WASHINGTON – After the surprise Conservative victory in the May 7 British national elections, David Cameron can feel vindicated. His austerity policies produced some results. The British economy does a bit better than the average in continental Europe. The unemployment rate is lower. And therefore it makes sense that a majority of the British voters expressed confidence in his leadership.
Unexpected victory
In the end, notwithstanding the opinion polls that placed the Conservatives and Labour at 35% each, the Conservatives did a lot better than expected. In fact, after this vote they have a clear majority. This time they do not need to form a coalition in order to govern.
Problems ahead
That said, the resounding victory of the Scottish Nationalists in Scotland reveals that the independence issue that was put aside after the recent referendum is far from dead. Besides, now Cameron will have to honor his pledge to hold a national referendum on Britain’s continued EU membership.
The effort of holding a fractured country together while Britain’s future position within Europe is uncertain will absorb a great deal of energy. At the same time, the British economy, while improved, is not out of the woods.
Competitive Britain?
Just like the rest of Europe, Britain needs to chart and then successfully pursue a new course leading to innovation, competitiveness and higher standards of living. This is going to be extremely hard.
Having a clear majority in the House of Commons certainly helps any leader trying to put in place measures that will foster growth. But Britain’s systemic problems will not be resolved through parliamentary measures alone.
Needed: a capitalistic renaissance
At best, good laws and minimal regulations can foster an “enabling environment” in which capitalism may flourish. The rest is really up to the ingenuity of the British people. In order to get out of stagnation and move up to the next level, Britain needs a genuine renaissance of its old spirit of enterprise. Britain needs highly educated risk takers willing to open up new sectors.
For sure, a hoped for renaissance is more likely to take place under Cameron’s leadership. But the connection between this convincing political victory and a bright economic future for the UK for the moment is fairly tenuous.