If Labour splits…

Over on the YouGov website I’ve written about an experiment we did looking at how the votes might fall in the event that the Labour party did split (the tabs are here). As I say in the article, this needs a thousand caveats – in what proportions has Labour split? Which party is the main opposition with all the publicity that implies? Who is the leader of the anti-Corbyn Labour party, and what sort of policies are they following? How did the split happen? Respondents don’t know, so this can only be a straw in the wind.

The important things to take away are these:

One – there is a sizeable chunk of the Labour vote who are brand loyalists, in the event of a split they would keep on voting for Labour, regardless of whether the left has split away or the right has split away. Just as the faction that is left controlling the Labour party will get the party’s property and assets, they’ll also get that base loyalist vote. Looking at this poll, it seems to be about 28% of the current Labour vote (so about 8% of the national vote)

Two – a lot of Labour voters would go with the left if the Corbyn was somehow ousted and his supporters left. A smaller group of current Labour voters would go with the right if they left, but they’d pick up more support from don’t knows, current Lib Dems and so on. A Labour splinter group of either side would start with around-about 13-14% (again, there are a thousand caveats to this, so don’t take that as set in stone).

Three – the sum total of the support which the two rival Labour parties would be slightly more than the current Labour party (between them they’d get about 34%, compared to Labour’s current polling figures that are around or just under 30%). Under a proportional voting system this might be a good thing. Under First Past the Post this would likely be disastrous for them, splitting the Labour vote and allowing the Conservatives (or UKIP, or whoever) to gain more seats from them. Exactly how bad it would be we cannot tell without knowing how their votes would be distributed geographically, whether individual Labour MPs would be able to retain the Labour vote in their own constituencies. It is likely to be pretty nasty though.

Finally, given the purpose of the exercise was to see what proportion of Labour voters would stick with the “Labour brand” in the event of a party split, we were faced with the problem of what to call the splitters in each scenario. We wouldn’t call them the “anti-Corbyn Labour party” or “Corbyn Labour party” or whatever as the whole point is that they would NOT be the Labour party, we had to give them a new made-up name. But what? In the end we tried it out with various different names to try and cancel out any effect from choosing a compelling or duff name – “Momentum”, “People’s Party”, “Moderates”, “Progress”, “Radicals”, “Social Democrats” – none of the names seemed to make much difference, whatever we called it, the splitters got around 13-15%.

165 Responses to “If Labour splits…”

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  1. @Pete B

    “I await a rubbishing by people who think they know about economics, but for now goodnight.”


    Nah, it’s basically ok, nothing massively wrong with it, it’s just that there’s a limit to how much you can do it, because eventually may well result in inflation.

    Not initially, because we’re not at full employment. So you put money in the economy, peeps have more money to spend, buy more stuff, business sells more, produces more, economy grows.

    Crucially, this extra production to meet the extra demand resulting from peeps with more money, keeps inflation in check. Putting more money in the economy tends to inflate prices, because now you have more money chasing the goods in the market. But then when business produces more goods to meet the demand, this pulls prices back into line again.

    …Until… you near full employment. Then business finds it harder to up production further, because can’t get the staff, so inflation is more likely. Tbis is why controlling inflation was such a big deal in the post-war era of full employment.

    However, it is possible to make some investments in some areas that help to counter inflation, e.g. housing, energy etc…

  2. @Muddy Water

    “But a double Wimbledon champion! Have they got any idea how long it took us to get one of those?”


    Exactly, after all we’ve done for them. Successive Scots PMs, even ones who may have had issues, a chance to reaffirm their allegiance with the indy ref, we even let them look after the subs!! If they think currency is an asset, then surely Murray, whose finest hour was winning Wimbledon, should be considered a shared asset.

    After all, you can’t win a grand slam in Scotland. And they’ve got the golf thing anyways. Should Independence happen, we’ll have to negotiate joint custody of the Murray. On a pro rata basis according to relative population size. We could let them keep Judy and his bro as a goodwill gesture. Might let them borrow Sue Barker too…

  3. PETEB

    @”If the BoE can ‘print’ money to give to the banks, ”

    It didn’t.

    It purchased UK Gilts from them with electronically created funds.

    The Gilts were already in issue from The Treasury and are dated stocks which will be & have been repaid by the Treasury at their redemption dates.

    QE is an excercise in increasing liquidity-not giving money away.

  4. Muddy


    So we can look forward to many more months( ? years) of sullen Labour backbenches disconnected from their own Front Bench.

    I wonder if Bercow might be dragged into such a scenario at some point?

  5. I see that Corbyn is 1/8 on to win against Smith, so that is clearly by far the likeliest outcome. And thus far, Smith is not making inroads, but it is still early days.

    I just wonder what the 172 will do when Corbyn wins. Just sit back, accept Corbyn as Leader, ponder deselection, and abject defeat in 2020?

    Or start another party in the most difficult circumstances?

    They really have messed it up completely. They panicked in the febrile post-Brexit atmosphere, and fatally assumed that Corbyn would resign after an overwhelming vote of no confidence.

    I really wonder what on earth they are going to do.

    One possibility is that Corbyn will retire after winning the Leadership contest. He will have confirmed his status as a popular hero of the Left, he will have seen off the Blairites, and established the supremacy of the membership over the PLP. He can then choose his successor ( McDonnell? ) who will be able to pursue the Corbynite political agenda, but be able to put him/herself forward as a unifying Leader. This will provide the figleaf for which the PLP will be desperate.

    Smith as Deputy Leader, or Shadow Chancellor, maybe.

    Remember that Corbyn didn’t want to do it in the first place, and is getting on, and, not surprisingly, looking tired.

    I have never thought that Corbyn would fight the 2020 election.

    And 172 relieved people will be saying ‘Jeremy’s done the right thing, we can work with McDonnell, its a fresh start, we’ve had a difficult time but a healthy debate, blah, blah…’

  6. OK Colin – How about;

    1) BoE electronically creates money, exchanges this with banks for existing gilts, with the banks writing off an equivalent amount of stressed consumer debts in return.

    So banks get liquidity, improve their real balance sheets by elimintaing some bad debts, and consumers are relieved of the cost of these debts, with the BoE able to unwind the QE at a later stage.


    2) BoE creates money electronically to buy newly issued 100 year gilts direct from the government at 0% interest. Government takes cash and gives it to the banks to boost liquidity. In exchange, banks write of an equivalent amount of debt from consumers.

    This would boost demand, reduce debt levels, aid banks liquidity, and leave the QE position as now to be unwound at some future point.

    On the wider problem of the UK relying on debt financed consumer spending, the simlpe answer is to adopt some of the Labour leadership candidates policies on collective pay bargaining and wage councils.

    A report yesterday showed that wage earners now get 49% of GDP, compared to nearly 70% in the 1980’s. This effectively means that the only way they can spend at the levels the economy requires is to borrow, while the income drawn by other sections is fluid and exported or lost to domestic economic growth. Our high debt is a symptom of the failure of the neoliberal model.

    It’s also pertinent to oint out that CEO’s of the FTSE 100 and other big economic players retain their rights to collective bargaining – they pressure governments daily – so why can’t workers have a bit of that too?

  7. @ Tancred
    “Hmmm. Northern Irish parties are pretty irrelevant.”

    Except in that case you would then also need to deduct the equally “irrelevant” “rabidly anti-Tory” votes of SF, the SDLP, Peeps before Profit, WP & the Greens – which also totalled ~300,000. So his assertion remains broadly accurate. In fact I could have included Alliance in the “rabidly anti-Tory” column but they are far too nice to be rabidly anything. The only froth by their mouths is on their macchiatos.

  8. @Alec

    there is also the problem of how much of those wages gets eaten up by essential bills, rent etc.

    The benefit of increasing wages is eroded if it just means others can just out prices up…

  9. Millie

    A month ago when Corbyn lost the vote of confidence he had the chance to step down with dignity and choose a possible successor. By attempting to stay in post against the wishes of the PLP he’s thrown away any goodwill his parliamentary colleagues had left. Because of that there’s now no way that a Corbyn-sponsored candidate is going to get the nominations required to get into the race. He’ll now have to wait until 2018 or so when deselections are looming to have a chance at picking his replacement.

    As an aside, even if Corbyn had stepped down in July he’d have struggled to get McDonnell or Abbott on the ballot. They are, at the very least, Corbyn’s attack dogs, or if you’re being less charitable they’re the ones pulling his strings. Either way they’re probably the only members of Corbyn’s cabinet less popular with the PLP than the man himself.

  10. ALEC

    My objection to the “economists” idea ( only 35 this time :-) ) is to be found in their penultimate paragraph -I quote:-

    “In any of these policy scenarios, new money will be directly introduced into the real economy, stimulating aggregate demand and boosting employment, investment and spending. While it is a job for the Treasury to set up the framework for these policies to be deployed, it would remain a decision for the monetary policy committee as to the timing and size of any future stimulus.”

    ie- The UK Central Bank is to be in charge of both Monetary AND Fiscal Policy-thus compromising its current brief to manage inflation.

    Fiscal Policy ( and Money Printing IS Fiscal Policy) should be left to accountable politicians -not unaccountable Bankers-even Central Bankers.

    I think it is clear that May intends to pursue looser fiscal policy. Given what looks like an extended period of ultra low interest rates ahead ( or even negative rates) -this makes sense.

    But she will be accountable for what she borrows & spends.

  11. @Colin

    So we can look forward to many more months( ? years) of sullen Labour backbenches disconnected from their own Front Bench.

    When was the party ever different from this? ;-) It’s just a question of which group is disenchanted.

    If Smith wins (a very big *if*) I’d imagine that the social democrats will be much more positively engaged than they have been with Corbyn. As Alec said earlier in the thread, he is their man. They know the party doesn’t support their own policies at the moment. Even if they’re sceptical of his policy positions, they need to show that their disengagement from the current leadership was exceptional – that they remain loyal folk who will actively support a leader who sits within (albeit at one end of) the broad traditions of the party.

    The really important dividing line for them will be in international policy – where Smith has said very little, probably deliberately – rather than domestic and economic affairs. They will want Smith to revive the Labour party’s support for liberal, humanitarian internationalism and to move away from a world view in which the UK, the US and Israel and their motivations and interventions are axiomatically wrong and nearly always evil.

  12. MUDDY



    Your comments paint a period of reasonable accomodation -if Smith wins.

    But if-as seems likely-he doesn’t then we will presumably return to the status quo.

  13. In response to Cambridge Rachel of a couple of days ago & on the subject of the Labour ‘brand loyalty’.

    Whilst I see this in large number of Labour voters, I am not convinced that the supporters of any other party have voters who cast that vote in anything like the same numbers / proportion.

    If the Tories for instance were to split, and two parties on with the name one without, I suspect that the outcome of a vote would not be anything like a similar scenario with Labour.

    I doubt there is any hard evidence to support this, other than my own experience.

  14. On the subject of giving away money ….

    As for handouts, I was a beneficiary of this circa 2009 when the US government applied a universal tax credit (I think it was around $400) to everyone filing a tax return. I believe that even if you had no earned income you could still claim and get the money as a tax rebate. This was part of a gigantic fiscal stimulus package which also included road building, research and a lot of other extra spending on ordinary government activities. (As I recall there was also an extension of unemployment payments, which are usually limited over there to a certain number of months).

    As for writing off debt, that’s all very well, but it should be done at market rate! Comedian John Oliver recently bought $15m of medical debt for roughly $60k:


    (US medical debts are a bit of a special case, though, since they are o0ften calculated on “list prices” that almost nobody pays).

  15. Colin,

    “But she will be accountable for what she borrows & spends.”

    There is never any borrowing with government spending. The government spends by marking up bank accounts via the Bank system it owns and controls.

    If there is something for the government to spend money on, then it can spend it. Once that happens a chain of transactions is set in place that will – if everybody spends the money they receive as income – result in precisely the same amount of money coming back to the government in the form of taxation.

    That happens for any positive tax rate in any country with its own floating rate non-convertible currency.

    Macro 101 – my spending is your income. Get yourself a pile of monopoly money, do the sequence yourself and you’ll see how it works. As the money bounces around it taxes itself away until nothing is left.

    The only thing that stops that is people not spending the money – aka saving. The aggregate of people doing that is what causes the taxation amount to be less than the initial spending.

    So government doesn’t borrow at all really. Its spending simply puts those people that want to save rather than spend ‘in credit’.

    In other words just like a bank when it holds your deposits ‘in credit’.

    Government can never be short of money. It can only ever be short of stuff priced in its currency that it can buy.

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