Summer Recess Lexcomm

21/07/2011

Difficult times for Cameron as the summer recess approaches
 


– David Cameron should survive this period but his Government, and his own personal authority as Prime Minister, are damaged

– Ed Miliband has led his party effectively through ‘Hackgate’ and has gained credibility with the political class but has not yet made a breakthrough with the voters

– The politics of the crisis have pushed the Liberal Democrats closer to Labour and will allow them to be more assertive in Government
 


David Cameron has faced the most difficult two weeks of his leadership and will hope that the pressure on him will ease as MPs depart for the summer recess. His decision to employ former News of the World editor Andy Coulson, his close links to Rebekah Brooks, and even his trip to Africa in the midst of the crisis have raised doubts about his judgment. While Cameron should survive, some commentators have suggested that the phone hacking scandal could come to haunt Cameron in the same way that the Iraq War dogged Tony Blair’s premiership.


The Coalition remains stable but this period has shown that scandals can creep up and swiftly engulf a Government. As Cameron said in his statement to Parliament today, ‘You live and you learn. And I have learned.’ He will have to show better judgment in spotting the potential issues that might blow up and have a surer touch in managing crises that cannot be avoided. Conservative backbenchers are not so concerned about his initial decision to hire Coulson but in his day to day management of the crisis.


It has certainly been a good crisis for the Opposition. While the intervention by former Prime Minister Gordon Brown misfired, his protégé Ed Miliband has been on the front foot throughout. Arguably his decisive actions led directly to News Corporation’s decision to withdraw its bid for the remaining stake in BSkyB. He has been widely praised by the political class and as a result will be spared calls for him to be replaced in the run up to the Labour Party conference. Recent polls have improved his personal ratings which are at similar levels to David Cameron’s but Miliband has not yet made a definitive breakthrough with the public. He will look to consolidate on this period and push the theme, developed over recent weeks, that David Cameron is light on detail, weak in judgment and in thrall to business elites.
 


The politics of the crisis have pushed the Liberal Democrats closer to Labour. The junior partner in the Coalition shares the Labour leadership’s concerns about the concentration of media ownership and the Liberal Democrat’s overt hostility to News International has served them well during this period.  Recent polling is far from consistent but broadly the Liberal Democrats have enjoyed a small improvement in their standing over the past two weeks and this puts them in a stronger position to be more assertive within Government, coming so soon after their successful battle over health reform. Nick Clegg has had a good crisis and the period has helped to differentiate his party from his Coalition partners.

A new media landscape

Rupert and James Murdoch’s remorseful appearance before the Culture, Media and Sport Select Committee on Tuesday shored up the share price of News Corporation and answered some of their critics. While BSkyB and News International will remain an important part of the British media scene, News Corporation as a political force is significantly diminished. The takeover of BSkyB is unlikely to be resurrected any time soon, certainly not before the outcome of the Leveson inquiry, which will consider issues of media ownership. While previous changes in media ownership have tended to favour News Corporation, the inquiry will be under significant pressure to recommend more robust plurality and ‘fit and proper’ tests. The Prime Minister confirmed that the inquiry may report within a year, allowing the Government to publish a White Paper in autumn 2012 followed by legislation in Spring/Summer 2013, a full year before the Government planned.
 

More widely relationships between politicians and the media will undoubtedly change, not least because all meetings between members of the press and Ministers, senior civil servants and special advisers, including social meetings, are to be published quarterly following a change to the Ministerial Code.

Populist drift?


The decision of the political class to unite in bringing down a commercial takeover deal will raise concerns among multinationals with interests in Britain. Over recent years governments have distanced themselves from takeover decisions, particularly when a foreign owned firm is involved, because political leaders understood that businesses need and value consistency. While politically understandable, the decision of the Government to publicly speak out against the News Corp bid could have lasting consequences for Britain’s reputation in the global business community.
 

Following the banking crisis the general political drift has been towards tighter regulation and diminished faith in free markets. This trajectory has been reinforced by recent events. The watering down by the Labour leadership of pro-market policies promoted under Tony Blair puts the Conservatives in a difficult position. There are a wealth of populist campaigns, similar to the blocking of News Corporation’s bid for BSkyB, that Labour might look to promote. David Cameron has always strived to not be seen as in thrall to vested interests and following this crisis he will look to position himself as both cautiously supportive of business but also on the side of the consumer.

Looking ahead to the summer

Whilst further revelations could keep ’Hackgate’ on the front page we would expect attention to swing back to the major political issue of our time: the economy. After the shock fall in growth at the end of last year, George Osborne will be hoping the second quarter growth figures, due out in August, show conclusively that the economy is returning to growth. However, with inflation dominating public concerns even a stellar rise in growth is not likely to improve the public’s view of the Government’s handling of the economy. The recent announcement of double digit rises in energy prices were greeted with widespread dismay. The trade unions have talked up a summer of discontent, in protest against stagnating public sector pay and pension reforms, but so far this has largely failed to materialise, and public opinion is not with the unions.
 


September looks to be an unusually busy political month with the final stage in the Commons of the troubled Health and Social Care Bill and the publication of the draft boundaries for the 2015 General Election. With the number of constituencies to be cut from 650 to 600 a significant number of sitting MPs will face having to fight for a new constituency, often in direct combat with neighbouring MPs. Looking ahead to the party conferences, Ed Miliband will celebrate his first year in office, and will hope to build on the News Corp row whilst Nick Clegg will hope to avoid major rows during his party conference. David Cameron will look to secure his position with his party, aware that his backbenchers are growing restless and increasingly mutinous. Research by Nottingham University’s Philip Cowley found that backbench dissent amongst Government MPs is running at a historically high level, with a rebellion in almost one in every two votes in the Commons. Ed Miliband’s proposal to abolish bi-annual elections to the Shadow Cabinet, supported by MPs and almost certain to be endorsed by Labour’s autumn conference, will enable him to reshuffle his team, possibly following conference.
 
Legislation round-up


While the current session of Parliament will be one of the longest in recent history, departmental business plans published in June indicate that the Coalition Government is falling behind its legislative milestones. There are concerns on the Conservative benches that further constitutional reform, in particular House of Lords reform, could come to dominate the second half of the session, and that Peers will seek to disrupt the Government’s wider legislative programme.
 


After an intense period of political manoeuvring, the Health and Social Care Bill, which aims to modernise the NHS through significant structural change, finally finished its Committee stage in the Commons last week. The final stage of the Bill’s passage through the Commons will take place during Parliament’s brief return in September, followed by what is likely to be a lengthy and difficult period of scrutiny, dominated by a sceptical and weighty contingent of medical experts, in the House of Lords.



In terms of anticipated legislation, reports suggest that a White Paper to reduce regulatory burdens on industry will be delayed until October and the Government’s Social Care Bill is now not expected until 2012.


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