A Tipping Point?

The recent UK election may presage a ‘tipping point’, a transformation of the British political landscape.  The next few years may witness the implosion of the Conservative Party as we know it; the election of Corbynesque Labour government, followed by a period of political unrest.

The UK Conservative Party is one of the longest-lived political parties on earth, so forecasting its demise seems like a very long odds bet. But. Brexit is at once the most important constitutional change in the UK for 100 years and at the same an issue which has no good outcome for the party. Whoever signs the final Brexit agreement on behalf of the UK will become the most hated Tory figure (among Tories) since … well, I can’t think of a parallel. For three generations, Labour supporters had Ramsey MacDonald as their in-house pariah – that’s the closest parallel I can dredge up.

What Brexit deal can please the CBI, the City of London, David Davies, Jacob Rees Mogg, the Daily Mail, the FT, the Telegraph and John Redwood? None. There are soon-to-explode mines everywhere – immigration, the divorce bill, the ongoing alimony payments, tariffs, the European Court, border controls – does anyone really think we can get everything we want on every one of these issues and a dozen more? Unlike other intractable issues for the Conservative Party (grammar schools, fox-hunting, inheritance tax to name but three), Brexit cannot be ducked. As soon as the ink dries, the recriminations will begin. And no-one, including Boris the court jester, wants this particular poisoned chalice.

And what of Labour? I think they will win the next election, save only that re-districting may mean a coalition to secure a complete majority. The problem with arguing against Corbynism is that, since 2008, successive Tory chancellors have magic’d up billions and billions of pounds for bank bailouts and quantitative easing. And the result? High growth, high employment, historically minimal inflation and close to zero interest rates. Ever since Keynes we have been told that expansionary policies may indeed lead to short-term growth, but a price. Where is the price? As of today, the price seems to be zero – except for ever growing wealth disparities. In this scenario, it is hard to argue against ‘quantitative easing for the people’ – more money for the NHS, the elderly, students, public servants, police, pretty much anyone in the queue.

But the price will, in fact, have to be paid eventually. Interest rates will increase and the young, who voted Labour in, will in time grasp how much all of this inter-generational robbery is going to cost them and THEIR children. And I think they will be angry, very angry.

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