Analysis

Britain’s Coalition government: keep calm and carry on?

18 May 2012
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Region: 
UK

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  • This month marks the second anniversary of the UK’s Conservative-Liberal Democrat Coalition government. After a strong start, the Coalition now looks increasingly strained. Two years of austerity politics, public sector job cuts and unpopular changes in areas such as university tuition fees have tested the political ambitions and comfort zones of both partners.
  • Decisions on public spending cuts, raising VAT and raising student fees may have fulfilled Liberal Democrat leader Nick Clegg’s ambition to demonstrate that his party is capable of taking tough decisions, but they also provoked a minor crisis of identity and confidence among much of the Liberal Democrat activist base.
  • For business the Coalition has had a mixed record. Ironically, it is the traditionally pro-business Conservatives who have brought the greatest element of uncertainty to business policy with their approach to energy, immigration and Europe.
  • Nevertheless, despite the tensions and current political speculation, our prediction is that the Coalition is likely to last the full five year parliament until 2015. Not only is it cumbersome to dismantle, but it is in neither party’s interest to do so.

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