After Victory, the Deluge

7/21/2019 After Victory, the Deluge

1/16

Aftervictory,the deluge


2/16

As a result of the election,both the private and publicsectors can expect a markedly

different path from the previouscoalition government.


3/16

03

After victory, the delugeAndrew MacDougallSenior Executive Consultant

To succeed in his second term, Cameron must solve two

existential questions: Europe and Scotland

The passage of time has done little to dampen the shock

of the May 7 election result. Despite months of pollingpredicting a hung Parliament and attendant political

and market instability, the people of the United Kingdom

instead returned Prime Minister David Cameron to

Number 10 Downing Street to helm the first majority

Conservative government in 18 years. As a result, both

the private and public sectors can expect a markedly

different path from the previous coalition government.

If the stock markets reaction is any indication, the private

sector is indeed pleased with Camerons re-election.

Then again, the markets might instead be reflecting

relief at what is not to come. There will no return of the50p band; there will be no mansion tax; non-dom

status will not be abolished; and the government willnot be injecting controls into the transport, housing,

or financial markets. These policies crashed out of the

realm of possibility the moment Labour was crushed

in the exit poll.

Conservatives

331

SNP

56

Green

1

232

Labour

8

Lib Dem

1

UKIP

21

Others


4/16

04

After victory, the deluge

While Cameron is free to march on, the opposition

parties are in disarray, with Labour facing a bruising

leadership contest and the Liberal Democrats struggling

to pick up the pieces following their complete electoral

dismantling. One leader who appears to have escaped

the chop, however, is UKIPs Nigel Farage who, despite

following through on his pledge to resign following his

loss in South Thanet, has re-emerged as leader afterthe party rejected his resignation (albeit with Farage

lordingover them in the room).

Armed with a majority, David Cameron now has the

luxury of ignoring his political opponents; if he keeps

his side united he will control the legislative agenda.And thanks to the surprisingly strong result,

Camerons standing has never been as high withinhis own party. Indeed, Bill Cash, a long-serving MP

and notorious Cameron-sceptic led the cheers as

the caucus re-convened after the election. To succeed

in his second term, however, David Cameron must

do a much better job of managing his troops now

that he has lost the buffer coalition government.

He simply cant afford to get his caucus management

wrong. Indeed, Camerons success rides on thesupport of a group of backbench MPs in whom he

took little interest over the past five years. To succeed,

particularly on the vexing question of what to do aboutEurope, Cameron must first tend to his own garden.

First on the list of gardening tasks: appoint gardeners

to tend to his crop of new policies.


5/16

05


Appointing a team that unites the party

With his opposition turning inward, Prime Minister

Cameron is reaching out to cement his position both

within his party and the country. A quick start on hisagenda will put his opponents on the back foot while

building support from voters tired of political talk. To

with, the engine of government is already in gear: a new

cabinet has been appointed and a new Queens Speech

outlining the governments agenda is being drafted.

To please his backbench Cameron is sure to include

in that speech new counter-terrorism proposals, tougher

online surveillance powers (the so-called Snoopers

Charter), provisions for jobs including plans to create

3 million apprenticeships and plans to scrap the

EU-flavoured Human Rights Act so that it can bereplaced by a UK version. One area where Cameron

wont be able to quickly please his supporters is

immigration, a sore spot further irritated by this weeksBank of England figures which suggest that immigrants

are placing downward pressure on British wages.

Cameron has returned key figures to marquee posts

to implement his agenda: George Osborne remainsChancellor of the Exchequer; Theresa May remainsHome Secretary; Philip Hammond will again handle

foreign affairs; and Michael Fallon retains his post as

Defence Secretary. There is also continuity in other key

departments: Jeremy Hunt once again leads at health;

Iain Duncan Smith at the Department of Work and

Pensions; and Nicky Morgan returns to Education.


6/16

06


Of course, with every Cabinet appointment made,there are dozens of MPs who are angry to have

been overlooked.

To help mitigate some of this disappointment theprime minister has also put old faces into new places

and brought fresh blood into his Cabinet. Leading

the former category is Sajid Javid, the former banker

turned culture secretary, who now heads the Business,

Skills and Innovation department vacated by defeated

Liberal Democrat Vince Cable. Javids top priority

will be to develop policies that will reverse Britains

woeful slide on productivity. His replacement at the

Department of Culture, Media, and Sport is veteranMP John Whittingdale, a standard bearer for the

Thatcherite right and Vice Chairman of the all-important 1922 Committee of backbench Conservative

MPs. This is an appointment that will be well received

by Camerons Conservative critics. Whittingdales top

task will be to address the long-term viability of the

much loved (or hated) British Broadcasting Corporation

(BBC). A new face in a new role with a big assignment

is Greg Clark, who as Secretary of State for

Communities and Local Government will have theunenviable job of tackling Britains housing problems.


7/16

07


To round out the team the prime minister has

appointed a slew of newer MPs into junior roles along

with resurrecting some members who had earlier

resigned or been demoted: Mark Harper returns to

Cabinet as Chief Whip; Alistair Burt is now a junior

minister at Health; and, most importantly, Michael

Gove is back on the front bench at Justice, where he

will oversee the replacement of the Human Rights Act(a long-standing Tory pet peeve).

To round out the list of key players, Mr. Cameron has

even found a place in his political cabinet for putative

leadership rival Boris Johnson, the current mayor of

London and now Member of Parliament for Uxbridgeand South Ruislip. While not bound by Cabinet

solidarity, bringing Johnson close gives the primeminister a modicum of control over a proven wildcard.

Now that he has his team, Cameron must now get onwith business. Having ruled out a third run for prime

minister, he must deliver key manifesto policies before

succession talk overtakes his final term.

Here, the sequence of implementation will be as

important as the speed; the government knows thatthe elephantine shapes of Scotland and Europe could

soon be squashing whatever long-term legislative

agenda it has planned. Of the two, it is the latter which

looms larger, and the prime minister will need some

quick wins to buck up his backbench ahead of a

bruising battle over Europe. And one of those early

wins could involve Scotland.


8/16

08


A thistle in the governments side

David Cameron was quick too quick to turn

last years Scottish referendum and the debate about

devolution into a plan to offer English votes for Englishlaws. While immensely popular with his party, it

appeared to put party before country. Now there is

a second chance to get it right. Despite Scotland

sending 56 SNP MPs to Westminster, the Caledonian

contingent will exert little to no influence on the formal

parliamentary agenda. The SNP will get what the

government proposes on devolution, and no more.

There is even an opportunity for the Conservative

government to give Nicola Sturgeon more than what

shes asking for. The plunge in oil prices has punched

a hypothetical hole in an independent Scotlandsfinances and transferring taxation responsibilities

to the Scottish government (i.e. full fiscal autonomy)would put them on the hook for the tax hikes needed

to fund their social programs. The SNP would

undoubtedly protest this sudden responsibility, giving

Prime Minister Cameron the opportunity to put the

wily SNP on the back foot. David Mundell, the new

Secretary of State for Scotland, has poured cold wateron that suggestion for now, but it remains a more

radical option available for deployment in the future.


9/16

09


In the meantime, passing the proposals in Lord Smith

of Kelvins commission report should apply some

balm over the rough patches in the fabric of the

United Kingdom.

No matter the tactics, it is clear Britain will need to

have an adult conversation about finding a new, more

equitable constitutional arrangement. In post-election

remarks Cameron has said his plans are to create the

strongest devolved government anywhere. Hell have

a long way to go to match jurisdictions like Canada,

however, where the provinces have control over taxation,

health, education, and the implementation of justice.

And just how a four-country federation could work with85% of the population living in England is only one

of the tough questions to be answered in the debate.Cameron wont, however, want to get bogged down

in extended constitutional wrangling at home; hesgot treaty change with Europe on his agenda and the

result here will frame his legacy as prime minister.

David Cameron doesnt want to be the leader who

sleepwalked Britain out of Europe.


10/16

010


First Grexit, then Brexit?

Thanks to the rise of UKIP, the prime minister must

attempt to lance the Eurosceptic boil that sits on the

body politic of the United Kingdom. Cameron hopesthat, by offering and winning a referendum, he can

remove the European question from the British

political agenda for years to come.

Prime Minister Cameron is but the latest in a long lineof British leaders to grapple with the European question:

John Majors (slim) majority government began its

unravelling over the Maastricht Treaty; Tony Blairs

government struggled over whether to join the Euro;

Gordon Browns premiership unfolded as the Eurozone

went into freefall during the global economic recession;

and now David Cameron has been forced into offeringan in-out referendum by his restive backbench.

The war will unfold over two battles: the referendum

itself; and the preceding negotiation to secure

a better deal from Europe.

Here, the unexpected election result has greatly

strengthened Camerons hand. Even with a slim

majority he holds a stronger position than he wouldwith a coalition partner at this side. Every single Tory

ran on a manifesto pledge to offer the British people

a choice on Europe. As a result, every single European

leader knows that a reckoning is coming and that it isin their interest to sweeten Camerons pot to some

degree ahead of a vote.


11/16

011


It wont be easy. There are a lot of European diplomats

who are fed up with British demands for special

treatment. But the alternative seeing Britain leave

would be worse. And with Greece teetering on the

southern edge of the Eurozone, the last thing European

policy makers will want is another front opened up to

the North.

While the so-called four freedoms the free

movement of persons, goods, services, and capital

wont be up for negotiation, there is room for movement

on other fronts. Cameron knows he wont be able to

placate the hard-line group of 60 or so of his MPs that

want out of Europe no matter what; his task will be

to put something substantive on the table for the

remaining 270 in order to try and claim victory.To deliver victory the prime minister has appointed the

good cop/bad cop team of George Osborne and Philip

Hammond. While Osborne shares Camerons viewthat Britain is better off within the EU, Hammond has

a more jaundiced view of Europe. If they are to get

what they want, they will have to ensure this is a fight

between Britain and Brussels bureaucrats, and not

between Britain and the countries of the EuropeanUnion. There are indications of goodwill; European

Commission President Jean Claude Juncker has made

some positive noises following Camerons re-election,

but will need some positive noises back from hisBritish counterparts if any real progress is to be made.


12/16

012


The shape of the ensuing deal is widely presumed

to be immediate concessions on issues like migrant

benefits, with eventual, albeit ill-defined, treaty change

at some unspecified future moment. Tone, as well as

form, will matter, and Britains refusal to help settle

migrants attempting the Mediterranean crossing

will have done nothing to improve the mood in the

diplomatic salons of Europe.

The main challenge in this pas de deux will be to

keep the entire negotiation from looking like a stitch

up. The rebellious Conservative backbench knows it

wont get significant European treaty change, but it will

need to feel that its interests are being pursued withmaximum sincerity and vigour by the government.

Send in the private sector troops

If Cameron has his way he will secure his deal with

Europe as soon as possible. The longer the process

drags out, the more his hold over his caucus weakens,

and the more impact it has on his overall program.

He has promised a referendum by the end of 2017 but

would greatly prefer to hold it in 2016. So, it turns out,

would Bank of England Governor Mark Carney, whosejob of calibrating monetary policy is made infinitely

harder thanks to the political instability caused by

haggling over Europe.

Once he is able to present his European deal tothe people of Britain, Cameron will look to mobilise

support for the yes side. Here, he will look to British

industry, both large and small, to help make the case

for Britain in Europe.


13/16

013


The leading Eurosceptics in the caucus including

heavyweights like Boris Johnson, Owen Paterson,

the former Environment secretary, and former Minister

David Davis are convinced Britains business would

thrive outside of the European project. If they are to be

convinced otherwise, it must be done by business

leaders and their workers.

Cameron will be looking for all the help he can get

and there will be ample opportunity for the private

sector to partner with the government to present

the case for Europe.

The big question for the yes camp will be how

much to highlight the dangers of leaving, the benefits

of staying, or to what degree to mix the message.

The recent Scottish independence referendum dweltmore on fear than hope; experience suggests a better

effort will need to be made to highlight the benefits

of Britains relationship with Europe.

Here, Cameron will have multi-partisan help.

While he might end up fighting a significant portion

of his own party, Prime Minister Cameron will be able

to count on the support of a majority of Labour, SNP,and Liberal Democrat MPs as he stumps for Europe.

David Cameron and Nicola Sturgeon might not agree

on much, but they are both of the opinion that Britain

belongs in Europe.

With close cooperation between government and

industry, Cameron should be able to carry the day.


14/16

014


A long road ahead

Nothing derails a political agenda like an existential

crisis. The prime minister faces two Europe and

Scotland in this, his second term. They will be thefight of David Camerons political life and will define

his legacy. But they will hardly be his only battles.

Britains finances remain in a parlous state. A lackof productivity threatens the long-term recovery of theeconomy. The armed forces are threadbare. Syria is

in flames and ISIS terror is spreading ever wider.

Vladimir Putins revanchism shows no signs of

abating. Greece could yet send the European Union

down the drain. And then there are the usual nagging

scandals of government: misspending, inept

performance by ministers, and tin pot rebellions.

David Camerons leadership will be tested to a degree

with which he is unfamiliar. He must approach Europe

and Scotland with strategy, and not his usual bag of

tactics. If he displays leadership and marshals his

allies he can win both fights.

In so doing, he would cement his place in history

and leave the Conservatives as the dominant partyin a United Kingdom.

To discuss this paper and what the election results

mean for businesses in Britain, send an email to

[email protected] tweet

@AGMacDougall.

Click hereand hereto read the first two instalments

in this series on the United Kingdom election.


15/16

015

AboutMSLGROUP

We are MSLGROUP in the UK.

Were a communications agency with digital, insight and creativityat its heart. We help some of the worlds leading employers to buildand protect their reputations and relationships inside and outsidetheir organisations. Our clients include Associated British Foods,BG Group, BMW, BP, EY, Canon and GSK.

We help organisations around the world to deliver their businessand people strategies by understanding, attracting, recruiting,

engaging and retaining top talent. Our works spans the entireEmployee Lifecycle from EVP development to attraction andengagement. Our teams combine expertise in consultancy,insight and strategy development to activation includingcreative, writing, digital and technical development.

As part of the global MSLGROUP network we have more than3,500 colleagues worldwide. MSLGROUP is Publicis Groupesstrategic communications and engagement business, advisingclients on all aspects of their multi-stakeholder communications.

Find out more at mslgroup.co.uk or by contacting Victoria [email protected]


16/16

Victoria SuggBusiness Development Director

[email protected]+44 (0)7950 821 272

mslgroup.co.uk

Be interested.Be interesting.

Be influential.

Documents

After Victory, the Deluge