British Politics since 1997 New Labour and After

British Politics since 1997 – New Labour and After Iain McLean, Professor of Politics, Oxford University Iain.mclean@nuffield.ox.ac.uk February 2008 sequence • Lecture 1. Party politics since 1997 • Lecture 2. Devolution – Scotland, Wales, and Northern Ireland • Lecture 3. The government of the economy Lecture 1 Party politics since 1997 Outline of lecture • • • • Labour’s consistent lead since 1997 How did they get it? Why is it faltering now? Difficult issues: – Devolution; Europe; Russia; Iraq/Afghanistan; economic downturn • Effects of the electoral system • Have the Conservatives got it right at last? How did Labour get its lead? • Long-term tend: – Lab best for ‘soft’ subjects (health, employment) – Cons best for ‘hard’ subjects (running the economy, immigration, law and order) • Step change in September 1992 – Labour’s lucky loss – Cons lose reputation for economic manag How did it hang on to its lead for so long? • Brown 1997: – Stick to spending targets – Bank independence • Blair the great showman • Conservatives go for core vote (anti-EU, anti-migrant) – Too few to win an election Why is it faltering now? • • • • • Running out of talent? Iraq The great showman departs Gordon Brown is blind in one eye Lib Dems doing poorly – Lab needs them to take seats from Cons Difficult issues • Devolution – all 3 territories have nationalists in government • Europe – opinion Eurosceptic but Lab seems to have got over it (constitution, Cen Eur migration) • Russia; energy security – looming issue • War: Iraq getting better; Afghan worse? • Economic downturn – govt of day usually blamed Effects of the electoral system • Responsiveness and bias – The cube law Si/Sj = (Vi/Vj)3 – Exaggerates lead – Bias to Lab (100 seats at equal votes) – Spatial bias – Cons weakness in northern England, Scotland, Wales Have the Conservatives got it right at last? • Always torn between ‘core vote’ and ‘median voter’ strategy – Think Huckabee v. McCain • 4 leaders since 1997, Cameron is first to go consistently for median voter • Vote Blue, Go Green • But doubts about northern sellability • Not as far ahead as opposition usually is at this stage Lecture 2 Devolution – Scotland, Wales, and Northern Ireland Outline of lecture • • • • • • Asymmetric devolution, unequal powers How it arose Peace in Northern Ireland Scotland’s Claim of Right And to a lesser extent Wales Nationalists in power since 2007 – Three Slovakias? Asymmetric devolution, unequal powers Scotland Wales N Ireland England Pop, m Pop, % Relative GDP/head (UK=100) Power to tax Power to make law Electoral system 5.1 8.4 95 3.0 4.9 77 1.7 2.9 81 50.8 83.8 102 y y Add Mbr n n n n Plurality n (but coming) n Add Mbr STV How it arose (1) • Wales, part of Ireland, conquered by English • Protestant settlement in Ireland C17 • Scotland independent till 1603 (crown); 1707 (govt) • Scottish union mostly accepted; Irish mostly rejected • Unionist coup d’etat 1914; Treaty 1921 How it arose (2) • N Ireland created 1920; always sectarian • Credible threats from Ireland, Scotland (not Wales) – Throw money at them – Modern nationalism since 1970s – Abortive devolution plan (thwarted by English backlash) – Barnett formula for block grant Devolution since 1997 • NI peace process – Began under Cons govt – Compulsory consociation – 2 false starts, seems to be running ok now • Scottish referendum – won easily • Welsh referendum – won narrowly Institutions of devolution • Finance – mostly block grant • Representation: all fully represented in Commons • Scots get most because they had thoughtout scheme (Claim of right) • Welsh got least because they are always an afterthought • Joint ministerial councils – not used before 2007 The nationalists in power • NI – govt of extremes • Wales – first electoral pact – Plaid demands more powers, review block grant • Scotland – SNP minority government – Alex Salmond the Trotskyist • Will Scotland become like Quebec? • Or Slovakia? Lecture 3 The government of the economy Outline of lecture • Distribution to poor, to rich, or to median? • Two centuries of failure • Is central bank independence the secret of success? • Labour always failed before 1997 • New institutions since then • Are they robust? Distribution to poor, to rich, or to median? • Aristotle (and many other since): Democracies plunder rich and redistribute to poor • Marx: bourgeois democracies do the opposite • Downs: distribute to the median • Modern pol. sci: plurality regimes (eg UK) have lower welfare spend and better balanced budget than PR regimes Two centuries of failure • Those damned spurts which Pitt used to have just in the nick of time 1814 • Inflate the economy before the election, deflate after • Not credible in the long term • New economic literature on this – Kydland/Prescott 1977 (won them a Nobel Prize) Central bank independence • Tying yourself to the mast • For incumbents: short-term cost, long-term benefit • Treasury and Chancellor wanted it in 1988-9 • Mrs Thatcher said no • Alternative – ‘shadow the D-mark’ • Crashed Sept 1992 Labour’s lucky failure • Expected to win 1992 election • Would have also joined ERM – therefore would have crashed in 09.92 • Brown’s advisers – go for indep bank and extreme fiscal tightness • The surprise of May 1997 • Not in manifesto • Treasury’s favourite charts Gordon Brown’s fiscal rules • We have also put in place a new fiscal policy framework set out in the Code for Fiscal Stability requiring the Government to conduct fiscal policy in a transparent and responsible way. And we have set two strict fiscal rules: the golden rule requires that over the cycle we balance the current budget, and the sustainable investment rule requires that, as we borrow for investment, debt is set at a prudent and stable level. (G Brown 1999). Has Labour’s luck run out? • Global recession 2008 • ‘Golden rule’ probably OK – UK could join € – But Brown doesn’t want to • ‘Sustainable investment rule’ broken by Northern Rock • At next election parties may level-peg on competence for the first time • But macro policy has undergone a step change • Micro too – we are all Vaclav Klauses now (well almost)