The big divide widens

The election

May 12th 2005
From The Economist print edition

Resentment in the south-east at high public spending in the north and west helps explain the election result

THE outcome of last week's general election was unusual, in that all three contenders feel they did badly. Although Labour is back for an unprecedented third term with a solid working majority, it lost 47 MPs and was returned with a mere 35.2% of the vote—the lowest share for a government since the Reform Act of 1832. Although the Tories gained seats—33 altogether—for the first time since the 1980s, along with a much-needed infusion of new talent, Michael Howard succeeded in increasing his party's share of the vote by less than one percentage point. The Tories' gains had more to do with Labour losing votes to the Liberal Democrats than with any positive appeal of their own.

The Lib Dems now have the largest third-party representation in the House of Commons since the 1920s; yet they too are disappointed. As the main political beneficiaries of the Iraq war, the Lib Dems should have been the big winners, but they increased their share of the vote by only 3.7 percentage points.

The Lib Dems enjoyed much bigger swings in their favour in Labour-held seats where there were large student or Muslim populations that wanted to protest against the war, or university tuition fees, or both. But the potency of these issues will have faded by the time of the next election. At the same time, the Lib Dems' failure to make headway against the Tories in the dozen or so seats which they had come closest to winning in 2001 strongly suggested that they paid a price for the strategy adopted by their leader, Charles Kennedy, of presenting his party as the natural home of Labour malcontents.

A big factor behind shifts in voting patterns seems to have been contrasting attitudes to taxation and public spending in different regions. Labour's vote held up well, even increasing in some places, in parts of the country where the economy depends on high public spending; the Tories did better than even they were expecting in areas that pay a disproportionate whack of the tax bill, but get relatively little back from central government.

The Centre for Economics and Business Research recently produced an analysis of the way public funds are divvied up (see chart below). It shows the remarkable disparity in the extent to which different regions' economies depend on public spending, with figures ranging from around 60% of GDP in Labour's northern and Celtic strongholds at the top, to 33% in the increasingly Tory south-east. Although people living in the south-east and London tend to earn more than elsewhere, high housing and transport costs shrink their disposable income. They have been particularly hard hit by the government's refusal to raise tax thresholds in line with earnings and by high council-tax charges. In London, hospitals, schools and doctors' services are generally worse than in other parts of the country because the high cost of living makes it difficult to attract qualified staff.

Across the south-east and in the prosperous outer London boroughs, Labour suffered swings to the Tories two and three times greater than the average across the country of 3%. It lost some well-thought-of MPs, such as Stephen Twigg, who famously displaced the Tories' Michael Portillo in 1997, and is now clinging on in many of its remaining seats in the region with tiny majorities.

The Conservatives have the opposite problem to Labour. They did poorly in the Midlands and the north. Compared with 2001, the party's share of the vote fell in the three northern English regions. It now holds only 19 out of 162 seats in that part of the country. In future, to be returned with a majority of 50, they will need to win seats such as Middlesbrough South and Cleveland East, which has a Labour majority of 8,000 and is in a region in which public spending has risen in recent years to nearly 60% of GDP—about the same as in Hungary when it was emerging from communism in the early 1990s.

The Tories' task has now become even more difficult because of the redistribution of Liberal Democrat votes. In the south-east, the Lib Dems have repelled voters with promises of higher taxes, but in less affluent parts of the country they have relegated the Tories to third place. In 104 of the 356 seats held by Labour, the Lib Dems are now in second place. But that confronts the Lib Dems with a difficult choice as well. Should it build on its new status as a party well to the left of Labour on some issues or should it try to re-engage with the voters in the Tory-held seats that still represent its best chance of making future advances?

If there is a message from this election it is this: the coalition that Tony Blair built that brought together prosperous middle England and the party's traditional heartland is crumbling. But neither the Tories nor the Lib Dems seem to have any idea of how to replace it.

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