Will Gordon mop-up those who switched in 2005?

If the punters, the pundits and the pollsters have got this one right then in a few months time the Chancellor, Gordon Brown, will take over the Labour leadership and start the post-Blair era in British politics.

The big question for the Lib Dems is where the changed political environment leaves them? For while the Tories were going through their fourteen year nightmare it’s been Paddy’s, then Charles’s and now Ming’s party that’s been brilliantly placed to pick up support from both sides of the political divide.

Only eighteen months ago at the General Election the big shift was not to the Tories which gained less than a point – but to the Lib Dems which picked up the lion’s share of the huge drop in the Labour vote.

The nightmare for the Lib Dems is that while Cameron’s Tories are surging forward a significant part of the Labour switchers of 2005 will go back to their former allegiance when the Blair premiership is no more.

Certainly the polls seem to indicate that this will happen. The data just out from last week’s Populus poll shows that one in nine Lib Dem supporters would switch to supporting Labour if Brown was leader. This finding is in line with every other such survey for the past two years.

For a significant part of the support that the Lib Dems have put on has come from Labour voters who have been turned off by Blair. With a new Prime Minister then the polls suggest that a signficant proportion of them will return. There are signs from the post-Blair announcement round of polls that this might be starting to happen.

A key part of current Lib Dem thinking to deal with the new environment is to propose a tax system that is even more re-distributive to the poor than anything the Gordon Brown has done – and that takes some doing. Thus in many ways the party is moving to the left.

It’s a bold visionary objective but it has huge political risks. For the Lib Dem tax plan is to be paid for by cutting back pension tax relief for higher rate payers and by reversing a number of measures that Brown has put in place to boost investment and job creation. Thus, to take one example, under Brown’s tax regime investors in start up companies only have to pay 10% capital gains tax if the business that they have helped create is a success and the value of their holding goes up. Under the Lib Dem plan that would be 40%.

Thankfully there’s no plan from the Lib Dems reverse Gordon’s decision to abolish betting tax. This move came after the on-line bookies began moving there business to Gibraltar and other locations and Brown introduced a higher taxes on bookie profits instead.

Mike Smithson