A few thoughts on the headlines in 2012
Channel 4 News’ Political Editor offers his predictions for the year ahead.
Eurozone
British and Brussels sources I’ve spoken to remain convinced that, when there’s nothing else for it, Chancellor Merkel will press the button and the ECB will metamorphose into a full-blown, flying, lender of last resort, central bank, thereby saving the entire eurozone project. But a crisis of Europe’s banks could throw everything into a dark pit before that happens.
Economy
A shallow double-dip recession in the UK now seems as good as it gets. The eurozone crisis could throw the graph lines much lower. Government ministers will spend most of the year bedecked in high-visibility jackets to remind you how busy they are pushing growth … but rising unemployment, insolvencies and low confidence seem with us for 2012.
Public sector
Cuts to the public sector already now prolonged and deepened may be added to in 2012. That would come just as some of the cuts already announced begin to bite, unless the deficit reduction target is “adjusted” or, as some economists argue, the Autumn Statement OBR gloomy forecasts prove overly pessimistic allowing the government to undercut its latest borrowing predictions.
Coalition
The coalition will continue, albeit with passion spent. Neither party can pretend the economic emergency that brought them together is sorted so either would risk accusations of abandoning the national interest they claim to protect if they bailed out early. The Lib Dems would additionally risk plummeting to earth without a parachute. The main tensions will come over Europe, with some Tory backbenchers regrouping to push for repatriation of powers.
Scotland
Alex Salmond still wants a two ballot paper referendum maybe as late as 2015 with the second ballot paper offering “devolution max” (all powers to Scotland except defence and foreign affairs). The new Labour leader in Scotland, Johann Lamont, wants to stop the second question, have one vote – on independence – and have the referendum as soon as possible. Who wins that battle should become clear in 2012 and could have huge implications for the future of the union.
Afghanistan
There is pressure to bring forward what is already a pretty tight withdrawal timetable. The treasury thinks early drawdown could bring significant savings in the billions. That requires more engagement with the Taliban.
Phone hacking
Expect charges to be brought over police accepting money from newspapers and over phone and computer hacking. This story will run throughout 2012 with potential criminal cases, appeals etc taking it into 2013 and 2014.
Labour
Ed Miliband will remain leader throughout 2012, despite disappointing poll ratings and what looks like it could be for Labour a disappointing result in the London mayoral contest.
Apologies in advance if all or some of this proves to be wrong. And have a good Christmas!
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