The Labour Party has prevailed in what Australians of a certain vintage might describe as a “drover’s dog” election. Sir Keir Starmer’s party has secured a mammoth majority in the commons, albeit on a vastly reduced turnout, which may be analogous to a spike in the share price of an illiquid stock; a scenario in which it’s possible to draw meaningful conclusions based on both superficial and underlying factors. Ergo, an unprecedented advantage underpinned by low conviction. The reality is that Labour now has five years or so to bend the economy to its will. It will do so in the face of a numerically ineffectual opposition; something of a rarity in a first-past-the-post system.
Starmer and the new chancellor, Rachel Reeves, have been at pains to burnish their “fiscally conservative” credentials, but it's worth remembering that some of the most damaging policy decisions have come about through what might be termed “tinkering at the margins”. Readers of a certain age will recall – no doubt with some regret – that following the Labour landslide of 1997, Gordon Brown scrapped tax relief on pension firms' dividends, a move that not only helped render many final-salary schemes unviable, but may have also contributed to the ultimate stark fall-away in the proportion of domestically traded shares held by UK pension funds.