Caerphilly by-election earthquake leaves Labour trapped

To grow the economy the government would have to make tough choices voters don’t want to face

Ahead of my newsletter tomorrow morning, here is my very quick take on a political disaster in Wales. This post is free to read, and if you would like to upgrade so you can read the newsletter, you can do so here.

What happened in the Welsh valleys last night was an earthquake, and it is worth acknowledging the scale of it before considering the full impact and likely aftershocks. Caerphilly has been Labour since forever, since the party became the dominant force on the left of British politics, and in the by-election for the Senedd (what used to be the Welsh assembly) Labour could not even muster 4,000 votes. The party was crushed by the left-wing Welsh nationalists Plaid Cymru. The insurgent Reform came second and the Tories came nowhere.

In line with the justified complaint usually made by the veteran Australian strategist Lynton Crosby, who says that the failure of the media to provide, prominently, the basic numbers on elections symbolises its wider problems. He’s right. There is a blizzard of analysis and live blogs and everything else when the starting point should be the numbers. Give us the main numbers, mate, as Lynton says.

Here we go…

Plaid got 15,961 or 47.4% of the vote. A swing of 19%.

Reform secured 12,113, 36% of the vote. A swing of 34.2%.

Labour ended up with just 3,713 votes, 11% of the vote.

The others got almost nothing at all.

This weekend I’m in Scotland where Labour has similar problems and I’ve written my newsletter on financial crises warning signals, and something on the ridiculous mess the UK has got itself into on China policy. But Caerphilly is worth noting.

Yes, it’s a by-election and there have been many by-election shocks in British politics down the decades. It is possible that one or more of the old parties reassert themselves either before or after the next general election in 2028 or 2029.

On the latest edition of the Not Another One podcast I record with Steve Richards, Tim Montgomerie and Miranda Green, Steve says that the lesson from Caerphilly is that left-wing voters will vote tactically to block Reform. It’s a good point. Tactical voting to stop Farage is going to be a major feature.

But my main conclusion from the by-election is that voters having smashed the Tories now want to smash Labour. This is partly about protest. It is also about punishment for what most voters see as the abject failure of the two old parties on the economy, public services, migration and social cohesion.

This result leaves Labour trapped in an almost impossible position, pursued by Reform to its right and the rising Greens (extremely left-wing), Plaid (extremely left-wing) and the SNP (extremely incompetent and sanctimonious). Even Farage flirts with the left on economics and nationalisation.

Even if Keir Starmer decided that what the country needs is the immigration crisis dealt with robustly, cheaper electricity bills via a scaling back of net zero, pro-growth deregulation to encourage epic amounts of building, control and the reduction of welfare spending, and an entrepreneurial wave encouraged by tax simplification and even business tax reductions, even if he decided to give the correct answer a go, the guy is stuck with a party that wouldn’t let him. All the pressure will be for him to go left, to satisfy places such as Caerphilly where hacked off voters have concluded that the government isn’t spending enough (!) even when we have record borrowing.

This weekend it seems likely Labour will elect Lucy Powell as deputy leader. Powell was fired from the cabinet by Starmer, of course. Her elevation by the membership will only increase the pressure from that wing of the Labour party - the left-wing eco-fanatic Milibandite wing - for positions and policies that appeal to voters switching to the Greens and Plaid, and maybe even Corbyn’s breakaway fringe party. We must reunite the left, will be the cry from Powell, urged on by many of her colleagues, and some of them in the cabinet. Don’t chase Farage, go left! Which, obviously, increases the chances of the left of centre vote being divided between a Labour party facing existential collapse, the Greens, the Lib Dems and nationalists. A dream scenario for Reform and Farage in which they can win a general election with roughly 33% of the vote.

Meanwhile, our over-taxed and over-borrowed economy trundles along towards the edge of the cliff.