The state of the UK economy compared to how it was five years ago, and when compared to the EU at the moment, is impressive. Fragile, but impressive nonetheless. And the Coalition should be commended for that.
But let’s make one thing clear: one of the main reasons this has been achieved is that the “austerity” that the Conservatives were calling for five years ago has not materialised. The national debt has increased every year since 2010, is still increasing, and will still be increasing near the end of the next Parliament. For the government to emphasise that the economy has improved while the deficit has been cut is to pull the wool over the eyes of most voters, who are understandably misled by the complicated terminology relating to our level of indebtedness. In short, the rate at which the debt is increasing has slowed, but it is still going up.
The Tories had wanted to spend less than the coalition government has ended up shelling out, but thankfully, they have not been as fiscally restrained as bailed out countries like Greece. Nevertheless, the opposition doesn’t really have much of an argument to make against the economy. Because it has improved, Labour has had to temper its spending plans. In fact, the headline fiscal plans of the UK’s two main parties are not as different as one might expect. Certainly, politics in the UK is more polarised than it has been for 20 years, and individual policies show stark ideological differences. But the country’s relative economic strength compared with the rest of Europe has prevented anything near the far left uprising that we have seen in Greece and Spain.
If the Tories can articulate their message more clearly, then the economy should be helpful for them when it comes to May’s General Election. At the moment, the deficit debate just seems to be confusing voters and gaining neither party much traction in the polls.
Aside from that, issues of Europe and immigration controls are crucial – more so than since the 1990s. Interestingly, it is much more of a cross-party issue than it has been in the past. But while it will cost both Labour and the Conservatives votes, it will likely only cost the latter actual seats. Nonetheless, I expect Ukip to win far fewer seats than the polls are suggesting. Although it has now won Parliamentary seats, that has only been via defections – and a large amount of their current support may prove to be in protest and desert them come May.
The NHS is also a crucial topic (as always) but frankly, it is a little tedious. We all want it to stay. We all want it to get better. We don’t really believe any party has the ability to carry the latter out – and too much politicisation of the issue just makes voters tire of politicians in general.
The wild card, which is largely ignored at the moment, is constitutional reform. At a time when voters are disillusioned with everyday politics, changing the way our country is governed has the ability to boost turnout significantly, and thereby upset all the current polls or predictions. The Scottish Independence vote last year highlighted how nationalistic issues really capture people’s imaginations. Referring to the English votes for English laws issue, William Hague told CNBC that there would be a “specific pledge to have fairness for the whole of the UK, including England” in the Tory manifesto. They have kept relatively quiet about this so far, but it’s a topic to watch.
The bookmakers currently suggest that we are heading for another coalition. Labour could lose more seats to the Scottish National Party (SNP) than the Conservatives lose to Ukip. While this will hurt their ability to win a majority, it should not impact their ability to win the election. A coalition between Labour and the SNP is very plausible. Nicola Sturgeon has said that, while she would “never, ever put the Tories into government”, the party “wouldn’t rule out a coalition with Labour”.
Conversely, it is not obvious who the Tories could form a coalition with. Hague all but ruled out a coalition with Ukip last week. Another deal between the Conservatives and the Liberal Democrats also seems unlikely. We could, therefore, end up with a situation where the Conservatives win the most seats, but most of Parliament is united against them, leading to a Labour-led coalition, including the support of the SNP. This is the most likely outcome, according to calculations made by Deutsche Bank last week.
This election is going to be a fascinating one. It’s the closest since 1992, and the next few months will see a lot of confusing political rhetoric. Whichever way it goes, I hope turnout is high and the result is convincing.
City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.