This is an election that was more interesting than its campaign. The parties moved towards each other, because like many elections in the twilight of an expansion, everyone wants to promise the one thing that cannot be delivered upon: continuation of the status quo. Britain is headed for recession along with the Eurozone. The US will join them somewhat later - we have more room on George's charge card.
Thus each party promised the present, only better. The Liberal Democrats promised smarter and fairer, the conservatives promised tougher and cheaper, and the Labourites promised that if the electorate didn't vote for them that Margaret Thatcher would be made Prime Minister again.
[Stirling Newberry is Chief Economist for Langner and Company the opinions expressed here are his own. Crossposted at Bopnews.]
First the obvious: Britain is now a nation of the left, the last flailings and illusions that a grinder, ghastlier England could reign over the rest of the British Isles is dead and gone. It is clear that all Britons are in the same boat, and that an active and intelligent government must lead it. Which is why going into a stupid, greedy war has been such a disaster for New Labour.
The Tories are the big winners of Iraq, in that it saved them from extinction at the hands of the Liberal Democrats. If the LibDems had swung as hard against the Tories as they did against Labour, they would have gained twice as many seats, simply because there were more marginal constituencies between the two.
New Labour
To understand the disaster, realise that the Labourites gained only one seat, from the Libs in the south. I was overjoyed when Blair defeated John Major in 1997, I am equally overjoyed now that his penchant for wanting to be "that other Tory Party" has lead to a sharp rebuke from voters.
New Labour is dead, it was an alliance between red tories and old labour has broken apart on the major difference between the two: red tories are colonialists, and old labour was not. The red tories are also in favour of a police state, where as old labour, while it is regimented and militant, is not. Red tories, like all tories, like either authority figures, or slick salesmen with fresh faces that aren't as familiar with gravity as they ought to be.
Tony Blair was the slick face, and his time at the top of the "greasy pole" has been one where a series of very specific reforms were made in order to get Britain moving again after the lumbering government of grey John Major. But as importantly, it was about bringing back city life. The defection of London and its environs to the New Labour banner was one of the crucial parts of the landslide that brought New Labour to power.
The attacks of 911 struck a certain segment of urbanite very differently from much of the rest of the public. It can be seen, on this side of the pond, as hitting the psyches of people as different as Bill Maher, Thomas Friedman, Nicholas Kristof and a host of others. The attacks struck at the heart of civilization - the city itself. The reaction of this part of opinion was that this threat justified anything, absolutely anything, to get what was needed to protect the city.
And it was this fault line which would splinter Blair and his part of the New Labour coalition from the majority of other Britons. They didn't not suddenly want a "Jack Bauer" Prime Minister, running around and breaking any law he deemed necessary to get what he decided was necessary. The criticism of "running roughshod" over others, of being "presidential" came to the fore. Britain has a fundamentally deliberative view of its democracy, and of its constitution, not a fundamentally executive view.
The politics of this rift played out over another New Labour way of making it all work: constriction of access to London centre by increasing the cost of commuting in. It should not escape anyone that the peripheries of London revolted against Blair sharply. Monetizing the illiquidity of land is an old tory trait, where as opening access to city centre to ease the "natural monopoly of land" is at the cornerstone of modern liberality and liberalism.
The policies to juice up the real estate market were, in fact, the most right leaning policy of New Labour, part of a global movement to get ordinary people to borrow money on the mortgage market, and buy housing. This increases the money supply, and improves the whole economy, without the government carrying more spending on its books, as lending for commerce through government program does. In short, it meets the public demand to have "smaller" government, while at the same time continuing to get big checks from the government. The problem is that at a certain point it becomes necessary to artificially constrict supply in order to prop up this market in urban centres, after growth no longer justifies higher housing prices.
This "land is the new gold" strategy, hoping that the bubble would not pop as badly because, after all, people get more numerous but land stays scarce, is at the core of the New Labour economy, and its crumbling, both because it is having a greater and more specific political and economic cost, and because it was destined not to go on forever anyway, is the crumbling of the basis for their party.
Blair has promised a radical social agenda, but he knows he cannot do it, because the only radical right now is for radical status quo. Instead what will happen is that Blair is now a "dead body", he will stay in power until the downturn, and when that downturn has made him unpopular, Brown will take over, and blame Blair. Taking over before the downturn bites would be a massive mistake, because then it will seem that Brown let things fall apart, and he would lose the next election.
New Labour's challenge is to win back the defectors from the Liberal Democrats. This is what will give the Tories their best chance of government, with the two parties of the left locked in a life or death struggle, the Tories can eat away at both sides - at the fist full of LibDem-Tory marginals in the country side, and at the more numerous Labour-Tory marginals around the edges of cities.
The other constituency that underwent a marked shift was the Labour in the industrial centres other than London. First, they came to decide that the Liberal Democrats were a viable place for their ballot. This should concern New Labour considerably, because here is a trove of seats that, when there is economic pain, are now no longer safe: before the threat of "us or Thatcher's ghost" was credible, and could keep these seats in play. In fact, the aggressively vicious New Labour attacks on the Liberal Democrats after the election show the dog in the manger effect.
The Tory Labour battle was essentially a stalemate, in no small part because few red tories were trouble by the same things that trouble the internal Labour divide. Hence, while Tories came to the fore, it was almost all because people could not support New Labour, and had someplace else to put their votes. The exception to this is London, but it is a crucial exception. Here there is growing dissatisfaction by commuters over the handling of the metropolis. If Labour wants to stay in power, it must open the city again, even if that means capping the real estate bubble.
Thus the Labourites hope that Iraq will be forgotten, and people will vote for competence again. However, this is a vain hope, people measure competence by results, and by sense of trust. Having broken trust, the New Labourites are now, like the Clintonians were, completely dependent on a good economy to hold power. If the next down turn is sharp, the Tories will govern again. New Labour must find a new basis for its coalition.
Hence Gordon Brown must be very careful, and must get effective power now to reshape the British economy, or he will be a footnote leader, taking over for an important party leader, only to suffer a short and poorly remembered time in power. It happened to Anthony Eden, another good man who simply could not contain the centrifugal forces that he was left to contend with.
Conservatives
The Conservative Party is back. Not because it increased its voting share, quite the contrary, because it regained its footing in its base. Before the election the Liberal Democrats could dream of "decapitation" and taking over as the more and more natural party of the heartland of England of small cities and towns. The gamble failed, and Tories were returned with greater majorities, and won a net of three seats from the Liberal Democrats, particularly in areas closer to England. The Conservatives can be more aggressive in the Commons and in public, because they no longer have the head of their moderate leadership so close to the battle line.
Just as with New Labour, the story of the Conservatives is a division between their two factions. The "aging grass roots", the Thatcherite crabs in a bucket vote, wants a true believer for the leadership. Davis is the name mentioned, because he is also acceptable to the MPs - who are far more pragmatic. New Labour rose to power by dividing the red tories, and the moderate leadership of the elected wing of the party was in grave danger before this election, because the Liberal Democrats could maintain a more centrist stance on a host of issues. To win Britian is to convince this bloc of "socialists without socialism" that you are the opposition party. The splitting of this vote by Blair is what brought him to power.
The defense of this bloc is the best news for the Tories, they are now on the offensive against the Liberal Democrats, looking for a young face to get young voters. They stacked important seats with fresh faces, starting with Putney's new representative, and are going to attack outwards from "Merry Olde England". The Conservatives can, again, push into the areas where people want a small government that sends them large checks, and the weak rhetoric of this campaign will give way to stronger rhetoric - it must, among voters under 50, the Tories are the third party.
The most important development for them, however, is that they are back in London, and now must come up with an ideology that will allow them to leverage their "inside against the outside" metropolitan battle. The 1990's produce "Cool Britannia" and Blair's London. To win the Tories will need to have a new vision of London that will pry loose more seats.
Liberal Democrats
No party is more at a crossroads that the Liberal Democrats. They are still not a potential governing party, simply because adding their first places, that is 62, plus their second places, that is 160 come to 212. Since 324 are required to form a majority government, the Liberal Democrats have a very long way to go before they even could win government. But they could make it: among voters under 50, they are the second, not third, party. The party of the future.
They gambled big on being able to blow the moderate Conservative leadership out, leaving only a nastier rump tory party which could have been counted on to produce another unacceptable leader. It was a worthy risk and shows the nature of the Liberal Democratic leadership - easily the most courageous and forward thinking of the leaderships put forward.
However, the reality is that that gambled failed, and the results are a Liberal Democratic Party which has two wings: the peripheries, which were their strength before, the people who are very far away from the centre, and people in cities themselves. If the battle between the Conservatives and the Labour Party can be thought of as a battle over who gets how much of the surplus that cities create - the cities or the outlying areas - the Liberal Democrats are the party of those who do not feel London as their centre of gravity at all.
This is about to change, the incoming Liberal Democrat delegation to the Commons is far less midlands, more periphery and city centre. This might seem like an odd combination, but it is not. Alliances of those close to the core and far from it are common in politics - for a long time it was the American Democratic Party's composition.
Thus the challenge for the Liberal Democrats is to use this moment and establish themselves as being the visionaries, the people who understand the changes that are occuring in the world, and understand how the British people must sieze those changes. While the others fight over how much of the surplus to spend on what, the Liberal Democrats have already staked out the idea that how the surplus is distributed is as important as how much. By opposing budget gimmicks and gewgaws, they have put a first, important, brick on the base.
Also important for the Liberal Democrats is that their supporters are louder, prouder and have finally seen them as a home party. The claws of labourite attacks have had a perverse effect: driving out many voters who saw their vote, not as abandoning the principles of egalitarianism, but as telling labour that the war in Iraq abandoned the core sense of justice and fair play that the left bases its moral foundations upon.
Thus the Liberal Democrats have two challenges: one is to expand on being the party of the future, and the other is to start shaping the kind of progress that will lead Britain out of the next recession. The best scenario for the Lib Dems would be to have Labour fall with a thump, have a hard right Tory government, and in that interregnum of the left, establish that they, and not Labour, are the best party to represent that "better, fairer Britain", against the Conservative Party in one of its writhing fits of madness.
Party of protest? Or Party of Progress? To move to 10 Downing is to be the latter and not the former. If the Liberal Democrats are to govern, they must win council races, prove they can manage, and find a way to build on the tremendous seachange in the north, where they, and not the Tories, are the party waiting in the wings.