IF Boris Johnson loses the London mayoral election next week, he will have just two men to blame: David Cameron and George Osborne. Yesterday’s latest poll showing the London candidates in a statistical dead heat – Boris on 51 per cent including second preferences, and Ken Livingstone on 49 per cent – can only be explained by one factor. London is now a Labour dominated city. More Labour voters who previously would have backed Boris as Mayor but voted for their party in the London Assembly elections the same day now say they will vote for Ken. That is the only real change – Boris still retains just enough Labour voters to win, but it is looking extraordinarily tight.
The big shift over the past few weeks, of course, has been George Osborne’s omnishambolic budget, the government’s inability to respond to the criticisms and events it unleashed, and its incompetence over Abu Qatada. Low grade government is retoxifying the Tories in London to such a degree that it is chasing away wavering Labour voters. Boris’ lead among women is also dropping, which is worrying for him as they were his stronghold. More people believe Ken’s pledge to cut TfL fares.
Boris is Cameron’s and Osborne’s biggest rival within the Tory party – but a Boris defeat would be lethal for them. The Prime Minister is hoping a Boris re-election would cement his fightback and the start of a phase of better news for the government. The stakes are high, not just for London but also for the coalition’s survival.
That said, Boris remains the favourite. He was ahead of Ken (albeit in a diminishing way) until the end of last year in the polls; then Ken enjoyed a brief period ahead after ticket prices increased; and Boris then moved ahead again a few weeks later when the price hikes receded in people’s memories and the campaign got going in earnest. The Mayor has stayed in the lead ever since though is now back to where he was in February. The remaining days until the election will see the campaigns follow careful strategies: Ken will go after Labour voters; Boris will try to retain his own Labour voters; and the Mayor will also try and maximise turnout for his core voters in outer boroughs. For once, it seems, every vote will really count.
IT is all going very badly wrong in the Eurozone. First we had the French elections. Then the Dutch government collapsed yesterday, once again because of the fallout from the crisis. And then came the grim economic data, oodles and oodles of it: first quarter GDP shrank by 0.4 per cent in Spain – and that was the least of the EU’s worries. The Eurozone composite purchasing managers’ index, a good gauge of activity, slumped to 47.4 in April, down dramatically from March’s 49.1; a number below 50 means contraction. This collapse was felt for both services, which slumped to 47.9 from 49.2 and for manufacturing, down to 46.0 from 47.7. Even Germany is being engulfed in the implosion of the periphery nations: its overall PMI is down to 50.9, suggesting very little growth, with manufacturing in deeply negative territory at a 33-month low of 46.3.
Contrary to the received wisdom, it is not fiscal policy but monetary policy that is triggering a demand crunch. The money supply is being hit as a result of banks being forced by regulators to deleverage too quickly. It’s madness. Of course, the supply-side is in urgent need of reform, and is responsible for the region’s long-term woes. Short term, however, the Eurozone’s problem is toxic: it faces a new credit crunch.
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