The 2015 UK General Election
A Cicero Group analysis
M
A
Y
2015
1
Foreword
Britain wakes up to an electoral bombshell. A small Tory
majority NO ONE predicted – not even the Conservatives
themselves.
Pollsters have their heads in their hands this morning
and with good reason. This was the 1992 election all
over again – the pollsters seemed unable to capture the
‘shy’ Tories.
And the big beasts– Ed Balls – Danny Alexander –
Douglas Alexander – Vince Cable – Ed Davey – Jim
Murphy – fell like skittles to the Tory and the SNP
advance.
his next term is a little easier and the parallels stop right
there!
The memory of that misery is still there for most
Conservatives. Never again? We shall see.
Iain Anderson
Director and Chief Corporate
Counsel
Cicero Group
The only poll that proved right was the exit poll at 10pm
last night. No one dared to believe it.
We now witness the Balkanisation of British politics – we
have four parties in lead place in the four countries that
make up the UK. Conservatives dominant in England
– the SNP – the lion ‘rampant’ in Scotland – Labour
leading in Wales and the DUP in Northern Ireland.
While David Cameron is settling back into Downing
Street and forming a Government – Farage, Clegg and
Miliband have resigned.
Politics is a brutal business indeed.
For Labour and the Liberal Democrats – this result is
nothing short of a total disaster. The wounds will take
some time to heal.
But business seems happier - market reaction has been
strong – bank and utilities leapt up to 7% in early trading
as the planned for heavy regulation of the sectors won’t
materialise now.
So the key priority for the new – majority - Government
will be the constitutional debate in the EU and Scotland.
I expect this to eat into much Government time – these
issues will dominate the first 2 years of this Government.
And after that EU referendum – it may well be time for
the Prime Minister to stand back and we will see a new
Tory leader. I expect Cameron to win that vote to keep
the UK in Europe – but there may be a price to pay with
his party.
But – rightly - he can now present a Queen’s Speech
without the need to negotiate with other parties. That is
quite an achievement. The first Conservative leader to
win a majority since John Major. The PM will be hoping
2
Contents / Cicero Elections analysis
2
Foreword
3
Contents
4
What to expect now - The implications for business
5
Cicero Elections analysis - Britain unbound
6
What happens next / Queen’s Speech overview
7
Election results map
8
What were the key regional battles?
9
How did each party do?
11
Party leadership elections
3
What to expect now - The implications for business
This election result has shocked the whole nation,
business included. A Conservative majority was not
expected and businesses will now need to adapt their
plans accordingly. The subsequent rise in markets would
suggest a positive initial reaction. Businesses will now
hope that a Conservative majority government will deliver
economic growth and a pro-business environment.
The key positive from this result should be a more
stable legislative environment. Gone are the prospects
of backroom deals between multiple parties. The
Conservatives have a workable majority and will be able
to construct and pass a Queen’s Speech based on their
manifesto framework.
This will also enable the Conservatives to continue the
work of the previous Government and to offer businesses
policy continuity. All of this means that we have a clearer
picture of the future policy landscape than had been
expected.
Banks can expect the Conservatives to oversee the
implementation of the Vickers ring-fence, promote further
competition in the sector and encourage more funding
sources for SMEs. Alongside this, there will be focus on
improving consumer protection, encouraging greater
customer switching through methods such as account
portability, and a renewed emphasis on innovation.
Additionally, do not be surprised if you see further activity
on executive remuneration and corporate governance.
The pensions industry can now look to the first
Conservative Pensions Minister in almost 20 years.
These should result in a continuation of the philosophy
behind the pension freedoms, and encouragement
of greater product innovation. The rollout of automatic
enrolment will also continue and the planned review of
financial fairness may see the introduction of caps on
pension fees.
This review will be led by Ros Altmann, who will be raised
to the Lords and will take on a new role overseeing
consumer protection. Expect to see a renewed focus
on financial education and advice as part of this. The
post-RDR landscape still concerns many Conservative
MPs and there will be calls for action in this area. This
could be driven by a Treasury Select Committee under
the leadership of Andrew Tyrie.
they are serious over their pledges to build an additional
200,000 homes a year and to unlock more homes on
brownfield land.
A continued focus on a competitive business tax
environment to attract foreign investment will be another
important component of the economic growth agenda.
Additionally, we can expect a review of business rates
and a further crackdown on tax avoidance and evasion.
The majority of this programme is good news for
business. But an ongoing business risk will be continuing
uncertainty over two vital issues – an EU referendum
and further Scottish devolution.
This Conservative majority guarantees an EU
referendum by the end of 2017 and the uncertainty that
comes with this. EU reform and the UK’s role in Europe
will be dominating issues in Parliament over the next
two years. Businesses will have to plan accordingly and
navigate their way through a potentially fractious political
debate.
The SNP’s overwhelming victory in Scotland will ensure
that they continue to press for further devolution. Senior
Conservative figures such as Boris Johnson are already
calling for a big federal offer. The key question for
business will be whether this includes fiscal autonomy.
David Cameron faces the unenviable task of trying to
resist this call while also beginning to rebuild links with
Scottish voters. This will also raise fresh questions
over the future of English votes and further regional
devolution.
This result means that we now have a degree of certainty
over the initial legislative programme in this Parliament.
However, large questions remain over European
membership and the future of the Union. Another key
question to consider will be whether Conservative
discipline holds steady over the Parliament. This will be a
vital factor for ensuring a stable legislative environment.
Tom Frackowiak
Executive Director for UK
Public Affairs
Cicero Group
A key plank of the Conservative economic growth
agenda will be early action on infrastructure and capital
investment, beginning with moves to build the ‘Northern
Powerhouse’ and HS2. This could also be matched by
an early announcement on airport expansion as well.
The Conservatives will now be expected to show that
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What happens next?
New Parliament
summoned
18 May 2015
Queen’s Speech
27 May 2015
May
Select Committee
Elections
May - June 2015
Possible
Emergency Budget
TBC June 2015
June
Mansion House
Speech
June 2015
Summer
Party conferences
19 September - 7
October 2015
Spending Review
TBC Autumn 2015
Autumn Statement
November/
December 2015
Autumn
The Queen’s Speech
An In/Out EU referendum will be the defining feature of the first Queen’s
Speech of this Parliament. With a majority in the Commons, Cameron
may look to bring the vote forward a year early from the 2017 deadline,
in part to avoid other EU member state national elections in 2017,
along with the UK’s presidency of the EU in the second half of 2017.
The Conservatives promised to introduce a tax lock if elected, a
commitment to legislate against any rises in VAT, Income Tax or
National Insurance over the next five years. The move will leave little
fiscal room for the Conservatives, with the party solely dependent
on economic growth and spending cuts to reduce the deficit.
Housing has risen up the political agenda with the squeeze
on affordable housing, particularly in the South East. One of
Cameron’s retail offers during the campaign was to extend
the Right to Buy scheme to housing association tenants. Also
expect measures to build more affordable housing for first time
buyers, aimed at voters saving with the new Help to Buy ISA.
The Conservatives’ drive to support small businesses is set to continue,
with measures to reduce cumbersome red tape and review business
rates. Also, an Employment Bill to deliver more apprenticeships
and tougher requirements on the young unemployed people will
carry on the economic programme seen over the last five years.
The issue of boundary reform is also back on the agenda, along with
English Votes for English Laws. There is an outside chance that the
Conservatives will look to move quickly on one or both of these within
the same piece of legislation.
Expected Bills:
EU Referendum Bill: Legislate for an
In/Out EU referendum
Tax Bill:- Introduce a lock to prevent
any rise in National Insurance, VAT or
Income Tax over next five years.
Housing Bill: Extend the Right
to Buy scheme to 1.3m housing
association tenants
Enterprise Bill: Reduce red tape for
small businesses
Employment Bill: Create 3m new
apprenticeships and double the
amount of free childcare for working
parents.
Education Bill: Deliver more
academy schools and force new
leadership teams on underperforming
schools.
Communications Data Bill: Require
phone and internet providers to store
records of emails, text messages,
web browsing and voice calls.
5
Cicero Elections analysis
Britain unbound
Presented with the clearest political choices between
Left, Right and Nationalist politics, the voters stunned
the political sphere with their ferociousness.
This election revealed two frightening aspects about
our electorate: Firstly, they are ruthlessly unsentimental.
Both Douglas Alexander and Jim Murphy had been MPs
for 18 years and enjoyed a combined majority of 27,000
votes, but they were swept aside without a second
thought.
Secondly, voters seem to have moved like an ice shelf
in an avalanche, suddenly breaking away en masse.
Scotland speaks for itself, but a similar pattern emerged
with Liberal Democrat voters in the South West, and
also in London. We knew a shift was coming, but the
scale of movement may have changed the UK’s political
landscape for a generation.
The Conservatives’ success is due to a ‘sword and
shield’ approach that saw the party shield 25 of its
most vulnerable seats from Labour assaults across the
midlands, whilst making successful thrusts into Liberal
Democrat seats across the South. Labour’s top five
target seats had a combined majority of 660 votes, and
the Tories preserved all of them.
ones. One MP in exchange for 3.8 million votes does
seem like a raw deal, but the party is responsible for
failing to seriously challenge in its target seats of
Castle Point, Thurrock and Cambourne and Redruth.
Regrouping after Farage’s capitulation will be a true test
of the party’s maturity.
The SNP is now a bull in the Westminster china shop,
but its horns have been corked by the Conservative
majority. Such was the swing of so many seats, it’s hard
to imagine that the SNP’s new-found dominance of
Scotland will be short-lived. We don’t yet know how the
party will go about pursuing its devolution/independence
agenda, but we do know that PMQs is about to become
much louder...
Britain unbound has handed the fire of power to the
Conservatives, but David Cameron must beware. We
have seen the power of the electorate’s wrath, and it
will be watching the Prime Minister’s handling of the
forthcoming European Referendum very carefully.
Dan Regan
Head of Cicero Elections
Cicero Group
Labour was the victim of momentum. From losing the
first marginal fight in Nuneaton to the surprise defeat of
Ed Balls six hours later, Labour failed to establish itself
outside of London all night. The vision of Miliband’s
Labour was admirably ambitious but he could not
convince the British people to follow him. Post-mortems
will look at his leadership, policies and campaign, but
ultimately, Britain was not willing for the steep turn to the
left that he was offering.
The remaining Liberal Democrat MPs owe their survival
to luck more than anything. The highly-focused ‘25
seat’ rearguard action was completely overwhelmed.
Seniority and local popularity mattered little as the party
was almost decimated. Last week, the South West
was a nest of strongholds; today, not a single Liberal
Democrat MP exists South of Guildford. Nick Clegg may
be remembered as the leader that inherited a party with
52 seats, and left one with eight, but the next five years
may just show how crucial his party was in guiding (and
restraining) the Conservatives.
In England, UKIP proved to be Miliband’s fifth column,
coming second in more Labour seats than Conservative
6
Election results map
Key:
Conservative
Labour
UKIP
Liberal Democrats
Scottish National Party
Green Party
Plaid Cymru
DUP
SF
UUP
7
What were the key regional battles?
Scotland
•
The SNP won 50% of the Scottish vote share, more than double Labour’s.
As a result, the SNP boast 56 seats, with the three ‘main’ parties each
keeping one apiece.
•
Both Labour and the Liberal Democrats suffered senior losses with the
former losing their foreign secretary, financial secretary, pensions minister
and Scottish leader.
•
A Conservative killing ground where the election was decided. Once a
nest of a dozen Liberal Democrat seats, there is now not a single Liberal
Democrat MP south of Guildford.
South West
London
South East
Northern corridor
•
Labour were encouraged by victories in the three Liberal Democrat seats in
the city.
•
However, they were unable to break through in key target Conservative
seats in North West London, and in Croydon South and Vauxhall.
•
Following this election, the capital is now a lighthouse of red in a sea of blue
in the South, with the next closest cluster of Labour seats in Birmingham.
•
The Conservatives protected their heartlands from any UKIP surge and ran
the Liberal Democrats out of the region.
•
The Green Party holds on to its only seat, with Caroline Lucas maintaining
her beachhead in Brighton.
•
This corridor of Conservative-Labour seats was key as each win effectively
counted as two. Labour failed to breakthrough in their must-win target
seats.
•
Crucially, the Conservatives protected four fifths of their vulnerable seats in
this area and even snatched a small number of Labour seats from their own
target list.
•
In this area, the two parties relied on their core votes to build their seat
numbers up.
•
There was very little interchange between the two parties, with Birmingham
remaining red and the Tories holding onto Staffordshire and Leicestershire.
Midlands
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How did each party do?
Conservative party analysis
The Conservatives performed much
more strongly than expected, winning a
surprise, modest majority. The exit polls had
suggested the Conservatives would be the
largest party, but failed to realise the success
they would have in Southern Liberal Democrat seats .
The Prime Minister no longer needs coalition partners
to pass legislation, but with such a narrow majority, he
may be keen to engender vote-by-vote support on key
legislation with the Irish DUP.
It appears the Conservative campaign was successful
in raising fears of a Labour-SNP alliance, driving English
voters towards the Conservatives. Voters may have also
been fearful of change to the UK’s economic trajectory,
as growth has returned and unemployment continues
to drop. However, they do also seem to have benefited
from voters simply abandoning the Liberal Democrats.
Regardless of how victory was achieved, Lynton Crosby,
the party’s election guru, should feel vindicated.
The victory will bolster Prime Minister David Cameron’s
standing in the party. Although, with such a narrow
majority, some are comparing this victory to Sir John
Major’s in 1992, whose leadership was vulnerable
to internal rebellion. One clear potential flashpoint is
the Conservatives’ promised referendum on the UK’s
membership of the EU.
Cameron has said that he, and his government, will
campaign in favour of EU membership, which puts him at
loggerheads with around 100 Eurosceptic Conservative
backbenchers. The chances of internal instability will
only be increased by Cameron’s announcement that
he does not intend to stand for a third term. As a result,
party infighting could lead to Cameron stepping down
from the leadership after a referendum in 2017, allowing
a fresh leader to reunite the party. Given this possible
internal battle on the European issue, there could be
days in the next Parliament when Cameron struggles
to control his own party more than he ever did with his
former coalition partners.
Labour party analysis
Commentators broadly agreed that Ed
Miliband had ‘a good campaign’. The
national polls showed Labour neck and
neck with the Conservatives right up to the
last. Labour was confident that it would win
the ‘ground war’. But as soon as that exit poll appeared,
it was clear that something had gone seriously awry for
Ed Miliband’s party. Despite prior assumptions that they
would make at least 20-30 gains in crucial Tory-held
marginal, this simply didn’t materialise. Only a handful
of gains were made from the Conservatives, and even
these were cancelled out by losses in the opposite
direction – including, in a stunning upset, Ed Balls’
Morley and Outwood seat.
Labour made some significant gains from the Lib Dems
– for example ousting Simon Hughes in Bermondsey
– but ‘Labour gain’ was simply a phrase heard far
too infrequently on the night. The losses to the SNP
in Scotland were enormous, with only Ian Murray in
Edinburgh South managing to withstand the avalanche.
But even without these losses Labour would still have
been well short of mustering the numbers to deprive
David Cameron of his victory.
It is now clear that Ed Miliband will stand aside as Labour
leader. Both inside and outside of the Labour party
questions will again be asked as to whether he was ever
the right man for the job. Critics will argue that his ‘core
vote’ strategy of seeking to appeal to the traditional Labour
base and draw a line under New Labour, while never
fully overcoming the perception that Labour profligacy
caused the recession, was always likely to make gains
in Tory marginal difficult. But in Miliband’s defence,
such arguments had largely gone silent during the
campaign as he generally outperformed expectations.
Others will say that the crucial decisive factor was not
Miliband’s leadership, but the effective way in which the
Conservatives ‘weaponised’ the prospect of Labour in
government only with SNP support in the final weeks of
the campaign.
The post-mortem will run long in the Labour Party.
Whatever conclusions are ultimately reached, there is
no doubt that this was a devastating blow for a party
and a leader that truly believed they could return to office
after a single term of opposition.
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How did each party do?
advantage. With so few incumbents after today, they will
have to learn to win many more new seats, or recapture
The prophecies came true and the Scottish those lost.
National Party (SNP) came remarkably close
to a clean sweep of Scotland’s 59 seats They may now focus on council seats, becoming a very
in the House of Commons. In the process localised party, with central office acting in more of a
they claimed some notable scalps from coordinating, rather than leadership role. It could take a
both Labour and the Lib Dems, including the Shadow generation for the party to recover nationally, if they ever
Foreign Secretary Douglas Alexander, Scottish Labour do. Much of the Greens’ support was formed of former
leader Jim Murphy and Chief Secretary to the Treasury Lib Dems, and they lost many voters to Labour and the
Danny Alexander. Many of the 56 seats they won were Conservatives. The party will now need to communicate
on unprecedented swings of around 35% and above. It its policy platform to new, young voters, perhaps those
is now crystal clear – if it was not already – that the SNP too young to remember tuition fees, and work to bring
surge we have seen since the independence referendum departing supporters back into the fold.
is absolutely real.
Scottish National Party analysis
UKIP analysis
But ironically, despite performing at the top end of their
UKIP will claim they are a victim of an unfair
expectations, that UK-wide result means that the SNP will
voting system, as they obtained millions of
not hold the degree of influence that had been predicted.
votes but returned just one MP, Douglas
Rather than ‘locking out’ the Conservatives through a
Carswell. In South Thanet Nigel Farage
loose arrangement with Labour, the large SNP group will
failed, in his seventh and perhaps best
instead need to be noisy from the Opposition benches
chance of winning a seat in Parliament, and
and hope that they can still wring concessions out of a
has kept his promise to resign.
Tory government, particularly on a radical offer on further
devolution to Scotland, or even moves towards a federal Two issues will now dominate the party. The first is a
model.
leadership election. This will fundamentally change a
party shaped, and dominated, by its leader. Contenders
But make no mistake, the SNP landslide represents a to replace Farage? Douglas Carswell is certainly in the
seismic shift in the UK political landscape. With momentum frame, with perhaps a more cerebral UKIP, focused
firmly on their side, and a Conservative Government on rights and electoral freedoms, or MEPs Suzanne
now unburdened by Coalition, a second independence Evans and Paul Nuttall.
referendum within the next five years must be seen as a
real possibility.
The second issue is electoral reform. Both Carswell,
Liberal Democrats analysis
For the Liberal Democrats, this was never
going to be a strong performance. That’s
something we’ve known since support sharply
dropped following the reversal of a pledge on
tuition fees in 2010, but few thought it would
be this bad. Coalition with the ‘nasty party’ has punished
the Lib Dems with voters on the centre-left. The most
cautious seat projections had the Lib Dems around 20
seats, or just under. With only eight seats remaining,
they will have no role in coalition, the cornerstone of their
campaign. Moreover, they have been sent a message
never to do it again; the UK is not ready for long-term
cross-party governance.
The Liberal Democrats fought a hard campaign and
expected to be disappointed but this went beyond their
worst fears; 20 seats was seen as a low estimate, eight
seats is an annihilation. The Liberal Democrats have been
known for their strength on local issues and incumbency
in his winning speech, and Nigel Farage, in his losing
one, highlighted the spectre of electoral reform. Farage
called for “real, genuine and radical political reform”;
perhaps the party will now take over the mantle from
the Liberal Democrats as the main party advocating
proportional representation.
UKIP’s big impact on the election has been as the
spoiler. Polling well in northern seats and southern
working class areas, the party has deprived Labour
of a number of opportunities to win seats from the
Conservatives, such as in Thurrock, a UKIP target, and
Pudsey. The country now waits to see what’s next for
UKIP.
Ben Collins
Senior Account Manager
Cicero Group
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Party leadership elections
Following the election, Labour, the Liberal Democrats and UKIP will start the processes to elect a new leader. The
various methods and potential front runners are set out below:
The contenders:
The party rules state that the Deputy Leader will
take over, with the governing body (the NEC)
setting out a timetable.
Any contenders will need to secure nominations
from at least 15 per cent of MPs, and the winner
is likely to be announced at the party’s autumn
conference after a ballot of party members.
Yvette Cooper, an experienced and wellliked minister and shadow minister
Andy Burnham, a popular figure
amongst the grass-roots
Chuka Umunna, a charismatic shadow
minister from the next generation in the party
The contenders:
Tim Farron, popular amongst members
Candidates need 10 per cent of MPs to
support their nomination, in addition to 200
party members from 20 different constituency
organisations. Party members are then balloted.
The party’s Federal Executive sets out the final
timetable.
and not tainted by being a member of the
Coalition Government. Hot favourite.
Norman Lamb, well-respected with a
positive record on issues such as mental
health
Alastair Carmichael, a centrist with
cabinet experience
The contenders:
Douglas Carswell, the party’s first and
only MP
Nominees for the UKIP leadership require
the signature of a proposer and 50 members,
drawn from at least 10 different constituency
associations or branches. A postal ballot of all
members then takes place.
Suzanne Evans, deputy chairman, head
of policy and effective spokesperson
Paul Nuttall, an MEP and party insider
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