The UK’s New Prime Minister Faces a Stiffer Populist ‘Red Wall‘: An Interview With British Historian Stephen Davies
The sudden fall of Liz Truss makes a more immoderate UK populism likely
British politics seems intent on upstaging itself. As if the Brexit referendum of 2016 and the massive Conservative Party victory of 2019—itself a product of pro-Brexit voters—hadn’t been surprising enough, Conservative Party Prime Minister Liz Truss last week resigned suddenly after a mere 44 days in office, a historically short tenure precipitated by a shocking loss of confidence in her government.
But this political tumult won’t have taken close readers of The UnPopulist entirely aback. In late July, before Liz Truss was chosen by her party to replace discredited Conservative Prime Minister Boris Johnson, Stephen Davies of the U.K.’s Institute of Economic Affairs wrote for us about the future of populism in the U.K.
At the time, he observed that Conservative Party, the current political home of British populism, faced daunting challenges not just as a governing party, but as an unwieldy political coalition of three strands of voters. The first strand was admirers of former Prime Minister Margaret Thatcher, melding her “free-market economics and latter-career skepticism of the European Union” with an “opposition to ‘wokeness.’” Truss was very much part of this faction. The second was a more cosmopolitan, socially liberal group, who either rejected “things like Brexit or at least the hard form it took,” and who focused on “fiscal prudence,” such as balanced budgets. Their views were reminiscent of former Prime Minister David Cameron. The third strand was “strongly pro-Brexit populist voters who combined nationalism and social conservatism with interventionist economics,” such as industrial policies meant to help lower-income families. Many of these so-called “Red Wall” voters were formerly of the Labour Party.
Despite the challenges of such a coalition, Davies felt that the Conservative Party might well moderate the impact of Brexit populists in the U.K. Given recent events, however, this scenario is now in doubt. The UnPopulist spoke with Davies on Monday, just after Rishi Sunak was chosen as the country’s new prime minister. A transcript of that conversation appears below, lightly edited for length and clarity.
Tom Shull: In July, you wrote something that reads prophetically now. You observed, “If a Thatcherite like [Liz] Truss were to reassert a kind of old-school Conservative orthodoxy on taxes and small government and thereby delight some of the party’s (aging and shrinking) core vote, she would alienate the new populist and nationalist Labour voters the party gained in 2019—voters on whose continued loyalty the party’s future electoral success depends. She would also be doing nothing to regain the support of Cameronite suburban and metropolitan middle-class voters put off by Brexit and the party’s increasingly strident nationalism and culture war rhetoric.”
It does seem as if Truss’ proposals, with their emphasis on unfunded tax cuts, basically did just that.
Stephen Davies: Partly, yes. It was a completely radical Thatcherite—or if you like, radical libertarian—program. But it also contained an element that I’m sure Margaret Thatcher would have raised her eyebrows at, which was this enormous open-ended energy price support. It was costed at possibly 140 billion pounds. It was the combination of that plus unfunded tax cuts and the sheer lack of seriousness of her and the chancellor of the exchequer, Kwasi Kwarteng, that totally spooked the markets and blew her out of the water.
It was also the way it was done. They fired the senior civil servant of the treasury, a chap called Tom Scholar. They presented this so-called mini-budget and then said, “Well, no, we are not going to ask for an evaluation from the Office of Budget Responsibility about the effect of this on public finances because we have complete confidence that this is going to stimulate so much growth that we don’t need to worry.” There was this impression of blithe insouciance, which did not go down well.
Then to make it worse, over the weekend after the budget, the chancellor was interviewed, and he said: “Well, this is only the start. We’ve got more tax cuts on the way.” No mention of spending reductions to balance them or anything else. A lot of people say it was Thatcherite, but actually, that’s not correct. Thatcher didn’t start to cut taxes in any significant way until very late on in her first term, and really in her second term. She did all the heavy lifting first.
Shull: So tell us a bit about what you think the prospects are for both the party and the country with Rishi Sunak, a former chancellor of the exchequer, now as prime minister.
Davies: He’s certainly going to revive the party’s electoral fortune slightly—not that that would be difficult. Sunak is widely popular with the public. He’s regarded as being competent, although he did blot his copybook earlier on in the year because of the controversy about his wife’s tax affairs. He’s generally regarded as being (a) smart, and (b) a serious person, which wasn’t true of either of his predecessors [Truss and Boris Johnson].
Sunak is very much from the Cameronite wing of the party, and what he’ll bring is fiscal orthodoxy. What we will get, I’m afraid—because I think this is actually a bad economic policy; I agree with Truss on that—is a combination of both tighter monetary policy, because the Bank of England will be raising interest rates, and tighter fiscal policy, because the government is going to raise taxes and cut spending. Going into a recession, this is a pretty stiff dose of medicine. The result is going to be very hard for the public.
The Tory Party is not going to have an election because they know that if an election is called, they will be utterly massacred. They’re going to look to serve out the rest of their two years in office and hope to minimize the scale of their defeat in the next election.
Shull: Let me broaden the scope a little. We have Rishi Sunak, who is of Indian descent, becoming prime minister and leader of the Conservative Party. Is that likely to alienate the populist pro-Brexit voters who came over to the Conservative Party from the Labour Party in recent years?
Davies: His ethnicity doesn’t matter at all, I think it’s fair to say—well, it matters to about 10% of the population, according to the recent polls. The great majority of the population is positive about having an ethnic Indian prime minister or completely indifferent to the matter. I think it’s fair to say this is one of the big differences between the United States (and, indeed, some European countries) and the U.K. Racial politics is much less charged in the U.K.
That said, I think that he is going to find it very hard to keep those so-called Red Wall voters— largely working class, older working class, many retired—who combine left-of-center economics with a strongly nationalist, pro-Brexit view. The reason is not his ethnicity; it’s because of the economic policies he’s likely to follow—the fiscal orthodoxy, the cuts to public spending—and the perception that he is part of a monied nexus. His personal wealth, which comes from his wife, actually, is going to count against him, because he’ll be seen as being part the “monied establishment,” which those voters don’t feel at all comfortable with.
Shull: From your comments online over the past few days, it appears that you now see, longer term, the possibility that the three strands of the Conservative party could shear off into separate entities.
Davies: Yes. Well, what has become very clear over the last couple of months is that the Conservative Party is now so fractious that it really makes sense to think of it as being almost like a coalition government of the three parties you mentioned. What will happen going forward depends partly on the scale of the defeat that they suffer in the next election. If there is a truly shattering defeat, the party would be very unlikely to survive. You would get certainly two, maybe even three new parties emerging.
Given the really dark economic outlook for pretty much all European countries, I suspect that even perhaps before the next election, and certainly after it, we’re going to see the emergence of maybe not just one but several populist insurgencies. I suspect we’ll certainly see one probably led by Nigel Farage [the political leader of the Brexit movement], which will try to put the case for a libertarian form of populism—one that is pro-Brexit and nationalist, but also very free-market. That has only limited support.
The other thing we will see emerging, I suspect, is a more populist party of the kind that we’ve seen in U.S. politics—the Republican Party these days—or the populist parties on the continent. I thought that the Conservative Party had successfully contained that impetus, but the events of the last couple of months mean it probably hasn’t.
Shull: So if there is now going to be the possibility of at least one significant populist party, perhaps two, what might that mean in terms of the influence and the impact that populists in Great Britain would have on the country’s direction as a whole?
Davies: It’s very hard to tell. The problem for anybody wanting to set up a party that is broadly populist—anti-elitist, anti-establishmentarian, left-of-center on economics, but quite clearly right-of-center with multicultural issues—is not in getting support. The problem is, Where do you get the money, resources, and foot soldiers to build up the infrastructure? Setting up a political party that’s effective is not at all easy.
That said, one thing going for a party of that kind is that the voters are geographically concentrated in the coastal areas and small towns, basically ex-industrial small towns, essentially in the north of England, the Midlands of England, and to some extent, South Wales. That means the share of the vote that you need to get seats in Parliament is actually lower than it would otherwise be, because when your vote is concentrated, you get a much bigger payoff than you do if your vote is spread evenly around the country.
So it’s an interesting question. I suspect a vehicle of that kind will probably ultimately be more effective than people expect, but it really is up in the air.
Shull: In your July essay, you described a potentially moderate populism situated in the Conservative Party as, “for instance, hostility to immigration, but without an explicitly ethnic notion of identity; industrial strategies, but not for protectionism; and anti-wokism, but without an explicitly anti-liberal or post-liberal foundation arguing—à la Hungarian Prime Minister Viktor Orbán—that ‘woke’ ideas are the inevitable end point of UK’s liberal heritage.” Is there now a likelihood we’ll get a more immoderate populism emerging in coming years?
Davies: Yes. I would say, though, that of those three elements, there is much less risk of an explicitly nativist or ethnic-based politics. As I indicated earlier, only about 10% of British voters really are bothered about that. On the other hand, the other two elements—the very right-wing, explicitly post-liberal or anti-liberal cultural politics, and the populist economic argument—are likely to come out in a purer form.
Now, there is one party out there, very small at the moment, which is aiming to capture that vote for the moderate version of populism: the Social Democratic Party. If the SDP were to make a breakthrough, we would have a more moderate form of populism, which would then attract I think probably about 25% to 30% of the vote.
But there is a large part of the electorate that is very exercised about immigration. I think this fundamentally is due to two things. One is a misunderstanding of economics, quite frankly—lots of fallacious reasoning that immigrants are somehow simultaneously taking jobs and living on benefits—but more importantly, it’s the perception that high levels of immigration bring about cultural and social change, which people are not comfortable with.
So it is actually quite unlikely that you’ll get an easy immigration liberalization under the Labour Party either. The Labour Party is trying to get the votes of these voters, too.
Shull: You just brought up the Labour Party. Let’s go ahead and talk about them for a moment. What do you see next for Labour?
Davies: Well, a lot of the populist voters—Red Wall voters—will go over to Labour simply because they want to give the Tory Party a good kicking. But the signs are not good for Labour to be able to hold them in their own electoral coalition. At the moment, it’s obvious that the strains within the Conservatives’ electoral coalition have become gaping fissures, but that detracts attention from the fact that the Labour Party has equally severe fissures.
The Labour Party is currently in opposition. Once it’s in government, Keir Starmer [the Labour Party leader] is going to have to make some very tough decisions. If he does some things to placate the broadly national collectivist voters who will have returned to the Labour Party, he will alienate the younger, metropolitan college-graduate voting Left, who will probably start to vote in larger numbers for the Liberal Democrats or the Greens, particularly the Greens.
On the other hand, if he doesn’t do that, then it’s very likely that a populist party will start to take away large numbers of Labour voters in places like the Red Wall constituencies up North. And if he’s not very careful, he will end up doing what Liz Truss has done and alienating both of these wings of his coalition. He’s also going to find himself, very quickly, in a very difficult situation.
Shull: So there’s one last question that I would ask you. Do you think the Conservative and Labour Party dynamics that we see in the U.K. are similar to what we’re seeing between the Republicans and the Democrats in the United States?
Davies: I think that there is a similarity but also a critical difference, which reflects the greater democratic nature of the American political system and the ability of grassroots organizations to have greater impact on U.S. party candidates through the primary election system than is the case in the U.K., which is still a very elitist political system. We still have a very small and cohesive political class here. Both parties are now controlled by people who basically want to keep British politics the way it was between 1997 and 2015, even though a lot of voters don’t want that.
In the United States, because your political system is actually more open to grassroots pressure, one of the two major parties has clearly gone down the populist road, the Republicans in this case. The establishment Republicans, who are the equivalent of Sunak and people like that in the British Conservative Party, are basically finding it almost impossible, regardless of how much money they have, to recapture the party. Whereas in the U.K., both parties are controlled by, if you like, the kind of consensus establishment. I don’t think that’s ultimately sustainable, but they’re going to give it a good go.
Shull: So even if we don’t see the moderate populism within the Conservative Party that you originally described as possible back in July, the odds are still fairly good that the U.K. will not see quite as much populist control of the political sphere as we do in the U.S.?
Davies: Yes, I think so. I do think that’s partly a function of the way British party politics works. As I said, we don’t have anything like the primary system. Also, I would say there is another big difference, which is simply that the cultural divisions in the U.K. are nowhere near as sharp as they are in the United States. Speaking as an outside observer, what I think is very striking is the contrast between the United States and just the other Anglophone countries—places like Canada, Australia, New Zealand, Britain. The cultural divisions that we can see in U.S. politics appear to me to be much sharper both geographically and in terms of voting behavior and attitudes towards the other side than is the case in the U.K.
Why that is I don’t know. It obviously reflects features of American society that go back a long way in many cases. What that means is that the form that populist politics takes in the U.K. or other Anglophone countries is not going to be quite so robust as in America.
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And Sunak is also seen as a centrist technocrat, meaning representing everything that Brexitarian voters rejected. Paradox
I don't see how a hypothetical future party could be populist, nationalist but also "very free-market" at the same time. The populist and nationalist parts would strenuously insist on trade protectionism and "us first" policies that are the antithesis of free-market economics.