Prospects for Britain’s socially and territorially fractured polity

Colin Hay  - Director of SPERI

Perhaps more significantly still, the Liberal Democrats helped the Tories make austerity look normal and moderate.  Cuts to public spending and public investment on the scale and to the time-frame proposed would otherwise have seemed the clear product of ideological zealotry (for a while the official public spending projections had the British state shrinking to a size, relative to GDP, smaller than at any point since the 1930s and well below that of the United States, for example).  In short, without the Liberal Democrats in the Coalition, austerity would have been much more strongly resisted, the polls more volatile and the government far less stable.

So what about 2015?  As an election, it seemed, if anything, like an even tougher proposition – even more of a ‘good election to lose’ perhaps?  It is, again, likely to prove difficult for the government to govern – now, more than anything else, because of a territorially divided polity and the absence of a clear majority for the ruling party other than in the southern half of England (excluding London).  It is bound to be difficult to impose every tightening austerity in a context, still, of fragile growth (and with the pre-election stoking of the housing market arguably responsible for much, if not all, of the growth Britain has enjoyed since 2013).  It is important in this context to note that GDP per capita still remains below pre-crisis levels and in fact has grown at an average of only 1 per cent per annum since 2010.

Moreover, the new Conservative government seems to have little sense of a vision of the route back to stable growth or of the paths to productivity gains or enhanced competitiveness (whatever happened to the vaunted ‘rebalancing’ of the economy?).  Finally, of course, the government has a very difficult set of issues to deal with in the first two years of the parliament – a new settlement for Scotland and an ‘in/out’ referendum on EU membership – and it’s likely to be difficult to deal with one without compromising the other.

A good election to lose then?   Actually, no, not at all.  2015 was too important not to win because of the significance of the issues at stake.  Cameron’s administration, quite simply, could well prove to be the last of a Britain in Europe and the last of a united Britain.  As Tony Payne and I noted in an election-day post, Britain was on the verge of a ‘Brexistential’ crisis.  Post-election, from the perspective of ‘Brexit’ and break-up, the situation unquestionably looks bad.  But how bad exactly?  Consider, first, the worst-case scenario – in fact, there are two (and they are almost equally bad).

Here the Tories mess up the Scotland negotiations – failing to offer enough to the Scottish government (and the SNP) because of the need to appease the Tory right with a resolution of the West Lothian question.  This leaves Scotland with greater powers, but Scottish MPs with no vote on core areas of British economic and social policy (those where Scottish powers have ostensibly been extended but which are still likely to shape significantly the space within which any Scottish administration has to operate).  With the charge of betrayal hanging heavily in the air, the SNP writes a second independence referendum into its manifesto for the 2016 Scottish Parliamentary elections.  It would, of course, need a clear majority (in Scotland’s proportional electoral system) for this to precipitate a second independence vote.  However, in this kind of scenario, that is far from impossible.  Here, then, we find a potential route to break-up without Brexit.

But, even if this doesn’t transpire, we can get to break-up through a different (and more familiar) route.  Here Cameron fails to get much from his attempted EU renegotiation (not enough to appease southern England or Tory backbenchers) and might then, as recently hinted, throw in the towel and campaign for an ‘out’ vote.  Either way, though, the ‘Brexit’ vote is on a knife-edge and UKIP (as the anti-Westminster party) would surely to win the campaign, even if not the referendum itself.  The outcome is likely to prove too close to call.  But the point is that any ‘out’ decision would be decisive and would prompt a second (conceivably, third) Scottish independence referendum.  Here it is ‘Brexit’ that leads to break-up.

These are, of course, the worst-case scenarios.  But arguably things would not have been much better under a minority Labour government with tacit SNP support.  Here, the prospect might have been that, amidst intense media scrutiny and growing ructions between Labour and SNP over austerity, intensified by the attempt to negotiate a new constitutional settlement for Scotland, the Labour minority government falls.  The SNP mops up in Scotland (winning, perhaps, every single seat); and a newly Eurosceptic Tory party makes considerable gains over Labour and UKIP south of the border.  In such a scenario, Labour’s tenure would have been short-lived and would in all likelihood have led to the emergence of a government committed not only to an EU referendum but to ‘Brexit’ itself.  That wouldn’t necessarily have delivered ‘Brexit’ – but one would have been brave to bet against it.

Is it possible to find a more optimistic scenario?  Perhaps – but one has to try quite hard.  Here, the Tories’ perceived economic competence unravels as its austerity agenda is seen not only as swingeing, but at the same time pushes the economy back into recession.  The electorate, unprepared for the extent of the cuts to core services effectively guaranteed (but entirely unspecified) by the Tory manifesto, rebels; this gives a new Labour leadership the chance to overcome its habitual timidity in economic and social policy and develop a new British unity narrative.  This is arguably where this scenario becomes a little less credible.  But, anyway, let’s continue: Labour challenges and overturns the terms of the debate, offering a telling diagnosis of Britain’s growth crisis, galvanising support around a new growth agenda and making deficit and debt reduction conditional on the growth thereby attained.  I may now be stretching the bounds of credulity, but this is what one has to do to find an optimistic scenario.

But the key point is that, for any of this to happen, and to get to such a point in the first place, Labour has to hope that the ‘Brexit’ option will be resisted – that the electorate can be convinced of the economic risk that ‘Brexit’ represents (and to commit itself unambiguously to that outcome).  This genie is, however, already out of the bottle.  I would say that the odds are about 50:50 – and it is that thought that keeps me awake at night.