![](https://i.postimg.cc/sDGQqFdM/Liz-Truss-Election.jpg)
Not long ago, I suggested Truss poses Labour a threat if she proves herself strategically and tactically flexible. Since those words were written, her performance during the leadership contest has shown her to be anything but. You might argue she's sticking with her low tax plan, if it could be termed thus, to make sure those members' votes pile on up and she'll break with it once ensconced in Number 10. Her problem is that, though there are problems with Labour's price freeze, it has made political weather. Coming up with a more generous scheme is unlikely because of the problems that would pose parliamentary management, and something that doesn't come up to scratch would be an electoral catastrophe of Black Wednesday proportions. In other words, Labour have already nerfed her threat and boxed her into a very difficult position. Truss and her strategists know this, and are unlikely to want this position exposed during an election campaign.
Secondly, it doesn't seem credible to suggest Truss can look forward to a big bounce. In 2015 and 2016 Jeremy Corbyn got no bounce because Labour politicians did a pretty good job of trashing his standing and making out many of his positions were politically illegitimate or too extreme. This framing caught on and he was never able to push through it, even in the aftermath of the 2017 election. A more apposite example might be Boris Johnson in 2019. As a celebrity politician, throughout the contest the Tories more often held their lead over Labour than not because Johnson, as the candidate most likely to win, had Brexit as a cause to rally around. The result wasn't a massive bounce in support. A snap poll by YouGov (26th July) saw a four point increase, widening the Tory lead from six to ten points. Ipsos saw the lead extend from two points on 25th June to ten on 30th July. But it wasn't universal. ComRes reported a one point lead on 25h July, which turned into a one point deficit by the 28th. If the best known Tory in the land couldn't manage an over large and consistent bounce across the pollsters, what chance the more anonymous Truss?
But Truss has not been invisible. Arguably, this has been the most heavily covered Tory leadership contest ever. Ill-fated prime time TV slots and a seemingly endless cycle of hustings variously broadcast by other media outfits have meant a constant drip of news into the press and news bulletins. Everyone who keeps an eye on the news will have an impression of the contest, and know neither candidate have no solutions to pressing difficulties. Among Tory voters, 49% of them prefer Johnson with only 18% going for Truss. Not a vibe the Truss campaign are going to be happy with. Likewise, following Starmer's bill freeze announcement he's pulled eight points clear of Truss, who he trailed by a point a fortnight ago. And the reception for Truss's tax cuts is looking frosty. Where is a poll bounce coming from?
When Truss takes over, she will face a crisis whose depth and scope the Tories would rather pretend doesn't exist. The arrival of 18.6% inflation doesn't care whether they notice or not. What she has said so far has impressed none but the party faithful, but what she does have is a majority of 75. The Tories are divided, but if she brings enough of the ex-Sunak camp into cabinet she could neutralise internal opposition while offering whatever her cost of living plan turns out to be. Politically, with the majority of declared MPs and members in her corner, and under pressure by events no Prime Minister, even if elected by Tory constitutional coup, is going to see that relative stability dashed on rising prices, rising joblessness, and deepening recession. One cannot rule out an early general election entirely, but assuming Truss fancies being in the job for at least a couple of years it would be reckless foolishness for her to risk it.
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8 comments:
«This is because any uptick in Tory fortunes is likely to be short-lived as a) she has no plan for tackling the cost of living crisis»
I think that the BoE and "aligned" Economists are counting in inflation to have gone back to very small in 2 years, here are again some estimates by a "left-neoliberal" Economist:
https://mainlymacro.blogspot.com/2022/08/why-does-bank-of-england-appear-to-be.html
“22Q3 Q4
9.9 13.1
23Q1 Q2 Q3 Q4
12.8 11.9 10.5 6.4
24Q1 Q2 Q3 Q4
5.0 2.5 1.9 1.4
25Q1 Q2 Q3
1.1 0.9 0.8”
It seems very convenient that inflation should again be very low by the time of the next election, 24Q4 or 25Q1.
The next 2 years seem to have been planned to shrink the real value of wages 25-35% to make workers more "comepetitve"; the next 2 years will also make mortgages shrink in real value by 25-35%, massively helping "Middle England" voters make huge profits, especially if mortgage rates remain -6% or -9% in real terms.
Everybody in "Middle England" are selling every other investment they have to put together deposits for buying more properties, not just to protect their wealth from inflation, but also to ensure that their higher bills and higher costs of living will be fully covered by higher rents and prices from renters and upgraders.
Excellent analysis as usual, thank you.
It is often overlooked that the much talked about 'bounce' that John Major had in 1990 - and led all the way to the 1992 Tory victory, wasn't much of a bounce at all. In fact there really wasn't a bounce, with some polls after Major became PM still giving slight leads to Labour.
It was in fact nip and tuck in the polls for two years up to the '92 election, where many thought (hoped - certainly myself) Labour would win. It was a shock that Labour didn't in many quarters. And depressed myself and millions of others when they lost.
Another good article , Phil. Indeed, why would Truss and co risk a General Election during a once in a generation severe cost of living crisis, when they have a perfectly good working majority to continue their neoliberal assault and general banditry on the rest of us ?
As to the drivel above from that compulsive , essentially trolling, housing price obsessive, Blissex ! The current emerging 1970's style inflation , powered by, 1. the UK predatory profits boom for businesses, identified by the TUC, 2. Years of money printing Quantitative Easing which have given the rich so much added asset values and hence spare spending cash (mostly tax free in tax havens). The superrich 1% and corporations are using this cash pile to speculate at astronomic levels in the global commodity markets (the oil and gas, and grain, price hikes are NOT just down to the Ukraine crisis, but far predated it on a global scale). Despite the current rapid, inflation-causing UK rise in the MASS of business profits, stagnant global capitalism is still trapped in a RATE of profit squeeze on productive activity - and so financial and commodity speculation to 'earn' fictitious profits, are at a new high.
Wages in the UK are falling across the board - except for CEO type execs and those in the finance sector - and unless a major strike-based rising of workers at 1970's levels forces Business to reduce their profit levels, most worker wages, including the majority of the middle class home owner Tory voters too, will be circa 30% or so below their current real spending levels in two years. And the current inflation will NOT 'return to normal' in two years - this is pure BoE bullshit - to justify an interest rate hike that will provoke the mother of all UK recessions - such is the crude tool the BoE uses to suppress inflation. The BoE 'projections' are pure moonshine Blissex - supported by no other credible think tanks, or global private financial institutions. Anybody who believes BoE inflation projections needs to get a reality check !
In this situation , when a hike in mortgage rates will also be added, there will be a drastic fall in both general consumer spending, a huge rise in unemployment, a rise in mortgage rates to levels that will bring about huge mortgage defaults - a crisis in the housing market and hence house prices (most people have forgotten the 1990's housing bubble collapse) . Blissex's assumption that those property-rich Tory voters will ride this out in clover couldn't be more wrong. A future new Negative Equity crisis looms as this crisis deepens - including for the Buy to Let landlord class, who will simply not be able to find enough, employed, paying tenants for the extortionate rents they want to charge.
We are in a new economic and political ballgame going forward - and neither the Tories , Lib Dems, or NuLabour2 have any answers to the depth of the crisis emerging. The last thing Truss and co will go for is a General Election they have no need to call.
«the Buy to Let landlord class, who will simply not be able to find enough, employed, paying tenants for the extortionate rents they want to charge.»
They will just double up, given the enormous shortage of rentals. Part of the reason is that there is a flood of demand for property by "Middle England" "investors" who simply want to protect their funds from inflation, and also profit from prices going up faster than inflation, and are quite willing to leave those properties empty to be able to resell themn quickly when inflation ends.
They think that property is the main asset to have always beaten inflation, and that the government will never allow a repeat of the 1990s. Given that currently the government policy is to have mortgage rates at -6% to -9% in real terms, and that the real cost of mortgages is shrinking by 9% to 12% a year, that is pretty obvious.
Property supply and prices are not market prices, they don't go up or down because of circumstances, they are government controlled, and whether they go up or down depends largely on whether the government can afford to do that. For now and the short term future the government will sacrifice *anything else* for property.
There will probably be eventually a colossal crash driven by inability to pay for imports, but probably it is at least a decade away.
«They will just double up, given the enormous shortage of rentals.»
https://www.bbc.co.uk/news/business-62344571
«The rising cost of renting and buying a house has led to more over-50s looking for house and flat shares, according to property-sharing websites. [...] Leading flat-sharing site SpareRoom said it had seen a 239% increase in 55 to 64-year-olds looking for house-shares since 2011 and a 114% increase for the 45-to-54 age group. However people aged 25 to 34 years old still make up the majority of sharers. Meanwhile, Cohabitas, a site for over-40s, said it had seen a 51% increase in users aged 55 to 64. SpareRoom communications director Matt Hutchinson said the primary reason more older people were house-sharing was affordability. He told BBC News the increased cost of renting and buying a home meant more people were sharing for longer and becoming "lifetime renters", while people who had come out of long-term relationships and might originally have bought or rented a one-bedroom flat were now "priced out".»
https://www.theguardian.com/business/2022/jul/14/private-rents-in-uk-reach-record-highs-with-20-rises-in-manchester
«During the period from 1 April to 30 June, the average advertised asking rent outside London hit another new record of £1,126 a calendar month, Rightmove said. This figure has jumped by 19% – or £177 – in the two years since the pandemic started. [...] He added that the various factors at play had “created an extremely competitive market for tenants, where many offer landlords over asking price in order to secure a property”. [...] Rightmove said the stock of available rental properties was down 26% compared with last year’s levels, while demand was up 6%. It added that average monthly rental payments were now 40% higher than they were 10 years ago, while typical mortgage payments for the same properties were up 13%. An estimated 11 million people rent privately in England alone, and the sector has doubled in size during the past 20 years.»
https://www.bbc.co.uk/news/business-61650382
«People hoping to find a property to rent are going to ever greater lengths to secure a home. As well as having to put up more cash in advance, they're offering landlords CVs for their children and photos of their well-behaved dogs. That's because a shortage of available homes is pushing up monthly rents, deposits and leading to bidding wars. Industry body Propertymark says the number of rentals on the books of lettings agencies has fallen sharply. Propertymark surveyed over 440 letting agency businesses, spread across 4,000 branches UK-wide and found that on average, letting agents have seen the number of available rentals on their books halve, from over 30 to just 15. [...] "Two years ago, I could count on one hand the amount of times a tenant would offer above the asking price for rent," says Mr Kingswood. Now people regularly offer three or even six months rent in advance or an extra £50 extra a month above the asking price, he said.»
There, but for the grace of Thatcher and Blair,goes Middle England. :-)
«the much talked about 'bounce' that John Major had in 1990 - and led all the way to the 1992 Tory victory, wasn't much of a bounce at all. In fact there really wasn't a bounce»
A lot of people confuse themselves (or others by looking at percentages, but looking at number of votes, especially in some sample constituencies, is much more useful, for example:
YEAR TOTAL CON LAB LIB,SDP,UKIP
1979: 31.23m 13.70m 11.53m 4.31m
1983: 30.72m 13.01m 8.46m 7.78m
1987: 32.57m 13.74m 10.03m 7.34m
1992: 33.65m 14.09m 11.56m 6.00m
1997: 31.29m 9.60m 13.52m 5.24m
(note how in 1997 the Conservatives lost 4.5m votes, New Labour got 2m more, and abstentions increased by 2.5m).
In 1992 John Major won a landslide, despite (modernising) Labour getting 2m more votes (mostly back from the SDP+Lib alliance)..
The 3m voters who had switched from Labour to the SDP+Lib alliance had roughly halved seeing that they were going nowhere, but note how the total number of votes was 2.3m higher than in 1979, most presumably going to the Conservative as a reward for and to protect the massive southern property boom engineered by Lawson.
Note also that I think that while *average* UK property prices collapsed in 1990, the regional distribution of that was uneven, and they collapsed first in "the north" (because of the effects of the collapse in industry there) in areas which were already Labour.
https://3.bp.blogspot.com/-u0GPV3vHRlI/UMDghWB3I8I/AAAAAAAAAak/LRiqliC1YSM/s1600/lawson-boom-house-price-inflation.png
https://4.bp.blogspot.com/-G6efMMTOL90/Wb-PoocVKrI/AAAAAAAABBk/oqGjrvN6IsADlCbrzAGadhmHxispummFQCLcBGAs/s640/inflation-unemployment-1990s.png
(From random site https://econ.economicshelp.org/2008/01/lawson-boom-of-late-1980s.html)
«with some polls after Major became PM still giving slight leads to Labour»
John Major was very lucky, the election was held when the memory of the Lawson property boom was fresh, and just before the sterling crisis and before the 1990s property crash had really started to bite. Probably had the election been held only a few months later Kinnock would have won a landslide.
The April 1992 general election happened before the September 1992 EMU/Sterling crisis which resulted in trouble in the financialized south-east spiv economy, which had been largely powered by remortgaging.
«It was in fact nip and tuck in the polls for two years up to the '92 election, where many thought (hoped - certainly myself) Labour would win. It was a shock that Labour didn't in many quarters.»
Too many people were motivated to vote Conservative to attempt to protect their massive property profits. Only a a few months later they turned against as the profits turned into losses. My usual sarcasm is that Pol Pot would have won a landslide in 1997 such was the determination of many tory voters to punish the Conservatives.
Blissex, are you trapped in your mom's basement alone with a keyboard for company all day ? You really need to get out in the sunshine MORE, rather than posting up this house value obsessed economically ignorant drivel constantly, and blocking the potential of Phil's always interesting site as a forum for serious socialist discussion . Your constant , over-long, monomaniac, nonsense simply puts other , socialist, folks off contributing, dear boy. Desist please.
Enough of the personal attacks, Trot. Either read his comments or don't, you are not the arbiter of who gets to comment.
Blissex has been commenting for years here, and is generally interesting. And I'm not Blissex, before you throw that accusation out.
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