Learning from past general election results

Mike Hedges – MS for Swansea East

There will be a General Election this year, probably in September or October 2024 and the expectation is that there will be a change of Government. This article looks at General elections since 1964 and attempts to identify common themes that caused governmental change.

Taking 1964 as the starting point, subsequent General Election results have seen six changes in Government and ten re-elections of the Government. Three Governments stayed in power for prolonged periods – the Conservatives from 1951 to 1964, the Conservatives from 1979 to 1997 and Labour from 1997 to 2010 – and now the Conservatives since 2010. Labour held power for eleven of the 15 years between 1964 and 1979.

Confidence

Labour gained power in 1964 following the Profumo affair and a serious balance of payments crisis which caused the Conservatives to lose the confidence of the electorate. Interest rates were increased from 5.0% to 7.0% in July 1961, reducing to 6.5% in October 1961 and then to 6.0% from November 1961 onwards.

Labour then retained power in 1966. Conservatives won in 1970 following a devaluation and problems with the balance of payments. Labour won in February 1974 which was the first general election in the United Kingdom to
be held during an economic crisis since 1931. It followed the Three-Day Week which was one of several measures introduced in 1973–1974 by Edward Heath’s Conservative government to conserve electricity, the generation of which was severely restricted owing to industrial action by coal miners and railway workers. Labour then retained power in October 1974.

Inflation

The Conservatives won power in 1979 following the ‘winter of discontent’ where there were a large number of strikes and unemployment reached a 40-year high of 1.5 million during 1978. There was also high inflation. In 1976 Britain faced a fiscal crisis and the Labour government was forced to apply to the International Monetary Fund (IMF) for a loan of $4 billion. IMF negotiators insisted on deep cuts in public expenditure, affecting economic and social policy.

The Conservatives then retained power in 1983, 1987 and 1992. Labour won power in 1997 following the 1992 sterling crisis when the Government was forced to withdraw sterling from the European exchange rate mechanism after a failed
attempt to keep the exchange rate above the lower limit required. The crisis damaged the credibility of the Major government in handling economic matters.

The Conservatives had a number of scandals after John Major declared “we need to get back to basics.” The party then suffered a landslide defeat five years later at the 1997 general election. Labour retained power in 2001 and 2005.

The Conservatives won in 2010 following the banking collapse in 2008 which led to the collapse of Labour support. In the period September 2007 to December 2009, we had a global fiscal crisis, and the UK government enacted a number of financial interventions in support of the UK banking sector and four UK banks in particular.

They have since retained power in the general elections of 2015, 2017 and 2019.
If a recession is the cause of a party losing power, why did the Conservatives not lose in 1983 when company earnings declined by 35%? Unemployment rose from 5.3% of the working population in August 1979 to 11.9% in 1984. It took thirteen quarters for GDP to recover to its pre-recession peak at the end of 1979. Annual inflation was 18.0% in 1980, 11.9% in 1981, 8.6% in 1982 and 4.6% in 1983.

Why were the Conservatives not punished at the 1983 election? I suggest three reasons: Firstly, they blamed the problems on the previous Government; secondly, the formation of the SDP led to a split opposition; and thirdly, their success in the Falklands war.

Expectation

The results of a number of the elections were expected: Labour’s wins in 1966, October 1974, 2001, and 2005 and Conservative wins in 1983, 1987, 2017 and 2019.
There was an expectation driven by opinion polls that Labour would win in 2015 but the Government had only been in office a short time and, despite its commitment to austerity, there was no major economic shock. There was the “pasty” tax, but the Scottish Independence referendum hurt Labour far more than the Conservatives.

In 1992 there was an expectation of a Labour win but that had to wait another five years. Opinion polling leading up to election day had shown the Labour Party under Neil Kinnock, consistently, if narrowly, ahead. At the start of 1992, the recession had still not ended, and unemployment topped 2.5 million. But it was not to be.

In February 1974 and 2017 we came remarkably close to a different election result. What does this mean for the next general election? I start with the financial services disclaimer that previous performance does not mean future performance is certain.

Despite that, it would be a surprise if a government that had been in power for almost fourteen years and had an economic crisis with high inflation and a recession would be able to achieve re-election.