It may already be too late for Labour

The popularity of the Labour party has plunged since the election, and history tells that once a certain narrative has taken hold, it’s very difficult to turn it around, says Paul Ormerod

Since the general election in July, the popularity of both the Prime Minister and the Labour Party has fallen sharply.   

Labour’s share of the vote in the election, at only 34 per cent, was of course by some margin the lowest share of any winning party since the Second World War. But in the polls Labour seems to have lost around a quarter of that support.

In by-elections for local councillors, where actual votes are cast, Labour is doing even worse.  Worryingly for Labour’s high command, there are signs of a reverse of the tactical voting which saw Labour gain a huge Parliamentary majority in July. People are starting to select the party with the best chance of beating Labour.

In traditional working class wards, the loss of Labour votes to Reform is large. In one spectacular example, according to the excellent database of elections and opinion polls maintained online by Mark Pack, in a Wolverhampton ward Labour took 71 per cent of the vote in May 2024 but only 25 per cent in a November by-election, losing to Reform.

In more aspirational areas which have been traditionally Tory/Labour marginals, such as Swindon and Milton Keynes, there is a straight switch from Labour to the Conservatives. In more urban, inner city areas full of young liberal professionals, Greens, Lib Dems and independents are gaining at Labour’s expense.

The voters do not always get tactical voting right. In a Tory/Labour marginal ward in Blackpool, held by the Conservatives, Reform surged from nowhere taking votes from both. Despite losing one third of its previous percentage share, Labour gained the seat by a handful of votes.

Since 1945 there has only been one other example of a political party losing support so quickly and so substantially after a general election.  

And it is not Lady Thatcher who provides the example. Already a very divisive figure at the May 1979 election, she and the Conservatives lost a bit of support in the aftermath. But it was only in the second half of 1980, as a massive recession spread across the country and unemployment began to soar, that Labour took a large lead in the polls. Of course, with the left-wing lunacies which then emerged within Labour and the Falklands war, Thatcher won a decisive victory in 1983.

The next John Major?

The prize for the previous largest and most sudden drop in support goes to John Major after the April 1992 election. Seen as a rather colourless figure – his notorious affair with fellow MP Edwina Currie had not yet emerged – he won a surprising and rather substantial victory.  Even just a week ahead of the vote, most polls had Labour ahead.

But in September the same year, sterling was forcibly ejected from the Exchange Rate Mechanism, the precursor to the Euro. The reputation which the Tories had for economic competence was badly damaged. Rapidly, Labour surged into a double digit poll lead which it never lost and won the 1997 election decisively. 

The Conservatives did not exactly help themselves with a string of stories around sleaze, but the damage was done within six months of the 1992 election.

Ironically, the devaluation of sterling laid the foundations for what proved the most successful five year period ever in British economic history

Ironically, the devaluation of sterling laid the foundations for what proved the most successful five year period ever in British economic history. Growth was well over three per cent, and both unemployment and inflation fell sharply.

But this golden actual economic record could not overturn the narrative created early in the 1992 government’s life that it was economically incompetent.

This is the real danger which Keir Starmer faces. Once embedded, narratives can be very difficult to shift. Indeed, as 1992-97 shows, once this happens no amount of achievement, be it targets hit, aims fulfilled or missions accomplished, can overcome it.

Paul Ormerod is an economist at Volterra Partners LLP, a Visiting Professor in the Department of Computer Science at UCL, and author of Against the Grain: Insights of an Economic Contrarian, published by the IEA in conjunction with City AM