by David Steven | May 6, 2010 | Global system, UK
It’s a fitting end to the British general election.
We have had thirty years of entrenched majorities – as a dominant party defined the terms of the debate, and the media made sure the opposition never caught a break. In 1997, the swing from Conservative to Labour dominance was sudden and decisive.
Now we have an utterly unpredictable polling day. Tiny shifts in the share of vote between parties and, especially, its geographical distribution could have a disproportionate impact on the political landscape that emerges on Friday.
If it’s close, it will all come down to spur-of-the-moment decisions by three very tired men. Constitutionally, Brown remains Prime Minister until someone else can command ‘the confidence of the House.’
As incumbent, he also should get first dibs on forming a new government, though it is widely expected that Cameron will declare victory early, and use the media to establish his right to govern.
As Alex has warned, there’s also a possibility that the bond markets will push the pace, as they open at 1 a.m. tomorrow morning to react to election news. Yields on UK 10-year bonds have spiked this morning, but are still lower than they have been for much of the year.
If Cameron gets the most votes and the most seats, he’ll surely go on to form a government. If not, a period of Florida-style uncertainty seems more than possible. What, one wonders, will be the UK’s equivalent of the hanging chad?
Either way, we can expect some exceptionally close Commons votes, perhaps a referendum on electoral reform, and – surely – a Parliament that won’t last for a full term. That means more elections for parties that have bankrupted themselves during this one.
This unaccustomed volatility in the electoral system seems curiously appropriate. As the past few years have shown, we now live in an era where the UK is far from being in control of its own destiny.
Look forward and we can expect the following forces to frame the government’s strategic choices.
First, global risks will continue to drive domestic policy. Voters will not actively call for a more effective foreign policy, but they will notice and bemoan its absence.
Global forces will continue to have considerable impact on their lives, with the main sources of strategic surprise coming from beyond the UK’s borders.
Over the next ten years, moreover, most risks will be on the downside. We have lived, as I have argued, through a volatile decade. There is every reason to expect risks to continue to proliferate.
Each new crisis will create political aftershocks with demands for governments to clear up the mess, matched by inquiries into why they failed to prevent the problem in the first place.
Finally, the government will find that, in most cases, it does not have the levers to manage risks as effectively as it would like to.
Whatever the next Prime Minister wants to do, he is going to find that global volatility, a lack of money, and government mechanisms that are equipped for the problems of another age, constrain his scope for action.
On top of that, he’ll only be able to solve problems if he can rustle up a coalition of other countries, all of whom will be beset by the same problems.
If – and it’s a big if – there is to be a new dominant paradigm in British politics, replacing those established by Thatcher and New Labour, then it will be because a leader emerges who has the skill to govern well in an age of global uncertainty.
I can’t imagine a more exciting time to pitch up in Downing Street, but it’s going to be a bumpy ride.
[Read the rest of our After the Vote series.]
by David Steven | May 5, 2010 | Europe and Central Asia, Global system, UK
Early today, I pointed out some of the difficulties Europe could cause David Cameron in his early months as PM (should he form either a minority government, find himself leading a coalition, or win a majority tomorrow).
But what would a positive agenda for a new Conservative (or Conservative-led) government look like on the EU, given (i) the dreadful problems facing the Euro (a debt crisis from which sterling is not immune); (ii) broader strains in global strains (fall out from the financial crisis, growing competition for resources, nuclear proliferation etc.); (iii) the Conservatives’ historic ambivalence about the European Union?
Here are six pointers for Cameron, should he become PM.
First, get stuck into the Eurozone crisis aiming for (in order of preference): (i) A strengthening of the Euro with greater sharing of economic sovereignty among Eurozone members (but with the UK left on one side); or (ii) An orderly removal of the weaker economies from the single currency.
Even on the Euro, the UK has some influence as an honest broker, given its position as an interested party, but not a full player. Cameron should adopt this role wholeheartedly – reminding British voters that the disorderly breakup of the single currency would be absolute disaster for the UK economy.
Second, recognise the severe dangers posed to the UK by a loss of cohesion in European societies.
It is tempting, but foolish, to see a breakdown in social order in Greece as only being a peripheral issue, or to fail to take seriously signs of a loss of trust between ethnic and religious groups across a number of European countries.
Maybe this is just a passing blip, but if I was Cameron I’d accept that it only makes sense to talk about a resilient nation within the context of a resilient European neighbourhood. We live in an era where social movements hop borders with ease. The last thing the UK needs is to get sucked into an era of riots, strikes and violence within its communities.
This may be a low probability/high impact threat to British national security, but we all remember a time when global economic collapse was regarded as so unlikely it wasn’t worth planning for, don’t we?
Third, pursue a vision of turning Europe into an outward-facing platform for managing global risks.
As Alex and I have argued, globalization is in the early stages of what is likely to prove a ‘long crisis’. The UK has made a one-way bet on a rules-based international order and we need to fight for our interests in this wager (even though meaningful progress on most issues is going to be hard to achieve).
The world is now shooting the rapids. The new government must be a clear and consistent voice arguing for Europeans to start looking outwards, making whatever contribution we can to charting a course through turbulent waters.
Another era of navel gazing is the last thing the EU can afford.
Fourth, accept that the development of a multi-layered Union is now inevitable, with the EU running at different speeds and on different tracks.
This could be good for the UK, if we: (i) don’t sulk on the sidelines; (ii) see that a distanced-but-engaged stance will often make us a more attractive partner (e.g. for the French, as they seek to balance German hegemony); (iii) take an extremely active leadership role on policy issues that matter most to the UK, compensating for times when we choose not to get involved.
Finally, become an intelligent advocate for subsidiarity.
It should be absolutely clear that Europe is yet to work out which issues need to be managed at European, national, or more local levels. But, so far, the Eurosceptic position on this has won few friends, coming across as unconstructive and lacking nuance to many Europeans.
But that could change if Cameron is prepared to reframe Euroscepticism as an ongoing search for a more balanced, flexible and adaptable union between European nations.
Carefully tuned, that message could resonate well with at least some of our European partners, while also helping Cameron triangulate divergent camps at home, including the pro and anti-European factions on his own backbenches.
[Read the rest of our After the Vote series.]
by David Steven | May 5, 2010 | Europe and Central Asia, UK
This morning sees early evidence of the difficulties David Cameron will face on Europe, if he ends up leading a minority government or has a very slim majority.
The Spanish presidency has set out proposals to amend the Lisbon Treaty in order to allow 18 additional MEPs to take up their seats (read Bruno Waterfield for background). The Conservative Party’s Eurosceptic wing sniffs an opportunity: maybe this will allow a new PM to throw the entire treaty back up in the air.
The Taxpayers’ Alliance leads the charge:
It has been widely assumed that the hope of a Lisbon Treaty referendum was dead and buried, but this development brings it back to the fore. David Cameron has always claimed that had he been in Government when the Lisbon Treaty passed through Parliament then he would have held a referendum. Will he now promise to hold a referendum on this new version of the Lisbon Treaty if he is in charge after the General Election? […]
Grasping this opportunity would be popular, strategically shrewd and – perhaps most importantly of all – honourable to the spirit as well as the letter of the Conservatives’ EU pledges. The failure to grasp it would not only be astonishingly shortsighted; it would be the final brutal betrayal of the pledges made to the British people in a general election – the election of 2005.
ConservativeHome weighs in, to great excitement in its comments, while England Expects mutters darkly about an entirely new Lisbon Treaty being ‘rammed’ through both Houses of Parliament.
This is a storm in a teacup, it seems to me – but it’s a sign, surely, of battles to come.
If he emerges from the election as PM, I expect David Cameron will need votes from Labour and Lib Dems if he is to avoid a series of fruitless rows with the UK’s European partners.
[Read the rest of our After the Vote series.]
by Alex Evans | May 3, 2010 | UK
So we’ve looked at the composition of a potential coalition government, how a coalition might change policymaking in Whitehall, and what it might mean for electoral reform. But what about the most immediate issue: how negotiations between the parties would work on the morning after the vote?
Start with the constitutional issues. The key thing to remember is that if we do end up with a hung parliament, then the Queen will first invite Gordon Brown to form a government, because he’s the sitting PM, and only if he can’t will she invite David Cameron to take a shot.
This sequencing issue is of no small importance, because it fundamentally shapes the Lib Dems’ room for manoeuvre – and according to Philip Stephens, they’re already screwing it up. He pronounces himself “baffled” that Nick Clegg “seems intent on throwing away his best negotiating cards in the event that Britain wakes up on Friday to a hung parliament”. He explains (emphasis added):
Were Mr Clegg to repeat on Friday morning that he intended to shun the prime minister and talk to the Conservatives, Mr Brown would be obliged to resign immediately. Mr Cameron would be summoned to the Palace and would be prime minister by Friday afternoon, regardless of anything Mr Clegg said. It would then be entirely up to the Tory leader whether to talk to the Lib Dems before the Queen’s Speech on May 25 or whether to dare Mr Clegg to try to vote the new administration down.
The Lib Dems would have lost all leverage, since forcing a second election would be to risk a backlash from the voters. By contrast, by stating that he was ready to talk to both party leaders with a view to a coalition or other electoral arrangement, Mr Clegg would keep hold of his bargaining chips. Mr Brown would remain in Number 10 while talks were under way, putting pressure on Mr Cameron to match any offer to the Lib Dems from Labour.
I agree with Philip’s argument, but there’s one key variable he doesn’t take account of: the bond markets. In a radically unhelpful move, LIFFE – the London futures exchange – has announced that instead of starting off at 8am, as normal, gilt markets will be open from 1am on election night.
Bond traders will be able to react in real time to results rolling in from key marginal seats, in other words: so as well as measuring how the night’s going through the traditional BBC swingometer, we’ll also be able to track progress through yields on three month short Sterling interest rate futures. Well, great.
Because bond traders – those noted political science experts – have clear views about what a hung parliament would mean for the deficit, as today’s Wall Street Journal makes clear.
“It will be difficult for a minority government to implement credible fiscal tightening through tax hikes or cuts in spending [if] we end up with a hung Parliament,” said Mark Schofield, global head of interest-rate strategy at Citigroup.
As it happens, they’re wrong. As I argued in my post on coalition scenarios, a coalition would be more credible on cutting the deficit, not less, as long as it can hammer out a joint programme; a government with a wafer-thin majority and less than a third of the popular vote doesn’t exactly have a resounding mandate, whereas two parties, with 60% of the national vote, have much more of a base from which to be able to make unpopular decisions.
But who cares about any of that? What LIFFE’s decision means is that if we do end up with a hung parliament, then rather than having a few hours for party leaders to draw breath, get some sleep, and ready themselves for the talks ahead, the pace of events and the media narrative will be dictated by the stampede mentality of the bond markets – and potentially by a rout on sterling that could be well underway hours before the Queen is even awake, never mind receiving party leaders.
Admittedly, such a scenario would pressure party leaders to move decisively to create greater certainty for the markets. But realistically, forming a government is just the first step, nowhere near sufficient on its own. Before investors start to calm down for real, the coalition will need to agree a joint programme for cutting the deficit – and how long do you suppose that’s going to take them to hammer out?
Earlier this week I quoted Alan Beattie observing of the Eurozone crisis that “adherence to constitutional niceties is admirable, but this is a debt crisis in the capital markets of the 21st century, not the Congress of Vienna”. Let’s hope his words don’t come to have similar resonance closer to home.
Update: anonymous senior Tories are quoted in today’s Telegraph as coming close to ruling out a deal with the Lib Dems:
Even if he fails to secure an outright majority, it is understood Mr Cameron is preparing to “go it alone” and form a minority government. The Tories are confident an informal understanding with unionist MPs from Ulster could secure Mr Cameron a safe passage with his key early Commons battles, including getting a first Queen’s Speech and Budget passed …
… Mr Cameron is also relying on the reluctance of the Lib Dems or Labour to risk unpopularity with the electorate by bringing down a minority Tory government at a time of economic uncertainty. Nick Clegg, the Lib Dem leader, indicated yesterday that his party would be unlikely to force another election. Senior Whitehall sources have indicated they expect Mr Cameron to push ahead without a formal coalition if he falls short of a majority. A shadow Cabinet minister said: “We don’t need a formal coalition deal if the unionists are on board for the key pieces of legislation.”
The Democratic Unionists have eight seats in the current Parliament, having won nine of them in 2005.
[Read the rest of our After the Vote series.]
by David Steven | May 2, 2010 | UK
I have been wondering how the road to reform of the British electoral system might play out. Assume Thursday’s vote gives the Liberal Democrats sufficient power to extract a pledge from one of the other parties to move this agenda forward, what might we expect to ensue?
An easy way to address this question is to assume the Lib Dems end up in the (perhaps unlikely) position of being given everything they ask for on the issue.
A bill would swiftly be pushed through Parliament to switch future elections to Single Transferable Vote in multi-member seats, right? After all, the party’s policy brief on political reform is unequivocal (if frustratingly lacking in detail) on the subject:
The Liberal Democrats will change politics forever and end safe seats by introducing a fair, more proportional voting system for MPs, and for the House of Lords.
Well, no, changing politics forever may not be nearly as simple as that.
The Lib Dems can hardly claim a mandate for a fundamental transformation of British democracy based on what Nick Clegg derides as a ‘clapped out’ and ‘potty’ electoral system.
After all, the party knows that polls suggest public ambivalence, at best, about PR. It would have to offer a ‘fair vote’ on a concrete reform proposal. To me, that means a referendum would be inevitable.
Lib Dems concur. The party’s manifesto describes STV as its ‘preferred’ system, but it also promises to ‘introduce a written constitution’:
We would give people the power to determine this constitution in a citizens’ convention, subject to final approval in a referendum.
So, in the Lib Dem ‘dream scenario’, a government would be expected to
- Set up a process that it wouldn’t fully control (and that’s not to criticise the need for inclusion and consultation).
- Through that process, agree a constitution that would contain a package of issues that went far beyond electoral reform.
- Put the whole package to an up-or-down vote and then live with the consequences.
All this would, presumably take time (creating new constituencies would then take even longer). In some ways, this would be good for the stability of a coalition. After all, the Lib Dems will have an enormous incentive to trigger a new election once PR is in place.
But there would be considerable political dangers as well. One can’t help being reminded of the tortuous process that led to the Lisbon Treaty. It also started life at a citizen’s convention and then floundered through a series of referenda.
Surely a Lib Dem-ish government would risk losing a vote on PR because the electorate objected to other parts of the proposed constitution; or was angry with the government for other reasons (highly likely, in an era of austerity) and used the referendum to punish it.
And if the referendum was rejected, wouldn’t the government fall as well? Either because the Lab Dems pulled support in a huff. Or because the government was simply discredited by losing such as important vote. (more…)
