Britain’s No-Win Election?

With Labour trailing the Conservatives slightly in opinion polls, the British election on May 6 could well produce a “hung” parliament, in which neither major party obtains a majority and the Liberal Democrats hold the balance of power. Depending on which party wins more seats, either Labour’s Gordon Brown or the Conservatives’ David Cameron will become prime minister with the Liberal Democrats’ support.

The surprise is that the Conservatives are not polling far ahead of Labour. After 13 years in power, Labour started the election with a huge disadvantage: the legacy of Tony Blair. From being Labour’s most potent asset in 1997, Blair turned into the party’s greatest liability after the Iraq war, and had to be practically forced out in 2006.

His successor, Chancellor of the Exchequer (finance minister) Gordon Brown, was well described by Blair as “clunking.” A man of charm and humor in private life, he is relentlessly dour in public. In Britain’s first ever “presidential” television debate the youthful Nick Clegg stole the show for the Liberal Democrats with his freshness and directness. David Cameron was polished but vague, and the jowly Brown came across as gun loaded with statistics.

But the statistics were not as good as they should have been. Brown’s reputation for fiscal prudence evaporated with the Great Recession.

Nevertheless, it is the Great Recession that keeps Labour in contention, particularly in the light of the Conservatives’ pledge to start cutting public spending the moment they take power.

This makes people anxious for their jobs. Most people – bankers and many “experts” excepted – are instinctive Keynesians, even if they have never heard of John Maynard Keynes. At some level, they understand what Keynes called the “paradox of thrift”: if households and firms are forced to reduce their expenses, and the government simultaneously cuts spending, unemployment will rise, because one person’s spending is another’s income, and the outcome will be less spending and less income all around.

Moreover, now is not the time for a political party to be seen to be in cahoots with the bankers. Although there is no real British equivalent of the American revolving door between Washington and Wall Street, the Conservatives are widely considered to be friends of the City of London and soft on rich tax evaders like Lord Ashcroft and Zak Goldsmith. Although the MPs’ expenses scandal – parliamentarians claiming reimbursement for dubious expenses – hit both main parties, the most egregious cases involved wealthy Conservative MPs.

And even though inequality of wealth and income in Britain increased in the 13 years Labour has been in power, this is thought to be something that a left-wing party might seek to correct, whereas there is no similar expectation for a party of the right. In short, when the power of money is under attack, a party that represents money will have a harder time.

Labour has an obvious interest in fighting the election on their handling of the economic crisis. The Conservatives would have done better to support them on this, while focusing their attack on the government’s economic record as a whole –especially Labour’s addiction to centralization and over-regulation. But this is going to be difficult to do because their naïve Shadow Chancellor, George Osborne, seems determined to put “cutting the deficit” at the heart of the Conservative program.

Spending cuts, he argues, would restore credibility to Britain’s public finances, thereby quelling the anxieties of businesses, investors, and consumers about future tax increases and inflation. A more certain future would restore confidence, boosting private investment and ensuring a robust recovery.

Public spending cuts come more naturally to Conservatives, and they have – despite their lack of candor – attempted to make a virtue out of this necessity. The Conservative manifesto ‘An Invitation to Join the Government of Britain’ is merely a grandiloquent way of saying that under a Conservative government the people will have to look after themselves.

Labour, by contrast, argues that immediate spending cuts would wreck the recovery – that the hole in the economy, not the government budget deficit, is the problem needing most attention.

In practice, both parties are afraid of their convictions. The Conservatives’ pledge to start cutting the deficit immediately amounts to only a 1% reduction in the coming year. Any promise of deeper cuts would, they feel, be electoral suicide, even though their model of the economy tells them that the government should be smaller, and that the deficit is unnecessary and even damaging.

Labour’s model of the economy implies maintaining the deficit for as long as needed, and even increasing government spending if the recovery appears to be flagging. But Labour is too afraid of the markets to say so openly. So, like St. Augustine, they promise virtue, but not until next year.

In other words, neither major party can afford to blurt out the awkward truth: how much deficit reduction any government can achieve will depend on what happens to the economy over the next five years, and no one can say anything for certain about that.

So the main parties vie with each other in their promises not to cut public services. Labour will not cut spending on unspecified “front-line services.” The Conservatives will not cut spending on health, international aid, and defense, similarly leaving unclear just where the cuts will be made. Only the Liberal Democrats are committed to a big cut: scrapping Britain’s nuclear submarines.

Finally, all the parties promise big constitutional changes. The Conservatives want to reduce the size of the House of Commons by 10%. Labour wants to reduce the House of Lords’ membership by half and hold referenda on making it wholly elected and on changing the voting system. The Liberal Democrats want MPs to be elected by proportional representation.

In a hung parliament, Britain’s ancient constitution would become a pawn among the parties as they haggle for a share of power. In that case, voters would get both more and less than they bargained for.