'd been a lot of sort of fluttering in the sidelines about a possible summer election, which hadn't completely died, there was you know, usually the conversation would end with, you know, MP's one to have six more months or have you know, several months more of pay and looking for jobs, even if they think they're on the way out. You don't give up as a government because that just feels like you're walking away from the top job, and that you, you know, the lack of leadership we had, you'll be able to do an autumn statement which gives more tax cuts. I mean, all those arguments seem to have just disappeared. I mean we get into the economics, because I think there probably wouldn't have been any text cuts. Maybe that is. I do think there's some big economic reasons. But let's just think about why why do you think it's now?
Because I think, as I've written in the read out, I think that politics doesn't often give you clear moments where you can say tick. And I think that inflation being down to two percent is it has a two at the front. It has a two at the front, and it was expected to be two point one and it's now two point three, and that is higher than expected, and it will have an impact on whether or not there's a rate cut in June, which i'd you know, I think the number today suggests won't now happen. But even if the number had been one point nine, the bank would have been quite norvius about doing it. Because they didn't know when they did.
But you are right, then it's low twos kind of that feels like jobs.
So I think it's this any compelling reason for doing it now, I really don't. I feel that it's a feeling that they've just run out of road, that they've been bleeding to death in public and why go.
But you can flip that, which is they want a mandate, and that is what you've just said. But it's the other way of saying it, which is we need to get Richie Sunak needs to go to the public and get them to say, yeah, we'll have a bit more of you thanks, so he can then because one of the biggest problems for him has been the sort of you know, unruly party, and he needs to have his own mandate, not Brois Johnson's mandate.
Not They're not going to get a mandate. I mean, I think the economists, the economists seat predicted pole, whether it is sliding pole that they do all the time, gives the Tories a one percent chance of winning. He's just annoyed the entire journal stick community and the entire MP community political community by by forcing them to reschedule their holders, including me what.
You were doing.
Do you think you could get quite quite a lot, get quite a lot of But.
Those core cohorts were not they weren't Besies, right, So it's not it's not that you know, suddenly you've lost people that were, you know, cheerleaders. So I think, you know, in politics, you don't get very many clear.
Moment more staunching the flow of blood. Every week you were getting a Tory defecting to the other time. Every time week you were getting some Tory doing some weird thing about photographing their genitals and and and and publicizing. Every week there was just some sort of terrible disaster. I think you just had an.
I think and there is there's there's an economic piece of this. It's partly a legras point that you've now got You've had an unexpectedly strong growth number. You've got inflation looking like it's kind of under control, even if the interest rate picture is not clear. I think fundamentally, you know, we saw it earlier this week, there's another ten billion at least going out the door. Finally, with the compensation for the victims of the contaminated blood scandle. And there's also an increasing feeling when you look at the underlying numbers from the last few years. You know, even the very tight fiscal forecast that Jeremy Hunt would have been playing with in trying to find a bit more money for tax cuts rely on actually what is considered to be a very optimistic forecast for UK growth based on a rather optimistic forecast for productivity growth. You know, output per head in the UK is expected in these official forecasts to grow twice as fast as it has in the last ten years, and if it doesn't, there'll be another hole of forty billion pounds in the budget which might yet might easily get revealed in the next quote unquote fiscal event, because the Office for Budget Responsibility might decide, look, we've got to follow the Bank of England many other city forecast is in sort of accepting the reality of UK growth.
I think that ten billion number is quite significant. Is a lot of money suddenly to lose. So I don't think there's anything good that was going to happen to them, and probably a lot of bad things they're going to happen to them over the summer.
Also, I was looking at the date and July fourth, one would hope that England will have got through at the group stages and the first round of the first round. After that, of the years, they won't have lost yet because they won't have gone to the quarterfinals finals, and he'll be able to go to the Games.
Having been quite grumpy already, i'd like to be grumpy again about Rish's announcement, which I thought was wrong what he says said. He started off by saying, we live in a dangerous world and you need somebody you can rely on, somebody who will defend us against the Russians and the Chinese and the Iranians and all of these people. And I think that business of playing politics with the issue of defense is very, very questionable. I think that the Labor Party, it's not Corbyn's Labor Party, it's a pretty sensible labor party. And I think these defense issues are so important that we should be agreeing upon them, and we should collectively be agreeing to be spending a very significant amount of you know, three percent rather than two point five percent, not rolling around in mud about them. So I didn't like that. I can see that his choice is limited, but I don't think he should be trying to present the label.
Also, you end up looking at quite a contrast with Keir Starmer as well, because he's been made such a point, certainly in the Middle East. He's made such a point of being, you know, at cost to his unity, and his party has made a point of unity with the government in order to show a sort of statesman.
As the Labor Party keeps saying, when they were in power in twenty ten we spent two point five five we're now spending lesson.
I think, to be fair, I think it started in ninety seven, it started at three, so it went down hard to.
The cathartic point that now we can have these or rather they the leaders will do TV debate after TV debate, and they can thrash exactly these arguments out, whereas before there's been this phony war where it's been somebody making a speech about the topic they want to make it, you know, asserting something that you know you're uncomfortable with or whatever. But actually now Starmer will get the opportunity to respond directly and and and the electorate will hear and be able to make their own mind up. And that personally, I find that is there's a sort of breath of fresh air coming.
I know, I think that's that that that's a reasonable point. But I don't think that the the the week on defense point necessarily sticks. I am and I'm still uncomfortable about about politicizing what all to be a sort of national effort to to deal with these unprecedented threats from from from from Russia and Jina and Iran all at the same time.
I think, I mean, it is interesting that a number of people have responded, even on the left, you know, who've probably wanted to have an election, but have now sort of said, oh, this just shows terrible, you know, failure of leadership that he's given up, which I think you can't have it both ways. I think there's an interpretation. I'm not saying that this has driven him, but there's an interpretation that says this is better for the country. You know, if you look at how much the civil service everybody was parading, was not just you know, by the prospect of a new administration, but also the sheer uncertainty of the date. And I found myself thinking, as when I was watching Prime Ministers questions earlier today and he was asked about the rumors, and I'd have to say, at that time I thought it was fairly unlikely that we'd have an election. I wasn't necessarily believing it, but I just wanted someone to ask him, what is the country, you know, what is the benefit to the country of having these several months more uncertainty of whatever the result, uncertainty about the date, with no one able to plan policy, no one able to plan things. And I think, you know, it's possible that that may have you know, that may have been one of the things because you can't there's no statesmanlike reason for holding out, and certainly and certainly for keeping it uncertain, you know, for not saying you could say the debate dates November fifth, and there's actually quite a lot of benefit from stating a date, but it does it just used to have policies too, to be to be sort of holding everyone in suspense.
What do we think about the possible results, And do we think that that it really matters that we were we're likely to change government?
I think I think if you are as you are, Adrian, assuming the Conservatives lose, the question of what degree they lose to obviously is relevant to firstly who next, but not just and who next is determined by the type of seats that are left. And then there is the one percent chance, as you say earlier, one percent who says the economist, And I think John Curtis has said one percent as well. The John Cursi is the very famous sophologist. So if so, I think it matters in terms of what next with the Conservative Party, I would also say, though you'll both laugh at me and chuck me out the ediit sweet shortly. While things happen in election campaigns. We've we've all covered enough. Elections matter and they really matter, and the TV debut debates will matter, and I remember very vividly covering the TV debate where David Cameron lost it and Nick Clegg had played a blinder and it really affected the election results. So I think we all know that things can happen that are that are not predictable right now. But equally on your central question, the sort of does the result matter? It matters to what happens to the Conservative Party next.
It matters, but what sort of labor party. Let's assume that we get a labor victory, what sort of labor party are we going to have? Remember that it wasn't that long ago that this was a semi Marxist Party twenty nineteen in the last election. What's happened to the Labor Party since then?
I mean we have seen clearly Keir Starmer get elected in a party that was still very corbonite and obviously that's allowed. You know, it's some of the things that he said he would do in order to get elected in that election, you know, get thrown back at him by the Prime Minister repeatedly. He has pulled it as far as you can back to in this day and age, to a much more blair eyed party, including some key individuals coming back who have experience of the Blair era. But you know, we all know it's a different world and it is. You know, everything's changed, including leaving the EU, but the economics have fundamentally changed for this country and arguably more broadly in terms of how one expects the global economy to proceed.
That was a snap podcast for you from the Votonomics team. Thank you for listening. On Friday, we're going to bring you a conversation with Taiwan's former Digital Minister, Audrey Tang. This episode was hosted by me alegra Stratton, Adrian Woodridge and Stephanie Flanders. It was produced by Samasadi with help from Chris Martlou and Julia Mann's editorial direction from Victoria Wakeley. Sand designed by Moses and Brendan. Francis Newnham is our executive producer. Sage Bowman is Head of Podcasts. H