Politics & Policy

David Cameron’s Ruthless Path to Victory

Cameron on election day (Dan Kitwood/Getty)

EDITOR’S NOTE: A version of this article first appeared at CapX.

‘You gotta do what you gotta do,” a reelected Bill Clinton told an aggrieved Bob Dole, who was complaining about Clinton’s attack ads. David Cameron went one better. Dole was an opponent. Nick Clegg was his deputy. Ruthlessness in a political leader is a virtue. After the disappointment of the 2010 election, David Cameron more than made up with Thursday’s stunning result. The Conservatives had begun 2010 polling 40 percent but ended up with 36.4 percent of the U.K. vote whilst the Liberal Democrats slightly increased their share. On Thursday, the Conservatives increased their share by a half point but squeezed the Liberal Democrats, whose share fell by 15.1 points, losing 49 of their 57 seats. Clegg was one of the eight to have kept theirs.

Few politicians get a second chance. David Cameron earned his with an election win for the history books. Thanks to his decision to hire the Australian campaign strategist Lynton Crosby to run his reelection, everything that went wrong in the 2010 campaign was put right in 2015. Whilst a Conservative parliamentary majority seemed beyond reach, there was a guaranteed way of not winning a majority, and that was not to aim for one. The path to a majority was by targeting Liberal Democrat seats. Crosby and Obama’s 2012 campaign manager, Jim Messina, who was also working on the Conservative campaign, shoved the proverbial hose pipe down the throats of Cameron’s drowning coalition partners and turned the tap on full.

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Whilst his twelve-seat majority is nine less than John Major’s after the 1992 election, the prime minister is in a far stronger position. The political landscape is more favorable to Conservatives than it has been for a generation. Labour has paid the price for treating Scotland like a huge pre–1832 Reform Act rotten borough. As for UKIP, in the South, it is wandering off into the political wilderness whining about electoral reform, but it could still retain the capacity to draw off Labour votes in the north, to the Conservatives’ benefit.

Few politicians get a second chance. David Cameron earned his with an election win for the history books.

Although Major’s and Cameron’s political instincts are similar, the two are temperamentally quite different. It is hard to believe that Cameron would have inflicted on a divided Conservative party the agony of pushing the Maastricht treaty through the House of Commons after the collapse of the European Exchange Rate Mechanism (ERM). Indeed, Cameron is the only British prime minister to have vetoed a prospective EU treaty. In this respect, he is more in the mold of former Labour prime ministers Harold Wilson and Jim Callaghan, who used renegotiation and the 1975 referendum on Europe as a means of party management. There is hardly going to be a backbench revolt on the legislation to authorize another one. Unlike in the 1990s, when the EU was on a march to federalism, today the EU’s energies are absorbed dealing with the dysfunctionalities of European monetary union.

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As for the EU referendum itself, the election and last year’s independence referendum show that voters north and south of the Anglo-Scottish border prioritize the economy. So far, debate about Britain’s membership has revolved around the costs of leaving the EU. Advocates of withdrawal have yet to demonstrate the economic benefits of leaving. Following the Gordon Brown playbook used to block Tony Blair’s aim to take Britain into the euro, the Treasury will doubtless produce an economic assessment to underpin the government’s case for remaining members of the EU. It is likely that the prerequisite for a “Brexit” is having a government that not only makes the economic case for withdrawal, but has policies showing how Britain would make a success of it. In contrast, UKIP’s most eye-catching economic policy this election was for abolishing hospital car-parking charges, illustrating the yawning credibility gap advocates for withdrawal must close.

Neither is Scotland the headache for the government that it might appear from the Scottish National party (SNP)’s sweep of 56 of Scotland’s 59 seats. There is no objective need for the Cameron government to go an inch farther than the pre-referendum vow in handing more powers to the Scottish parliament. It does not have to solve the insoluble West Lothian question and rectify the imbalance caused by Scottish MPs’ jurisdiction over English matters which in Scotland have been devolved to the Scottish parliament.

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The West Lothian question becomes incendiary if Scottish MPs end up deciding which party governs Britain — as it looked like they might have before the bombshell exit poll was announced the moment the polls had closed. SNP members instead will constitute just another group sitting on the Opposition members’ benches. Boundary reform should reduce the proportion of Scottish seats, but there is a compelling reason for the Conservative government to do as little as possible: The threat of the “Tartan Terror” galvanizing reluctant Tory voters in future elections means that it is Labour, not the Conservatives, who have the incentive to come up with a credible answer to the West Lothian question.

#related#Rather than Europe and Scotland, the big threats to the Conservative government are likely to be economic. Last year’s public-sector net borrowing of £87.3 billion (around 5 percent of GDP) was forecast by the Office for Budget Responsibility (Britain’s equivalent of the CBO) to turn to a small surplus a year before the next election. Since then there have been a raft of spending promises and a pledge to raise the personal income-tax allowance, which will further erode the tax base. The good news is that any drift from the projected path of borrowing reduction will have to be rectified exclusively from the spending side of the ledger. As the Major government showed with its mammoth tax-raising budgets after the 1992 election, the political consequences of winning an election on a tax-cutting platform and then raising them once back in office are horrendous. Even without legislating against tax increases, the best guarantor of no rise in taxes is Chancellor of the Exchequer George Osborne’s ambition to win the 2020 election and succeed Cameron as prime minister.

But the government’s biggest economic challenge is Britain’s stagnant productivity. Without productivity growth, planned government spending becomes less affordable and living standards stagnate. In the 1940s, Joseph Schumpeter foresaw capitalism exhausting itself. “The rate of interest is converging towards zero and the whole economic system is becoming increasingly static,” Schumpeter wrote in Capitalism, Socialism and Democracy. There is little sign that the Treasury has grasped the productivity nettle. Ultra-low interest rates reward inefficient capital. Government policies are misallocating billions of pounds in wealth-destroying wind and solar farms and high-speed-rail projects, reducing the economy’s productive potential. If you need to subsidize it, chances are it’s bad for the economy. Productivity growth is the key to delivering the freshly elected Conservative government’s economic objectives. On this it will be judged in five years’ time.

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