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The UK Governing Coalition The U.K. Governing Coalition: The Challenges Ahead and Why America Has a Stake in Britain’s Success Robin Harris SPECIAL REPORT NO. 102 | FEBRUARY 22, 2012 from THE MARGARET THATCHER CENTER for FREEDOM The U.K. Governing Coalition: The Challenges Ahead and Why America Has a Stake in Britain’s Success Dr. Robin Harris SR-102 About the Author r. Robin Harris served during the 1980s as an adviser at the United Kingdom Treasury and Home Office, as Director of Dthe Conservative Party Research Department, and as a member of Prime Minister Margaret Thatcher’s Downing Street Policy Unit. He continued to advise Lady Thatcher after she left office and has edited the definitive volume of her Collected Speeches. Dr. Harris is now an author and journalist. His books include Dubrovnik: A History (Saqi Books, 2003); Beyond Friendship: The Future of Anglo–American Relations (The Heritage Foundation, 2006); Talleyrand: Betrayer and Saviour of France (John Murray, 2007); and The Conservatives: A History (Bantam Press, 2011). Photos on the Cover— © BL Images Ltd/Alamy This paper, in its entirety, can be found at: http://report.heritage.org/sr0102 Produced by the Margaret Thatcher Center for Freedom The Heritage Foundation 214 Massachusetts Avenue, NE Washington, DC 20002–4999 (202) 546-4400 | heritage.org Nothing written here is to be construed as necessarily reflecting the views of The Heritage Foundation or as an attempt to aid or hinder the passage of any bill before Congress. Contents Abstract . .. iv Section I: Introduction . 1 Section II: The Legacy from Labour and the Compromises Reached Between the Governing Coalition Parties . 2 Section III: The Story So Far . 4 Section IV: The Current Crisis . 10 Section V: The European Dimension . 13 Section VI: The Future . 17 Table 1: General Government Total Outlays . 7 Table 2: General Government Cyclically Adjusted Financial Balance . 8 Table 3: Cyclically Adjusted Budget Surpluses: Changes in OBR Fiscal Forecast . 10 THE U.K. GOVERNING COALITION: THE CHALLENGES AHEAD AND WHY AMERICA HAS A STAKE IN BRITAIN’S SUCCESS Abstract n May 2010, the U .K . general elec- It is now clear how this biparti- For the United States, with its Ition resulted in a hung Parliament san model of governing has fared . different constitutional system and from which emerged a Conservative– First, little or no progress has been electoral cycle, the applicable lessons Liberal Democrat coalition with made in tackling either the bud- would seem to be twofold . The first Conservative leader David Cameron get deficit or the British economy’s conclusion is encouraging . In the as Prime Minister . The experiment underlying weaknesses . Second, United Kingdom, an electorate not was widely justified by the evident no credible, coherent, or convinc- dissimilar from that in the U .S . has need to cope with the economic crisis ing path toward national recovery proved to be stoical if not enthusi- and, in particular, the unsustain- has yet been presented . The latter astic when convinced that unpalat- able budget deficit inherited from the is consequential, both in terms of able economic medicine is required . outgoing Labour government . Mr . the Conservative Party’s failure The second conclusion constitutes a Cameron and his Liberal Democrat when in opposition to think seri- possibly timely warning: Failure to Deputy Prime Minister, Nick Clegg, ously about large policy questions devise and present a clear analysis also claimed to be introducing a new and now in terms of the inability of the country’s ills before achieving and better kind of politics, one based of a coalition, hampered by inces- power will leave even a well-inten- on reasoned discussion and a rejec- sant compromise, to react to major tioned and right-thinking govern- tion of “tribal loyalties ”. In practical changes in circumstances—as with ment floundering as new, unforeseen terms, both sides then made a series the unresolved, and arguably unre- challenges threaten to throw it off of policy compromises . solvable, euro-zone crisis . course . IV SPECIAL REPORT | NO. 102 FEBRUARY 22, 2012 Section I: Introduction n May 2010, the U .K . general elec- have gone unfulfilled . Opposition coherent, or convincing path toward Ition resulted in a hung Parliament to public expenditure cuts has been national recovery has yet been pre- from which emerged a Conservative– relatively muted; trade union pro- sented . The latter is consequential, Liberal Democrat coalition with tests and strike action have had little both in terms of the Conservative David Cameron, the Conservative effect; and there is widespread public Party’s failure when in opposition leader, as Prime Minister . Britain acceptance, in the short term at least, to think seriously about large policy has a long history of coalitions that of the sharp pressure on living stan- questions and now in terms of the were not unsuccessful, but since the dards . Moreover, both the still-fresh inability of a coalition, hampered by Second World War, British party recollection of the shortcomings of incessant compromise, to react to politics has been sharply polarized . Gordon Brown’s government and major changes in circumstances—as So the 2010 outcome was a novelty . the perceived failings of the present with the unresolved, and arguably The experiment was, however, Labour opposition have kept up the irresolvable, euro-zone crisis . widely justified by the evident need coalition’s political ratings . For the United States, with its to cope with the economic crisis different constitutional system and and, in particular, the unsustain- THE PROBLEM IS THAT LITTLE OR electoral cycle, the applicable lessons able budget deficit inherited from the NO PROGRESS HAS BEEN MADE would seem to be twofold . The first outgoing Labour government . Mr . conclusion is encouraging . In the Cameron and his Liberal Democrat IN TACKLING EITHER THE BUDGET United Kingdom, an electorate not Deputy Prime Minister, Nick Clegg, DEFICIT OR THE BRITISH ECONOMY’S dissimilar from that in the U .S . has also claimed to be introducing a new UNDERLYING WEAKNESSES AND proved to be stoical if not enthusi- and better kind of politics, one based THAT NO CREDIBLE, COHERENT, astic when convinced that unpalat- on reasoned discussion and a rejec- able economic medicine is required . OR CONVINCING PATH TOWARD tion of “tribal loyalties ”. In practical The second conclusion constitutes a terms, both sides then made a series NATIONAL RECOVERY HAS YET BEEN possibly timely warning . This is that of policy compromises . PRESENTED. failure to devise and present a clear It is now clear how this bipartisan analysis of the country’s ills before model of governing has fared . The problem is, first, that little or achieving power will leave even a The overall judgement must so no progress has been made in tack- well-intentioned and right-thinking far be a qualified negative, though ling either the budget deficit or the government floundering as new, the final outcome remains unclear . British economy’s underlying weak- unforeseen challenges threaten to Certainly, the worst predictions nesses and, second, that no credible, throw it off course . 1 THE U.K. GOVERNING COALITION: THE CHALLENGES AHEAD AND WHY AMERICA HAS A STAKE IN BRITAIN’S SUCCESS Section II: The Legacy from Labour and the Compromises Reached Between the Governing Coalition Parties he Labour government had over- tax increases . This approach showed in a telling sentence: “While parents Tspent under both Tony Blair and courage, but one should not exagger- worried about childcare, getting kids Gordon Brown 1. An inherited budget ate the severity of what was planned to school, balancing work and fam- surplus had become a regular bud- (let alone achieved) . Total public ily life—we were banging on about get deficit, predictions of economic spending in 2014–2015 would still Europe .”2 (Of course, the Prime growth were overly optimistic, and have been higher in real terms than it Minister is now himself “banging on plans for public spending were unaf- was in 2008–2009 . In any case, this about Europe ”). David Cameron also fordable . When the financial crisis announcement, with the underlying seriously damaged his credibility in and recession of 2007–2009 hit, Mr . intent it signified, reassured finan- the eyes of his Euro-skeptical party Brown, true to his prejudices and cial markets . The confidence thus by failing to honor what was seen as convictions, then spent much more . engendered has since kept down the a firm undertaking, made in oppo- This dramatically worsened the state cost of servicing existing debt and sition, to hold a referendum on the of public finances without avoiding new borrowing . European Union’s Lisbon Treaty . recession . But the Conservatives, in On the eve of the 2010 general exchange for agreement from their PRIME MINISTER CAMERON’S election, Labour finally promised to coalition partners, also made a INABILITY (IN COALITION WITH rein back the deficit, but without pro- series of concessions . Here many viding details . The Conservatives in of the current difficulties find their THE LIBERAL DEMOCRATS) TO the election campaign were equally— origin . Tax cuts were avoided or PRESS AHEAD WITH CURBING THE and deliberately—reticent, though slanted toward groups favored by IMPACT OF EUROPEAN HUMAN they promised quicker action to curb the Liberal Democrats . Upgrading RIGHTS LAW HAS LED TO A RASH OF borrowing . This urgency was amply of the Trident independent nuclear EMBARRASSING FAILURES TO DEPORT justified . The U .K . budget deficit in deterrent was postponed . Measures Labour’s last year rose to 11 percent to check the inroads of the European SERIOUS CRIMINALS, INCLUDING of gross domestic product (GDP), the Court of Human Rights were all but THOSE LINKED TO TERRORISM. highest in the country’s peacetime abandoned . history and the largest structural Of greatest current political The Prime Minister’s compromis- deficit in Europe .
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