25 September 2018

A political risk assessment

Such visible instability in Government inevitably leads to talk of general elections and suddenly we’re only one step away from the possibility of seeing the keys to 10 Downing Street in the hands of Jeremy Corbyn


Such visible instability in Government inevitably leads to talk of general elections and suddenly we’re only one step away from the possibility of seeing the keys to 10 Downing Street in the hands of Jeremy Corbyn.

The outcome of the Brexit negotiations and the terms on which the UK will (or will not) trade with the rest of the world is one thing. The Labour Party in its current form in government is quite another.

So how likely is it and what would it look like if it happened?

First, no-one in politics or in the wider country wants a General Election – not even the Labour Party. Who would want to take over the insoluble and all-consuming puzzle that is the Brexit negotiations? Far better to leave Theresa May to it at least until Brexit Day next March and then think again.

In the meantime, there are more pressing concerns if you’re an MP, like the boundary review. Started in 2011 by David Cameron to cut the cost of politics, the chances are that the number of constituencies (and therefore MPs) will be reduced from 650 to 600. Shortly after that, at Labour’s Annual Conference, we can expect further rule changes that put more power into the hands of Jeremy Corbyn-supporting Labour Party members. 

Who would want to take over the insoluble and all- consuming puzzle that is the Brexit negotiations?

That will fire the starting gun for sitting Labour MPs to scramble for the nomination in 50 fewer seats and will see many of those critical of the Labour leadership lose to candidates from the far Left of the party.

If the boundary changes do go through (and in many ways we are asking turkeys to vote for Christmas), the outcome at any General Election becomes harder to predict. But one thing is always true: incumbency is a huge advantage. People vote for what and who they know. And they really don’t like it when a small group of Labour Party members get rid of a good local MP. 

Economists, politicians, lawyers and investors will all want to know exactly how nationalisation would work in every case

At the same time, Labour’s internal row on anti-Semitism is one of the more toxic manifestations of the war for the soul of the party. The battleground is local party meetings where Momentum, branch by branch, constituency by constituency, is taking over. These are battles fought behind closed doors in church halls and community centres. It means that the Labour Party, once a formidable campaigning machine, is no longer talking to voters.

But it’s not really voters who these new Labour Party and Momentum members are interested in. They want to rid themselves of moderates so that the party can return to a purer and truer form of its Socialist self. Whether that policy agenda is popular with the wider electorate is irrelevant to them.

Yet, nationalisation of certain industries is ever more popular in the opinion polls. This is not a complete surprise considering the chaos that came with the new train timetables, or water companies threatening hosepipe bans days before announcing record executive bonuses, or with the Royal Mail fined record sums for losing parcels and poor performance.

While the Tory government is in paralysis over Brexit, there is little in the way of an alternative narrative or anything resembling a debate on how we deliver our public services as efficiently and cost- effectively as possible.

That means Labour’s nationalisation programme doesn’t have to be too carefully argued or costed. It is enough to declare that water bosses are fat cats and that the trains aren’t running on time.

This is not to say that the Labour Party isn’t thinking about how to implement its proposals. It is. As natural monopolies, the water companies would come back into national hands (the Welsh and Scottish models are usually used as examples), and the energy companies would be challenged by local government-led cooperatives and mutuals where workers and consumers sit on boards and take decisions.

But that won’t be detail enough when it comes to an actual General Election campaign. Economists, politicians, lawyers and investors will all want to know exactly how nationalisation would work in every case, how compensation will be calculated and who is going to pay.

That’s before the trade unions who organise in these industries start to ask questions about what happens to their members, and to their members’ pension funds, many of which are heavily invested in public utilities.

The main reason, though, why these plans are unlikely to be implemented is because whoever forms the next government, Brexit and its long tail will not have gone away. For good or bad, leaving the European Union is, and will continue to be, a political and economic upheaval.

And most people, especially investors, just want things to settle down again. What they don’t want, and what they are unlikely to vote for, is radical social change and uncertainty about whether the lights will stay on.

The real beneficiaries of the last General Election were William Hill and Paddy Power. Most political analysts and commentators, had they put their money where their mouths were, would have been seriously out of pocket.

That’s to say that nothing in politics is certain, but if I had to take a bet, as things stand, I’d say 3:1 on a Tory win. But I wouldn’t put more than a quid on it. 

Natascha Engel

Until the last election, Natascha Engel was Labour MP for North East Derbyshire and Deputy Speaker of the House of Commons. She has since made a living as a political analyst and writer, particularly on energy and public utilities.


By Natascha Engel Illustration by Adi Kuznicki


Also in this issue

AB Foods (ABF) is split into five rather different divisions, Sugar, Agriculture, Retail, Grocery and Ingredients. By far the largest of these is Retail or more accurately, Primark, a budget fashion…

Maintenance capex can be considered the cost of sustaining current revenue and profits for a business. This type of outlay is equivalent to a normal operating expense; such an example would be the…

To date, Trump has slapped a 25% tariffs on $50 billion worth of Chinese goods. He also mooted a 10% levy on an additional $200 billion of imports. China retaliated with tariffs on $50 billion of…