The vote for German Chancellor and Federal Elections

The vote for German Chancellor and Federal Elections

Yesterday, elections for the Bundestag took place in Germany. The election results constitute a substantial defeat for the governing Conservatives (CDU/CSU). At the dawn of the 16 years long era of Chancellor Angela Merkel (CDU), Germany finds itself at a turning point. For the first time, it is very likely that the Federal Government will encompass up to three parties. The race remains too close to call who will lead the next government. It remains unclear whether Olaf Scholz (Social Democrats) or Armin Laschet (Conservatives) will be the next Federal Chancellor. The narrow results also open up the door to new possible coalitions. At the same time, the formation of the new government will be rather complex and take some time. According to German electoral law, the voters do not directly elect the Chancellor but determine the composition of the Bundestag by voting for candidates and party lists.

Monday morning’s preliminary official results did not indicate a clear winner as the two major parties appear to be nearly tied at around 24-26%.

Preliminary official results including the difference (in percentage points) to the 2017 Federal Elections are: Conservatives (CDU/CSU) 24,1,% (-8,9%), Social Democrats (SPD) 25,7% (+5,2%), The Greens 14,8% (+5,9%), Liberals (FDP) 11,5,% (+0,8%), The Left (Die Linke) 4,9% (-4,3%), Alternative for Germany (AfD) 10,3% (-2,3%) and other parties 8,6% (+3,6%). The voter turnout remained similar to the previous elections at 76%.

The results display a substantial loss for the Conservatives, while the Social Democrats managed to improve their results, in comparison to the last Federal Elections. Commentators argue that SPD’s Chancellor candidate Olaf Scholz (SPD) managed to gain ground on the Conservatives by representing stability and continuity. He served as Vice-Chancellor and Federal Finance Minister of the current government. Furthermore, as opposed to the Conservatives, the Social Democrats stood firmly behind their candidate and demonstrated unity throughout the election campaign.

The results represent a substantial loss for the Conservatives, coming in with the worst result the party has seen at a Federal Election so far. Commentators argue that the Conservatives’ bad performance is due to disunity in the party, several scandals surrounding conservative policymakers and mistakes by Armin Laschet (CDU’s Chancellor candidate) throughout the election campaign.

The Greens achieved their best result in a Federal Election so far, almost doubling their results compared to the last elections in 2017. Albeit, the party still underperformed and came in third after ranking first in some polls in spring. The Liberals and the AfD retained almost the same position as in the last elections. However, the hard-left Linke party suffered losses and will just slightly enter the next German parliament.

Likely coalitions:

  

Due to the distribution of seats in the Bundestag, the following coalitions are possible and politically conceivable:

  • Social Democrats (SPD) + Greens + Liberals (FDP) (‘Traffic Light Coalition’)​ ​​
    The ‘Traffic Light Coalition’ is the preferred option for the SPD to lead a government. However, such a constellation has few policy overlaps in fields such as taxation, with the FDP refusing any new taxes. Conversely both the SPD and the Greens want to introduce new taxes such as a ‘wealth tax’. Therefore, coalition negotiations would be rather difficult and bear an increased risk of failure. Albeit, as the Social Democrats came in first after the elections, the ‘Traffic Light Coalition’ becomes more probable.
  • Conservatives (CDU/CSU) + Greens + Liberals (FDP) (‘Jamaica Coalition’)​ ​​
    The ‘Jamaica Coalition’ would be the preferred path to the Federal Chancellery for the Conservatives. The FDP is more aligned with the Conservatives’ political agenda than The Greens.​ We can expect climate change to be one of the major crunch points throughout potential negotiations for a ‘Jamaica Coalition’.
  • Social Democrats (SPD) + Conservatives (CDU/CSU) or Conservatives (CDU/CSU) + Social Democrats (SPD) (‘Grand Coalition’)
    While both the SPD and CDU/CSU oppose serving as a junior partner in another unpopular coalition with each other, the close results will raise some questions regarding a potential continuation of the current government. However, this scenario remains unlikely as a grand coalition remains the last resort for both parties. For the Social Democrats entering a coalition with the CDU/CSU would likely once again entail making concessions on many social policies which represent the core of the SPD’s current election campaign.​ For the Conservatives, on the other hand, it would represent the first time in history of entering a government as the junior partner.
    A coalition between Social Democrats (SPD), Greens and Left (Die Linke) ​ ​(‘Red-Red-Green Coalition’)​ will most likely not have a majority in the next Bundestag.

The narrow results make both the ‘Traffic Light Coalition’ with Olaf Scholz (SPD) as Chancellor as well as the ‘Jamaica Coalition’ with Armin Laschet (CDU) as Chancellor possible. The coming days and weeks will show which alternative turns out the most viable. The final composition of the Federal Government will depend on the Greens and the Liberals. Both parties will be the kingmakers of the next Chancellor. However, one of the parties will have to bite the bullet and join a government with a Chancellor they opposed throughout the election campaign. In the course of the negotiations both parties will have strong leverage against the Conservatives and the Social Democrats. In the end, it will come down to what party delivers the most compelling offer to both the Liberals and the Greens.

Key Statements by party leaders:

  • Both Armin Laschet (CDU) and Olaf Scholz (SPD) interpreted the narrow results as a mandate to form the next German government.
  • Despite the historically low results for the conservative CDU, Armin Laschet still interpreted the elections as a vote for a CDU-led government and promised to “do everything we can to form a government led by the CDU.”
  • While the election remains too close to call, Olaf Scholz (SPD) was pleased with the results and is convinced to have received a clear mandate to become chancellor and lead a new government.
  • Annalena Baerbock (Greens), whose party will play a decisive role in crowning the new government, stressed her desire for a “climate government” but  refrained from making any clear statements concerning a preferred coalition.
  • Christian Lindner (Liberals), who is – alongside Annalena Baerbock – perceived as a kingmaker in these elections, argued that Liberals and Greens should hash out their positions before including SPD or CDU in coalition negotiations. Given the German tradition of the election winner to initiate coalition talks, this advance is highly notable.

Traditionally the strongest party of the election is usually tasked with the formation of the next government. Upon its invitation, the parties will meet in the coming week for first exploratory talks to determine if there is enough common ground between them to form a government together. However, this time all eyes are on the Liberals and the Greens as they become the kingmakers for the next Chancellor. Due to the narrow results and the necessity to involve up to three parties in the coalition talks, we expect the negotiations to last at least until the end of 2021. Moreover, both the Greens and the SPD will most likely run a general vote among their members to greenlight the coalition agreement.

Furthermore, several crunch points must be resolved by the negotiators. Among them are measures to tackle climate change, taxation, and restarting the economy after the pandemic. For the time being, the current government under Angela Merkel will remain in office as a caretaker for official duties. However, it is a constitutional tradition that a caretake government refrains from initiating any far-reaching legislative projects.

Update State Elections in Berlin & Mecklenburg-Vorpommern

In addition to the federal election for the Bundestag, two state elections were held in the German states of Mecklenburg-Vorpommern and Berlin over the weekend. Overall, the Social Democrats´ success on the federal level was reflected in the results of the regional elections.

Berlin is not only Germany’s most populous city and capital but also constitutes one of the country’s 16 federal states. The city state’s mayoralty has consistently been held by the Social Democrats for two decades.

Despite a rocky start to the campaign and a plagiarism scandal involving the party’s candidate for “Governing Mayor” Franziska Giffey, the Social Democrats managed to retain their position as the strongest party in Berlin’s senate. Similar to Annalena Baerbock’s campaign for the Chancellery, The Green’s candidate Bettina Jarasch lost a significant lead in the months leading up to the elections. However, The Greens still attracted more voters than the Conservatives. Giffey now faces the choice between continuing the current “Red-Red-Green Coalition” with The Greens and hard-left Linke party or entering a “Germany Coalition” with the Conservatives and the Liberals, instead.

Berlin preliminary official results including the difference (in percentage points) to the 2016 State Elections are: Social Democrats (SPD) 21,4% (-0,2%), The Greens 18,9% (+3,7%), Conservatives (CDU) 18,1% (+0,5%), The Left 14,0% (-1,6%), Liberals (FDP) 7,2% (+0,5%), Alternative for Germany (AfD) 8,0% (-6,2%) and other parties 12,4% (+5,0%).

In Mecklenburg-Vorpommern, one of the least populous and rural German states, the incumbent minister-president Manuela Schwesig (Social Democrats) secured a resounding win ahead of the right-wing Alternative for Germany and the Conservatives. The Social Democrats has been the strongest party in the state’s capital of Schwerin since 1998 and is likely to continue the grand coalition with the Conservatives. Schwesig now faces the choice between continuing the current coalition with the Conservatives or entering a coalition with the Linke party instead.

Mecklenburg-Vorpommern preliminary official results including the difference (in percentage points) to the 2016 State Elections are: Social Democrats (SPD) 39,6% (+9,0%), Alternative for Germany (AfD) 16,7% (-4,1%), Conservatives (CDU) 13,3% (-5,7%), The Left 9,9% (-3,3%), The Greens 6,3% (+1,5%), Liberals (FDP) 5,8% (+2,8%) and other parties 8,4% (-0,2%).

This was first posted on Miller Meier’s website.

Boris Johnson faces Tory revolt over “radical” planning reforms – but risks angering voters if he backs down

Boris Johnson faces Tory revolt over “radical” planning reforms – but risks angering voters if he backs down

The proposals and consultation 

When a new white paper on overhauling planning laws to speed up housebuilding was revealed last year, Boris Johnson declared he would “tear it down & start again”. 

But the backlash from Conservative MPs on the white paper and its “mutant algorithm” was fierce before the summer recess. The former PM, Theresa May, labelled the plans “mechanistic” and “ill conceived”. Backbenchers including Isle of Wight MP Bob Seely called the plans an “assault on democracy” with the algorithm being a “suicide note to the Tory shires” that required “significant evaluation”. The algorithm did not go down well.  

As we near MPs returning from summer recess, another looming rebellion now threatens to pour cold water on the PM’s plans. 

A controversial bill 

Over recess, controversy has been brewing over the proposed Planning Bill, ahead of its introduction to the House of Commons. There’s been a reigniting of Conservative concern over the Bill, to the point where, according to reports, 100 Conservative MPs could rebel against the government on the Bill unless changes are made.  

It’s also being rumoured that No10 is already planning a tactical climbdown on certain aspects of the Bill too. This comes in the aftermath of their by-election loss of Chesham & Amersham to the Liberal Democrats, who successfully played on voters’ fears – exacerbated by HS2 – of the destruction of their green and pleasant land. The loss sent shockwaves through the Conservative backbenches, especially those in southern, home county and southwest constituencies who now can envisage losing their own seat to focused, anti-development Liberal Democrat campaigns. But whispers are now circulating of two potentially new national parks in the Cotswolds and Chilterns to calm nerves on the Conservative backbenches.   

There’s also the added potential of the government straining its delicate relationship with local authorities across England as well. The proposals tend towards the Prime Minister’s notion of cakeism, where everyone can have what they want. The changes have been posited – interchangeably – as giving communities greater power over planning and design, local authorities greater control over the plan making process, and house-builders greater certainty on delivery.

But none of these stakeholders in the process seem to agree and MPs will be swayed by how their local communities and councils react to the Bill and their reactions will not be easily dismissed. 

This means that when the legislation to enact the reforms is finally tabled later this year Johnson is expected to face his toughest Commons challenge yet, despite rumours many of the controversial elements from the white paper will be ditched. 

Planning reform started as a hugely ambitious attempt to transform a sclerotic and bureaucratic planning system but has become bogged down in the realpolitik of managing competing interests within the Conservative parliamentary party. 

Building on the reports of 100 MPs set to rebel against the reforms, there are almost 100 MPs in a WhatsApp group called “Planning Concern” as well as senior figures speaking out & comparing it to the much maligned “poll tax”, with Housing Secretary Robert Jenrick now holding weekly video sessions with backbenchers to try and soothe anger ahead of Parliament’s return. 

This will be an intriguing and deeply personal battle within the Conservative Party which will strain the new 2019 Conservative collation between north and south to its very political fibre. Cavendish & BECG will be there to scrutinise Johnson’s plans to “build, build, build” & keep you updated with every twist and turn of this important political debate as we head into the autumn.       

For further information, please contact Alex Challoner.

The ‘Build Back Better’ Construction Dilemma

The ‘Build Back Better’ Construction Dilemma

The Build Up

There has been growing concern about the crisis building in construction. This crisis is bearing down on two fronts and could easily become a barrier to Government hitting their ambitious 300,000 new homes per year target. The first issue is supply of materials, the second the availability of skilled workers.

The government’s plan is to ‘build back better’ from the pandemic. That’s taken literally on the housing front. However, alongside demand for materials increasing, from homeowners extending and renovating during the pandemic and new housing projects being driven forward, supply of materials has fallen, and prices have driven up. The pandemic and Brexit are clearly the key factors in this predicament.

The same issues also causing a headache on the availability of a skilled workforce too. A lack of skilled tradespeople in the construction sector is nothing new. But the impacts of Covid-19, especially the first lockdown and the hard stop that had on construction, have caused this issue to become much more acute. EU nationals have headed for home nations and an ageing workforce has seen many hang up their hard hats as they retire.

Remediation Options

Government could implement a raft of interventions to help remediate the growing issues in a key sector that will drive economic post-pandemic recovery. There’s a need to look at working hours in the construction sector and to ensure the sector is given as close to the same rights to flexible working as other sector workers will get as possible.

However, Government also need the sector to appeal to a younger, more digitally savvy demographic. The newly announced apps from MHCLG for permitted rights development on the homeowner and local authority sides are encouraging. But the sector needs to implement more tech-driven ways of working into their day-to-day processes. The need for technology within the sector will also be driven and focussed by the Government’s Net Zero targets, the MMC and the retrofit agendas but digital ways of working will also help to attract a younger set of applicants. Stability in pay and working hours will help with recruitment in the sector as well, not only in the younger demographic but across the board. Too many roles are currently zero-hour contracts and a better rate of pay across the industry alongside reliable hours seems like a simple fix but a crucial one for a skilled workforce.

Solving the problem of materials, demand and price is more complex. The Construction Leadership Council recently noted cement, timber, steel and other materials were in short supply in the UK and that high demand was due to continue. A key factor in this shortage of supply is a lack of hauliers. Again, this is mainly due to Brexit and the pandemic. The FT recently reported that a severe delay in new hauliers being able to take tests due to Covid-19, an ending of EU national recruitment and self-employment tax reform causing EU drivers leaving. Again, the government will need to work quickly to rectify these challenges to ensure this issue doesn’t intensify and become a national source of pain for the sector and the government in the recovery from Covid-19.

Surveying The Issue In The Round

Covid-19 policy interventions aside, this government is wedded to delivering the 2019 election manifesto, treating their pledges made in the election as a governmental to-do list. Despite the upheaval and scarring impacts of Coronavirus, there’s been no stopping the government ticking off their manifesto commitments pledge by pledge. Social Housing White Paper; brought forward, planning reforms; controversially in progress, First Homes; now on the market, but the availability of both materials and skilled workers has the ability to stop government in their tracks and hinder the economic and housing recovery from the pandemic. Strong policy interventions to improve the availability of materials and skilled people is key. But speed is also a vital factor on the government side as well, ensuring the ‘build back better’ mantra is followed as the public expect and the government want.

Cavendish Advocacy and BECG bring together national and local expertise to ensure those in the construction industry are communicating with the stakeholders that matter, from the parish council to No10. We can help keep you updated with crucial government policy as we move through the latter part of 2021 through events and research throughout the year. For further information and advice, please contact alex.challoner@cavendishadvocacy.com.

Is uncertainty the one thing we can be certain of over the coming months?

Is uncertainty the one thing we can be certain of over the coming months?

Hope is in the air. The sun is shining, the vaccination programme is progressing, and people can take advantage of non-essential shopping, sit in a beer garden, and see their friends and loved ones. After a hard and testing winter, it is only right that the country enjoys a return of those freedoms which we all took for granted pre-COVID-19 and have sorely missed over the past year and a half.

Of course, we are still some way off a complete return to normality, but the UK remains well on its way to that crucial date of 21 June, when (barring some disaster) the majority of restrictions will be lifted. If this date still seems a million miles away, it is worth reminding ourselves what we can look forward to between now and then.

From 17 May, indoor hospitality and entertainment venues will reopen. That means pubs, restaurants, and cinemas to name but a few. For those so minded, indoor adult group sports and exercise classes will also be permitted. In addition, performance and sporting events will return, although the exact number of spectators allowed will depend on whether the event takes place indoors or outside, and how large the venue is. Finally, up to 30 people will be able to attend weddings, receptions, funerals, and other life events. This will enable more of us to celebrate or mark those important moments which all mean so very much to us.

However, while these are important steps in the right direction, there remains huge uncertainty in a number of important areas.

The report published by the Global Travel Taskforce in April, provided a framework for restarting overseas travel on 17 May, but very little detail. Those who work in the aviation and travel industries will therefore be anxiously waiting for government to publish its Green List of countries, from where travellers can return to the UK with no requirement to quarantine.

Throughout the long process of lifting restrictions, the government has understandably been cautious. Failed attempts to reopen the economy in 2020 (we all remember the Christmas U-turn) provided a stark lesson in expectations management, and the government has repeatedly said that the pace of the lockdown will be dictated by data, not dates.

However, as more people are vaccinated, the Prime Minister could come under increased pressure from both the opposition and his own backbenchers to accelerate the pace of unlocking. The extent to which he will be inclined to listen will depend on how the Conservative Party performs in the local and mayoral elections on 6 May.

 

Outlining the political landscape

Up until now polls have consistently shown the Conservatives to have a robust lead over Labour. But the current fallout between No10 and the Prime Minister’s former Chief Advisor, Dominic Cummings, could cast a shadow over the Conservative Party’s lead so far. However, assuming this is short term political turbulence in the run up to the local elections, then any strong performance in these elections, alongside a win in the Hartlepool by-election, will likely be viewed as confirmation of the current approach.

It will also leave the Prime Minister in a strong position as he considers his next Cabinet reshuffle and returns focus to his domestic agenda. We will know more about what this will look like on 11 May, when HM The Queen opens Parliament and delivers her government’s legislative programme.

We can anticipate some bills to be rolled over from the previous term, such as the long-delayed Environment Bill, which is a key part of the government’s green agenda and will become increasingly important in the run up to COP26 in November. Other new legislation will address the building safety regulatory regime, reform the asylum system and repeal the Fixed-term Parliaments Act. We may also see a bill designed to finally reform Health and Social Care, based on the proposals set out in a DHSC White Paper in February.

These bills will inevitably be accompanied by other initiatives to promote the economic recovery and the levelling up agenda. This has been the cornerstone of this government’s purpose since 2019 and will be one of the defining yardsticks by which the government will be measured come the next General Election which, if the Fixed-term Parliaments Act is repealed, could arrive sooner than we think.

Further political analysis will be provided by Alex Challoner at the next CBI Government Affairs Network event on 10 June, register your free place below.

This article first appeared on CBI’s website. You can view it here.

Note to Prime Minister: from his “virtual” Parliamentary Private Secretary (PPS)

Note to Prime Minister: from his “virtual” Parliamentary Private Secretary (PPS)

Indulge me for a few moments but let us imagine that I am the Prime Minister’s Parliamentary Private Secretary (PPS). What would my candid advice be to Boris Johnson as Parliament return? Here is what I would say:

Dear Prime Minister,

You appointed me to be your eyes and ears in Parliament to help keep you abreast of developments before they engulf us.  So, here are my top 5 observations as we enter the autumn session:

1. Colleagues – and by that, I mean old and new intake – have come back in the foulest of moods from their summer holidays. In fact, I have never known a time quite like it.  In the space of a few days I have been told everything from the “party is in a bad way and new MPs are very depressed” to “there is a lot of unhappiness amongst colleagues about the current situation”. These are some of the milder comments. Amongst old and new MPs there is a general sense the Government is drifting off course and if nothing is done about it then it could cause longer term damage. The chorus of MPs expressing disapproval about the Government’s general handling is growing louder by the day and it is imperative that the Government is seen to get back on the front foot after the summer debacle. I know that is not easy in the middle of a pandemic and a severe economic downturn, but colleagues are sick and tired of being caught off guard by Government announcements which can change by the minute. There is a lot of grumbling about the whipping situation and it might be a good idea to put a member of the new intake into the Whip’s office as a morale booster for the new intake?

2. Members are getting a very rough ride when they return to their constituencies and are faced by disgruntled councillors, many of whom could be out of a job soon. Our local government base is up in arms about our proposed changes for reorganisation and many feel they will be side-lined when the Government publishes its plans for more Metro Mayors and Unitary Authorities. This is on top of planning reform White Paper which, depending which area of the country you live in, could see a significant rise in housing numbers. A combination of these two so quickly could inflame already hot tempers. Could there be a way of delaying the plans for further devolution until the New Year at least?

3. Some colleagues are getting jumpy by the prospect of a collapse in trade talks with the EU, and I am not talking about the usual suspects! The proposal to rewrite parts of the Withdrawal Agreement as part of the Internal Market Bill; some believe this leaves us exposed to running roughshod over international treaty obligations. If we can suddenly re-write clauses of an agreed treaty, how we can be judged seriously if say we are telling China to respect its international treaty obligations to Hong Kong? For some colleagues this does not bode well. On top of this, an imminent collapse of talks would be a gift for the SNP ahead of Holyrood Elections next year. How can we dial down the rhetoric between ourselves and the EU on this matter?

4. Several colleagues have questioned the need for a No10 press conference from October onwards to take the place of lobby briefings. Aside from finding the right person to head up these daily briefings, some MPs are concerned we are spending too much time focusing on the delivery of our message at the expense of the substance of our message. Would it not be a better use of time and resources to find someone within No10 to help shape the over-arching message for the Government as it begins to articulate a vision for the UK as we emerge out of the pandemic?

5. Back again on the trade deal, between ourselves and the EU are we creating a rod for our own backs with any new occupant of the White House? Colleagues have been struck by the willingness of senior Congressmen to come forward to denounce any proposals which might lead to a harder border between Northern Ireland and the Republic of Ireland. This would pose a real obstacle to any future trade deal between the UK and the US – we cannot risk that, surely?

I appreciate all above points are part of a bigger, fast-moving picture and chain of events within the Government but thought as your “Virtual PPS” that I should bring to this your attention.

Yours sincerely,

While the observations are mine the quotes are real and if left ignored could pose real problems for the Government longer-term. Between now & Christmas, Covid aside, the Government needs a stronger centre to deliver a narrative that instils confidence in MPs across its backbenches & to demonstrate that it has a plan and a vision for the country.