Given that most Americans are either suffering political fatigue or are focused entirely on November, one could be forgiven for missing—or just not caring—that British Prime Minister Gordon Brown has called a general election for Thursday, May 6. It will be Britain’s first general election in five years and the Prime Minister’s first attempt at winning an electoral mandate, having been Chancellor of the Exchequer during the Labour Party’s historic third straight election victory in May 2005.
And his chances of victory?
Although the polls have fluctuated in the last week to ten days, as of April 12 YouGov—arguably the most reliable pollster—gave the Conservatives a lead of 6 percent, a major fall from their double digit highs of last summer. Given that the UK’s electoral system favors the Labour Party, the Conservatives require a 4.3 percent swing to become the largest party and 6.9 percent swing to have an overall majority. Thus, in order to form the next government, the Conservatives and their leader, David Cameron, will have to achieve a greater swing than Margaret Thatcher in her landmark victory in 1979. However, if the Conservatives can only achieve a 1.6 percent margin of victory, the Labour Party and Brown will form the next government.
Of course, whilst the Prime Minister may not have the Clintonian charm and panache of his predecessor Tony Blair, but has also been struggling to garner any semblance of credibility on the critical issues that the critical issues facing the country.
As Chancellor, Brown had a reputation as a competent keeper of the public purse—economic growth was robust, inflation low and employment all but full. However, at the same time the state sector ballooned, the deficit grew, taxes soared and reliance on financial services grew to unprecedented levels. Now exporting little more than bad debt, the British economy was arguably the most exposed to the global economic earthquake.
And yet, a plethora of bank rescues later, a depressed currency, a record deficit, a wounded military, the highest inflation in the G7, and a number of failed leadership coups later, the man who only three months ago was regarded as a political carcass may still find himself and his comrades re-elected to office. In an era of so-called “personality politics” the British electorate appears to be bucking the trend, greeting the policies of David Cameron and his “modern” Conservative Party with a fistful of salt.
Having surgically removed his party’s toxicity, Cameron—a former PR man—could be just weeks away from becoming the first Conservative leader to win a general election in over eighteen years. The John Major era stigma of “sleaze”, nastiness and corruption appears to have dissipated (well, as much as it can for any political party), replaced with pledges for greater transparency and a purging of those politicians found to have fiddled their parliamentary expenses. In addition, instead of repeating Margaret Thatcher’s alleged heartless mantra of there being “no such thing as society”, the Tory leader talks of a vibrant “Big Society” where the state distributes—rather than monopolizes—power to individuals and communities.
Sure, at times Cameron’s rhetoric comes across as a little fuzzy (“Change” and “Hope” are ever present) whilst critics claim his policy agenda is almost as empty as the current government’s bank account. But as Tim Montgomerie of ConservativeHome pointed out, a number of Cameron’s initiatives are radical—and very Conservative. Plans to cut corporation tax, death taxes, introduce Wisconsin-style welfare reform whilst loosening the state’s grip on schooling and education form his party’s platform for government. Just as the polls were tightening, Cameron even pledged that he would overturn the government’s planned payroll tax increase, offsetting the costs through cutting around $9.2bn of government waste. The Labour Party responded by saying this tax cut would take money “out of the economy”; a statement that would only have made it passed the Soviet Politburo’s laugh test.
But the elephant in the room here is spending. One adviser to the Conservative Party recently remarked to me that the problem with the Britain’s economic morose is that it’s completely unprecedented—no major economy in recent history has been so over leveraged and saddled with debt without the cushion of either a trade or budget surplus, or holding a reserve currency. Despite the government using growth assumptions that resemble Soviet tractor production statistics, ratings agency Fitch recently revealed that out of all Western economies, the UK faces the gravest threat of losing its AAA credit rating.
Not only is the UK’s deficit double that of the European Union’s average, but her structural deficit—the sum of government borrowing that exists outside of the recession—is so grave that the International Monetary Fund has raised several alarm bells. Unlike 1976, the IMF simply can’t afford to bail out the UK. Although Cameron has been far more candid with the electorate than the Prime Minister about the need to cut spending, neither party has conveyed the full scale of the problem. Unless the next government plans on running the Weimer-style monetary policy embraced by the current administration, the scale of the cuts will be without precedent. Politicians may not like it, but history shows that the bond market will demand it.
Whether the American people find the prospect of following an election race between the dour Scotsman and Fitzwilliam D’Arcy is obviously open to question. Nevertheless, as both the largest foreign direct investor in the United States and the nation with the second most considerable footprint in Afghanistan, what happens on May 6 certainly matters in Washington.
A native of Scotland, Ewan previously worked in the London office of Weber Shandwick Public Affairs, Europe’s leading political consultancy. He has contributed to ConservativeHome.com, and YPNation.com, a US blog for young professionals. Ewan is a political consultant based in Washington, D.C.