When Governments change and why

Mike Hedges MS

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

Labour gain 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 win in 1970 following a devaluation and problems with the balance of payments.

Labour wins in February 1974 which was 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 the United Kingdom 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.

The Conservatives win power in 1979 following the winter of discontent where there was a large number of strikes and unemployment reached a 40-year high of 1.5 million during 1978 and there was also high inflation. In 1976 Britain faced fiscal crisis, 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 win power in 1997 following the 1992 Sterling crisis when the UK 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 of economic matters. The Conservatives had a number of scandals following John Major saying “we need to get back to basics”. The Conservative party then suffered a landslide defeat five years later at the 1997 general election. Labour retains power in 2001and 2005.

Conservatives win 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 financial crisis 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 rises 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, the formation of the SDP led to a split opposition and success in the Falkland war.

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 a government that 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 and the Scottish Independence referendum which 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 the 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, unemployment topped 2.5 million.

In February 1974 and 2017 we came very 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.

Mike Hedges is the Senedd member for Swansea East