ANALYSIS/OPINION:
More than just the future of Britain hangs on the success of David Cameron, at 43 his country’s youngest prime minister in 200 years. Whether he can overcome the worst economic crisis since the Great Depression, massive immigration pressures and the challenge of dealing with a U.S. partner besotted with self-doubt is a global concern — not just London’s.
Once again, British democracy this month proved it could outmaneuver a constitutional crisis — a “hung” Parliament where no party had a majority. The lure of power may hold the new ruling coalition together and the partners have already promised to stick it out for a fixed five-year term. But Mr. Cameron’s minority Conservatives must now rely on their Liberal Democratic partners, who are neither “liberal” — in the Scottish tradition — nor quite sure who they are.
More Eton-Oxford than any recent leader, Mr. Cameron is untested despite a long career as a party apparatchik. He speaks well. (No teleprompters needed.) His genes should carry the commercial acuity of his Scottish forebears, with ancestors in everything from China trade to stockbrokers and estate managers in the City. Despite British class-consciousness, he has sidestepped charges of upper-class snobbery. He flirts with pop culture. And the British public empathized with the Camerons’ bitter loss of a child last year.
With the euro and the European Union in dire straits these days, Britain again sits apart, clinging to its own embattled pound sterling. In France, President Nicolas Sarkozy flits from problem to problem, while German Chancellor Angela Merkel faces an electorate feeling sorry for itself as it shoulders the bulk of the Continent’s bailout burden.
Even so, the “Greek disease” has managed to jump the channel. London’s budget deficit is on a par with that of Athens. The 2007 recession lasted six quarters in Britain, longer than in any other major industrial country, and the economy shrank by 6.2 percent. Previous governments borrowed so heavily that Britain has the highest ratio of government borrowing to gross domestic product of the world’s 20 largest economies. Sterling has lost about a quarter of its value since mid-2007.
But Britain is not Greece. Bankers, generally, trust in the government’s ability to crawl out of this crisis. It has never defaulted. Unemployment looks better than elsewhere, although it is not likely to improve quickly. While there is considerable labor unrest, Britons still pay their taxes. Britain’s openness to trade, capital flows and migration will keep the City — London’s financial hub — a strong competitor for a Wall Street that is itself facing Washington’s avenging controls. Even though Mr. Cameron on the campaign trail shied away from it, there is enough of the Thatcher revolution left to permit flexibility that Continental societies don’t have.
Still, Mr. Cameron faces the same conundrum confronting all the major developed economies — how to stimulate growth while trimming the budgets that helped caused the crisis in the first place.
The outlook is not all black. Business groups expect growth of just over 1 percent this year and over 2 percent in 2011. The new prime minister has promised a strong role for Bank of England Governor Mervyn King, who has kept “stimulus” spending within bounds, relatively speaking. Mr. King has set interest rates at 0.5 percent since March 2009 and thrown nearly $300 billion at the credit markets. Exports were helped by the falling pound, and domestic demand grew, at least temporarily, with a reduction in the value-added tax and subsidies to car buyers.
But just as important for the rest of the world is how Mr. Cameron handles the country’s growing cultural crisis. Britain’s long, often too-intimate ties with the Arab and Islamic world — and the government’s relations with its own 3 million Muslims — are crucial in the continuing battle between the West and Islamist terrorism.
As a member of that dying breed of communicants in the wobbly Church of England and as a skilled public-relations practitioner, Mr. Cameron has bobbed all over the map in the navigating the tensions between security and Britain’s unique personal freedoms. Confusion reigns in the conflict between individual rights — a gift of British culture and political thought to the world — and everything from Islamic Shariah law to pornography. Commenting on modern Western social ills such as drug abuse and high divorce rates, Mr. Cameron once remarked: “Not for the first time, I found myself thinking that it is mainstream Britain which needs to integrate more with the British Asian way of life, not the other way around.”
A top priority for Mr. Cameron is relations with Washington. President Obama’s enthusiastic postelection endorsement, one hopes, represents a turnabout. Mr. Obama appears to have gone out of his way to denigrate “the special relationship” and unnerve the Brits, from returning an Oval Office bust of Winston Churchill to reported snubs of Prime Minister Gordon Brown.
For his part, Mr. Cameron, given stringent economic restraints, will not be able to promise the same level of military commitment that Prime Minister Tony Blair made for Iraq and Afghanistan. But the British have a role to play and Mr. Cameron, in Britain’s great tradition of noblesse oblige, might be the one to play it skillfully.
• Sol Sanders, a veteran foreign correspondent and analyst, writes weekly on the convergence of international politics, business and economics. He can be reached at solsanders@cox.net.
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