I try my hardest not to comment too liberally on politics in this blog but the dramatic events of last week have prompted me to wonder what would happen if political parties were subject to the same market forces as businesses? The Brexit zig zag of last week – Monday disaster over Ireland, by the end of the week triumph as we move on to trade negotiations – simply reinforces the not very unique observation that “events” are likely to determine the fate of the current Conservative government. A very clear strategy for governing the country doesn’t seem in evidence which means that the Prime Minister will always be vulnerable to events beyond her control.
Inevitably something somewhere is going to horribly wrong and at that point, the Conservative government looks vulnerable, especially as Corbyn seems to be gliding into power on the back of public cynicism (nauseating though that thought is).
But once we step back from this rather miserable situation, we are confronted with a different question – do we have the political parties we deserve? More pertinently, if party politics was to behave more like any other marketplace, would we have anything resembling the current two-party tribal structure? I constantly write about how technology, globalisation and regulations are disrupting core markets: about how start ups are revolutionising business practices and about how established players can vanish within a matter of years. Why should political parties be any different? Aren’t they just brands like any others?
And yet the UKs party structure seems oblivious to major disruption. Sure, technology has an impact. We’ve also seen some changes around the edges especially in the smaller nations of the UK, but in reality, we are still stuck with the same dual party structure we’ve had for more than a century since the demise of the Liberal Party. Obviously, politics isn’t a pure market but let’s be honest it’s also not a pristine example of a pure public policy managed structure. Money does have an influence on outcomes and voters are simply consumers with a ballot box.
Yet as an investor, I have to say that as the political marketplace currently stands, I wouldn’t want to invest in either party. Both are not fit for purpose and if the market was genuinely open, they’d both be very vulnerable to new start ups coming along to disrupt their business model.
This has, to a degree, already happened with the Labour Party. I’ve often wondered where all the convinced socialists in the UK went to over the last three decades. By my estimate there’s probably about 10 to 15% of the UK who have a fundamentally red socialist view of politics. They’ve traditionally voted for Labour under duress – in outline, the traditional Labour Party is a boring social democratic party that claims to be socialist but isn’t really. Now we know the answer – the Left has invaded the Labour party and taken control in a populist surge. Put another way, in the language of markets, a disenfranchised group of consumers have realised that there is a product for them by taking over an existing product. Congratulations to them and full marks for spotting the opportunity. Pity about the policies but that’s beside the point.
The greater paradox for me is that there is no current rival on the centre right to the Conservative Party. If I were a pro-business, Christian democrat orientated (to use continental terms) voter I’d currently be very unhappy with the state of the Conservative party. It looks like it is one step away from being taken over by a flag waving contingent of strong nationalists who also represent a perfectly respectable slug of public opinion (again, pity about the policies). Traditionally the Conservative’s have prospered not because they are a vanguard movement of the masses – far from it given current party membership levels. They’ve prospered as a product in the market place for two hundred years by projecting calm brand confidence and an ability to change views and opinions at the first sight of a negative opinion poll. The Conservatives have carefully built a reputation for solid governance and non-ideological policies, interspersed with a generally lower taxes, small government mindset.
The travails of Brexit have exposed a horrible brand challenge for the Conservatives. They now seem daringly ideological and their governance credentials badly tarnished. As a brand they look vulnerable and weak.
So why isn’t there a rival centre right, dare I say conservative product? In plenty of other countries we’ve seen new political start ups challenging the established brands but in the UK we have a deafening conformity – the prevailing wisdom is that we are stuck with our two parties for ever and a day because that’s the way the electoral system dictates the answer. In effect, the market for votes is rigged and subject to oligopoly control.
It’s already blindingly obvious that the core centre is lacking a political party that truly represents everything from moderate social democracy through to moderate pro business centre right ideology – loosely expressed as the liberal centre. But for me, the more powerful critique is that we also lack a sensible centre-right conservative party that doesn’t have the same toxic qualities of the existing Conservative party? Where is the centre-right start up that says, yes we are pro-business, yes we think taxes should come down, but yes we believe in the NHS and yes we want a big surge in business investment? In other countries, we’d have a distinctive nationalist right wing party that would vie for votes with a pro business centre right party. In the UK political market place we have just one party – the Conservatives. But as a brand it is close to being in a terminal state of disrepair. When will change come to the centre right and right and what could prompt the disruption?