London’s benchmark stock index, the FTSE 100, rallied more than 2pc, with banks and energy companies chalking up big gains. The FTSE 250, which tracks medium-sized British companies, surged even more. The pound was rampant, rising steadily as the dramatic Thursday night exit poll solidified into a Friday morning realisation the Conservatives hadn’t just beaten Labour, but secured a slender overall majority.
Not only would the UK now be more business-friendly, with lower bank levies and less nasty market intervention during the coming parliament. Markets were also relieved to avoid the messy negotiations, the days or even weeks of uncertainty, over who would be running the world’s fifth-biggest economy.
So David Cameron did it, winning the Commons majority that looked unfathomable just 24 hours before. The Tories now boast 331 seats, almost 100 ahead of Labour. So why were the pre-election opinion polls, which had the parties neck-and-neck, so wildly askew?
One reason is that, as in 1992, lots of “shy Conservatives” didn’t admit their intentions to pollsters, for fear of appearing harsh. Many “undecideds” also eventually went Tory for fear of a Labour government propped up from the left by the SNP.
In my view, the regular polls – heavily reliant on urban-based internet-savvy surveyees, perhaps swayed by the relatively small participation fee – also favour Labour, largely excluding older, out-of-town Conservatives who assiduously use their votes. I give more credence to prices on betting exchanges – where countless punters, some with inside information, risk their own money. Such markets are bound to generate more accurate predictions than subjective, headline-chasing, client-pleasing opinion polls. And so it proved last Thursday.
Whatever the gap between speculation and outcome, it is difficult to overstate the significance of this election. It could be that, during the lifetime of this parliament, the 1707 Act of Union is upended and the UK breaks up. In addition, the composition of the new parliament, and the broader pattern of Thursday’s voting, mean there’s a strong chance that Britain will soon leave the European Union.
Despite the dramatic nature of the Conservative victory, and justified euphoria among those associated with the Tory campaign, Cameron’s majority is merely in the single digits. John Major had a rather bigger 21-seat majority after his 1992 victory – and, still, stroppy backbenchers on his own side were able to torment him, before the majority, through by-elections, deaths and defections, ultimately failed to last the parliament.
As such, and without the Liberal Democrats to blame for foot-dragging, the Tory leader will need to deliver, consistently, pretty much exactly what his parliamentary party wants – not just in terms of reining in the state, but at the constituency level too.
I wouldn’t be surprised, then, to see the roll-out of wind farms curtailed, as Tory MPs in the shires club together, many of their constituents full square behind them, to exploit the leverage provided by a tiny government majority. I can even see a Cameron-led government having to re-think its unwavering commitment to HS2, the proposed high-speed rail-link which so angers many Conservative backbenchers whose constituencies lie on the route.
The shires aside, the biggest story of this election is clearly what happened north of the border. With the SNP winning no less than 56 of Scotland’s 59 seats, up from just six in 2010, it is almost certain Nicola Sturgeon’s party will soon demand another referendum on independence.
Who cares if former SNP Leader Alex Salmond, now himself back at Westminster, assured us that the previous vote would settle the question “for a generation”. Go back through the transcripts and the canny Salmond often talked of the September referendum lasting for “a political generation”.
Well, Sturgeon is younger, and represents a generational change of the SNP’s political guard, Salmond will no doubt soon be arguing. Already, in the flush of their Labour cull, the SNP rank and file are wielding a new and chilling phrase, talking of their “decisive mandate”. No matter that they lost an independence contest by a hefty 10 percentage points just eight months ago. No matter that less than 5pc of our national electorate supported them on Thursday – they’re still determined to break up the UK.
And the more the SNP push, of course, the more they’ll “envenom” – to use a superb phrase wielded by the constitutional expert Professor Peter Hennessy on election night – relations with their British compatriots.
The more Cameron yields to the Scots – providing an ever more fiscally advantageous deal, with greater Southern subsidies – the more English MPs, not least that Tory awkward, will help the SNP in their mission by pushing them away.
We will, no doubt, now see an attempt to build some new kind of federal structure, with English-MP-only votes – and I sincerely hope it works. But with England largely blue, Scotland almost entirely yellow – and ancient hatreds and enmities now unleashed – I fear that last Thursday’s election may ultimately leave our union irreparably shattered.
Then, of course, there is Europe. The Tories spent the 1992 Parliament tearing themselves apart over the European question and something similar could happen again. Cameron’s post-victory authority among Tory backbenchers could soon evaporate, not least if he wavers on his pledged EU membership referendum in 2017. I’d say there are at least 100 Tory MPs who are determined to see the UK leave the EU, whatever “deal” Cameron manages to secure in his “renegotiation” with Brussels. And the new Conservative intake, many of them having fought off Ukip to win their seats, are likely to be even more Eurosceptic than those who entered parliament in 2010.
Although Labour currently opposes an EU referendum, that could soon change. Many returning opposition MPs were also run close by their purple-rosetted opponents. They’ll know that, to keep their seats next time, they’ll need to show a willingness, at least, to consider the option of defying Brussels. While most Tory objections to EU membership relate to a general loss of sovereignty, many northern Labour MPs have heard their constituents complain loudly in recent months about the impact on local wages of “the free movement of labour” from the Continent.
With net immigration at 300,000 last year, and average incomes in Poland, Romania and Bulgaria still less than a third, a quarter and a fifth of UK levels respectively, such inflows will continue until EU rules are changed. That either means Brussels yields or the mood in parliament, across the board, shifts strongly in favour of quitting – and that could provide the impetus for a country-wide vote the same way.
There are many people this weekend, Tory and Labour supporters alike, who are celebrating the demise of Nigel Farage. The former Ukip leader’s loss in Thanet South, and the fact that his party now has just one MP, fewer than before the elections, fills many mainstream politicians with glee.
Whatever you think of Farage, though, you have to marvel at his achievement. In 2010, his party came first in no constituencies, second in no constituencies and third in four, securing just 3pc of the popular vote. This time, Ukip was first in one constituency, second in no less than 120 and third in 364, the party’s national vote share rocketing to 13pc, getting on for twice that of the Liberal Democrats.
Having provoked the beginnings of a national discussion on Europe, and the UK’s broader place in the world, Farage has opened a Pandora’s box that cannot now be closed. Don’t be surprised if many of those Ukip second-places become Ukip victories in 2020 – and Nigel has the last laugh.