2012 New Year Lexcomm

06/01/2012

2012 New Year Lexcomm (PDF)

We enter 2012 sensing the tension in all three political parties; it’s not exactly going to plan for any of the party leaders.  The safe money is on a good year for David Cameron but we shouldn’t underestimate the scale of the challenges that lie ahead.  We all know how easily events can derail the best laid plans and the Prime Minister will be well aware that he remains vulnerable to international economic forces well beyond his control.
CAMERON CONFIDENT POST VETO
The Prime Minister will be starting the New Year feeling quietly confident.  His veto on the euro bailout has proved popular in the polls and buoyed the Tory right.  However, in doing so, Cameron has let out the genie which could contaminate the party’s brand, which he worked so hard to de-toxify in the public mind. 

Polling shows that the nation respects rather than loves Cameron but in the absence of any other strong or popular senior political figure (the ebullient Mayor of London aside) this won’t trouble him or his close advisers too much. Thatcher, too, was respected, not loved.

One headache for Cameron is the growing clamour from his backbenches for a reshuffle.  He hates the idea of reshuffles but knows that he needs to give some hope to frustrated backbenchers. Tory MP Louise Mensch wondered publicly what she had to do for a promotion but lots of her male colleagues feel that at least she has her gender going for her. The other issue is when — April to coincide with the Queen’s Speech, or May after the local elections or just ahead of the summer recess in July are all possibilities. 

A major rejig of the frontbench is unlikely but reshuffles have a tendency of becoming more complex than intended; just one difficult individual and the whole pack of cards has to be re-dealt. One possibility is a horse-trading of departments, with the Liberal Democrats exchanging their Secretary of State positions. 

Defra Secretary, Caroline Spelman and Justice Secretary, Ken Clarke, are mooted for departure but events could make Cameron’s decisions for him. Later this month the CPS will decide whether or not to pursue criminal charges against Energy Secretary Chris Huhne, which could trigger an earlier reshuffle.

CLEGG TO ASSERT HIS INDEPENDENCE
The Liberal Democrat leader continues to suffer in the polls but as the Coalition enters a new phase, post the European Treaty veto, we can expect Nick Clegg to be increasingly assertive in distancing himself from his Coalition partners.  While unpopular with the electorate, Clegg is in a relatively secure position, given his main frontline rivals, Huhne and Business Secretary Vince Cable, are in no position to challenge him.

Clegg has potentially made himself a hostage to fortune in his personal crusade to deliver Lords reform.  If by some miracle he succeeds, it will please his grassroots but will leave the wider public nonplussed.  However, alongside Vince Cable, Clegg is also pursuing a more voter-friendly agenda and enjoying maximising the political capital to be gained from the banking sector’s bonus season. 

Taxation will also remain a major theme with increased pressure on the Treasury to raise the tax allowance threshold to the politically significant £10k level, although Clegg appears to have talked down the prospect of a ‘Mansion Tax’ in recent interviews.  Clamping down on tax avoidance is one issue which has united the Coalition parties and will be a major plank of the Budget in March.

DIFFICULT TIMES FOR MILIBAND
Labour leader Ed Miliband has had a bad start to the New Year with bubbling criticism from all sides. The feeling that he’s not quite breaking through is resonating not just across Westminster and the media, but more worryingly for him, amongst Labour party members. Starting the year with criticism from former trusted advisor Lord Glasman, the Abbott twitter gaff and topped off by the leak of the party’s strategy memo has only served to heighten the pressure on Miliband to get a grip. 

The leaked memo revealed that the leadership intends to highlight the ‘squeezed middle’, focusing on the ‘cost of living crisis’. Consumer issues will continue to dominate and Miliband will gain political capital in appearing to be on the side of consumers against ‘vested interests’ such as the energy companies. Miliband will aim to ape the success of his condemnation of News International, his highlight of 2011 and will hope that the appointment of former civil servant Tim Livesey will help.

Speculation about his leadership and greater scrutiny of potential of rivals, notably Shadow Home Secretary Yvette Cooper, will continue.  A challenge is unlikely but if his ratings haven’t improved as he approaches his two year anniversary in September his future will be in doubt. 

To avoid this situation over the next year he needs to be seen to be credible on the economy; difficult when Labour continues to be seen by voters as primarily to blame for the current economic difficulties.  But on a more prosaic level his problem is presentational and his style is turning off the voters. While easy to identify, this problem is notoriously difficult to fix.

A YEAR OF NATIONAL PRIDE?
Ministers hope the Olympics will be a triumph dominating the second and third quarters of the year.  Representing Londoners at the Games will be a major prize for the victor in the Mayoral election.  Ken Livingstone will flag up his role in securing the Olympics but it is incumbent Mayor, Boris Johnson, who is expected to win, barring an upset.  However, it could well be a close run thing and is unlikely to be a landslide victory.

With the extra bank holiday for the Diamond Jubilee, the country could be bathed in a sport and royal-inspired feel good factor; not unhelpful for a Government struggling to convince the voters that the good times are around the corner.

THE AGE OF AUSTERITY CONTINUES…
The cuts will really start to bite in 2012 and this will inevitably lead to lots of firefighting and potentially more u-turns from the Government.  It will be a crucial year for Chancellor George Osborne and in the Budget in March he will aim to show that the economy is turning a corner and the Government’s growth agenda is working.  Many new measures, including investment in infrastructure and credit easing for small businesses have been trumpeted, and Osborne will now be judged on the extent which these measures are taking effect.

Whatever your reputation as a political strategist, the Treasury is never a comfortable place to be in a stagnating economy and a reputation for political cleverness can become counterproductive against such a background.  Despite Osborne’s strong grip on the bits of government that really matter, his presentational skills will be severely tested in 2012. 
Given the dependence on the private sector for growth, regional disparities in growth across the UK will become an increasingly important hot topic, and one which will be highlighted by the Opposition.

A NEW DAWN FOR LOCALISM
This year localism will emerge from its obscure beginnings to be a major feature of the political landscape. The Health and Social Care Bill is expected to gain Royal Assent in April and the Act will see local authorities take responsibility for public health. 

The inaugural elections for Police Commissioners, a radical innovation, will take place in November, as well as elections for Elected Mayors in those cities who vote in favour in referendums in May.  It will be interesting to see who stands in these new positions, with former frontline politicians likely to put themselves forward (including former Labour Welsh Secretary Alun Michael as Police Commissioner for South Wales).  This could create new power bases and a stronger voice for the regions but could also be a political danger for the government if extremist candidates win the posts of police commissioners in low turnout polls.

Alongside this, ongoing local disputes are likely (and possibly ministerial resignations) over major infrastructure developments, particularly High Speed 2.  It will be interesting to see the outcome of Osborne’s commitment to investigate the option of a hub airport in the Thames Estuary in the Autumn Statement. 

With the economic and political uncertainties, 2012 could be a rollercoaster year for all three party leaders. However the fundamentals – a relatively stable Coalition with a secure majority – are unlikely to change. The public doesn’t much like the cuts or some of the other government policies but nor are they much convinced with the alternatives.

Lexington will reveal latest thinking from the think tanks on localism in the next Think Tank Quarterly, to be published next week.

THE POLLS: STATE OF PLAY
2011 saw a lot of jockeying for position but the polls remained constant. Labour held a steady lead of approximately five percentage points over the Conservatives – only briefly extending its lead around ‘Hackgate’.  However, at the close of the year the turmoil brought about by the Euro crisis and the subsequent veto led the Conservatives to overtake Labour in the polls.

Ominously for both Ed Miliband and Nick Clegg, David Cameron has opened a dramatic lead in the leadership stakes.  Prior to Christmas, David Cameron – in part because of the veto – held large leads on personal qualities including ‘strong’, ‘decisive’ and ‘charismatic’.  The next twelve months are subject to events as much as any other political year, but how the leaders respond will be just as important to their party’s fortunes.

On the issues front, the economy still leads the way, with 81% citing it as one of the three most important issues facing the country at this time; this is followed by immigration and asylum, pensions and Europe.


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