What the economic data told Rishi Sunak about the best date for a general election

The announcement of July 4 for the UK general election took many by surprise. A key question is why it was called then when it did not have to be? The decision to call an election is always a gamble – there is perhaps no right time – and many factors feed into that call.

Legally, a general election had to be called in 2024. Behind the scenes, those in Number 10 will have been modelling when the vote should be held with the help of key economic indicators such as inflation and gross domestic product (GDP), as well as analysing the polls and speaking to focus groups.

In the UK, the power to request a dissolution of parliament and call an election lies with the prime minister. The party in power uses a process known as “evidence-based diagnostics”, in which evidence is collected regarding the state of the UK and analysed alongside voter perceptions, in an attempt to identify the best time – for them – to call an election.

This is complex, as it includes an assessment of the strengths and weaknesses of rival parties, and of independent analyses published by organisations such as the World Bank, the Organisation for Economic Co-operation and Development (OECD), and the International Monetary Fund (IMF). Increasingly, artificial intelligence is applied to sift through these vast amounts of data to spot patterns and make predictions.

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Recently, there has been some very good economic news highlighting that Britain is not as broken as politicians or some journalists might like us to believe. The UK inflation rate in April dropped to 2.3%, and GDP was estimated to have grown by 0.6% in the three months to March 2024.

The quest for economic stability

These two indicators played an important role in the decision to call a general election for July 4. It may be that, in terms of the economy, this is the best time for the Conservatives to take the fight to the Labour party, especially as Labour’s offer hinges around the promise of economic stability.

The UK economy has experienced an early recovery from the technical recession it experienced in the second half of 2023. Household incomes have improved and this is bolstering consumer spending. Some of this reflects alterations that were made in the 2023 Autumn Statement, including the four percentage point reduction in National Insurance contributions paid by employees.

In addition, financial markets now assume the Bank of England will begin cutting interest rates in August or September 2024, rather than in June. The anticipated timing of these cuts suggests the government had little to gain by waiting until the autumn to hold this election, because of the lag time between an interest rate cut and its impact.

As such, the Conservative party can claim there is evidence the UK has already reached a time of economic stability that provides a platform for growth. Vote for us, they say, and we’ll build on this work.

Meanwhile, Labour has unveiled its pledge card with six key policies, including economic stability. These are the six initiatives that its analysis will have identified as being most attractive to voters and party members.

Above all, Labour is arguing that now is the time for change. But to argue for change by itself is insufficient. Not all change is desirable and change also tends to disrupt, resulting in uncertainty and instability.

My experience in evidence-based diagnostics leads me to believe that neither party has made best use of this process in identifying the key challenges the UK faces.

In many respects, it is good for countries to experience regular changes in their leadership. Diagnostics to identify the most important challenges to tackle should be central to this, but politics – that is, the effort to please voters – will dominate this and many more general elections. There is a tension in all countries between the interests and needs of citizens as identified by the evidence, compared with the desires of politicians to form the next government.

Voters will hope the next UK government can rise to the challenge and ensure both economic growth and national security. But they might feel more confident if UK political parties looked at policy identification and prioritisation through the same evidence-based lens that informed Rishi Sunak’s choice of July 4 for the election date. Läs mer…

Britain is not as broken as everyone seems to think

According to many politicians and commentators, the UK is in a very sorry state. Ahead of the general election expected this year, Labour leader Keir Starmer has pledged to “fix broken Britain”.

He has spoken of his vow to “usher in a decade of national renewal”, claiming that “the economy is broken, the health service is broken, and public services are broken”. “There’s a lot of mess to fix,” he added.

It’s very similar to the promise former prime minister David Cameron made back in 2010. Then leader of the opposition, Cameron assured voters that he was the man to fix a country badly in need of repair.

So the “broken Britain” mantra continues, voiced, it seems, by whichever political party is seeking to return to government.

But this idea of a broken Britain needs to be challenged. It is far too easy for politicians to suggest that the country is on its knees when there is evidence to suggest something quite different. Despite its problems, Britain is not as broken as some would like us to believe.

The UK economy, for example, is not broken. True, it has not been growing rapidly, but the same holds for a range of similar countries.

And many of the challenges facing the UK’s economy are outside the control of this country’s government, such as the impact of war and climate change.

Recent figures show that in the first quarter of 2024, UK GDP grew by 0.6% compared to 0.3% in the EU and 0.4% in the US.

Inflation is still high but continues to fall, and interest rate cuts are expected later this year. Average wages, excluding bonuses, were 6% higher in the three months to February 2024 compared to the year before (or 2.1% higher when adjusted for inflation). Unemployment rates are around half those of France.

In terms of core public services, there are areas where the UK is doing well. The UK’s retirement income system, for example, benefits from a “triple lock” system which means the state pension increases each April in line with either inflation or average wages or by 2.5% – whichever is highest.

One outcome of this is that the UK is ranked tenth in an annual global pension index, which measures the generosity and sustainability of pension provision. The top three spots are currently held by the Netherlands, Iceland and Denmark, but the UK was still ahead of the likes of Germany (19th) and France (25th).

In education the UK compares favourably too. Across the OECD countries, 14.7% of adults aged 18-24 are not in education, employment or training, but for the UK this figure is 11.8%. Spending on schools, colleges and universities as a percentage of GDP by the UK (6.3%) is one of the highest.

In terms of the quality of education received, the OECD reviews attainment focusing on reading ability, skills in maths and science, with the UK scoring higher than the US, Germany and France.

A broken record

All of this is not to deny the hardship many have faced over the last decade or so. The cost of living has seen household incomes squeezed and waiting lists for hospital treatments are long. There are numerous aspects of British life in 2024 that could – and should – be improved.

But no country is perfectly governed. And a comparative analysis of the UK with other countries does challenge the blanket statement that Britain is broken – a phrase intended to raise doubts and to undermine.

Signs of uncertainty.
Pinon Road/Shutterstock

It reminds me of recent research on megaprojects which highlights how the powerful engage in “structural gaslighting”, using rhetoric intended “to sow doubt or confusion”. This study suggests that this is something which manipulates communities and works against rationality.

A similar process was identified in the debate around global warming, which was frequently distorted by politicians and commentators who were able to raise doubts about the science in a way that did not require supporting evidence.

One of the problems with the political rhetoric of “broken Britain” is that it influences business and consumer decisions which then have an effect on economic performance. Research suggests that uncertainty discourages valuable investment.

So perhaps it is time to set aside repetitive talk of broken Britain and develop a more evidence-based and responsible form of politics. For it may be that British political discourse is broken, rather than Britain itself. Läs mer…