Column | The economics behind Rishi Sunak’s electoral downfall

The Tories, as widely anticipated, suffered one of their worst electoral defeats in British history. While Rishi Sunak retained his North Yorkshire constituency, many prominent figures in the Conservative Party lost their parliamentary seats.
In the 650-member House of Commons, the Labour party won 412 seats, while the Conservative party secured just 121 seats. This represents one of the lowest seat counts for the Tories in its nearly 200-year history.

Prime Minister Sunak surprised everyone with an early election, even though constitutionally he could hold office until the end of this year. The Tories campaigned on the narrative of economic recovery during Sunak’s brief tenure, emphasising achievements such as reducing inflation from 11 per cent to 2 per cent, steering the economy out of recession into growth, and ensuring that wages have risen faster than prices. The election campaign also highlighted the IMF's revised 2024 growth projection for the British economy, which increased from 0.5 per cent to 0.7 per cent.

Despite Sunak's claims that the Conservative economic plan is working and people's lives have started to improve, his electoral strategy did not succeed. The Labour landslide was also bolstered by the rise of the populist, hard-right Reform UK party led by Nigel Farage, which divided the Conservative political base in numerous parliamentary constituencies and garnered over 4 million votes.

‘Impoverished’ Brits
The UK parliamentary elections took place amidst a backdrop of an ailing economy, stagnant salaries, acute housing issues, a cost of living crisis, and rising unemployment. Once a global economic powerhouse, the former empire now confronts the challenge of being one of the most struggling economies in Western Europe.

In May, the UK's public debt peaked at its highest level in the last 60 years, reaching a staggering 99.8 per cent of annual gross domestic product. The UK taxpayer now faces the highest-burden since the end of World War II, while the country experiences the most significant increase in absolute poverty in three decades.

For an average UK family with only one wage earner, there is very little salary left for monthly living expenses after deductions for taxes, national insurance, house rent, and council tax.
According to an OECD estimate, the UK is projected to be the worst performer among the G-7 economies next year. For the average person, this means fewer jobs, minimal salary increases, higher living costs, and deteriorating public services.

According to the latest research published by the London School of Economics and Political Science, spending cuts introduced by the British government have reduced the life expectancy of the population by approximately half a year. The study reveals a 3 per cent increase in mortality rates between 2010 and 2019, resulting in roughly 1,90,000 excess deaths across the UK, including a significant number categorised as 'deaths of despair'.

There are clear indications that the quality of life is declining in the UK, particularly among Londoners grappling with the severe cost of living crisis. Reports also highlight a shift within the UK's automotive sector from extravagant purchases to a rising demand for repairs and cost-consciousness. This trend of tightening budgets extends to the retail sector, where more people are opting for cheaper alternatives over higher-quality products.

The Housing problem
The UK is facing its worst housing crisis in modern times. According to a Bloomberg report, the country needs a new city as large as London to adequately address this problem. The cumulative impact of steadily rising real estate prices, skyrocketing rents, and a decrease in newly constructed residential units has made affordable housing a distant reality for the majority of British people.

The insufficient number of available housing units has led to widespread homelessness in the UK. Nearly 1.3 million people are now on local authority waiting lists for social homes, with many living in temporary accommodation, including a significant number of children.

The housing crisis has been a major election issue in the UK, with all political parties promising solutions, but voters fear these promises are empty. While housing prices are considerably cheaper than the national average in the interior regions, many people find mortgages and rents out of reach due to unemployment. Exorbitant rents are becoming the norm across the UK, with available housing options dwindling, causing tenants stress and prompting them to join protests.

The protesting tenants are demanding an urgent rent freeze to stop what they perceive as ‘exploitation’ by landlords, similar to the introduction of the Cost of Living (Tenant Protection) Act 2022 in Scotland. However, landlords attribute the ongoing surge in rent prices to government policies, particularly high tax rates on rented housing units, and market dynamics.

"A lot of people who don't necessarily understand the dynamics of the market think that landlords are simply money-grabbing and tenants are feeling squeezed. However, these days, the mortgage costs of landlords have gone up, and they should be receiving enough rent to cover their increased expenses," a private renter from London told a popular YouTube channel. Many house owners now prefer to distance themselves from the term 'landlord,' finding it archaic; instead, they prefer to be known as 'housing providers.’

Similar to the crisis unfolding in the housing sector, one can observe in the UK economy a series of vicious cycles that significantly affect people's lives. It's not surprising that many healthcare professionals, including a substantial number of Malayalis employed by the esteemed National Health Service, are either permanently relocating to stable economies like Australia or seriously considering leaving Britain altogether.

Not so ‘Great’ Britain
The British electorate turned out at the polling booths amidst a time when the UK, once the colonial empire where the sun never set, no longer boasts a promising economy or offers enough opportunities for the average citizen. They recognise that Great Britain's legendary might is now in its sunset years, and their nation will be remembered as 'great' only in name, preserved through its historical narrative and geography.

Interestingly, the 'impoverished' Brits voted out a prime minister whose ancestral roots trace back to their former largest colony. Paradoxically, he happened to be richer than the King, symbolising imperial wealth and colonial glory.
(Social anthropologist and novelist Thomas Sajan and US-trained neurologist Titto Idicula, based in Norway, write on politics, culture, economy, and medicine.)