Domestic politics in 2013 will be dominated by the continuance of the longest recession since the stock market crash of 1929. In the fifth year of flat growth the Coalition Government is faced with increasingly unpalatable decisions on public expenditure.
Ministers know that they will have to make radical cuts to public expenditure to ensure that that the UK’s credit rating is maintained. This has already been evidenced by the imposition of a 1% cap on benefit increases, the ending of child benefit payments to those in the higher income brackets and strong rumours of “means testing” for the pensioners’ Winter Fuel Allowance.
Failure to keep a “triple A” rating or at the very least a “double A” will have ramifications for every aspect of our national life and principally the ability of the Bank of England to keep interest rates at their historical low. Aside from this the Government would become increasingly unable to fully fund state services such as the NHS and forced to raise taxes to make up the shortfall.
The economic context will make the Treasury ever more powerful in Whitehall and the big spending Departments of State more cautious in suggesting costly policy initiatives. That is why cuts in the Civil Service will continue throughout 2013 and the privatisation of state services will gather pace. This has begun already with the handing over of major roles in the probation and immigration services to the private sector.
A Government that is unable to spend more on the things that people like and forced to cut existing public services will inevitably see a slump in its poll ratings. Both the Conservatives and Liberal Democrats have already pointed to the usual “mid-term” factors in this respect, but would probably privately admit that the depth of the recession makes this different to previous times.
The Labour Party is enjoying some of the highest ratings that it has seen since the beginning of the Iraq War in 2003. The issue for Labour and its leader Ed Miliband in 2013 will be how it translates favourable ratings into a credible platform for Government. We have already seen how David Cameron has sought to define Labour as being unable to take tough decisions in the recent vote on benefit cuts.
Much more of this can be expected over the coming months as the main parties begin to profile the coalition of voters that they will be seeking to attract in the next General Election. The 2013 Local Government Elections will provide the parties with a readout of their standings in the polls and these will offer a reliable prediction of how the electors would vote in a General Election, given the predominance of domestic issues in the public consciousness.
In 2013, politicians will also have to focus on the future nature of the British state. This is because there will be precisely one year before Scotland decides whether it remains as part of the United Kingdom. We can therefore envisage a greater intensity of debate over Scottish independence, economic uncertainty arising from the consequences a “yes vote” and fissures developing in the major parties over their post-independence electoral prospects.
What is clear to me is that David Cameron would not wish to be the last Conservative Prime Minister of the United Kingdom and, at the same time, Ed Miliband the last Labour leader to benefit from the Westminster seats drawn from the Party’s majority in Scotland. Nick Clegg’s worries will be of a different nature in 2013, given the way that his Party’s votes have been squeezed both geographically and across all voter groups.
David Cameron also faces the dubious benefit of being Prime Minister at the critical juncture of our relations with the European Union. His problems are twofold. They arise from being in coalition with a pro-EU party and leading a Conservative Party that sees Europe as the one issue that uniquely defines it against its political opponents.
In 2013 the Prime Minister will be pulled in two directions – if he pushes too hard against the EU, the coalition could fracture and if his stance is too light, then UKIP will continue to take a greater slice of Conservative votes, ultimately denying what he truly desires, a majority Conservative Government.
But there’s something else happening in the UK and in countries across the globe that poses a credible threat to the political status quo and this results from the power of activists to shape the political agenda. This can manifest itself in a campaign against supermarkets and their pay policies for interns, Governments being deterred from privatising our forests or the determination of multinational companies’ tax payments.
The popular accessibility of social media helps campaigners to coalesce quickly across domestic and international boundaries and can put politicians on the back foot in their response. The same issues arise for the business affected by such campaigns, the journalists who report on them and corporate advisers whose role has been traditionally to develop strategies aimed mainly at central Government stakeholders.
In 2013 businesses will increasingly need public affairs advisers who are sensitive to the coexistence of the new and old politics. This includes knowledge of how social media can shape the political agenda, the ability to spot developing trends, an understanding of the machinery of Government and the courage to “tell it as it is”. Without this businesses and even NGOs will continue to risk their reputations and damage their brand value.
At Lansons we are aware of this and ready to help our clients meet these challenges in the year ahead.
For more information about our Public Affairs offering please contact Andrew Silverman at email@example.com