Monday, May 18, 2015

It Was the Welfare Wot Won it: Age and Aspiration in the 2015 General Election

One of the most interesting - and barely commented upon - aspects of the recent election is that a strong relationship has emerged between party choice and age. Ipsos-Mori released some interesting data estimating the social characteristics associated with voting for different parties. The age dimension of voter choice is summarized in the graph below:




c/o Ipsos-Mori: https://www.ipsos-mori.com/researchpublications/researcharchive/3575/How-Britain-voted-in-2015.aspx?view=wide

We can see clearly that younger voters are more likely to vote Labour or Green, and older voters Conservative or UKIP. The effects are particularly striking in the 65+ category, which is of course the largest voting group, both because of the sheer size of the older population, and because of their high turnout rate (the UK has the biggest turnout differential between young and old in Europe).

Alongside the clear trend towards richer voters supporting the Conservative more than poor voters, this data suggests that the key to the Tory success was to look after a group of older and better off citizens. How did they do this? And in particular, how come they actually grew their vote amongst this group by 3%?

The answer is two-fold in my view. The first is that older voters are the biggest beneficiaries of the UK's house price boom: a typical homeowner in the 65+ category will have bought their home in the 1970s, when a typical home cost around 2.5 times the average salary. In London this same ratio is now 9:1. This cohort not only enjoyed mortgage interest tax relief, they were also big winners in the inflation of the 1970s, which wiped out the value of their home loans (whilst also wiping out the savings of the cohort born in the early 1900s - a generation as unlucky is the current 65+ cohort is lucky). The Conservatives have always done well with property holders, and the Ipsos-Mori data confirms that housing tenure has a strong relationship to the vote:



c/o Ipsos-Mori: https://www.ipsos-mori.com/researchpublications/researcharchive/3575/How-Britain-voted-in-2015.aspx?view=wide

Labour's appeal to social and private renters, and their threat of a 'mansion tax' on multi-million pound properties, is reflected in their much weaker performance amongst owner occupiers. In an economy where many families, and especially most older voters, have won big by buying property, the Conservative appeal had a ready market.

The second, less intuitive feature of this age skew is that the Conservative emphasis on austerity, living within our means, and reducing public spending did not extend to the retired population, the biggest recipient by some distance of welfare spending. It is well established that the coalition government's programme of cuts was directed almost entirely at the working age population and children, whilst pensioners were protected, indeed, guaranteed, by the 'triple lock' which updated pensions by whichever index happens to be higher. This strategy proved less than effective at reducing the deficit, but was very effective at securing the pensioner vote.

British politics is starting to look like the US, where support for the Republicans grows with age. The irony is that right-wing parties with clear political agendas to cut redistributive public spending find their strongest support amongst the parts of the electorate who receive the most spending. This paradox has baleful consequences, since the need to make cuts to government budgets whilst sparing the least productive part of the population from these cuts is almost guaranteed to have negative effects. Cuts to productive public investment, such as infrastructure and education and training, have to be made in order to pay for a dependent aging population. The resulting frustration amongst working age voters, as they pay higher taxes whilst suffering stagnation in their incomes, can be expressed in a variety of ways, from voting for extremist parties to not voting at all.

It is the Labour party's job to mobilise the losers in this particular trade and encourage them to support a more equitable distribution of the costs and benefits of economic change. Ed Miliband had a sense of the need to do this, as reflected in his impressive first speech as ex-leader this week, but was lacking in the ability to define such a project, much less win support for it. But the task remains the same, and the data we have so far shows that success of the Conservative party has very little to due with its appeal to aspirational voters, and more to do with doling out public money to a group of voters which has already done very well out of the financialization of the British economy over the past quarter century. There are more losers than winners, and what is more the winners will not be around for ever. It is Labour's job to show that growing the economy and helping those who have less are part of the same challenge.