So news is in that Britain’s next government is going to be a Tory-Lib Dem coalition, bringing an end to thirteen years of New Labour dominance. At a time of profound economic uncertainty and the imminent return of Great Power politics, it is pollyannish to believe that any British government could resolve Britain’s manifold problems without incurring big social costs. That said, this coalition is likely the UK’s best chance of pulling through in salvageable shape.
Let me recap. First, the UK has a budget deficit of 13% of GDP and a debt to GDP ratio of 80% for 2010. (For comparison, the figures for defaulting Argentina in 2001 were 6.4% and 62%, respectively). According to PricewaterhouseCoopers, “Britain would have to make across-the-board budget cuts of 5% a year to come close to cutting the deficit in half by 2014” – and that assumes an economic upturn that may not materialize due to Britain’s deindustrialization, high energy costs, and the growing crisis in the Eurozone. (If Britain doesn’t make deep cuts soon, a descent into a Greek-style compound debt trap is inevitable). Second, the UK’s abysmal energy policy under New Labour – ignoring the depletion of the North Sea gas fields, declining to invest in new generating capacity, and not concluding long-term gas supply contracts – has made chronic electricity shortages all but inevitable by 2015. Third, separatist undercurrents are ever present. Not very visible now, granted, but that tends to change when a state comes under severe socio-economic pressure. Overall, I would say all this qualifies as a “bad situation” for Britain.
But why is a blue-yellow coalition going to make the best of it? For the simple reason that combined, their set of priorities is near optimal, and each will hopefully be able to check the other’s less savory tendencies. I will be drawing from this excellent website explicating the positions of British party candidates on major issues (h/t Fistful of Euros).
Take taxes and spending. The former will have to rise, the latter will have to fall. This is not an ideological statement, it is a matter of fact. The alternative is default, either outright or inflationary, and a forced readjustment. And the ruling parties are in tune with this reality. Only 28% of Tory and 41% of Lib Dem candidates believe that “Britain should increase spending on public sector services” despite the recession, compared with 61% of Labour candidates. This isn’t because they are nasty neoliberals. Some 76% of Lib Dems and even 60% of Tories believe that any tax increases should be “disproportionately” paid by higher earners. Big majorities in every British party are averse to higher inequality. In today’s Britain, we are all social democrats. 😉
The Lib Dems and Tories are also the best bet for a balanced foreign policy. Elements of the Conservative Party (including one “e-friend” and successful local candidate) have expressed an interest in improving relations with Russia, which is a very wise move considering its bleak natural gas and energy outlook. Nick Clegg, the leader of the Lib Dems and to be Deputy PM, “has worked extensively in the post-Soviet bloc”. This will be a welcome change from New Labour’s Russophobia. What isn’t so good is that the Tories are one of the most bellicose parties, with only 39% of them saying they would not support a strike against Iran and 67% supporting British troops staying on in Afghanistan “as long as they are needed” (which is historically synonymous with “until you go bankrupt”). That said, their views on these matters are in line with all the other mainstream parties. The only pacificists are on the fringes – the Green Party (good intentions, no realism) and the BNP (which views these wars as Zionist projects).
Only 6% of Lib Dems and 30% of the Conservatives (that is, their reactionary wing) support beginning negotiations to exit the European Union. That would be an idiotic idea. Now I’m not saying that Britain should integrate further with a European Union that is being riven apart by economic crisis and self-interested nationalisms. But maintaining a foothold in it (and a veto!) is a very useful mechanism for sabotaging moves towards European federalism and manipulating the balance of power on the mainland on the cheap, not to mention the markets it provides. To their credit, most Tories realize this.
In this section I should warn you that my views here are colored by a social liberal bias. (But this isn’t critical – the most important issues that will define Britain’s near future are in how it handles its economic, fiscal, and energy predicament, not on how many gay rights or CCTV cameras it acquires). I should stress that the modern Conservatives are not a party of social reactionaries, Labour propaganda to the contrary. Now there is certainly a large undercurrent of social conservatism there, in contrast to the three “progressive” parties – Labour, the Lib Dems, and the Greens. But these reactionary tendencies on immigration or climate change will be countered by the Liberal Democrats. And with the sole exception of New Labour, all parties agree that there “are too many CCTV cameras in Britain”. In my opinion, not only is the UK’s surveillance culture insidious, it is also a waste of money and resources.
Finally, and most importantly, a blue-yellow coalition really is the best of all possible worlds. It kicks out Labour, just like the voters wanted to. It prevents the Conservatives from becoming entangled with the national-ethnic parties or kooks like the UKIP and the BNP. It presents the possibility of electoral reform to modernize Britain’s outdated “first past the post” system. It offers a (kind of) credible commitment to fiscal stabilization, without connotations of Thatcherite social injustice and insufferable moralism. Their foreign policy is moderate and well-tailored to Britain’s national interests. Most importantly, the two parties balance each other out – the Liberal Democrats will be able to nullify the global warming denying, viscerally anti-EU and anti-immigrant Tory reactionaries, while the Conservative mainstream will be able to squash the dafter Lib Dem ideas like getting rid of Trident.
All in all, a good match – and if it holds together, one that may just bring Britain in decent shape through its biggest crisis since the Second World War.