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The Progressive Policy Think Tank

World in motion: How globalisation is reshaping the party system

John Curtice argues that globalisation is fragmenting our party system, as those who have lost out from economic change and who are concerned about its downsides turn away from the established parties. Labour in particular is in danger, he says, of losing its claim to be the party that stands up for the exploited and disadvantaged.

Never has the electoral grip of the 'established' parties at Westminster looked to be under greater threat. With just six months or so to go to the next general election, the most successful independent fourth-party challenge in postwar English electoral politics is as popular as it has been at any stage in this parliament – and has already managed to secure two by-election successes. In Scotland, the Scottish National party (SNP) is sufficiently ahead in the polls that it appears capable of capturing the vast bulk of the country's 59 Westminster seats. Meanwhile, the Greens are seemingly enjoying their highest level of popularity since what ultimately proved to be a short-lived surge in support for the party at the end of the 1980s. Between them, these three parties currently command the support of more than a quarter of all voters.

By contrast, the three 'established' parties present a sorry sight. Support for the Liberal Democrats has been in the doldrums ever since the party performed its U-turn on university tuition fees, but since Nick Clegg took on Nigel Farage in a pair of televised debates last spring – and lost – the party's support has slipped from just above 10 per cent to firmly below that psychologically significant threshold. Meanwhile, Conservative hopes that the party will eventually be rewarded for its stewardship of the economy have yet to be realised: even though economic optimism recovered more than a year ago, the party continues to languish at little more than 30 per cent in the polls. Yet, at the same time, the double-digit lead over the Conservatives that Labour enjoyed 18 months ago has gradually melted away – and may have disappeared entirely. Right now, neither of the two largest parties can be sure of winning an overall majority.

How has this state of affairs come about? How likely is it to prove durable through to the general election in May? And why is the Labour party struggling to profit from the apparent unpopularity of the incumbent government, despite being the only party that is capable of offering an alternative administration?

In part, the story goes back a long way. As recently as the 1960s, many British voters had a strong emotional commitment to one party or the other. They regarded themselves as a Conservative voter, or a Labour voter, or whatever. But those days are over. Now, according to the British Social Attitudes survey, more than one in four voters do not regard themselves as being even a fleeting supporter of a political party, while fewer than one in three claim to be a strong supporter of any of the parties. It is arguable whether a satisfactory explanation for this decline has ever been provided. Irrespective of why it has occurred, however, the trend means that voters have become increasingly less likely to act as unconditional electoral fodder for the country's traditional parties. Indeed, at the last election, as many as one in 10 voters in Great Britain voted for someone other than their local Conservative, Labour or Liberal Democrat candidate, more than had done so at any election since and including 1832.

Still, the fact that voters are now prepared to consider voting for non-established parties does not explain why they are now apparently willing to actually do so in much greater numbers than ever before. To understand this, we need to identify the circumstances that would appear to have given rise to this change in mood. The best place to start is to look at the economic circumstances of our time, circumstances that in many respects appear to be reconfiguring some of the social divisions in our society.

At the centre of these circumstances lies the process of globalisation. Capital, labour and goods now move around the world to an unprecedented degree. The richest rewards do not necessarily go to those who can find the most profitable way of doing business within their own country or region, but rather to those who can do so internationally. Those with the professional and linguistic skills to help deliver international business success can thus look forward to being richly rewarded.

But for others, globalisation represents a potential challenge. Not only do they lack the skills that employers value, that can help to deliver international comparative advantage in a high-wage economy, but they may well find themselves facing competition for the jobs that they can do from international migrants, for whom even a relatively poorly paid British job looks more attractive than anything they can secure at home.

Still, despite the inequalities and uncertainties that it generates, we might still anticipate that this process would be accepted by most voters so long as it appeared to promote economic growth and that most, at least, were enjoying gradually improving living standards. But this, of course, is not their recent experience. Rather, following on from the financial crash in 2008 – itself seemingly a product of a heavily internationalised capital market – voters have endured an unprecedented decline in living standards. This has followed on from a period of very high inward migration, thanks not least to the decision of the Labour government in 2004 to grant much earlier than most other member countries EU freedom of movement rights to the citizens of the accession states in eastern and central Europe. In combination, these experiences have inevitably raised questions in voters' minds about whether international institutions such as the EU should indeed have the right to 'interfere' in their country's affairs. After all, relatively few in Britain acknowledge a sense of European identity, as opposed to feeling British, English, Scottish or Welsh.

All three of the 'insurgent' parties currently challenging the hegemony of the Westminster parties can be seen at least in part to represent a response to the challenges posed by globalisation. This perhaps is most obviously true of Ukip, who have successfully linked opposition to the EU with the issue of immigration. In part, of course, they have tapped into a concern about the perceived cultural consequences of immigration that is most common among older voters with relatively few educational qualifications. This feeling often flows from a sense of national identity that regards inwards migrants as 'other'. At the same time, however, Ukip supporters are also distinguished by their economic pessimism. According to the most recent Ipsos MORI poll, for example, those who are pessimistic about Britain's future economic prospects still outnumber optimists among Ukip supporters, while almost every poll finds that Ukip supporters are more pessimistic about the future even than Labour supporters.

In Scotland, the 'Yes' campaign in the independence referendum might be regarded as a child of globalisation, which, because institutions like the EU facilitate continued access to a relatively large 'domestic' market, arguably makes it easier for smaller countries to pursue a path of independence. But the campaign also contained echoes of the debate about globalisation. At the heart of the nationalist case is a belief that their country's nationhood and distinct sense of identity should be reflected in how it is governed, thereby raising questions about the legitimacy of 'London rule' that are not dissimilar to those Eurosceptics raise about being 'governed by Brussels'. Meanwhile, the demographics of the Yes vote – higher among those in more working-class occupations and particularly high among those living in the most deprived parts of Scotland – were underpinned by a greater willingness among this group to believe that independence would deliver a brighter economic future. In short, the losers from our current economic arrangements were disproportionately attracted to the Yes side, a propensity that has now been carried forward into relatively high levels of support among such voters for the SNP.

The Green party, in contrast, certainly does not have a particular appeal for those who might be regarded as globalisation's 'losers'. Their core constituency is composed of young, well-educated university graduates who might be expected to be able to compete in an international labour market and who are less likely to be concerned about the cultural consequences of migration. However, this is also a party that worries about the environmental consequences of economic growth, that argues that the ever-growing international transportation of people and goods has unsustainable implications for the global climate, and that urges a return to a more locally focussed (and more equal) economic system. In short, while the Greens may highlight a different set of downsides to those Ukip focusses on, it is nevertheless arguable that the party's recent rise to relative prominence (it is currently polling at around 5–6 per cent) is further evidence of how the debate about globalisation is disrupting the traditional contours of British electoral politics.

Not, of course, that we should assume that we are on a socially and economically driven escalator carrying us inevitably towards greater electoral – and perhaps parliamentary – fragmentation. Politics and how the established parties respond to the challenge posed by the 'insurgents' matter too. It is just that the parties do not seem well-placed to do so.

In part, the shape of the current political battle is a product of the unintended consequences of coalition. When the Liberal Democrats entered government (for the first time since 1945) they effectively gave up their role as the 'party of protest' to which voters were able to turn to express their dissatisfaction with the performance of the incumbent government. Indeed, the rise in Ukip support began in the spring of 2012, when voters began to lose faith in the ability of the Conservatives to provide effective economic management, in the wake of a budget that generated more than its fair share of U-turns. And once they were offered that opening, Ukip have exploited it effectively.

At the same time, none of the three main Westminster leaders stands out. Nick Clegg had not long walked through the Cabinet Office doors before he became deeply unpopular. Ed Miliband has never succeeded in inspiring voters, while some of his more recent ratings echo those of Michael Foot shortly before he led his party to its worst-ever defeat. And while David Cameron fares much better than either of his opponents, critics of his performance still outnumber those who regard him favourably. There has never previously been a period in the postwar era when all three party leaders were collectively so unpopular.

That will not make it any easier to win voters back. Doing so will almost certainly mean finding ways of addressing the concerns of those who in a variety of ways are reacting against an economic system that seems to be hurting more than helping. And, of all the parties, this is a challenge not least for Labour.

Labour is, of course, traditionally the party of the less well-off and of those who are at risk of being unfairly exploited by those who run business and our economy, a role it crafted for itself long before capitalism was globalised. However, now it seems to be at risk of losing that mantle. The party was palpably discomforted to find itself on the side of the argument in the Scottish referendum that was more popular among middle-class than working-class voters, and now the SNP is claiming to be the party of 'social justice' north of the border. Equally, even though Ukip voters consist disproportionately of those who voted Conservative in 2010, Labour can hardly be sanguine about the fact that working-class voters now make up a higher proportion of Ukip supporters than they do of Labour supporters. Meanwhile, at least half of the increase in Green support over the course of this year seems to have come from those who backed Labour in 2010 but have now finally become disillusioned.

Doubtless many in the Labour party will argue that it is fruitless to try to hold back the tide of globalisation. For some, the idea that Britain should compete in that world by becoming a 'knowledge economy' opens up the prospect of creating valued and valuable jobs for more of its citizens and thus a potential engine for further social mobility. But at the same time, Labour needs to remember that there are losers from globalisation, and that its chances of winning power next May could well depend on finding a voice that speaks for them. Otherwise the party may well find itself adrift in a fragmented democracy within which its traditional role as the party of the exploited and disadvantaged is under severe threat.

John Curtice is professor of politics at Strathclyde University and a columnist for Juncture.

This article appears in edition 21.3 of Juncture, IPPR's quarterly journal of politics and ideas.