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UK: Scottish Independence Keeps Simmering, English Realignment Continues

May 12, 2021
By Carsten Nickel

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Despite the SNP's win in Scotland, a second independence referendum is not likely before the next UK general election, which might now be held around 2023. Now essentially a different party from the Conservatives who returned to power over a decade ago, PM Boris Johnson's Tories did extremely well in England. The deep realignment of UK politics continues, but the immediate effects on policy remain uncertain, as seen in the Queen's speech.

 

Scotland

After the 6 May regional elections, a second referendum is still possible at some point, but very unlikely before the next UK general election. While the Nationalists (SNP) plus the Greens have a significant overall pro-independence majority at Holyrood, the lack of an overall SNP majority makes it slightly easier for the UK government to do what they were going to do whatever the result – say 'not now' to the SNP's calls for a second referendum.

Initially, the UK government will point to the priority of the post-Covid recovery. This is likely to morph into 'not now' because the Covid backlog in public services will have to be handled. By around 2023, it will be because there will soon be a UK general election. In the meantime, the UK government will help and support Scotland to drive home the benefits of being in the union. It will also remind the Scots that there would have to be a trade and regulatory border between England and an independent Scotland that re-joins the EU. The currency and deficit questions will also be highlighted.

However, the SNP will likely seek to legislate for a referendum. The UK government could ask the Supreme Court to declare these efforts illegal. Another option would be to see if First Minister Nicola Sturgeon will hold a referendum – which, unlike parts of her party, she does not want to do – and then boycott it to ensure it has no legitimacy. Either way, the SNP and the Greens will likely claim that Westminster is ignoring the democratic will of the Scottish people. Over the longer term, the political culture of Scotland – where the SNP will have been in power for nearly 20 years by the time of the next Scottish elections in 2026 – does look increasingly separated from Tory-run England and Labour-run Wales.

 

England

Meanwhile, the Conservatives did extraordinarily well in the English local elections for a party that has been in power for 11 years. The Tories increased their number of council seats by over 235. This unprecedented outcome becomes easier to understand against the backdrop of ongoing party-political realignment: PM Boris Johnson's Tories are, in many ways, a different party from the one that returned to power over a decade ago.

One factor to watch over the medium term is the Tories losing support in their heartlands of the South East of England. Voters there will care less about the Tories' new focus on the Midlands and the North, while worrying about the disappearance of the traditional small-state, low-tax, and low-regulation philosophy. However, for now, losses in these areas are insufficient to weaken Johnson's coalition of support.

Against this backdrop, the Conservatives are now envisaging autumn 2023 as the date for the next general election. By then, the fixed term parliament act will have been repealed, re-empowering Johnson to set the date. Apart from a redrawing of constituencies, the Tories will have had two years of economic recovery after Covid and will not yet have implemented all of the tax rises that may be needed to pay for it. Meanwhile, Labour may still be struggling.

 

Policy

The implications of these dynamics were on display in the 11 May Queen's speech, setting out the government's legislative priorities for the parliamentary year ahead. In terms of contents, this was an exercise in Johnson catching up on his domestic program and manifesto commitments post-Covid and Brexit. The mix comprises skills, infrastructure and freeport projects, post-Brexit rules for state aid and procurement, as well as waging war on 'woke' and being tough on crime and asylum to please his culturally conservative coalition of supporters. Other initiatives include national security measures to reflect the rise of China and the threat from Russia, tackling online harms, national health reform and anti-obesity measures, and environmental and animal welfare measures given that the UK hosts COP26 in November.

While this program gives a good idea of the preferences of the voter coalition backing Johnson, crucially, no specific plans on social care were included. These will only be published 'later in the year' given unanswered questions of financing. Also missing from the speech were planned moves to tighten company auditing, governance, and reporting, measures to increase the rights of those renting homes and better regulate social housing, and initiatives to improve workers' rights in the gig economy. In these areas, the Tories' focus on lower-income voters is not (yet) visible.

Looking ahead, Johnson's government will face major concerns about the lack of progress on social care, a potential rebellion against a planning bill that would remove local authority control, and concerns from Tory civil liberties supporters on forcing voter ID at polling stations. The PM might be forced to amend the legislation in many cases. Still, with a majority of 87 in the Commons and his political authority enhanced by the Tories' success in the elections last week, the bulk of the program should go through parliament in the next year. The real test of his program – including the points that have not been included in his agenda so far – will only loom at the next general election.

The views and opinions in these articles are solely of the authors and do not necessarily reflect those of Teneo. They are offered to stimulate thought and discussion and not as legal, financial, accounting, tax or other professional advice or counsel.

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