Once a year in June I go away with a bunch of friends to ride my Lambretta abroad. Our goal is to attend a rally of like-minded European scooter enthusiasts, which takes place annually in different countries chosen by rotation. This year our destination was Italy. So it was that after a day’s riding on Lake Garda, I turned on my mobile to check the news and discovered to my amazement that projections after the election vote closed at 10pm had Conservatives and Labour running almost neck and neck. Like most others, I had assumed the Tories would win with a large majority.
Since then, gobsmacked commentators have offered plenty of reasons, some more credible than others, as to how Labour managed to come within 800,000 votes of the Tories, surpassing all previous expectations. Advisers reading this column almost a week after the election will have had the opportunity to assess which ones they find most compelling.
For me, what is striking about the debate over manifestos, when viewed from abroad, was not only the absence this time round of compelling “money-in-your-pocket” reasons why people should vote Tory.
In previous elections, the Conservatives have always come up with eye-catching proposals to prove they are the ones with a common touch when it comes to voters’ personal finances.
George Osborne was a natural at this: forget his occasional cock-ups, for example, with “pasty taxes”, he could usually be relied upon to come up with a pre-election incentive to keep potential electors on his side. His 2007 pledge to raise the inheritance tax limit to £1m, which spooked Labour into calling off an early election that year, was described even by the New Statesman as a “political masterstroke”.
In late 2014, his reform to the way stamp duty was levied, just months before the following year’s election, not to mention the changes to inheritance tax and the other pension reforms he introduced, including the 2015 pledge to keep the triple lock in place for another five years, were aimed at keeping voters sweet.
This time round, however, there was almost a masochistic decision to allow swathes of the population to believe they would be worse off financially if they voted Conservative.
Pensioners take a pounding
This was the case for pensioners and those coming up to retirement, who were told their winter fuel allowance would be means-tested – with no estimates as to how that might work. Basically, you offer nothing extra to the less well-off while allowing everyone else to believe they might lose out: how clever is that?
The scrapping of a triple lock on state pensions, supported by many experts on the “left” of the Tories, was another own goal. The original idea had been it would remain in place until at least 2020. But during the election itself, the impression given was of an imminent abandonment of this policy.
Intriguingly, in the 12 months before the election, when the debate over the triple lock was raging, it was Royal London policy director Sir Steve Webb who argued for keeping the triple lock in a modified form. Webb clearly identified that for many who have no other savings in place, retirement incomes from the state were still too low. In April, he proposed the triple lock should be retained for all pensioners on the old basic state pension, before the new state pension was introduced in April 2016.
“There was almost a masochistic decision to allow swathes of the population to believe they would be worse off financially if they voted Conservative.”
Yet there was no sense of understanding on the Tories’ part that a compromise might be necessary on this issue because large numbers of existing pensioners do not yet feel that their living standards have been transformed in the past six or seven years. Their savings income is stagnating because of low interest rates while prices for the staples they are more likely to spend their money on – food and electricity in particular – are rising faster than inflation generally.
Even worse were proposals on the so-called “dementia tax”, a subject on which Ros Altmann has done a superb demolition job in her latest briefing. Her argument is that contrary to some who argued Theresa May was in effect quadrupling the previous £23,500 means-test threshold to £100,000, for those who needed home care or had a relative still living in their home, the Tory manifesto proposals were actually worse than current provisions.
Indeed, Ros points out the £100,000 floor is an artificial one anyway as it does not cover those facing additional costs, for example, elderly relatives in a more expensive care home or those who need more than a token 15-minute home visit every day. Her argument that “rather than using care as a political football, a national solution is needed” to the social care crisis, is a valid one.
Always assuming anyone wants to listen, of course. I have previously said the Conservatives were far better at offering pre-election inducements than Labour, miraculously finding the money to fund their natural constituents’ financial preferences.
This time round, it was Labour who hit the sweet spot: their pledge to scrap tuition fees for students, not to mention keeping the triple lock in place until 2025, were masterstrokes. Now it has learned how the bribery system works, why would Labour want to go back to the old ways?
Nic Cicutti can be contacted at email@example.com