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A Game of Votes: The Lowdown on the United Kingdom's May Election

April 16, 2015 Topic: Politics Region: Europe Tags: United KingdomElections

A Game of Votes: The Lowdown on the United Kingdom's May Election

Could we see a hung parliament?

The United Kingdom goes to the polls on May 7, 2015. Opinion polls indicate that neither of the country's two major parties, the Conservatives (also called Tories) and the Labour Party, is likely to command an outright majority. Complicating matters, the Tories' coalition partner in the last government, the center-left Liberal-Democrats, are trailing in the polls, fourth place behind the anti-immigration United Kingdom Independence Party (UKIP). In the north, the Scottish Nationalist Party (SNP) appear on the verge of obliterating Labour and capturing a clear majority of Scottish seats.

The UK 2015 elections are exceedingly messy, the outcome very uncertain and the consequences could lead to greater political instability in the country having the “mother of all parliaments.” British historian Simon Jenkins in his A Short History of England (2011) warned "...the asymmetric nature of the Westminster parliament, with England's government in partial thrall to MPs from the semi-autonomous Celtic fringe, cannot be sustainable in the long term." Indeed, the 2015 election could be dubbed the “Revenge of the Celtic fringe,” since what happens in Scotland and, to a lesser extent, in Wales and Northern Ireland will be critical to the shape of the British nation.

On the surface, the "big" election issues are the economy, income inequality (which touches upon the issue of better management of the National Health Service, or NHS) and immigration. The UK is currently enjoying moderate economic growth, and inflation is under control. However, the sharp economic downturn in 2008-2009 made income inequality painfully more evident.

The question for many British voters is who will be a better steward of the economy going forward: Prime Minister David Cameron or his Labour rival, Ed Miliband? The former presided over the economy's stabilization and its recovery, but imposed harsh austerity measures. Cameron wants another term to stimulate greater economic growth, which will help generate employment and reduce income inequality.

In contrast, Miliband favors raising taxes on the wealthy, more programs for the poor and directing more tax money into the NHS. Miliband's approach is more statist and in many ways harkens back to Labour's left wing of the 1970s, represented by the likes of Michael Foot and Tony Benn. British industry is wary of Miliband, but he appeals to a beleaguered working class.

Immigration is an ugly issue in the 2015 election. According to opinion polls, 45 percent of Britons consider immigration to be the nation's most formidable challenge. In some quarters, it is believed that foreigners are taking too many jobs and keeping downward pressure on wages. The problem is that the Conservative and Labour approaches to the issue have left a degree of ambiguity in many voters’ minds.

In contrast, UKIP's policy stance is clear—radically reduce the flow of immigrants, which strikes a chord with some Britons. UKIP's views have been called racist and the party's appeal is limited, but it could eat into Conservative votes in a number of constituencies and help Labour.

While immigration, income inequality and the economy are the major issues of the 2015 British election, the stealth issue is the pending destruction of the Labour Party in Scotland. While Wales and Northern Ireland are not demonstrating strong separatist tendencies, last September, Scotland held a referendum on whether or not to secede from the United Kingdom. The separatists were defeated, capturing 44.7 percent of the vote, compared to the 55.3 percent who preferred to remain part of the United Kingdom.

The Scottish issue, however, has not gone away. Despite the referendum’s failure, there is a lingering appeal for an independent, or more autonomous, Scotland. The 2015 election has brought this issue sharply into focus.

Labour has traditionally done well in Scotland, having a strong appeal among the working class. In the 2010 elections, Labour captured forty-one seats out of a possible fifty-nine. The Liberal-Democrats won eleven seats, and the SNP an anemic six seats and the Conservatives one seat.

But the political landscape has changed. Opinion polls indicate that the SNP is enjoying a surge in popularity at Labour's expense. Under the leadership of their new leader, Nicola Sturgeon, the party of separation appears reinvigorated. Going into the May election, Labour held forty seats, but a recent ITV News/Con Res poll indicates that the party could lose twenty-nine seats to the SNP. Such a change could radically tip the balance of power in parliament.

What is the likely outcome of the May election? The Tories will probably lose marginal ground to UKIP; Labour is likely to suffer a loss of Scottish seats; and the Liberal Democrats are likely to be loose votes to Labour, due to their coalition with the Conservatives during which there were cuts in social spending. In Wales, Labour is likely to retain the most seats, followed by the Tories and UKIP. The Welsh separatist Plaid Cymru is expected to finish fourth with three to four seats.

The end result is that the Conservatives and Labour will win the most seats, but both will be short of an outright majority. This could potentially lead to a hung parliament in which no one party can form a government. This could leave the Tories seeking to form a new coalition with the Liberal Democrats as they did in 2010, but the latter party may not be able to offer the needed seats for a majority. A potential Conservative-Liberal Democratic alliance could need more Northern Irish parties to gain a majority. In this electoral contest, Wales is not Scotland (with those favoring independence at 6 percent), but if every seat counts, even the separatists could be courted for their three to four seats.

Labour faces the same daunting electoral jigsaw as the Tories. It could seek to form a coalition with the Liberal Democrats and possibly one of the Northern Irish parties (with the notable exception of Sinn Fein (which wants to join Ireland). Labour is also leery of an alliance with the SNP. The Labour Party's shadow chancellor Ed Balls stated in early April: “The SNP is a party which seeks to break up the United Kingdom.”

Yet, there is a pressing need to form a government in the aftermath of the vote. The SNP has already stated that it will not form a government with the Tories, but might entertain some type of accommodation for Labour. What could happen is that Labour enters into an informal relationship with the SNP with support for particular votes and issues. This would mean a Labour minority government dependent on the SNP, hardly an optimal situation. This would depend on how much Miliband wants to be prime minister.

The other option is that none of the parties is able to form a government and new elections are held. In the interim, a caretaker government would administer to the affairs of the state.

The post-election landscape must also be seen with a view to the next major political event—the Conservatives’ push for a referendum in 2017 on the whether the UK stays in the European Union. If the Conservatives win the 2015 election, they can be expected to call for a referendum, possibly moving up the timing from 2017 to 2016. While this would appease the Tory hard right and UKIP (as EU membership is associated with immigration and job losses), it would inject considerable uncertainty over the UK’s attractiveness for business and investment.

There is already foreign-investor nervousness over the potentially sloppy nature of the May election’s impact on the long-term value of sterling, with data from the Debt Management Office indicating that in January and February, nonresidents sold a net 14 billion in UK pounds. According to one British journalist, this was “an even bigger sell-off than during the white heat of the financial crisis in early 2009.”

Britain has a lengthy history of stable parliamentary government, in which the two major parties have dominated, with occasional exceptions (as in the 1970s). The May 2015 elections offer a potential departure from the script, making British politics look more like Game of Thrones minus dragons and eunuchs, but with the Celtic fringe, namely Scotland, hanging over the political landscape. If it comes to it, SNP support for a Labour government will not come cheap. Although the SNP lost the 2014 referendum, it could be the real winner in 2015.

Scott MacDonald is the Head of Research for MC Asset Management Holdings, LLC, a wholly owned subsidiary of the Mitsubishi Corporation. He is the co-author of the forthcoming State Capitalism’s Uncertain Future. The views expressed are his own and may not reflect those of MC Asset Management Holdings, LLC, the Mitsubishi Corporation or their affiliates.

Image: Flickr/The Prime Minister's Office