April 22, 2015 / 12:17 PM / in 2 years

Game of losers? Poisoned chalice awaits UK election victor

(L-R) Ed Miliband the leader of the Labour Party, Leanne Wood the leader of Plaid Cymru, Nicola Sturgeon the leader of the Scottish National Party (SNP) and David Cameron the leader of the Conservative Party and Britain's current prime minister take part in the leaders televised election debate at Media City in Salford in Northern England, in this April 2, 2015 handout picture provided by ITV.Ken McKay/ITV/Handout via Reuters

LONDON (Reuters) - Few politicians would be foolish enough to say publicly they'd prefer not to be elected because of the unpopular decisions that await, but next month's election in Britain is one some may privately regard as a poisoned chalice.

Britain's economy is one of the fastest growing in the developed world, but whoever wins still faces challenges that could test their party to breaking point.

Politicians say they would always rather be in power than opposition, but they agree Britain is getting tougher to govern.

"If you look at it rationally, none of the two main parties would want to win the next election," Steven Fielding, director of the Centre for British Politics at Nottingham University, told Reuters. "It is more than a double-edged sword."

Among the possible challenges: A referendum that could mean Britain leaves the European Union, Scottish nationalists mounting a new independence push despite losing a referendum last year, the governing party commanding no majority in parliament, and unpopular budget cuts that must be made whoever wins.

Level in most opinion polls ahead of the May 7 vote, Prime Minister David Cameron's Conservatives and the opposition Labor Party are struggling to establish a clear lead.

That's in part because populist parties such as the anti-EU UK Independence Party (UKIP) and the Scottish National Party (SNP) are siphoning off their support, meaning neither main party can expect an overall majority.

EUROPE

If the Conservatives win, Europe would be the big issue.

Cameron once said that "banging on about Europe" was a vote loser, but he has failed to mend a schism within his party over Britain's ties with Europe that helped bring down two of his predecessors, John Major and Margaret Thatcher.

Hoping to thwart UKIP and appease eurosceptic Conservatives, he has promised to reform Britain's EU ties before holding a membership referendum by the end of 2017 if re-elected.

That would dominate the first two years of any Conservative government and Cameron would have to show he was making progress in his renegotiation.

The outcome is unpredictable. Cameron favors staying in a reformed EU, but he won't rule anything out if he does not get the changes he wants, including a 'Brexit' (British EU exit).

So far, signals from Brussels have been mixed, with European leaders saying they don't want Britain to leave while warning they won't budge on issues such as free movement of people.

The issue could tear Cameron's party apart. Conservatives like Foreign Secretary Philip Hammond have said they would back leaving if a referendum was held today, but others, like former minister Ken Clarke, are EU supporters.

"The whole issue of Brexit and Cameron's stance on Brexit could become the basis of splits within the Tory (Conservative) party," said Colin Hay, co-director of the Sheffield Political Economy Research Institute.

LEADERSHIP CHALLENGE?

Cameron's future would also be on the line, raising the possibility of his being ousted mid-term.

He failed to secure outright victory at the 2010 election and some in his party say he is too liberal. If he only managed to form a minority government or another coalition this time, he could face a leadership contest.

"It depends how badly the Conservatives do but there is a scenario in which ... there is a potential challenge to Cameron coming from the eurosceptic wing of the Conservative Party," said Hay.

Opinion polls show Britons are evenly split on leaving the EU. If Britain voted to leave, the pro-European Scottish nationalists could seek a re-run of last year's independence referendum.

That means the Conservatives risk presiding over a Brexit and the break-up of the United Kingdom within five years.

AUSTERITY

Labour leader Ed Miliband would face an equally tricky situation, though his weakness would be budget cuts.

Ahead of the 2010 election, then Bank of England governor Mervyn King was quoted by a U.S. economist as saying that whoever won would have to embark on an austerity program so severe that they would be out of power for a generation.

While Cameron's coalition has made big spending cuts, the deficit has only been halved rather than eliminated as promised, and many of the worst cuts have been postponed.

The Institute for Fiscal Studies think tank last year estimated 35 billion pounds ($52 billion) of cuts had been made in government departments, with 55 billion pounds still to come.

"Very significant spending restraint and reform of welfare entitlements will be necessary in the next parliament and beyond to begin to get our debt levels back under some semblance of control," Mark Littlewood, director general of the Institute of Economic Affairs, said of Labour's economic policies.

Center-left Labour would face a backlash from many supporters if it makes deep cuts.

The trade unions are their biggest financial backers and, should they fall short of a majority, they may need to call on the support of anti-austerity left-wing parties such as the Scottish nationalists or the Greens.

'MESSY AND UNPLEASANT'

Whoever wins is likely to be governing from a position of weakness, with even small rebellions potentially blocking policy.

With Cameron's Liberal Democrat coalition partners facing heavy losses, they may not have enough seats to provide either the Conservatives or Labour with a majority, meaning three or more parties could be involved in a power deal.

That could see lengthy wrangling over policy, unpopular compromises and an unstable government dictated to by smaller parties.

"It is going to be complicated, it is going to be messy, it is going to be very unpleasant," said Fielding.

Editing by Andrew Osborn and Giles Elgood

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