Spanish regional nationalism is a curse and a blessing for Rajoy

Regional parties mitigate the threat of a single populist party winning national support.

Once Catalonia’s regional election completes on 25 November, Spain’s electoral calendar is scheduled to be blissfully clear for at least 12 months. But anyone hoping this will keep a lid on political instability in the country will likely be disappointed. Spanish politics is primed for a difficult 2013.

The reasons for this are no secret: a worsening economy, painfully high unemployment, and an austerity programme which is likely to exacerbate these issues further. What is less clear is how the inevitable fall in the government’s popularity will affect Spanish politics at both the national level and at that of its restive, independence-minded regions.

Polls suggest that Artur Mas, leader of the Convergence and Union party, is likely to win Catalonia’s regional election in November. He has made the promise of a vote on Catalan independence from Spain a central plank of his campaign. Any referendum would be illegal without the sanctioning of Prime Minister Mariano Rajoy’s government, which has vehemently rejected such a possibility. But whilst the law may be on the government’s side, popular support is with Mr Mas (polls show over 70 per cent of Catalans want a referendum). The constitutional standoff that looks set to take place will at best be an unwelcome distraction for an already harried government; at worst it will thrust Mr Rajoy into a destabilising power struggle, greatly inflaming regional nationalism and sapping the confidence of Spain’s creditors. If the centralisation of powers which has been necessitated by the drive for deficit reduction (i.e. newly-legislated powers to take over the budgets of overspending regions) is perceived to be threatened, markets may well lose faith in the central government’s ability to rein in the activities of its recalcitrant autonomous regions.

But whilst the risks are real, regional nationalism is also likely to serve a more benign purpose. Its capacity to absorb anti-government sentiment should work to reduce the risk of national populist parties gaining support, as they have to disruptive effect in other peripheral countires. If Spain’s national parties lose legitimacy then regional parties will fill the gap, dissipating opposition to the government and mitigating the threat of a single populist party gaining enough support country-wide to challenge the mainstream establishment.

This is important as, currently, Spain’s political profile is following the same inglorious route that Greece laid out in 2010/11. The absolute majority the People’s Party (PP) holds in parliament is comparable to that which George Papandreou’s PASOK enjoyed following its overwhelming victory in the 2009 election. The rapid collapse PASOK suffered thereafter (as its unpopular budget measures fomented increasing opposition and dissent) is being mirrored to an even more precipitous degree by Rajoy’s PP. PP support has slumped from 46% in March to 30 per cent in October and seems likely to fall further as the recession persists. The less likely, but far more concerning risk in Spain is of a disintegration in the government’s majority brought about by the deepening unpopularity of the People’s Party.

Spanish voting intentions (2008-present)

Source: ASR Ltd. / CIS / Obradoirp / NC Report / MetroscopiaG

The difference between a ruling party which is ahead in the polls and one which is terribly unpopular is difficult to underestimate. The control party leaders have over their members is almost entirely predicated on their ability to advance, hinder or, occasionally, destroy political careers. With a degrading party brand and the increasing personal unpopularity of the leader, party discipline is an almost inevitable casualty. That process is ongoing for Rajoy’s People’s Party, albeit at an early stage. The absolute parliamentary majority it enjoys, at just ten seats, must be considered vulnerable, just as PASOK’s proved to be in Greece in 2011.

Greek voting intentions (2006-present)

Source: ASR Ltd. / CIS / Obradoirp / NC Report / MetroscopiaG

The expulsions and splinter party formations that eroded PASOK’s majority were the result of a conveyor belt of austerity packages that became ever more austere as target after target was missed. Spain is in danger of being locked into a similar cycle. Its 2013 deficit targets are based on growth figures considered over-optimistic by everyone except the Spanish government. The need for further austerity seems certain to grow, and the potential for a disruptive political shock in Spain will grow with it.

Richard Mylles is a political analyst at Absolute Strategy Research

Supporters of independence for Catalonia demonstrate in Barcelona. Photograph: Getty Images.

Richard Mylles is a political analyst at Absolute Strategy Research, an independent consultancy based in London.

Photo: Getty Images
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How can Britain become a nation of homeowners?

David Cameron must unlock the spirit of his postwar predecessors to get the housing market back on track. 

In the 1955 election, Anthony Eden described turning Britain into a “property-owning democracy” as his – and by extension, the Conservative Party’s – overarching mission.

60 years later, what’s changed? Then, as now, an Old Etonian sits in Downing Street. Then, as now, Labour are badly riven between left and right, with their last stay in government widely believed – by their activists at least – to have been a disappointment. Then as now, few commentators seriously believe the Tories will be out of power any time soon.

But as for a property-owning democracy? That’s going less well.

When Eden won in 1955, around a third of people owned their own homes. By the time the Conservative government gave way to Harold Wilson in 1964, 42 per cent of households were owner-occupiers.

That kicked off a long period – from the mid-50s right until the fall of the Berlin Wall – in which home ownership increased, before staying roughly flat at 70 per cent of the population from 1991 to 2001.

But over the course of the next decade, for the first time in over a hundred years, the proportion of owner-occupiers went to into reverse. Just 64 percent of households were owner-occupier in 2011. No-one seriously believes that number will have gone anywhere other than down by the time of the next census in 2021. Most troublingly, in London – which, for the most part, gives us a fairly accurate idea of what the demographics of Britain as a whole will be in 30 years’ time – more than half of households are now renters.

What’s gone wrong?

In short, property prices have shot out of reach of increasing numbers of people. The British housing market increasingly gets a failing grade at “Social Contract 101”: could someone, without a backstop of parental or family capital, entering the workforce today, working full-time, seriously hope to retire in 50 years in their own home with their mortgage paid off?

It’s useful to compare and contrast the policy levers of those two Old Etonians, Eden and Cameron. Cameron, so far, has favoured demand-side solutions: Help to Buy and the new Help to Buy ISA.

To take the second, newer of those two policy innovations first: the Help to Buy ISA. Does it work?

Well, if you are a pre-existing saver – you can’t use the Help to Buy ISA for another tax year. And you have to stop putting money into any existing ISAs. So anyone putting a little aside at the moment – not going to feel the benefit of a Help to Buy ISA.

And anyone solely reliant on a Help to Buy ISA – the most you can benefit from, if you are single, it is an extra three grand from the government. This is not going to shift any houses any time soon.

What it is is a bung for the only working-age demographic to have done well out of the Coalition: dual-earner couples with no children earning above average income.

What about Help to Buy itself? At the margins, Help to Buy is helping some people achieve completions – while driving up the big disincentive to home ownership in the shape of prices – and creating sub-prime style risks for the taxpayer in future.

Eden, in contrast, preferred supply-side policies: his government, like every peacetime government from Baldwin until Thatcher’s it was a housebuilding government.

Why are house prices so high? Because there aren’t enough of them. The sector is over-regulated, underprovided, there isn’t enough housing either for social lets or for buyers. And until today’s Conservatives rediscover the spirit of Eden, that is unlikely to change.

I was at a Conservative party fringe (I was on the far left, both in terms of seating and politics).This is what I said, minus the ums, the ahs, and the moment my screensaver kicked in.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.