24 Apr 2017

UK Election 2017 – 45 days to go

Philip Shaw

Chief Economist

We now have just over six weeks to go until 8 June when, including referendums, the UK will stage the fourth major vote in as many years. The Conservatives’ huge lead in the opinion polls would surely tempt any Prime Minister to call for a snap election, well ahead of its previously scheduled date in 2020.

More of a surprise was the lack of resistance by the Labour Party, which could easily have vetoed the poll. The Fixed Term Parliament Act specifies that a two-thirds majority in parliament is necessary for an early election to take place. In the end, it was backed by 522 MPs and rejected by just 13.

In this context a new abbreviation is the INLBs. This stands for ‘I’m Normally Labour But…’, the ‘But’ referring to leader Jeremy Corbyn, whose approval ratings remain close to historical lows. The INLBs appear to be a significant factor behind Labour trailing the Tories by around 20% in most polls (some show a bigger deficit), compared with a Conservative lead of 6.5% at the 2015 election. On this admittedly simplified basis, there are 56 of the 650 constituencies where the Tories were second to Labour by a margin of less than 14%. If the Conservatives won these seats and no others changed hands, they would win an overall majority of 122.

In terms of separate dynamics, UKIP is struggling, averaging 8% in the polls (2015 share 13%). Indeed many observers note that the Conservatives are picking up Labour voters that might otherwise have drifted to UKIP. Meanwhile the Liberal Democrats are faring better than in 2015 (average poll rating of 11% compared with 8% two years ago). Additionally the Lib Dems have scored a number of spectacular by-election successes at local authority level which could be a straw in the wind for June. They might also pick up some Tory seats in areas where there was a strong ‘remain’ vote at last year’s EU referendum (their parliamentary by-election win at Richmond Park last December, is a good example). There have also been signs of a resurgence of the Conservative Party in Scotland. They currently hold just one of the 59 seats there (the SNP won 56 in 2015) and could well boost their presence there after 8 June.

As in every election there are many nuances to consider in looking at the electoral arithmetic. But overall it seems sensible to expect the Tories to capitalise on their current standings and win a large majority in six weeks’ time. On conservative (small ‘c’) estimates this could be 75, but it might easily be double that. Accordingly while we do not consider that the early election is a reason to shift our economic forecasts, a combination of a hefty majority and a shift back in the subsequent election to 2022, should remove some of the potential banana skins in the PM’s Brexit negotiations.