Economic Insecurity is foundational for Labour’s electoral losses, and key to any potential recovery

The fortunes of Britain’s Labour government over the next three years will, as things currently stand, be determined by its approach to the two key issues for the British electorate: the economy and immigration. Our new research, summarised here, reveals that feelings of economic security are foundational to understanding both. They are the key to understanding Labour’s 2024-2025 losses, the root of Labour’s problems on the national economy and the root to Labour’s losses on the issue of immigration too.

Justin Robinson, Postdoctoral Research Fellow, Nuffield Politics Research Centre

Feelings of economic insecurity – people’s worries about the ability to cope with the various financial pressures faced by themselves and their households – remain prevalent. Our new research, using a nationally representative survey of British adults fielded in April 2025, shows that just over a third of the population feel economically insecure. This matters for politics and policymakers because economic insecurity is both socially and politically significant. It is rooted in economic experience – in savings, home ownership, job tenure, out-goings, debts and risks, perceived ability to rely on the welfare state, and household income – and is central to well-being. In addition, our previous work has shown that feelings of economic insecurity serve as a signal of poor government performance which leads voters to abandon the party in power.

Given this, the fortunes of Britain’s political parties rely, to a substantial degree, on whether people feel more economically secure. But economic concerns do not exist in a vacuum. Immigration, too, remains a lightning rod, with the potential power to redraw the political map for Labour and the Conservatives. Underlying the importance of these issues is the fact that they are playing out in an unprecedently volatile British electorate, in which voters appear more ready than ever to abandon the traditional governing parties.

This political context raises a series of questions. How should the Labour government weigh the electoral risks of economic insecurity, especially given the dangers facing them on immigration? How should other parties respond in this volatile landscape? In our research, we address these questions using novel data to examine how changes in individuals’ economic insecurity and immigration-attitudes influence their tendency to stick with Labour or defect to other parties, or become undecided, between 2024 and 2025. These changes are known as within-person effects, as they concern the impact of a change in attitudes or circumstances on an individual’s vote intentions, rather than observed differences between people at a given point in time. We draw upon three large surveys of panel data, the ‘JRF-Nuffield Economic Insecurity Panel Study’, collected in March 2024, October 2024 and April 2025. Each survey wave contains around 8,000 respondents, with around 4,500 individuals appearing in all three waves. This analytical approach allows us to move beyond opinion polls, which tell us little about how individuals’ changing beliefs and experiences influence their votes; and it enables us to understand the relative importance of economic insecurity and immigration concerns for Labour’s declining electoral support.

Our findings are stark. Economic insecurity is draining Labour’s support across the political spectrum, explaining vote losses to parties on both the left and right, and to ‘undecided’. Our within-person analysis indicates that moving from economic security to insecurity is associated with, at minimum, a 5.45 percentage point increase in the probability of defecting to Reform; a 3.42 percentage point increase in the probability of defection to the Lib Dems; and a 4.15 point increase in the probability of switching to ‘undecided’, currently the largest group of Labour’s vote losses. In contrast, the within-person effects of immigration attitudes are limited to the smaller proportion of Reform switching (around 10% of 2024 Labour voters). Moving from supporting further immigration to opposing further immigration is associated with, at minimum, a 4.08 percentage point increase in the probability of defecting to Reform, but it has no impact on the likelihood defecting to other parties or to ‘undecided’.

Furthermore, the consequences of economic insecurity for the Labour government are multiple. We show that beyond the direct consequences of economic insecurity for Labour’s support – by pushing voters away – economic insecurity also has indirect consequences for the government’s fortunes. In doing so, we highlight the numerous ways that addressing economic insecurity is vital for the government’s popularity.

First, feelings of financial insecurity make people rate Labour’s handling of the economy more negatively. In other words, people translate their experiences of economic insecurity into wider judgements about Labour’s overall economic performance. A figure 1 below shows, economically insecure individuals (in red) are more likely to evaluate Labour’s performance on the economy as ‘very bad’. This matters because ratings of Labour’s economic management are also important for how people vote. Improving economic security would help Labour’s reputation for managing the economy and boost its electoral prospects.

 

Second, economic insecurity makes people care even more about how Labour manages the economy. Insecure Labour voters are more likely than others to ‘punish’ the government by switching parties if they think Labour is doing a bad job in its handling of the national economy, and they do so irrespective of which party they switch to. This means that improving financial security could reduce Labour’s net vote losses on its handling of the national economy too.

Third, economic insecurity provides a grievance that make people more likely to move to parties that better reflect their views on immigration, driving Labour losses to both Reform and the Lib Dems. To be clear, economic insecurity does not increase voters’ concerns about Labour’s handling of immigration, or people’s underlying attitudes about immigration. But it does make concerns about immigration more relevant to decisions about which party to defect to. As figure 2 below shows, 2024 Labour voters who evaluate Labour’s handling of immigration as negative are significantly more likely to defect to Reform and the Lib Dems when they are also economically insecure. So, improving financial security would also reduce Labour’s losses associated with immigration, on both the left and right.

 

These findings help us understand the relative importance of economic insecurity and immigration concerns for Labour’s political fortunes. Our analysis shows that economic insecurity is a broader explanation for Labour’s losses than are immigration-related grievances, because insecurity predicts defections to both parties on the left and right, whereas immigration attitudes predict defections to Reform alone. Thus, addressing the issue of economic insecurity could stem the tide of Labour defections across the political spectrum; in contrast, a focus on immigration may only limit defections to Reform, whilst potentially exacerbating Labour’s loss of support to liberal-left parties among those voters who oppose a hardline approach to immigration. In other words, our analysis suggests that addressing immigration brings trade-offs that tackling economic insecurity will not.

In sum, a policy approach and political strategy that addresses economic insecurity and prioritises an ‘economic feel-good factor’ for both the national economy and for individuals and households would have several electoral benefits to Labour, and would lead to vote gains across the political spectrum. It would, of course, also have multiple benefits to the population. If Labour continues to prioritise vote losses on the immigration issue, however, our analysis suggests that this decision would likely lead to vote losses as well as gains. These losses would be mitigated, significantly, if people also feel more economically secure.