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Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Will New Labour Voters Commit Financial Suicide at an General Election?

ElectionOracle / UK General Election May 24, 2008 - 10:11 AM GMT

By: Nadeem_Walayat

ElectionOracle The crushing triple whammy of defeats for Gordon Browns government at the hands of the electorate now make a conservative government led by David Cameron a reality. Many labour voters have enjoyed riding on governments gravy train over the past 10 years are now biting the hand that feeds them as Labour has sought to redistribute wealth from the well offs to the not so well offs.


The main beneficiaries under New Labour have been -

  • 8,000,000 on Benefits - Those out of work and on benefits have benefited significantly under new labour, as the government has sought to improve standards of living and alleviate poverty. However this has contributed to the creation of a culture of benefits across many areas of the UK which was highlighted in a recent BBC Panorama programme.
  • 12,000,000 Pensioners - A group greatly neglected under the previous conservative government have enjoyed much improvement under New Labour which includes in healthcare, the winter fuel payments and well above inflation annual pension increases.
  • 6,000,000 Public Sector workers have enjoyed huge rises in pay as the government has tripled the annual budgets of manu public sector departments over the last 10 years. However this increase has not resulted in a for like increase in output. I.e. for every extra £1 spent on the NHS, 70p is wasted. Similarly GP's have enjoyed a more than tripling in pay whilst at the same time cutting back on their hours as the NHS has been forced to fly in eastern european doctors to cover for out of hours care, hence patient care has suffered instead of improving.
  • 5,000,000 Low Paid workers - Have benefited hugely from both the minimum wage and the tax credits system which is especially targeted at young families and single parent households.

30,000,000 in total ride on New Labour's gravy train, more than enough to ensure general election victories.

The New Labour Losers

The losers are basically everyone else not included above, which includes young families where the household income is above £25,000. However the losers have put up with the government spending waste as strong economic growth coupled with rising house prices made people feel richer under New Labour. However now that the housing bubble has burst the cushion of rising house prices has now been replaced with the prospects of loss of equity, this at a time when global stagflationary forces are resulting in huge fuel and food price hikes that are not reflected in the officially flawed inflation measure (CPI).

The Labour vote meltdown increasingly suggests that those that have benefited under New Labour have forgotten their experience of a Conservative government, which would result in the conservatives targeting their natural voter pool, i.e. average earners upwards to fund the new Conservative Gravy Train, those on benefits and the public sector workers would be expected to be targeted for cut backs, and to a lesser extent the low paid and pensioners.

So whilst labour policy beneficiaries feel the pain of economic slowdown and contraction during 2009, it will be interesting to see to what degree they are willing to switch to the conservatives at an general election. Self preservation suggests that at an general election, many of the May 2008 protest voters will return to new Labour and therefore the election will be much closer than opinion polls now suggest, so all is not lost for Gordon Brown, unless he is forced out of office by panicking Labour MP's.

More Articles on New Labour's Problems

23 May 2008 - UK House Values Have Fallen by 25%, Contributing to Labour Vote Meltdown
13 May 2008 - Caroline Flint UK Housing Market Briefing Notes in FULL
13 May 2008 - UK Tax U-turn Rebates to Buy Votes- Personal Allowances Up by £600
13 May 2008 - UK Flawed Inflation Measure Explodes Higher, 3% CPI, 4.2% RPI
08 May 2008 - UK House Prices Tumbling- Interest Rate Conundrum
03 May 2008 - Gordon Brown is New Labour's Grim Reaper
24 Apr 2008 - Teachers Strike as Real Inflation is Far Higher than the CPI
23 Apr 2008 - Gordon Brown's Tax U-Turn as Anticipated- Your Fired!
21 Apr 2008 - Bank of England Throws £50 billion of Tax Payers Money at the Banks
19 Apr 2008 - Gordon Browns Abolishment of the 10% Tax Band- Leadership Challenge?
16 Apr 2008 - Bank of England Prepares to Ramp Up the Money Printing Presses
08 Feb 2008 - UK House Prices on Target for 15% Fall Despite Interest Rate Cuts
20 Nov 2007 - UK Public Sector Incompetence Sinks to New Low - Loss of 25m UK Child Benefit Records
06 Oct 2007 - Gordon Brown Panics - NO UK Election in 2007 or 2008!
06 Oct 2007 - Gordon Brown Bottling Out of Calling a UK General Election As It All Goes Wrong

 

By Nadeem Walayat

Copyright © 2005-08 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 20 years experience of trading, analysing and forecasting the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication. We present in-depth analysis from over 150 experienced analysts on a range of views of the probable direction of the financial markets. Thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Attention Editors and Publishers! - You have permission to republish THIS article if published in its entirety, including attribution to the author and links back to the http://www.marketoracle.co.uk . Please send an email to republish@marketoracle.co.uk, to include a link to the published article.

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