UK election: a poisoned chalice?

As I write on Friday morning after the 2015 general election, the incumbent Conservative party is heading for an outright majority in the new parliament.  As I keep saying ad nauseam, this is what I predicted back in 2009 before the Tories (Conservatives) won the 2010 election and formed a coalition with the Liberal Democrats.  The main reason for the victory , I think, was as I pointed out in a recent post (https://thenextrecession.wordpress.com/2015/04/30/economic-well-being-and-the-uk-election/), that the economic recovery since the Great Recession has reached a peak in the last year, with UK real GDP growth picking up from near zero in 2012 to 2.5%-plus in 2014 and with real income per head finally turning up.

The exit poll immediately after the close of the vote last night turned up to be very accurate.  It predicted that the Conservatives would be the largest party by some way and there would be a meltdown of the Liberal Democrat vote, while the Scottish Nationalists (SNP) would wipe the floor with Labour in Scotland.  And so it turned out.  It now seems that the Conservative share of the vote in the UK election will be around 36% (the same as in 2010) and Labour’s share is just 31% (up from 29% in 2010). So the Conservative share is a little higher than the polls reckoned but Labour did much worse than forecast. Labour were wiped out in Scotland and it appears that the UKIP share was lower than forecast (with its leader, Nigel Farage failing to win a seat) and those votes went to the Conservatives. And the Liberal meltdown also helped the Conservatives.

UK election

The voter turnout seems to be about 65.7%, almost exactly the same as in 2010.  But as the turnout was much higher in Scotland, that means voter turnout in England and Wales fell compared to 2010.  Also, the share of the two major parties has fallen again, a little.  So the fragmentation of politics that we have seen across Europe continues.

But, in many ways, this victory for the Conservatives may turn out to be a poisoned chalice. They will have at best a small majority (as the Liberals are unlikely to join a new coalition).  The right-wing of the Conservatives (pressured by UKIP) will be baying for the promised referendum on leaving the EU.  This may take place within a year or so and not wait until 2017.  The City of London and big business is firmly opposed to leaving the EU and all the major parties will call for staying in.  The British public has shown in all polls that it is opposed to leaving.  So my third prediction (after forecasting a no vote on Scottish independence and on the Tories winning in 2015) remains that the British people will vote to stay in the EU.  By the way, there is no majority in Scotland for another independence vote (only 36% in favour according the latest poll).  No wonder, the SNP leader, Nicola Sturgeon, called the huge SNP victory in Scotland as a vote for ‘anti-austerity’, not independence.

Just as the Conservatives won because of an improving economy, the poison in the cup of victory is the economy over the next few years.  The government is still running a sizeable budget deficit which is not expected to disappear on the most optimistic forecasts of economic growth until 2019.  Public sector debt to GDP is still rising.  Even more worrying, private sector debt is still at record highs, with the property bubble.  Above all, business investment is very weak and corporate profitability is still below the levels of 15 years ago.  UK capitalism is running a large external deficit on trade and depends on an influx of finance capital (‘hot money’) to pay its way.  And a global recession is due probably right in the middle of this term of parliament.  Then the poison will have to be taken.   The Tories won’t win the next election.

 

7 Responses to “UK election: a poisoned chalice?”

  1. karenhelveg Says:

    I am just wondering why you repeat that there has been ‘real’ growth in the UK economy, and at a rate of 2,5% + to boot. It seems to me that there would be good cause to explode the notion in the particular context. Yes, some people affiliated with housing, finance and all types of TED may earn more, but we also know that the poor are worse off – fortunately for the Cons they don’t vote and Ed Miliband has not exactly given them reason to do so. So let’s hear about the leftist perspective. Is it in Scotland, in PC (I know nothing about this creation) where is it, the Worker’s Party – absent. 1 green in Parliament.

  2. SimonH Says:

    A poisoned chalice yes, and I can’t shake the feeling that they will be drinking it even sooner then you have thus far predicted Michael. Is a 2015 Slump coming? seems more and more likely to me.

  3. Roger Manser Says:

    Worries from a neo-liberal perspective must include private debt, ( a new bubble bursting?), zero productivity growth, as well as the trade deficit.

  4. Hnery Says:

    I also predicted a Tory majority but only because England is such a petty bourgeois nation, England is like the tea party on steroids. I don’t see that changing much anytime soon, so if they don’t win the next election a doppelganger will.

    The Scots are going to suffer austerity by staying in the UK. So to be honest I am not sure on what basis they are voting on. They almost seem worse than the English.

    If you are a revolutionary look away from the UK because change isn’t coming from that septic isle.

    • matthewrusso9 Says:

      Unfortunately I must agree with this sentiment. Labour Left’s revolutionary opening was in the 1970’s. It was successfully closed by the Thatcher counterrevolution. The result is that the UK is now a “dead country” in broad historical terms i.e. in class struggle terms. The UK bourgeoisie is highly centralized around the City, industrial capital is utterly subordinate – compare with the mid-19th century “Reform Era” – presenting few possibilities for ruling class fractures, one condition for successful reform *or* revolution. In the present era of capitalism, the era of permanent counterrevolution, real substantive pro-working class reform a la the US New Deal or postwar UK Labour will be tantamount to the overthrow of the present regime, that is, revolution.

      Love to be proven wrong. But as with Syriza, so far, not. Even the “radical left” knows that substantive reform will lead straight to revolution. So the whole “official” Left sticks with the capitalist system.

  5. PT Says:

    “Even more worrying, private sector debt is still at record highs”

    I’d hardly describe the property market as a bubble. Prices are merely reflecting credit pricing, borrowing ability and market conditions.

    So even if private sector debt is at record higher, so is private sector wealth and asset values e.g.. debt may rise 10%, but property values will likely gain 20%.

  6. 'Arold Says:

    The low price of oil is not the wealth and powerful being kind to the poor, it reflects real concerns, construction is underline all ready and the business purchasing is only just positive. I suggest there may well be negative figures in the last quarter of 2015 or early 2016. Then what about the cuts, that is £12Bn out of the economy, the uncertainty about the EU referendum the selling off of Housing associations properties and the Universal Credit which will undoubtedly be a mess. I also think any Labour leader with policies more to the left or less would have been subject to the same attacks, strange the Tories and SNP both got what they wanted, any link?

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