By Jack Larkham, Senior Research and Policy Analyst

When Rishi Sunak kicked off the 2024 General Election, the received wisdom was that positive growth figures and good news on inflation were the things that convinced him to go for an early summer vote.

Since then, both parties have been keen to burnish their credentials on the economy. The Labour Party has made ‘kick-starting economic growth’ number one of their five missions to rebuild Britain, and they roll out Rachel Reeves having the Bank of England on her CV at every opportunity. The Conservatives are equally keen to talk to the electorate about their record on growth, as one of the Prime Minister’s five pledges they can point to some recent success on. 

On the one hand, this focus is perfectly understandable. As an indicator of the success of the economy, growth tells us much about how prosperity and living standards are changing. Moreover, ‘growth’ is a fairly simple concept, and GDP is one of a handful of economic metrics that are part of public discourse, albeit one which people generally don’t fully understand.

But on the other hand, and what is perhaps perplexing about politicians’ seeming fascination with talking about economic growth to voters, is that it gives us very little indication as to a party’s actual success at the ballot box. More specifically, increases in GDP that occur during a party’s time in office seem to bear very little direct relation to their electoral fortunes at a general election.

Figure 1 demonstrates this by plotting the average rate of annual economic growth over the lifetime of a parliament on the horizontal axis, against the change in the governing party’s vote share at every UK general election since 1959 (excluding October 1974) on the vertical axis.

As can be seen, the pattern that emerges has very little coherence. Take the 1964 General Election for example. Despite delivering an impressive average annual rate of economic growth of 3.8% since the 1959 election (a rate that any modern-day UK politician could scarcely dream of), the governing Conservative Party’s share of the vote fell by 6% and lost its parliamentary majority to Harold Wilson’s Labour.

A similar story befell the Labour Party in 1979, with Margaret Thatcher defeating incumbent Prime Minister James Callaghan despite GDP growing at an average of 3.2% per year during Labour’s four and a half years in office. It is, however, fair to say that this might not be the best way of representing the relationship between GDP growth and voting behaviour. Growth is not linear and fluctuates over the life of a parliament. Moreover, when deciding how to cast their ballot, voters are more likely to give greater weight to the state of the economy in the lead up to the election than to how healthy it was during the earlier stages of a party’s term in power.

Yet Figure 2 demonstrates that even when accounting for this, there is still not a clear, direct relationship between economic growth and electoral success. This time, the rate of GDP growth over the four quarters preceding a general election is plotted on the horizontal axis, while the change in the governing party’s vote share at the election is on the vertical axis.

Again, the results seem to defy expectations. John Major won the 1992 General Election with very little decrease in vote share, despite negative growth in the four quarters prior to the vote. While Tony Blair’s landslide victory in 1997 came off the back of Major’s government overseeing more than 4% growth in GDP in the lead up to polling day. This is not to say that the state of the economy is not important to a government’s electoral success. Indeed, there is a strong body of evidence that demonstrates that economic performance is an important indicator of voter behaviour, but crucially this research recognises that voters are not solely influenced by the state of the economy when casting their ballot.

So, what measures should Rishi Sunak have been looking at while trying to choose when to head to the polls?

Measures of overall life satisfaction have been shown to be a better indicator of government support at the ballot box

The drive to go ‘beyond GDP’ by using people’s happiness as a more reliable measurement of social progress has gained traction among economists in recent years. As a result, in the UK, the collection of data relating to life satisfaction, happiness, anxiety, and feelings that life is worthwhile has been routinely undertaken by the ONS since 2011. And had the Prime Minister glanced at the ONS’s UK Measures of National Well-being Dashboard, he might have made a different decision in May.

That’s because measures of life satisfaction provide a much more accurate indicator of a governing party’s electoral fortunes than economic indicators such as GDP, unemployment, or inflation. Happy voters are much more likely to support incumbent governments, while in the US, falling levels of wellbeing have been shown to lead to an increase in support for opposition parties. Crudely testing that premise in the UK shows how that has played out at recent general elections, to the benefit of the Conservative Party.

There have been three general elections held in the UK since the ONS began regularly reporting data on life satisfaction in 2011. As Figure 3 shows, in the period between this and the 2019 General Election, average life satisfaction rose and remained buoyant. At the three general elections held during this time, the incumbent Conservative Party increased its vote share each time.

But now, happiness measures are telling a different story. The pandemic, lockdowns, and the easing of restrictions following the vaccine rollout resulted in considerable fluctuations in levels of happiness. The cost of living crisis, falling living standards, rising levels of poor physical and mental health, and a gradual uptick in economic inactivity and unemployment have continued to chip away at the nation’s collective happiness.

As average life satisfaction has waxed and waned, so too has support for the government. Figure 4 shows how the gradual erosion of life satisfaction has followed a very similar path to levels of approval for the government, and people’s intentions to vote for the Conservative Party across the lifetime of this parliament.

The impact of this might be affecting the political fortunes of more than the Conservative Party. A study of the 2017 presidential election in France identified that those with the lowest levels of wellbeing were more likely to vote for parties at the outer margins of the political spectrum. Similar research in the Netherlands and an exploration of the surge in populist voting in Europe have all identified a link between rising unhappiness and increased support for more radical parties.

Current polls showing a dramatic surge in support for Reform UK could indicate such a phenomenon unfolding here. However, recent electoral history in the UK provides some counter to this. The surge in support for UKIP prior to the 2015 General Election and the Brexit Party in 2019 both came at a time in which levels of happiness in the UK were at their peak. A more nuanced exploration of this relationship in the UK context is needed in order to shed better light on this aspect of voting behaviour, as policymakers well beyond the inhabitant of Number 10 should be conscious of what’s driving the behaviour of those with the lowest wellbeing in the UK.

Such additional research in this area is even more important in the context of turnout, which in the UK is much lower than in some of our peers. Studies have shown that happier people are more likely to turn out to vote, while conversely, those experiencing depression are less likely to do so. Superficial analysis of this in the UK context over the last three general elections is once again inconclusive, but should the relationship between happiness and turnout prove to be genuine, we would expect to see a lower turnout on 4 July than at the last three general elections.     

Election results may have an impact on people’s happiness, but addressing rising levels of low life satisfaction will need a more determined effort

After the results roll in on 5 July, some people in the country are going to be feeling particularly chipper – measurably so. Some studies indicate that even before a single manifesto pledge can be delivered, voters on the ‘winning’ side of an election – be it nationally or in their constituency – are likely to feel happier as a result. In contrast, a study of US presidential elections in 2012 and 2016 identified that those who identified with the winning party experienced little or no increase in their wellbeing, while those who considered themselves to be on the losing side had a drop in their level of happiness.

But in the grand scheme of things, any possible electoral bounce in happiness is likely to be small and short-lived. What is likely to endure is the large and growing number of people in the UK experiencing worryingly low levels of wellbeing. The most recent wellbeing data shows that around one in 10 (12%) adults in the UK, roughly five million people, report low levels of life satisfaction.     

Getting to grips with this situation needs to be a priority for the next government for more than self-interested reasons. Whichever party wins the general election, it is clear that they will need to proactively address the issues that have the biggest impact on wellbeing, with a particular focus on closing the gaps in wellbeing inequality.

A large part of that will be dependent on addressing the economic stagnation that has blighted the UK since the 2008 financial crisis. It will also need a government that does more than just deliver growth. It remains the case that the UK is the fifth richest country on earth. Directing those considerable resources to ensure every citizen has the opportunity to live a happy and fulfilling life must surely be the standard by which the next Prime Minister and team are judged.

The discipline of economics has slowly begun to think beyond GDP in the way it defines and measures social progress. It is perhaps time that politicians in the UK begin to do the same.