16 Apr

UK General Election - the final weeks.

We are now less than a month ahead of the general election, and as previously covered, the result is too close to call. Whoever is Prime Minister by the summer, he (and unless something extraordinary happens, it will be a he) will have to first pull together a Government which can command the confidence of the House of Commons, and prepare a legislative programme to put through it. All main parties are currently publishing their manifestos, which should give us some idea of the immediate priorities facing the next Government. Nonetheless, even manifestos rarely stand contact with reality, so it's unwise to consider the contents as any concrete predictor of what the next Prime Minister will have on his mind post-May. Instead, there are a number of issues which are immoveable, impossible to ignore and too tricky to solve without a great deal of public debate. So what will be in the PM's in-tray once he takes office?

Start with the economy. The Conservatives promised to eliminate the UK's staggering budget deficit in this Parliament - a pledge which they have failed to deliver. Many political wags are of the view that they never meant the pledge this seriously, given the scale of the cuts involved. But the trend for iron financial discipline has caught on, and both Labour and the Conservatives have pledged to eliminate the deficit this time around (with the exception that Labour would borrow to invest). So job number one for Ed Miliband or David Cameron is to work out where the savings axe should fall, a process which will be all the more painful given the protections offered to sensitive bits of spending like health and international development.

One of the biggest early rows in the next Parliament will be about defence spending. Under its NATO commitments, Britain is meant to spend at least 2% of GDP on defence, a promise it has so far managed to keep. The Government’s official line on the matter is that there will be a defence spending review after the election, in which the level will be addressed, but Britain’s NATO allies are likely to be disappointed when the results are announced. Moreover, there will be a separate ruckus around Trident, Britain’s nuclear weapons system, which must be renewed in the next Parliament if the UK is to keep its deterrent. Although the Conservatives and Labour are officially signed up to the renewal, many politicians are critical of the promise, claiming that Trident is an expensive cold-war hangover with no place or relevance in the modern world. If Labour wins in May, the debate will be particularly charged, as their likely partners in Government, the SNP, are strongly opposed to the renewal as well as Trident being based in Scotland.

Of course, a Conservative electoral win would also contain the odd political landmine. If the Conservatives are propped up by UKIP in the House of Commons, they will have to negotiate a referendum on Britain’s membership of the European Union, in which UKIP will campaign vigorously to leave. The issue of Europe has long been a dividing issue for the Tories, so a protracted and potentially rancorous public quarrel will be the last thing they need. The issue of Europe will be especially damaging given the Conservatives’ close links with the business community, the vast majority of which wants to stay within the EU. Referendum aside, the next PM may well also have to deal with the break-up of the Eurozone, or at the very least the possibility of a Greek exit and severe financial instability. About half of the UK’s trade is with the EU, so any significant changes in business confidence in Europe will have a large knock-on effect at home.

Another home issue is house-building. Politically contentious in many countries, the UK is particularly fraught with problems when it comes to providing homes for people. A small, crowded island already, the UK has restrictive planning laws enabling communities to block or endlessly delay local projects which are in the national interest. Similarly, ‘green belts’ around cities have the beneficial effect of stopping urban sprawl, but push up prices for anyone living within them. Both main parties want to encourage more houses to be built (Labour has promised 200,000 a year by 2020) but how they will be funded, where they will go and how the necessary infrastructure will be put in place to connect them with the rest of the country remains to be explained in detail.

Funding the UK’s growing healthcare budget is another political headache. The head of the NHS, Simon Stevens, claims that he will need at least £8bn a year by 2020 just to keep the service running, and that is once large-scale efficiencies have been delivered. Although the Conservatives have pledged to find the money, both would-be leaders know that, at some point, there will have to be a reckoning with the electorate about the costs and scale of healthcare delivery in the UK. The NHS raises the passions of Britons like few other issues, so it will be a brave politician who kicks off the national conversation about change – but delivering care to all, free at the point of need, is unlikely to be sustainable in the long term.

This list could go on, of course. The UK’s energy generation capacity in the UK is likely to fall to worrying levels after the election, which will mean that we may have to rely on other countries to keep the lights on. One of those countries is Russia, which may start to stir up trouble in the Baltic States and further destabilise Europe’s eastern flank. The PM will have to consider where the UK’s immigration policy goes next, how to (properly) fund social care for the elderly and to meet its commitments on climate change among other things. Politics is never a quiet business, but the next five years, in this commentator’s opinion, will be particularly noisy.

Mark Detre is a communications and government relations manager currently based in London.

Posted in General by jcramond@britishchamber.com

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