Chesham and Amersham not a new political dawn, but winds of change are building

Paul Montague-Smith, senior counsel for public affairs at MRM

The Chesham and Amersham by-election upset isn’t the political earthquake it is being painted as, but winds of political change are blowing, writes Paul Montague-Smith

If you’re of a certain age you might remember Spitting Image’s David Steel puppet heralding “the surge David, the surge” for the SDP (a precursor party to the LibDems). The surge never came and, aside from being king makers in 2010, the LibDems have generally played a bit part in Westminster politics.

Their stunning win in the Chesham and Amersham by-election – overturning a Conservative majority of 16,000 to win with a majority of 8,000 – has sent a shockwave of apprehension through the Tory backbenches. LibDem leader Ed Davey quickly got someone to find a bunch of blue bricks he could knock down to suggest the Tories’ ‘Blue Wall’ in the south was starting to crumble.

Last month I suggested we might be seeing a significant realignment of politics, with Conservative inroads up north leaving them vulnerable to attacks in their southern (pro-Remain) heartlands, but that Boris was willing to run the risk for the prize on offer, considering the fragmented state of the left. Is the Chesham and Amersham result the start of a rapid sea change from which the LibDems will benefit?

Probably not.

Unpicking the reasons for the win isn’t straightforward. The LibDems threw the kitchen sink at the seat in terms of resources. They were certainly helped by the total collapse of the Labour vote from over 7,000 to 622. Dominic Cummings’ revelations don’t appear to have been a significant factor and while the seat was pro-Remain, insiders haven’t been saying it was Brexit-related.

National polling has been putting the LibDems at single figures, occasionally creeping up to 10-11 %. The Government’s intention to reform the planning system was, however, ruthlessly exploited by the LibDems and has been latched on to by Tory backbenchers as a key reason, along with fears that the levelling-up narrative is being interpreted as the south becoming ignored.

Overall, the LibDem win supports the argument that a significant realignment is underway, but it is probably going to be much more gradual than this result might suggest. The next electoral signal is the Labour-held Batley and Spen by-election on 1 July.

Recent polling puts the Conservatives in the lead. With George Galloway standing, the Labour vote faces being split. Nevertheless, if their candidate – the sister of Jo Cox, the murdered MP who represented the seat – doesn’t win, the future of Keir Starmer will be in serious question.

Financial measures

Back in Westminster Parliament heads off for its summer break on 22 July. A Cabinet reshuffle originally expected in July has been pushed back, because of the ongoing situation with the virus. Boris will, however, probably want to freshen his team ahead of the party conference in October.

The Chancellor is expected to announce another round of measures to help bring our public finances back onto a more stable footing in November. With the manifesto commitments on income tax, VAT and the pensions triple lock all being stuck to for now, the pensions lifetime allowance is once again in the frame. A further reduction, though, could be expected to raise only a couple of billion pounds over five years – small change in the scheme of things.

Even while the inevitable difficulties with the Northern Ireland protocol play out (and the DUP tries to recover from its recent leadership troubles and avoid an election), the government is pushing hard to highlight and realise ‘Brexit benefits’. The recent trade deal with Australia does little overall economically, but is hoped to be a stepping-stone to bigger things.

More relevant to businesses here, including in the financial services sector, was the report of the Taskforce on Innovation, Growth and Regulatory Reform, which recommended bringing back the ‘one in, two out’ rule on regulations and has a shopping list of measures to support insurance and investment businesses, amongst other sectors.

In response the Prime Minister has asked Lord Frost to create a new Brexit Opportunities Unit to explore how best to take advantage of the regulatory flexibility we now have. Businesses with ideas should be looking to engage with the unit and Lord Frost in the months ahead.