The state of British Politics

Summary

Podcast Summary: The State of British Politics

Podcast: LSE: Public Lectures and Events
Host: Justin Gest (A), LSE Film and Audio Team
Guest: Dr. Jonathan Hopkin (B), Senior Lecturer in Government Department
Date: May 13, 2009

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Overview

In this episode, host Justin Gest sits down with Dr. Jonathan Hopkin to dissect the ramifications of the 2008 financial crisis and the subsequent world recession on British politics. Their conversation covers the Labour government's immediate and ongoing responses, the infamous parliamentary expenses scandal, and the prospects for the upcoming general election. The tone is incisive, analytical, and occasionally wry, providing both political context and expert commentary.

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Key Discussion Points & Insights

1. Labour’s Initial Response to the Financial Crisis

• Timeframe: [00:00–01:31]
• Dr. Hopkin credits Prime Minister Gordon Brown for moving swiftly and knowledgeably during the crisis, particularly compared to other world leaders.
• Key government actions included:
  • Coordinating on the international stage
  • Extending protection of bank deposits
  • Defending British savers’ assets (notably in banks like Icesave)
• Hopkin notes that while the UK’s policies mirrored much of Europe’s, Brown’s impression of "decisive action" was politically important.
• Quote:
  • "Gordon Brown was immediately on the international stage coordinating the response to the crisis and seemed to perform very well." (B, [00:33])
  • "He also had the advantage of being one of the few world leaders who probably had some quite detailed understanding of the financial system." (B, [00:47])

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2. The 2009 Budget: Political Calculations and Tax Changes

• Timeframe: [01:31–03:15]
• The budget was less economically novel and more politically strategic.
  • Major monetary policy moves had already occurred (interest rate cuts, VAT cut before Christmas).
• The headline political gesture:
  • Raising the top marginal tax rate from 40% to 50% for incomes above £150,000.
  • Aimed to force the Conservative opposition to defend wealthy interests at a time of public anger toward the financial sector.
• Quote:
  • "The biggest statement within the budget is the increase in the tax rate for highest paid employees in the UK." (B, [02:19])
  • "It was an invitation to the other political parties in Britain to respond...forcing them to side with wealthy, moneyed interests in a period where the British electorate...is rather angry and hostile towards the financial sector." (B, [02:37])

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3. The Parliamentary Expenses Scandal

• Timeframe: [03:15–04:48]
• Unfolding scandal involving MPs misusing expenses (e.g., for "moat cleaning and hedge trimming").
• While both major parties (Labour and Conservatives) were affected, the party in power is traditionally hit hardest.
• Risk of fallout benefiting minor or even extremist parties (e.g., the British National Party) ahead of European elections.
  • Parallels drawn with 1990s scandals that damaged Conservatives and enabled Labour’s rise in 1997.
• Quote:
  • "Because it relates to MPs' expenses, and there doesn't seem to be a very clear difference between the parties...it could well turn out to damage the Conservatives too, and end up probably favoring minor parties. Either the Liberal Democrats... or indeed, more fringe parties. And most worryingly, perhaps even extremist parties like the British National Party." (B, [04:07])

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4. Election Prospects and the Impact of the Recession

• Timeframe: [04:48–06:37]
• The financial crisis gave Labour and Brown a temporary boost, but poll standings soon reverted: Conservatives 15–20% ahead.
• Despite the worst recession in decades, party standings were little changed from before the crisis.
• Future election outcomes depend on:
  • Duration and depth of the recession
  • Potential leadership change within Labour
• Sense of uncertainty, but the prevailing expectation is a Conservative victory unless recovery and leadership renewal shift dynamics.
• Quote:
  • "If the recession bottomed out very quickly, and there were already signs of economic recovery...then we could say that Labour might be in with a shout, perhaps especially with a new leader, given that Gordon Brown has lost a lot of credibility." (B, [06:08])
  • "The fact that we've moved from a situation of economic growth to the worst recession, perhaps for decades, doesn't seem to have affected that all that much." (B, [06:27])

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Notable Quotes and Moments

| Timestamp | Speaker | Quote | |---|---|---| | 00:33 | B | "Gordon Brown was immediately on the international stage coordinating the response to the crisis and seemed to perform very well." | | 02:19 | B | "The biggest statement within the budget is the increase in the tax rate for highest paid employees in the UK." | | 04:07 | B | "It could well turn out to damage the Conservatives too, and end up probably favoring minor parties... perhaps even extremist parties like the British National Party." | | 06:08 | B | "Labour might be in with a shout, especially with a new leader, given that Gordon Brown has lost a lot of credibility." |

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Important Segments with Timestamps

• [00:00] Introduction & framing of crisis impact
• [00:25] Labour’s immediate response to the financial crisis
• [01:31] Analysis of the 2009 Budget and new top tax rate
• [03:15] Effects and implications of the MPs’ expenses scandal
• [04:48] Election outlook and effect of the recession

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Conclusion

This episode provides a timely snapshot (as of May 2009) of British politics in crisis, featuring sober analysis of both policy and perception. Dr. Hopkin offers thoughtful perspectives on how economic turmoil and political scandal may reshape voter attitudes and party fortunes in the months leading up to a pivotal general election.

Listeners walk away with a sense of both the immediate machinations and the deeper uncertainties facing Britain at a time of unprecedented economic and political upheaval.

Transcript

[A]

Hi, welcome to the hot seat. I'm Justin Guest here in the Government Department. The world economic crisis has affected the global economic system dramatically but it has also had a severe influence on national government politics. Here with us to discuss this is Dr. Jonathan Hopkins, senior lecturer in the Government Department. Thanks for being here.

[B]

Thank you.

[A]

It's a pleasure to have you. How would you rate Labour's immediate response to the world economic crisis?

[B]

Well initially it seemed that they responded quite quickly and quite effectively, especially compared to a lot of other world governments including the United States who found it very hard to play a leadership role with Bush being in the tail end of his presidency. Gordon Brown was immediately on the international stage coordinating the response to the crisis and seemed to perform very well. He also had the advantage of being one of the few world leaders who probably had some quite detailed understanding of the financial system. He'd probably heard of credit default swaps before everybody else had and so he seemed quite effective in the immediate response. And some policy measures such as extending protection of bank deposits and sort of aggressive response to defending British savers assets in banks such as Isave and so on appeared quite effective and I think went down quite well in public opinion in terms of concrete measures there probably wasn't an awful lot of difference between what Labour did in Britain and other European governments but, but certainly Gordon Brown was able to give an impression of decisive action.

[A]

Well since the first indications of this world financial crisis Labour's had more time for a more calculated response in the form of the budget that they presented last month. How would you interpret the moves that they've made there?

[B]

Well economically there was nothing very earth shattering in the budget. A lot of the action in terms of the British government's response to the crisis has been through monetary policy, through the actions of the bank of England, China, cutting interest rates very aggressively, pumping liquidity into the markets and so on. Also the government anticipated the budget by cutting VAT by a small amount just before Christmas. And so there were a number of policy measures already in place before the budget. I think the budget was more important politically than economically. It was Gordon Brown's chance to make a political statement in terms of response to the crisis and in particular the biggest statement within the budget is the increase in the tax rate for highest paid employees in the UK. People earning more than 150,000 pounds a year have seen a tax increase from 40% to 50% on all income above, above that level and that was a clear political marker. It was an invitation to the other political parties in Britain to respond by either approving the measure or. Or countering it. And the idea was to put the Conservatives in an embarrassing position by forcing them to side with wealthy, moneyed interests in a period where the British electorate, on the whole is rather angry and hostile towards the financial sector and towards the people who've made a lot of money in the past few years of the boom.

[A]

Indeed. Now, some people, of course, in Parliament have been aided by this boom in other ways, in ways in which they use government expense accounts to purchase things like moat cleaning and hedge trimming and various other goods and services. This new expenses scandal that's been revealed this past week, who does it damage the most, do you think?

[B]

At the moment, it's quite hard to say. Most commentators suggest that although all parties have been affected, or both of the main parties, Labour and the Conservatives, have been affected by the expenses scandal, the assumption is that the party in power is going to suffer more. And there is a precedent to this. In the mid-1990s, there were a number of relatively minor scandals on the whole, affecting the Conservative government of John Major, which appeared to damage John Major quite a lot and contributed to Labour's election victory in 1997. And the assumption would be that this could have a similar effect. The big difference here, though, is that because it relates to MPs expenses, and there doesn't seem to be a very clear difference between the parties and how MPs have used and abused the expenses system, it could well turn out to damage the Conservatives too, and end up probably favoring minor parties. Either the Liberal Democrats in the middle of the political system, or indeed, more fringe parties. And most worryingly, perhaps even extremist parties like the British National Party, who look like they may do well in the European elections that are coming just now.

[A]

Great. Now, taking a step back, have the prospects of the election next year been affected by the world financial crisis?

[B]

Well, if we look at the state of the opinion polls now and compare them to the opinion polls before the financial crisis started to really hit home in September 2008, there's not a whole lot of difference. Already in September 2008, Gordon Brown was looking very weak. He was quite an unpopular prime minister. Labour was doing very badly in the polls, had a 15, at times even 20% disadvantage in the polls, conservatives leading by about 15, 20%. And the financial crisis gave a brief fillip to Gordon Brown. He seemed to do quite well in terms of selling himself as having a response to the crisis. And Labour's poll results improved. But still, since about Christmas time, they started to decline again and we're back to square one. So it's hard to see whether the financial crisis in itself has changed the general position of the parties. It seemed that Labour were down to lose the next election. The polls suggest that right now. But there is a good year or so to go before the likely date of the election. Things could change and a lot will depend on how severe the recession is. If the recession bottomed out very quickly and there were already signs of economic recovery late this year or early next year, then we could say that Labour might be in with a shout, perhaps especially with a new leader, given that Gordon Brown has lost a lot of credibility. So it's quite hard to predict. But on the whole, the parties seem to be in a similar position to where they were a year ago. And the fact that we've moved from a situation of economic growth to the worst recession, perhaps for decades, doesn't seem to have affected that all that much.

[A]

All right, very good. Jonathan Hopkin, you are off the Hot Seat. Thanks very much for being with us and thank you for joining us on the Hot Seat. We'll see you next month.