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The New Depression

The business and political elite are flying blind. This is the mother of all economic crises. It has

We are living through a crisis which, from the collapse of Northern Rock and the first intimations of the credit crunch, nobody has been able to understand, let alone grasp its potential ramifications. Each attempt to deal with the crisis has rapidly been consumed by an irresistible and ever-worsening reality. So it was with Northern Rock. So it was with the attempt to recapitalise the banks. And so it will be with the latest gamut of measures. The British government – like every other government – is perpetually on the back foot, constantly running to catch up. There are two reasons. First, the underlying scale of the crisis is so great and so unfamiliar – and, furthermore, often concealed within the balance sheets of the banks and other financial institutions. Second, the crisis has undermined all the ideological assumptions that have underpinned government policy and political discourse over the past 30 years. As a result, the political and business elite are flying blind. This is the mother of all postwar crises, which has barely started and remains out of control. Its end – the timing and the complexion – is unknown.

Crises that change the course of history and transform political assumptions are rare events. The last came in the second half of the 1970s, triggered by the Opec oil price spike and a dramatic rise in inflation, which marked the end of the long postwar boom. Its political consequences were far-reaching: the closure of the social democratic era, the rise of neoliberalism, the discrediting of the state, the embrace of the market, the undermining of the public ethos and the espousal of rampant individualism. For the next 30 years, neoliberalism - the belief in the market rather then the state, the individual rather than the social - exercised a hegemonic influence over British politics, with the creation of New Labour signalling an abject surrender to the new orthodoxy.

The modalities of this present crisis are entirely different. Extreme as they may have appeared to be at the time, the economic travails of the 1970s were progressive rather than cataclysmic. The old system did not hit the wall, but became increasingly mired and ineffectual. What swept the social democratic era away was not the force de frappe of an irresistible crisis but that it was accompanied by the steady rise of a new ideology and political force in Thatcherism - and Reaganism in the United States - and its victory in the 1979 general election.

In contrast, the financial meltdown of 2007-2008 demolished the neoliberal era and its assumptions with a suddenness and irresistibility that was breathtaking. The political class, from New Labour to the Conservatives, is standing naked. They are still clinging to the wreckage of their old ideas while acknowledging in the next breath that these no longer work. The financial crisis is a matter of force majeure; political ideas and discourse change much more slowly, even when it is obvious that the old ways of thinking have become obsolete. Meanwhile, there is no political alternative waiting in the wings, refining its radical ideas in think tanks ready to storm the citadels of power as there was in the 1970s, notwithstanding the fact that think tanks are now far thicker on the ground. Instead, it has been the mainstream which senses that neoliberalism no longer works, fatally undermined by events and, ultimately, the author of its own downfall. This crisis will have the most profound and far-reaching political consequences and will in due course transform the political landscape, but it remains entirely unclear in what ways and when that might be.

In all these senses the financial meltdown has far more in common with the Great Depression than the Great Inflation. When the financial crisis consumed Wall Street in 1929 and proceeded to undermine the real economy, engulfing Europe in the process, it was not accompanied by a radical shift towards Keynesianism, but rather a reassertion of sound finance orthodoxy, followed in due course by the adoption of protectionism. The political mainstream as represented by Labour's Ramsay MacDonald and Philip Snowden and the Conservative Stanley Baldwin all sang from the same hymn sheet. Only Keynes and a faction of the Liberal Party enunciated a plausible alternative. Eventually a programme of fiscal deficits and public works was pursued by Franklin D Roosevelt in the United States, but in Britain Keynesianism was not properly embraced until rearmament and the approach of war. Indeed, it was not until 1945 that the combined legacy of war and the Depression belatedly resulted in a fundamental political realignment and the birth of the social democratic era.

The Grim Reaper has finally spoken:

a boom pumped up by credit steroids and a bust that takes us back to the 1930s

Since the financial meltdown dramatically intensified in September 2008, Gordon Brown has managed to ride the economic storm rather more successfully than the Conservatives, or, for that matter, than Tony Blair would have done. It is Vincent Cable, the Liberal Democrats' econo­mics spokesman, however, who has indubitably emerged as the political sage, unafraid of confronting neoliberalism's shibboleths, demonstrating a clarity of mind and the political courage to tell things as they are, in a way that has escaped all other prominent politicians. Although Brown was the economic architect of the past decade and was responsible, more than anyone else, for its excesses and was shaping up to be a rather disastrous Prime Minister, he displayed last autumn, at least initially, an agility of mind and nimbleness of foot that defied the expectations of those who believed he was capable of neither. He revelled in the sense of purpose and vision offered by the crisis, seemingly prepared to jettison the thinking that had imbued his previous decade as chancellor.

But Package Part I, widely hailed at the time and imitated elsewhere, proved woefully inadequate, and the financial system remains frozen. Meanwhile the waters are rising up the Good Ship UK, threatening to transform the banking crisis into a fiscal and currency crisis. It seems unlikely that, if that should happen, Brown will survive the next election.

Even if it does not happen, Brown faces a serious problem about his own past role, because Britain’s crisis has been greatly exacerbated by the soft-touch regulation, easy credit, runaway house inflation and overexpansion of financial services over which he presided and for which he is accountable. So far he has refused to admit or accept responsibility for his actions – he initially had the temerity (or foolhardiness) to argue that the UK was better placed than other countries to deal with the credit crunch, even though it has become abundantly clear since that the very opposite was the case. So while Brown remains in denial, the plausibility of his new turn, and his understanding of what is entailed, must be seriously doubted.

Indeed, after its initial boldness, the government now seems trapped by its past actions and its former ways of thinking. Brown's failure to accept the need to nationalise the banks suggests the limits of his new-found political courage, and his inability to embrace the logic and imperatives of the new situation. He is still a prisoner of his old timidity and his conversion to the neoliberal cause. It is his good fortune that the Cameron Conservatives have been hugely wanting in their response to the financial meltdown. Having spent his first years as leader of the opposition seeking to reassure the country of his centrist credentials, David Cameron, at the first whiff of gunfire, has turned on his heels, rejected Keynesianism and, at the very moment when events have shown Thatcherism to be deeply flawed and historically out of time, headed back to the Thatcherite womb of sound finance, arguing that a government must balance its books and that deficit financing, Keynesian-style, is reckless and irresponsible.

But all this, it must be said, is the small change of politics. The crisis threatens in time to sweep away the political world as we know it and those who fail to grasp its magnitude and meaning. Far more is at stake than the fortunes of a few leaders, be their name Brown or Cameron. Who knows where things will be this time next month, let alone next year or, indeed, in 2012? The financial meltdown now rapidly plunging the western world into what increasingly looks like a depression is the first great crisis of globalisation. There was plenty of warning. The Asian financial crisis of 1997-98 proved a salutary lesson about the dangers posed by huge capital movements that were subject to precious little regulatory control. Three economies capsized (South Korea, Thailand and Indonesia) and others stood on the brink.

There were other earlier warning signs, notably Mexico in 1995, when GDP fell by 9 per cent and industrial production by 15 per cent, following a run on the peso. These crises were blamed on the immaturity and fecklessness of national governments - in the case of east Asia on so-called crony capitalism (which, incidentally, prompts the question of how we should describe Anglo-American capitalism) - which the International Monetary Fund obliged to engage in swingeing cuts in public expenditure as a condition of their bailouts.

Yet what if such a crisis were to be no longer confined to the peripheries of global capitalism but instead struck at its heartlands? Now we know the answer. The crisis has enveloped the whole world like an uncontrollable virus, spreading from the US and within a handful of months assuming global proportions, at the same time mutating with frightening speed from a financial crisis into a fully fledged economic crisis. In so doing, it has undermined the foundations on which the present era of globalisation has been built, namely scant regulation, the free movement of capital, a bloated financial sector and immense reward for greed, thereby bringing into question the survival of globalisation as we now know it.

Enormous international flows of unregulated capital have capsized the international financial system - with disastrous consequences for the real economy - in a manner akin to the effect of a roll-on, roll-off ferry shipping too much water. We can now see the cost of free-market capitalism and light-touch regulation. Iceland may provide an extreme example of the consequences of the credit crunch but it also illustrates the dangers facing the more vulnerable economies, the UK included, in a deregulated world where the market rules: a small, open economy; a large, internationally exposed banking sector; an independent currency that is not a serious global reserve currency (of which there are only three); and limited fiscal strength. These propositions have constituted the core economic beliefs - from Thatcher and Lawson to Blair and Brown - that have informed policymaking over the past three decades and without which, it was claimed ad nauseam, an economy could not succeed. Heavy-handed regulation and an overbearing state would serve only to frighten off capital and condemn a country to slow growth, stagnation and global marginality. Now we know the fallaciousness of these claims and the consequences of "letting the market decide".

Like Iceland, albeit not as extremely, Britain has been living in a fool's paradise. A failure to regulate the banks and other financial institutions in any meaningful fashion allowed bankers to behave in a grossly irresponsible and avaricious fashion; a boom that was made possible only by a government-enabled credit binge in which people borrowed recklessly; a bloated financial sector that grew to represent over 8 per cent of the total economy and which was found to have been built on foundations of sand; an overvalued currency that made manufacturing exports uncompetitive and thereby resulted in an unnecessary and counterproductive contraction in the manufacturing sector which must now be reversed; an absurd belief that boom and bust had been banished for ever, allowing the banks to turn a blind eye to the inflating of various asset bubbles and display a profound ignorance of the history of capitalism; a persistently chronic current account deficit that can no longer be compensated for by inward capital flows; monstrous salaries for those at the top of the financial and corporate tree, which were justified in terms of a trickle-down effect that remained a chimera, and as the reward for risk which was, in fact, a reward for greed and failure; growing inequality, which was justified in the name of a more competitive economy accompanied by declining social mobility in the cause of an open and flexible labour market; and, finally, the mushrooming of what can only be described as systemic corruption on a mega-scale as the state ignored the gargantuan abuses of those who ran the banks and other financial institutions, while regulatory authorities willingly colluded in their excesses.

This is the sad story of the New Labour era.

The ultimate cost of this debacle as yet remains unknown. What began as a financial crisis is threatening, as the government seeks to bail out a bankrupt financial sector, to become a currency crisis, with foreign investors concerned about the effects this might have on the value of sterling, and perhaps even worse, ultimately a sovereign debt crisis, with growing doubts about the UK’s financial viability. Until there is some end in sight to the financial crisis, and a line can be drawn under the banks’ indebtedness, we will not know the answer to these questions. One thing is clear, however: whatever the limitations of the social democratic era, it was never responsible for such an all-enveloping and cataclysmic crisis as the one that the neoliberal era – and the Thatcherites and New Labour – have managed to produce. After all the boasting about the virtues of the Anglo-American model of capitalism, the Grim Reaper has finally spoken: a boom pumped up by credit steroids and a bust that takes us back to the 1930s.

There are two key aspects to this crisis: national and global, with the latter promising to be rather solutions are concerned, we are in uncharted territory, with close to zero interest rates, a Keynesian-style fiscal boost that may prove inadequate to the task and could well fail, a hugely indebted financial sector that threatens to leave us with an enormous future tax burden and a greatly expanded national debt. All of this, furthermore, must be addressed in the context of an open-market regime which is very different from those of previous eras, and which could render Keynesian-style national solutions ineffectual. What would greatly assist any national recovery is a co-ordinated global response to the crisis; in other words, global co-operation at the highest level. This cannot be ruled out, but it would be a brave person that would bet on it. It was exactly the lack of international co-operation that bedevilled recovery in the 1930s and eventually led to the Balkanisation of the world into regional currency and trading blocs.

The most important single question in this context is the relationship between the US and China. Will the Obama administration be able to resist the slippery slope of creeping protectionism? Will arguments over the revaluation of the Chinese renminbi be resolved amicably? If the answer is in the negative, then the global outlook will be very bleak indeed and so, also, as a result, will be the prognosis for national recoveries. Indeed, the prospects would look disturbingly like those of the 1930s, with growing international antagonism and friction and a continuingly intractable crisis at a national level, with only the very slowest of recoveries.

Around the world there is growing evidence by the week of a resort to national solutions at the expense of others: measures to subsidise industries that are in severe difficulties; the Buy American clause that was inserted by the House of Representatives into Barack Obama's latest package (though since weakened); the industrial action in Britain against foreign workers; the withdrawal of banks to their national homes; the attack by Timothy Geithner, the US treasury secretary, on China as a currency manipulator. No Rubicon has been crossed but the warning signs are clear. A retreat into protectionism and beggar-thy-neighbour policies will deliver the world into a second Great Depression.

So what will be the political effects of the financial meltdown? Some are already evident. Just as the Great Inflation of the 1970s played to the tunes and concerns of the right, with its invocation of the market, the New Depression suggests the opposite, the inherent limitations of the market and the indispensability of the state. Indeed, the speed with which the neoliberal refrains and invocations have unravelled has been breathtaking. The single most discredited aspect of the social democratic legacy was nationalisation, and yet the government, with the most extreme reluctance, has been obliged to nationalise Northern Rock and partially nationalise the Royal Bank of Scotland and the merged Lloyds TSB and HBOS. Who would have ever imagined, at any point during the past 30 years, that no less than the financial commanding heights of neoliberalism would have ended up in the hands of the state, with precious little opposition from anyone except a few disgruntled shareholders? Even now, however, the Labour government, still trapped in the ideological straitjacket of New Labour and displaying extreme timidity in the face of powerful vested interests, which has always been a New Labour characteristic, is running scared of the inevitable logic of the situation, namely that all the high-street banks should be taken into public hands until the mess is sorted out. Anything else leaves the public responsible for all the debts and risks, while the banks continue to be answerable to the very different interests of their shareholders. But such is the fury and depth of the crisis that this scenario is highly likely.

The state is experiencing an extraordinary revival. The credit crunch is the most catastrophic example of market failure since 1945. It became almost immediately obvious to wide sections of society that there was only one institution that could potentially sort out the mess: the state. Far from being a rational distributor of resources, the market had proved the opposite. Far from bankers and financial traders embodying the public interest, they have been exposed as irresponsible and dangerous risk-takers whose primary motivation was voracious greed. If trade unionists and the nationalised industries were the demons of the 1970s, bankers and the financial sector have assumed the mantle of public enemy number one in the late Noughties. In fact, the irresponsibility of bankers, and the damage they have inflicted on the economy, hugely exceeds anything that the unions could possibly be held responsible for in an earlier era. Meanwhile, the fallen heroes of the pre-Thatcher era, most notably Keynes, are duly being exhumed, restored to their rightful position, and pored over for their ability to throw light on the present impasse and what might be done; if the recession turns into a depression, Marx will once again become required reading.

This political shift is not just a British phenomenon, but a more general western one. The most striking feature of President Obama's inaugural speech was the way in which it embraced and legitimised African Americans for the first time in American history. But it also had another powerful theme, namely its invocation of the public interest and public service. After decades during which American political discourse has been dominated by the language of individualism and the market, it came as a shock to hear a US president articulate a very different kind of philosophy, renouncing private greed in favour of the public good. Obama's election can in part be seen as a response to the failure of the neoliberal era, as well as of Bush's neoconservative agenda; certainly his election represents a remarkable shift to the left in US politics, in contrast not just to Bush, but every recent US president, including Reagan, Bush Sr and Clinton. That Obama is the first African-American president also represents a remarkable redrawing of the political landscape. There is no more powerful - nor difficult - way of redefining society or to embrace a new form of representivity than to include a racial minority that has been excluded.

This brings us finally to what might be the longer-term global consequences of the crisis. Again, we are inevitably stumbling around in the dark because so much depends on whether the recession metamorphoses into a fully fledged depression and in what way and shape the world eventually emerges from the debacle. That said, two key points can be made. First, the credit crunch signals the demise of the Anglo-American, neoliberal model of capitalism, which has exercised a hegemonic influence over western capitalism and been the blueprint for globalisation since 1980. Because of its catastrophic failure there seems very little chance of its resurrection. The process of recovery - whenever that might be - will be accompanied by an overriding concern to ensure that the events of 2007-2009 are not repeated in the future, just as happened in the US in the 1930s with the strict regulatory framework that was introduced for the banks after their comprehensive failure in 1929. This will include the search for a new global regulatory framework that controls and constrains international movements of capital, as well as strict controls over the financial sector at a national level. A new set of political priorities - and with it a new political language - will be born.

Meanwhile, the influence and prestige that the US, and to a far lesser extent Britain, have enjoyed will vaporise in the same manner as their neoliberal model. Their 30-year project has failed and they will be obliged to pay the price in their reputation and the esteem in which they are held. The countries of the former Soviet Union and the casualties of the Asian financial crisis that were forced to swallow the neoliberal medicine will have good reason to feel aggrieved and resentful. The west has been forthright in accusing the non-western world of corruption. The financial meltdown suggests that the west has been guilty of huge hypocrisy. Systemic corruption has lain at the heart of the western financial system. An entirely disproportionate and extortionate level of bonuses has ensured the enormous enrichment of top executives in the financial sector, all in the name of reward for success, when in fact it was the reward for failure. In addition, we have had the collusion of the credit-ratings agencies; a regulatory system characterised by its failure to act as any kind of constraint; and governments that ensured the continuation of this web of relationships and applauded its achievements. The corruption was on a breathtaking scale as evidenced by the size of the bailouts required to rescue the banks. It will be difficult for western governments to make these kinds of accusations of others in the future. That Obama represents such a voice of hope will help to mitigate the inevitable ill-will towards the US, but this should not be exaggerated amid the euphoria surrounding developments in Washington.

The second point is more far-reaching. It is doubtful whether we can still describe ourselves as living in the American era or, indeed, the Age of the West. If not yet quite over, both are certainly drawing to a close, and it seems likely that the effect of the financial meltdown will be to accelerate the rise of China as a global power. The contrast between the situation in China and that in the US could hardly be greater, even though it has been partially obscured by the depressive effect of the western recession on Chinese exports and on China’s growth rate. While the US economy is contracting, China’s grew at roughly 9 per cent in 2008 and is projected to grow at about 6 per cent in 2009. Its banks, far from bankrupt like their US counterparts, are cash-rich. China enjoys a large current account surplus, the government’s finances are in good order and the national debt is small. This is a crisis that emanates from the US and whose impact on China has been essentially indirect, through the contraction of western markets. It is the American model that has failed, not the Chinese.

One of the factors that intensified the Great Depression, and indeed was part cause of it, was Britain's growing inability to continue in its role as the world's leading financial power, which culminated in the collapse of the gold standard in 1931. It was not until after the war, however, that the US became sufficiently dominant to replace Britain and act as the mainstay of a new financial system at the heart of which was the dollar. The same kind of problem is evident now: the US is no longer strong enough to act as the world's financial centre, but its obvious successor, namely China, is not yet ready to assume that mantle. This will undoubtedly make the search for a global solution to the present crisis more difficult and more protracted.

Martin Jacques's new column will be published fortnightly in the New Statesman. His book "When China Rules the World: the Rise of the Middle Kingdom and the End of the Western World" will be published in June (Allen Lane, £25)

the global downturn in numbers


    IMF prediction for global growth in 2009 - worst since WWII

    Up to 40 million

    Number of people who will lose their jobs this year, according to the International Labour Organisation


    Total pledged by the US alone towards solving the crisis


    Proportion of GDP pledged by the G7 and BRICs countries towards fixing the crisis (1.5% this year)


    Number of US properties that received a default notice or were repossessed in 2008. In the UK, 45,000 homes were repossessed - another 75,000 are expected to be taken in 2009


    Number of major global banks which collapsed, were sold or were nationalised during 2008


    Number of European companies expected to fail this year; an additional 62,000 are expected to fail in the United States. These figures represent record levels of insolvency


    Increase in UK company failures between late 2007 and late 2008


    Drop in level of Chinese exports during January


    Current UK interest rates (down from 5% in October 2008). In the US, rates have fallen to between 0 and 0.25%

How the crisis unfolded

13 September 2007 Run on Northern Rock begins when it is revealed that the bank has requested emergency support from the Bank of England

21 January 2008 FTSE suffers worst falls since 11 September 2001

February 2008 Northern Rock nationalised

17 March 2008 JP Morgan Chase takes over the US investment bank Bear Stearns

12 July Mortgage lender IndyMac collapses - second biggest US bank in history to fail

9 August 2007 European Central Bank pumps ?95bn into banking market

7 September Financial authorities step in to rescue Fannie Mae and Freddie Mac

9 September Bradford & Bingley becomes second British bank to be nationalised

15 September Lehman Brothers files for bankruptcy

16 September AIG, biggest insurance firm in the US, receives $85bn rescue package

3 October 2008 US government announces $700bn Troubled Assets Relief Programme

8 October UK launches its first bank bailout plan, making £50bn available

October 2008 Iceland's banks collapse. IMF extends £1.4bn ($2.1bn) loan a month later

24 November Alistair Darling announces a temporary cut in VAT from 17.5 to 15 per cent

23 January 2009 UK enters recession

28 January US Congress passes Barack Obama's $819bn stimulus package

5 February UK Monetary Policy Committee votes to cut interest rates to 1 per cent - the lowest in over three centuries

Michael Harvey

Martin Jacques is a journalist and academic. He is currently a visiting fellow at the London School of Economics Asia Research Centre and at the National University of Singapore. Jacques previously edited Marxism Today and co-founded the think-tank Demos in 1993. He writes the World Citizen column for the New Statesman. His new book on the rise of China, When China Rules the World, will be published in June.

This article first appeared in the 16 February 2009 issue of the New Statesman, The New Depression

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Is it Ruth Davidson's destiny to save the Union?

Ruth Davidson is a Christian, gay, kick-boxing army reservist who made a passionate case for the EU and has transformed the fortunes of the Tories in Scotland.

In the end it made no difference, but during the EU referendum campaign Ruth Davidson achieved something that nobody else did: she made the case for Remain sound thrillingly righteous. In a live, televised BBC debate at Wembley Arena in London, she denounced the “lies” of the Leave campaign, turning to the crowd to declare, twice: “You deserve the truth!” Funny, fervent and pugnacious, Davidson pounced on the bluff assertions of Boris Johnson with gusto, a terrier savaging a shaggy dog. As she departed the podium, flashing a light-bulb grin, she left a question hanging in the air: how far can Ruth Davidson go?

On the face of it, it was a risk for the ­Remain campaign to send the leader of the Scottish Conservatives to Wembley, when most of its persuadable voters lived in England. Yet, according to Andrew Cooper, David Cameron’s pollster and an influential Remain strategist, “Ruth’s name was inked in from the beginning.” After the debate, nobody called this confidence misplaced. Davidson was acclaimed as the star of the night. English observers began to appraise her as a major player in national politics, even as a possible future prime minister.

The EU debate was, for Davidson and for Scots, the least energetically contested of four recent contests, following the Scottish independence referendum in 2014, the general election in 2015 and the Scottish Parliament elections in May 2016. In the last one, Davidson led her party to second place, overtaking Labour, and the Conservatives became the main opposition to Nicola Sturgeon’s Scottish Nationalists. It was their best result in nearly 60 years and evidence of an astonishing turnaround.

When Davidson was elected leader in 2011, it was like being declared the mayor of a ghost town. Her party’s core voters had long fled, first to Labour and then to the SNP. Margaret Thatcher and successive national Tory leaders had made it almost impossible for Scots to admit to voting Conservative, or even to being friends with anyone who did. It wasn’t just that the Tories were poisonous to the touch; they were on the verge of irrelevance. They held 15 out of the 129 seats at Holyrood. They barely mattered.

They matter now. The stigma of voting Tory has not been entirely erased, but the Conservative brand has been saved, or perhaps subsumed by its Scottish leader’s personal brand. On the ballot paper in May, voters were invited to put a cross next to the slogan “Ruth Davidson for a strong opposition”; party activists knocking on doors introduced themselves as being from “Team Ruth”. A recent poll found that Davidson was the most popular politician in Scotland, surpassing Sturgeon.

Ruth Davidson has been a politician for just five years. If you need reminding of how hard it is, even if you are clever and able, to become a high-level political performer on half a decade’s experience, recall the defining moments of a few Labour MPs of the 2010 generation: Liz Kendall’s flameout, Chuka Umunna’s failure to launch, Owen Smith’s bellyflop. David Cameron’s rise might seem to have been comparably quick, but he had been working in Westminster politics, on and off, for 13 years before he ­became an MP. Three years before being elected leader of the Scottish Tories, Davidson hadn’t even joined a political party.

Davidson may be the most gifted politician in Britain. “She’s a natural, and they are very rare in politics,” Cooper told me. The question for her is whether she will ever convert talent into power.



In August, I went to see Davidson speak in Belfast at an event organised by Amnesty International on behalf of the campaign for gay marriage in Northern Ireland. She made a case for equal marriage that was also a case for the institution of marriage. “More than 40 years married and my parents still love each other – and I look at what they have and I want that, too, and I want it to be recognised in the same way,” she said.

She paused to note that the passage was taken from an address that she made at Holyrood during the first reading of Scotland’s equal marriage bill in 2013: “I’ll be honest. I was absolutely bricking it.”

Davidson met her partner, Jen Wilson, in 2014. The couple got engaged this year on holiday in Paris, just after the May election campaign. Wilson, who is 34 and from County Wexford, Ireland, works in the charity sector. In 2015, she appeared with Davidson in a party political broadcast, which showed the couple strolling along Elie Harbour, Fife, and taking selfies with Davidson’s parents. It wasn’t a big deal and yet, at the same time, it felt significant. As Davidson noted in her speech, homosexuality was still a prosecutable offence in Scotland in the year she was born (it was not decriminalised north of the border until 1980).

After the event, I met her for a drink with members of her team at the bar of her hotel. She had returned to Edinburgh from a holiday in Spain in the early hours of that morning, shortly before boarding a plane to Belfast for a full day of engagements. Yet she bristled with energy, giving the illusion of movement even when she was sitting still, her attention distributed between emails on her phone, the conversation at the table and the level of everyone’s drinks. She had enjoyed the event, she said, although she had been hoping for more argument.

In September, we met again for a longer conversation in her small office at Holyrood. In person, she is friendly in a businesslike way, mentally fast (often starting her response before the question is finished) and generous with her answers. As she talks, her eyes fix you in your seat. “Ruth is a brilliant reader of people, including our opponents, and spots weaknesses very early,” her colleague Adam Tomkins told me. “She can see through me. I would hate to play poker with her.”

Before our meeting, I watched First Minister’s Questions, the first after the summer recess. The atmosphere in the chamber at Holyrood is very different from that in the Commons: quieter, less theatrical. The leaders of the main parties are not cheered to their seat. Sturgeon, dressed in black, walked to her desk at the front of the hall, unacknowledged by her colleagues, as a cabinet secretary answered a question on national parks. Davidson entered shortly afterwards, in a violently pink jacket that contrasted vividly with the muted tones preferred by most MSPs.

In the chamber, Davidson often holds her own against the First Minister. The two have contrasting styles: Sturgeon poised and coolly effective, Davidson a study in controlled fury. “Ruth has a real aggression to her,” says the journalist Kenny Farquharson, a columnist for the Times in Scotland. “She’s always looking for the next fight.”



Ruth Elizabeth Davidson was born at the Simpson Memorial Maternity Pavilion in Edinburgh in 1978, the second of two daughters to Douglas and Elizabeth Davidson. Her family lived in Selkirk, where her father worked at the wool mill. This was Douglas’s second career: his first had been as a professional footballer, for Partick Thistle and Selkirk FC. The Davidsons moved to Fife when Ruth was a child, after the mill closed. Her parents were Tory voters, without being especially political.

When Ruth Davidson was five years old, she was run over by a truck near her home and nearly killed. The accident shattered her leg, fractured her pelvis and severed her femoral artery, leading to a huge loss of blood. In interviews, she makes quick work of what other politicians might be tempted to craft into a narrative turning point. “My legs are still a bit squint . . . but it has never really stopped me from doing anything,” she told the Scotsman in 2012.

Her family was Presbyterian, in the Church of Scotland, a more austere and morally fiery tradition than Anglicanism. (A Scottish journalist remarked to me, “To us, Anglicanism is Christianity with all the fibre removed.”) Davidson is a practising Christian. Her piety does not extend to abstention from alcohol or profanity – she is a world-class swearer – but it is manifest in her moral muscularity, preacher-like cadences and horror of malingering.

In Fife, Davidson attended Buckhaven High School, a large comprehensive with a working-class intake. She is often referred to as working class, which isn’t quite right. Her mother and father were working-class Glaswegians. Her mother left school at 15, her father at 16. Douglas grew up on an estate in Castlemilk, a district then infamous for its deprivation and crime. He was one of the few Protestants in a solidly Catholic community, during a time of deep divisions.

The Davidsons, however, were upwardly mobile. Douglas had been a manager at the mill in Selkirk and then ran a whisky distillery on the Isle of Arran. The children had the importance of effort and self-improvement drummed into them. Ruth has recalled getting a school report that gave her a 1 for results in science – the best possible mark – and a 2 for effort. “I got a mini-bollocking for that. My mum would have been much happier if it had been the other way round.” Both children attended university (Ruth’s sister is now a doctor).

Davidson did well at school and excelled at sport. She played squash for her county and tennis to a level at which she can teach it. In adulthood, she took up kick-boxing, condemning herself to be forever tagged as a “kick-boxing lesbian” in the British press. Sport has been central in her life, not so much a leisure activity as a method of striving for new goals.

After graduating from Edinburgh University, where she studied English literature and took part in debating competitions, ­Davidson moved to Glasgow and started a career in journalism. In 2002 she joined BBC Scotland, becoming a radio presenter on a drive-time show, reporting on gifted pets one minute and traffic disasters the next. By all accounts, she was excellent: fluent, well prepared, interested in whomever she was talking to. Her producer Pat Stevenson remembers her as “a fantastic interviewer, incisive and forensic, able to spot bullshit a mile off. And she was fun.” Her abiding image of Davidson at the microphone is of a head thrown back in laughter.

Stevenson recalls being vaguely aware that Davidson held right-of-centre views, though these were less of a talking point with her BBC colleagues than her Christianity, or, even more so, her weekends spent deep in a forest, being shouted at while trying to read a map. Davidson served as a signaller in the Territorial Army for three years from 2003 and trained to be an officer. “It was very tough,” says Steve Bargeton, who oversaw the officers’ course. “Most fail or drop out, but Ruth flew through. She had tremendous character.” Davidson won a place at Sandhurst but broke her back during a training exercise, forcing her to end her military career.

She soon set herself a new goal: to be elected to parliament by the time she was 40. In 2009, she left the BBC and joined the Tory party. Davidson has attributed her career change to David Cameron’s call, after the MPs’ expenses scandal, for people who had never been political to get involved, but it is likely she had already decided that politics was the next hill to climb. Either way, she quickly acquired influential sponsors in Edinburgh and London. By the 2010 election, she was head of the private office of Annabel Goldie, the then leader of the Scottish Tories. She stood for an unwinnable Commons seat in Glasgow, twice, both times winning barely 5 per cent of the vote.

Even as the elections to Holyrood came around in May 2011, she was not expected to make it to parliament. She was second on Glasgow’s regional list, which all but ruled her out. A couple of months before the vote, however, the candidate at the top of the list was removed following allegations of past financial problems. The Conservative Party chairman promptly promoted Davidson, who was elected to Holyrood (she won a constituency seat of her own this year in Edinburgh, where she now lives).

In the 2011 election, the SNP, under Alex Salmond, won an unprecedented overall majority in Holyrood. This success transformed the politics of Scotland, and thus that of the UK. Labour’s grip on the votes of working-class Scots was broken. The Conservative Party, already a corpse, failed to twitch. It at once became clear that Salmond had won a mandate for a referendum on independence and that this would be the defining question of Scottish politics until it was resolved.

On the Monday after the election, Annabel Goldie announced that she was resigning. Four days after her election to the Scottish Parliament, Davidson began to consider a run at the leadership of her party. She was encouraged by senior figures, including David Mundell (then a Scotland Office minister, now the Scottish party’s sole MP in Westminster) and David Cameron. In her way stood the Scottish Tories’ deputy leader, Murdo Fraser, an Edinburgh-based lawyer who had been a Conservative activist for a quarter of a century. It was, by common consent, his turn.

Fraser, sensing a threat, committed to an act of excessive radicalism that proved to be his undoing: he proposed that the party ditch the name “Conservative” and break entirely from its southern counterpart. He argued that this measure (Alex Massie, writing in the Spectator, called it the euthanasia option) was the only way to move on from the past and compete with the SNP as a truly Scottish party. He did not recommend a new name; mooted alternatives included the Scottish Reform Party, the Caledonians and Scotland First.

Fraser’s gambit propelled Davidson into the race. She felt that his proposal would unmoor the Scottish Conservatives from their purpose, and also that it was politically naive, as there was little chance that voters would not realise that this was the same party in different clothes. In tactical terms, Fraser had opened up space for a candidate to run on preserving the status quo, rarely an unpopular position among Tories. For his challenger, it was a ripe alignment of conviction and opportunity, a ball bouncing into the perfect position for a killer forehand. Davidson declared on 4 September 2011 and won the final round against Fraser, 55 per cent to 45 per cent. She was 32.



It is easy to underestimate how much politics, in opposition, is simply about getting noticed. When Davidson became leader, Scottish politics was a (rather one-sided) battle between the SNP and Labour. She needed to fight her way to centre stage and into the calculations of voters – there wasn’t much point repositioning the Tory brand if nobody was watching. As Andrew Cooper put it to me, “You didn’t get to the toxic problem until you dealt with the irrelevant problem.”

Davidson excels at getting noticed. She has – even if she would not appreciate the comparison – a Donald Trump-like understanding of how to get and keep attention. She is at home on social media, something that is true of all the Scottish party leaders, though Davidson’s tweets are the most fearless and funny. She is also an artist of the photo opportunity: here she is in a pink scarf, bestriding the gun of a tank, a Union flag fluttering in the background; playing the bagpipes, or being played by them, eyes popping out of her head; smashing a football into the back of the net.

Such photos do more than get attention. They reinforce the sense of a person unintimidated by the rules of political protocol; indeed, of someone who scorns limitations. There is something almost cartoonish about Davidson’s public profile: the big eyes, the flashing grin, the unstoppable, barrelling walk. In debates, as she winds up to a clinching point, you can, if you half close your eyes, see her swinging her arm through a hundred revolutions before extending it across the stage to smack an opponent. She is one of us, and not like us at all. Flattened by a truck, she gets up and walks away.

Davidson’s willingness to play the fool wouldn’t work if she was not able to convey seriousness at the same time. The leadership race set the template for her political profile as an untraditional traditionalist. Davidson doesn’t look or talk like a typical Tory, but her ideological touchstones are profoundly Conservative. She is a British patriot, a churchgoer, a passionate supporter of the armed forces, an advocate for marriage, a believer in self-reliance. On becoming leader, she set about reviving a type of blue-collar Conservatism not seen since the 1980s. The former Scottish Tory MP Sir Teddy Taylor coined the expression “tenement Tories”: working-class voters with conservative instincts, sceptical of high taxes, patriotic but not nationalist. Davidson, the daughter of tenement Tories, is able to pitch herself as one of them.

To do so has required performing a balancing act with respect to her party in Westminster. She admired Cameron and, politically speaking, was in his debt. Her leadership is staked on the unity of the Scottish and English branches of the party. Yet she has managed, somehow, to position herself against the party’s privileged English elite – the “private-school boys”. Her evident animus against Boris Johnson is both strategic and personal. During the EU campaign, as the polls tightened, she asked Downing Street if it wanted her to go on a “suicide mission” against Johnson, a senior aide to the former prime minister says.



In Ruth Davidson’s first year as leader, her inexperience showed. She made a prolonged and embarrassing climbdown from a foolhardy promise, made during the leadership campaign, to draw a “line in the sand” against further devolution. Meanwhile, Alex Salmond, a skilled and pitiless debater, successfully patronised her every week at First Minister’s Questions. An impression that she had been promoted prematurely was discreetly given credence by members of her own party (most Scottish Tory MSPs had voted for Fraser).

Davidson was learning not only how to be a leader in public, but how to manage an organisation, a skill for which journalism had not prepared her. A rule change that came into effect when she took over gave her far-reaching powers over the party. As she says, she suddenly found herself responsible for MSPs, staff and activists, but with “no idea how to manage”. She fell back on her training in the Territorial Army. “I had to apply what I learned about leadership in the British army. The toolkit I used was from officer training: how to identify problems, make decisions, bring people with you.”

At Wembley this summer, debating national security, Davidson remarked icily, “I think I’m the only one on this panel who’s ever worn the Queen’s uniform.” Her TA training provides her with a rhetorical trump card and legitimises photo opportunities on tanks, but it does more for her than that. Military metaphors pervade her thinking and fire her imagination. One of her favourite books is Defeat into Victory, an account of the Allied forces campaign in Burma in the Second World War, by William Slim, a British field marshal. “It is the best examination of leadership you’ll ever find,” she told me, and then related, excitedly, an encounter she once had with a Second World War veteran who had witnessed Slim addressing his troops.

After getting heard, Davidson’s most urgent task as leader was to overhaul a demoralised and moribund institution. She focused on candidate recruitment – looking for better signallers. “I wanted to rebuild around the message carriers,” Davidson told me. After their run of bad elections, the Tories had stopped trying to pick winners: “They were asking good, hard-working foot soldiers to stand, just to get a name on the ballot.” Long-standing members would be asked to put their name down and reassured that they wouldn’t have to do anything, and so, by and large, they didn’t.

Davidson put together a new candidates’ board: a former human resources director for Royal Mail, a QC who had been a world champion debater, an expert in corporate leadership. She designed a series of tests based on the officer assessment test that she underwent before Sandhurst (“minus the assault course and press-ups”).

Applicants were asked to sit around a ­table with three others, each with a piece of paper in front of them. When they turned it over, they discovered who they were and what they needed to solve. A new policy was about to affect voters in four neighbouring constituencies, but in different ways: it would be detrimental to those in the first constituency, neutral for those in the second and third and advantageous for those in the fourth. Each candidate represented a different constituency. How would they agree a position?

“It was about making people interact in a way they hadn’t before,” Davidson said. “I made every sitting MSP go through it, including myself.” Her aim was to assemble a team of experts, from business, law, the armed forces and the third sector.

Among her recruits was Adam Tomkins, a professor of public law at Glasgow University, now an MSP and one of Davidson’s closest allies. “By late 2011, it was clear the referendum was coming. I wasn’t involved in party politics but I was a strong believer in the Union and I knew I wanted to do something. I wasn’t a Tory, though. In fact, I had been pretty hostile to them.” He offered his expertise to Labour but came away from meetings with the party’s leaders depressed by their tribalism. Davidson was different: intellectually curious, open-minded, eager to take advice. In 2013, she formally asked him to help the Tories formulate a constitutional policy and he agreed. On New Year’s Day 2014, he joined the Conservatives.

The Scottish independence referendum was the making of Davidson as a national leader, as it was of Nicola Sturgeon, who escaped Salmond’s shadow to become a force in her own right. In TV debates during the campaign, Davidson was the most compelling defender of the Union, capable of winning sympathy for even its most unpopular ingredients. “Ruth emerged as someone who could defend Trident and get applause,” says the journalist David Torrance.

After the referendum in September 2014, she once again had to battle for attention. She needed to convince the media that the Conservatives might yet play a big role at Holyrood – that she was more than an amusing sideshow. The referendum had shown her how decayed Labour’s relationship was with its own voters, and this gave her renewed impetus. She also grasped that, far from enabling Scottish politics to move on from independence, the referendum was still having the opposite effect.

In September 2015 the new Scottish Labour leader, Kezia Dugdale, announced that Labour MSPs would have a free vote on independence in the event of another referendum. In April 2016, she committed to an increase in the top rate of income tax. Together, the two moves were an attempt to move past the issue of independence. “I want people who voted both Yes and No to see that the Labour Party is the vehicle for progressive change in this country,” she said. Yet Dugdale misjudged the relentlessly centrifugal dynamic of Scottish politics after the referendum. Every policy position – from tax rates to tuition fees – returned to the question of what it signalled about Scotland’s relationship with England.

Davidson understood that if Labour was softening its position on the Union, she need only harden and amplify hers. At this year’s Holyrood election, she presented herself not as an alternative first minister, but as the most forceful voice of opposition to Sturgeon. In the campaign debates, she demonstrated it. By doing so, she was able to convince enough pro-Union Labour voters to defect to achieve second place.

For someone who is still relatively new to politics, Davidson has well-tuned strategic instincts. When I asked Tomkins what she excels at, he said: “Her framework is politics, not policy as such. She is brilliant at tactics, messaging, strategy.”

Davidson seems to have developed a serious interest in politics only as an adult, and then only because she thought that it presented a worthy challenge for her abilities (by contrast, most of the leading Scottish Nationalists joined the SNP before they were 18). A little like David Cameron, she just thought that she would be good at it. When I asked her to name her political heroes, or politicians whom she particularly admired, she struggled to come up with any from real life, naming Thomas More in A Man for All Seasons, Shakespeare’s Henry V and Atticus Finch in To Kill a Mockingbird. She wasn’t being coy – it’s just that, like most people, she has never looked to politics for role models. With prompting, she eventually named Peter Mandelson, for his part in making the Labour Party electable again, and William Hague, for his work on women’s rights while foreign secretary.

This lack of political nerdery is part of what makes her able to connect so directly with voters, but it is also a limitation. A consistent criticism of Davidson, even among those who admire her, is that she is not interested in policy, or at least that she does not have a set of distinctive policy ideas. This isn’t quite fair – she has published a paper on education and successfully focused attention on the attainment gap between poor and middle-class students. But she has not yet committed to a detailed alternative (a school vouchers policy was raised and then quietly dropped). Other than “maintain the Union”, it is difficult to know what a Davidson-led government would do.

The word everyone uses about her is “authentic”; like Sturgeon, she projects comfort in her own skin. But in a sense Davidson is a lucky politician, as well as a precociously accomplished one. It is much easier to be yourself in politics when what you believe matches so neatly with what you need to do to win. Her decision to present herself in the Holyrood elections as an effective opponent, rather than an alternative first minister, was tactically smart, but it raised a larger question. As one observer put it to me, “We know what she’s against. But what is Ruth Davidson for?”



On 12 July, the day after it became clear that Theresa May would be the new Conservative leader, Davidson spoke at a Press Gallery lunch in Westminster and delivered what was, in essence, a stand-up comedy set. Even by her standards, it was indiscreet. On the difference between the Tories’ truncated leadership contest and Labour’s lengthy deliberation, she remarked: “Labour’s still fumbling with its flies while the Tories are enjoying a post-coital cigarette after withdrawing our massive Johnson.”

It is difficult to say it without sounding like a stick in the mud, but to me this routine felt misjudged. Political leaders can be funny but not that funny – not without compromising our sense of their stability. Nor was it wise to be so rude. Johnson is in the same party as she is, after all, and may yet become leader (nobody, possibly least of all Davidson, is sure what she would have done had Johnson succeeded Cameron). Like many funny people, Davidson metabolises anger into humour and I suspect that, after Brexit, her anger was surging.

It wasn’t just that she thought the decision was profoundly wrong, or that she was contemptuous of Leave’s tactics. It was also that she was being forced to rethink her future. If Remain had won, the chance of another independence referendum may well have receded, allowing Scottish politics to normalise. The SNP would have found it harder to present itself as being simultaneously in office and opposition. Davidson could have embarked on the last stage of the Scottish Tory recovery: making it an alternative government. She might even have considered the option of taking a Westminster seat – after which, who knows?

The vote in favour of Brexit knocked all of this on the head. It put independence firmly back on the agenda. Instead of either disappearing or becoming imminent, the prospect of a second referendum will squat in the middle distance of Scottish politics for years to come. In a sense, this is convenient for Davidson, because she will remain the strongest voice on one side of the only real issue in town. She can make further inroads into the heartlands of a Labour Party that, at a UK-wide level, is strangling itself to death, while picking up SNP voters who lose patience with Sturgeon when she blames every problem with the National Health Service or schools on London.

Theresa May is not nearly so good a bogeyman for Sturgeon as Cameron was. Davidson gets on well with her despite some stylistic differences. Both are observant Christians and care about their duties to the Tory flock. When May came to Scotland to meet Sturgeon in the week after she became Prime Minister, she also attended a meeting of local Conservative members, which Davidson greatly appreciated (Cameron wouldn’t have done such a thing). Davidson has not, as May has, marinated for years in local Tory association meetings but she takes her responsibility to the membership seriously, in the manner of a general concerned with the troops’ morale.

Yet a referendum that is always two years away is one that she can never win or lose. It is hard for her to come up with distinctive ideas when there is little point devoting effort to envisioning a policy agenda that will be distorted through the prism of independence. Given the odds that she overcame to take her party to where it is now, nobody should dismiss the chance that she might one day become first minister. But Scottish politics is defined by long periods of single-party hegemony and the SNP under Sturgeon may well have just started its turn.

Then there is the option of running for a (Scottish) seat in Westminster. Davidson says that she has no interest in swapping Edinburgh for London, either politically or personally, and I believe her. Yet there may come a point at which she is forced to confront the possibility that this is the only way to escape a career in permanent opposition. She might also come to see it as the best way to defend the Union. Sturgeon has suggested that there is no longer any such thing as British politics. What a rebuke it could be to that idea to have one of Scotland’s most popular politicians in the cabinet at Westminster, or, indeed, in 10 Downing Street (a possibility hardly less plausible than Davidson’s elevation to first minister). On the other hand, Davidson may leave politics altogether. She was strikingly keen to emphasise, in our interview, that at some point she will seek an entirely new challenge.

We like to think that the best politicians will somehow find their way to power – that talent will rise to its appropriate level. But Davidson has only two paths to high office open to her: becoming first minister, or quitting Edinburgh for Westminster. Both are exceedingly steep. If she cannot or will not take either, in decades to come she may be remembered as we now recall her performance at Wembley: a firework show, lighting up the landscape without changing it.

Ian Leslie’s “Curious: the Desire to Know and Why Your Future Depends on It” is published by Quercus. Twitter: @mrianleslie

Ian Leslie is a writer, author of CURIOUS: The Desire to Know and Why Your Future Depends On It, and writer/presenter of BBC R4's Before They Were Famous.

This article first appeared in the 29 September 2016 issue of the New Statesman, May’s new Tories