by Alex Evans | May 3, 2010 | UK
So we’ve looked at the composition of a potential coalition government, how a coalition might change policymaking in Whitehall, and what it might mean for electoral reform. But what about the most immediate issue: how negotiations between the parties would work on the morning after the vote?
Start with the constitutional issues. The key thing to remember is that if we do end up with a hung parliament, then the Queen will first invite Gordon Brown to form a government, because he’s the sitting PM, and only if he can’t will she invite David Cameron to take a shot.
This sequencing issue is of no small importance, because it fundamentally shapes the Lib Dems’ room for manoeuvre – and according to Philip Stephens, they’re already screwing it up. He pronounces himself “baffled” that Nick Clegg “seems intent on throwing away his best negotiating cards in the event that Britain wakes up on Friday to a hung parliament”. He explains (emphasis added):
Were Mr Clegg to repeat on Friday morning that he intended to shun the prime minister and talk to the Conservatives, Mr Brown would be obliged to resign immediately. Mr Cameron would be summoned to the Palace and would be prime minister by Friday afternoon, regardless of anything Mr Clegg said. It would then be entirely up to the Tory leader whether to talk to the Lib Dems before the Queen’s Speech on May 25 or whether to dare Mr Clegg to try to vote the new administration down.
The Lib Dems would have lost all leverage, since forcing a second election would be to risk a backlash from the voters. By contrast, by stating that he was ready to talk to both party leaders with a view to a coalition or other electoral arrangement, Mr Clegg would keep hold of his bargaining chips. Mr Brown would remain in Number 10 while talks were under way, putting pressure on Mr Cameron to match any offer to the Lib Dems from Labour.
I agree with Philip’s argument, but there’s one key variable he doesn’t take account of: the bond markets. In a radically unhelpful move, LIFFE – the London futures exchange – has announced that instead of starting off at 8am, as normal, gilt markets will be open from 1am on election night.
Bond traders will be able to react in real time to results rolling in from key marginal seats, in other words: so as well as measuring how the night’s going through the traditional BBC swingometer, we’ll also be able to track progress through yields on three month short Sterling interest rate futures. Well, great.
Because bond traders – those noted political science experts – have clear views about what a hung parliament would mean for the deficit, as today’s Wall Street Journal makes clear.
“It will be difficult for a minority government to implement credible fiscal tightening through tax hikes or cuts in spending [if] we end up with a hung Parliament,” said Mark Schofield, global head of interest-rate strategy at Citigroup.
As it happens, they’re wrong. As I argued in my post on coalition scenarios, a coalition would be more credible on cutting the deficit, not less, as long as it can hammer out a joint programme; a government with a wafer-thin majority and less than a third of the popular vote doesn’t exactly have a resounding mandate, whereas two parties, with 60% of the national vote, have much more of a base from which to be able to make unpopular decisions.
But who cares about any of that? What LIFFE’s decision means is that if we do end up with a hung parliament, then rather than having a few hours for party leaders to draw breath, get some sleep, and ready themselves for the talks ahead, the pace of events and the media narrative will be dictated by the stampede mentality of the bond markets – and potentially by a rout on sterling that could be well underway hours before the Queen is even awake, never mind receiving party leaders.
Admittedly, such a scenario would pressure party leaders to move decisively to create greater certainty for the markets. But realistically, forming a government is just the first step, nowhere near sufficient on its own. Before investors start to calm down for real, the coalition will need to agree a joint programme for cutting the deficit – and how long do you suppose that’s going to take them to hammer out?
Earlier this week I quoted Alan Beattie observing of the Eurozone crisis that “adherence to constitutional niceties is admirable, but this is a debt crisis in the capital markets of the 21st century, not the Congress of Vienna”. Let’s hope his words don’t come to have similar resonance closer to home.
Update: anonymous senior Tories are quoted in today’s Telegraph as coming close to ruling out a deal with the Lib Dems:
Even if he fails to secure an outright majority, it is understood Mr Cameron is preparing to “go it alone” and form a minority government. The Tories are confident an informal understanding with unionist MPs from Ulster could secure Mr Cameron a safe passage with his key early Commons battles, including getting a first Queen’s Speech and Budget passed …
… Mr Cameron is also relying on the reluctance of the Lib Dems or Labour to risk unpopularity with the electorate by bringing down a minority Tory government at a time of economic uncertainty. Nick Clegg, the Lib Dem leader, indicated yesterday that his party would be unlikely to force another election. Senior Whitehall sources have indicated they expect Mr Cameron to push ahead without a formal coalition if he falls short of a majority. A shadow Cabinet minister said: “We don’t need a formal coalition deal if the unionists are on board for the key pieces of legislation.”
The Democratic Unionists have eight seats in the current Parliament, having won nine of them in 2005.
[Read the rest of our After the Vote series.]
by Alex Evans | May 2, 2010 | UK
In a post on Friday, I looked at the potential composition of a coalition government, and which Cabinet posts might be most attractive in negotiations between the two governing parties. But what would it all mean for public administration – for how business gets done in Whitehall?
First up, there’s the point that a coalition government would seem likely to lead to longer ministerial tenures. Cabinet reshuffles are politicised at the best of times, but in a carefully hammered out coalition government, they’re likely to look like the penultimate move in a drunken game of Jenga. So in order to avoid the coalition from collapsing, we can probably assume that ministers will be left where they are unless there are really compelling reasons to move them – e.g. a resignation offence. Given the sometimes absurd rapidity with which ministers have been moved about under Blair and Brown, this prospect should cheer us all.
There’s also a subsidiary uncertainty here, of whether Nick Clegg would demand and win the right to hire and fire the Lib Dem ministers in the Cabinet (or to make ‘recommendations’ to the PM). But even if he did, I still think the point about leaving ministers where they were, except in extremis, would hold: if one member of the coalition reshuffled its team while the other didn’t, it would look weak.
Second, we have some interesting uncertainties to savour over what would happen about junior ministers. Would Cabinet ministers have to work with junior ministers from other parties – and if so, would they really enjoy the confidence of their Secretary of State? Or would we be looking at entire departments becoming party fiefdoms – raising the delicious possibility of (say) a Lib Dem Foreign Office having to work with a Conservative DFID?
On a related note, I suspect a coalition government might well lead to a sharp rise in the number of Special Advisers, as the complexity of working through party political implications of policy suddenly increases by an order of magnitude. In a scenario of junior ministers hailing from different parties to their Secretaries of State, it wil be interesting to se whether junior ministers get their own advisers – as is already informally the case in a few departments in Whitehall.
But in particular, coalition government would clearly lead to a seismic shift in cross-Whitehall co-ordination mechanisms – above all the Cabinet Office and the private office network (the all-important web of relationships between ministers’ Principal Private Secretaries in different departments). In one sense, of course, these mechanisms are extremely well-versed on brokering agreement between departments warring over policy. It’s what they do for a living. But on the other hand, a Whitehall turf war starts to look very different when two political parties are involved – risking, at worst, the sustainability of the coalition itself.
Maybe the Cabinet Office would rise to the challenge and prove itself able to bang heads together in coalition government as in other contexts. The problem it faces, though, is the extent to which recent years have seen the Cabinet Office evolve towards being a de facto Prime Minister’s Department. Could it still be perceived as neutral if it were regarded as answering to the PM rather than (as traditionally) to the Cabinet as a whole – and hence to one member of the coalition more than the other?
Above all, there’s the question of where inter-ministerial discussions would actually happen. Would Cabinet – and its associated subcommittees – be the where the action takes place on inter-departmental (and hence inter-party) negotiations? Or would the real work shift towards back-room deals between party leaders and party machineries?
One might expect Her Majesty’s Civil Service to take a particularly lively interest in the answer to this question, and to do everything they can to nudge the answer towards the former. Sue Cameron‘s column this week demonstrates the acuteness of civil servants’ hopes and fears for a hung parliament…
The question is whether civil servants will be allowed much of a role in any negotiations. There are hopes that in a hung parliament they would be able to claw back some of the influence that they have lost to political advisers. This would be most welcome given that policy performance in recent years has so often been so poor. I fear it is far more likely that politicos in a hung parliament will insist on their personal aides/courtiers/spin doctors being in charge of all horsetrading.
Sounds about right to me – though I’m much less of a standard-bearer for Northcote-Trevelyan than Sue is, and so view this prospect with more equanimity than she does.
[Read the rest of our After the Vote series.]
by David Steven | Apr 29, 2010 | Economics and development, Europe and Central Asia, UK
If you’re in any doubt of the seriousness of the Greek sovereign debt crisis, read Mohamed El-Erian in the FT. A banking crisis has fuelled a sovereign debt crisis, which could in turn spark another banking crisis (with the whole caboodle, as I have argued, part of a sustained episode of financial instability that stretches back to the 1990s):
A number of things have to happen very fast over the next few days to have some chance of salvaging the situation. At the very minimum, the government in Greece must come up with a credible multi-year adjustment plan that, critically, has the support of Greek society; EU members must come up with sizeable funds that can be quickly released and which are underpinned by the relevant approval of national parliaments; and the IMF must secure sufficient assurances from Greece (in the form of clear policy actions) and the EU (in the form of unambiguous financing assurances) to lead and co-ordinate the process.
This is a daunting challenge. The numbers involved are large and getting larger; the socio-political stakes are high and getting higher; and the official sector has yet to prove itself effective at crisis management.
Meanwhile, the disorderly market moves of recent days will place even greater pressure on the balance sheets of Greek banks and their counterparties in Europe and elsewhere. The already material risks of disorderly bank deposit outflows and capital flights are increasing. The bottom line is simple yet consequential: the Greek debt crisis has morphed into something that is potentially more sinister for Europe and the global economy. What started out as a public finance issue is quickly turning into a banking problem too; and, what started out as a Greek issue has become a full-blown crisis for Europe.
Election or no election, the UK simply cannot afford to sit on the sidelines while this crisis runs out of the control. Alistair Darling needs to stop giving speeches to activists in Scotland and get back to work at the Treasury.
Lord Adonis stopped campaigning as soon as Eyjafjallajökull erupted. Darling must do the same as the UK faces contagion from Eurozone turmoil.
by David Steven | Apr 20, 2010 | UK
Blimey:
Stewart Jackson, Conservative shadow communities and local government minister and the party’s regeneration spokesman, was reported by audience members and rival parliamentary candidates to have told a public meeting organised by Peterborough Senior Citizens Forum last month that, in Afghanistan, “fifteen year old Muslim boys’ initiation rites are to rape a woman and shoot a foreigner”.
Jackson, who is the sitting MP in Peterborough, confirmed to this magazine that he had made the comments. But he said that the comments were made in reference to the situation on the ground in Afghanistan. He said they were “100 per cent” not his personal opinion but rather a view expressed in a briefing he had received on Afghanistan from the Ministry of Defence (MoD).
He said: “During a public discussion I referred to claims made at an MoD briefing on the situation in Afghanistan, this was part of a serious debate about complex issues and I hope no one is using it to try and score political points.”
But a MoD spokeswoman said that such a description of the situation in Afghanistan would be a complete departure from normal MoD practice. She said: “I can’t say that nobody from the MoD has ever said that but that is not the sort of thing we would ever say in an average MoD briefing”.
Update: This plays into an obsession on the fringes of the right with Muslim ‘rape gangs’. Our old friend, Mark Steyn, is a key promoter of this idea…
Update II: Stewart Jackson appears to have related concerns about the UK’s ‘broken society’:
The heart of Middle England is destined for asylum meltdown… News that the results of New Labour’s failed immigration policy are rising levels of violence and lawlessness on the streets of Peterborough come as no surprise to me – or anyone else who lives in the city…
Anyone walking through the city centre can see increasing numbers of young unemployed Kurdish men hanging around and residents are increasingly fearful as their area is used as a dumping ground for such ethnically mismatched groups like Afghans, Kurds and Pakistanis who riot and fight…
Tensions are growing not just between different ethnic minority groups – but also across the whole city – Pensioners, young families, professionals, Pakistanis. People are angry and feel impotent. When I knock on doors, people tell me that they’re fed up with seeing young men on street corners – mainly asylum seekers – intimidating old people and young women.
They’re fed up with homes being bought up in their neighbourhood by unscrupulous landlords milking the Housing Benefits system to let out to illegal immigrants used as cheap labour. And they’re angry that police resources are being diverted to keep warring factions in the city centre apart, whilst their streets suffer increased burglaries, robbery and car crime.
Update III: The UN has called rape a ‘profound’ crisis in Afghanistan.
Our field research also found that rape is under-reported and concealed and is a huge problem in Afghanistan. It affects all parts of the country, all communities, and all social groups. It is a human rights problem of profound proportion.
Women and girls are at risk of rape in their homes, in their villages, and in detention facilities. Rape is not unique to Afghanistan, but the socio-political context does have particular characteristics that exacerbate the problem. Shame is attached to rape victims rather than to the perpetrator. Victims often find themselves being prosecuted for the offence of zina, otherwise known as adultery.
For the vast majority of victims, there is very little possibility of finding justice. There is no explicit provision in the 1976 Afghan Penal Code that criminalizes rape. Thus, the UN recommended that the legislation on the Elimination of Violence Against Women make explicit reference to rape, contain a clear definition of rape in line with international law, and hold the government responsible for tackling this ugly crime.
The question remains, though, whether there is any evidence of it being used as an ‘initiation rite’. I think Stewart Jackson is going to have to give more details about who from the MOD briefed him and exactly what they said.
by David Steven | Apr 14, 2010 | UK
Daniel Hannan – Euro MP and the most influential politician on the Internet – has been finding the election campaign pretty stressful. Fortunately, he’s an early adopter of what I am told is the latest new television sensation from across the Atlantic:
In the evenings, Mrs H and I unwind by watching The Wire which is, for my money, quite the best cop show around. Spreading itself comfortably over five series, it uses the space to develop its characters. There are no straightforward goodies or baddies here, any more than in Shakespeare’s plays. And the dialect is addictive. Several times, on the campaign trail, I have had to force myself to say “yes” rather than “true dat” or “mos def”.
This is much more than just downtime though.
Jimmy McNulty – in real life an Eton boy like David Cameron (“I didn’t know him then but I do now. I know his wife a bit because my best friend used to be crazy for her. When she wound up marrying Cameron, we were like, ‘Why do you want to be with that fucking Tory boy?'”) – has endorsed the Conservatives, sending Toby Young weak at the knees (“Dominic West is a genuinely cool famous person – a fantastically gifted actor and a movie star in the making. It was almost as if Jack Nicholson had come out for George W Bush.”)
Not only that, Hannan reckons that The Wire provides a model for policing Britain’s lawless streets:
The programme doesn’t immediately look like an endorsement of the Tory policy of elected police commissioners. On the contrary, it often shows honest rozzers being made to do the wrong thing by vote-grabbing politicians.
Then again, perfection is not of this world. An elected sheriff might make the wrong call, just as an unelected chief constable might. The difference is that we can’t get rid of the unelected chief constable… The last word ought surely to go to local people.
And you know what? Unless The Wire is lying, those Baltimore coppers are out patrolling every day. They have to, you see: their bosses answer to local voters. Messy as it can sometimes be, democracy is a pretty good idea.
As the man says, true dat. Mos def.
