Double your cuts: the coalition is threatening to make a second round of cuts. Picture: Daniel Malka/Gallery Stock
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The economic consequences of George Osborne: covering up the austerity mistake

How did the coalition government manage to transform the media debate on macroeconomics so comprehensively - and what will happen now they have?

The coalition defined itself as a government of austerity or, as its members preferred, as a government with the courage to take the hard decisions necessary to deal with the deficit. In its first two years it did what it had promised to do – and more – and as a result inflicted palpable harm on the economy. The recovery was delayed, costing the average household the equivalent of at least £4,000. In 2012 the government departed from its earlier plans and eased up on austerity, but pretended it had not.

The numbers are stark. GDP per head, a far better indicator of prosperity than GDP alone, grew on average by just 1 per cent a year between 2010 and 2014. The average growth rate from 1950 to 2010 was close to 2.25 per cent. Even under the last Labour government, average growth was 1.5 per cent, and that period included the global financial crisis. The past few years, as we recovered from the crash, should have been a time of above-average, not below-average growth. Even growth in the past two years has been only average by historical standards.

A government entering an election with that kind of performance should be trying to avoid talking about its economic record at all costs. Yet the opposite is the case. Indeed, the Conservative Party has an election platform that promises to repeat exactly the same mistake it made 2010. As a macroeconomist, I find it very easy to explain the impact the government’s mistakes had on the economy. I find it much more difficult to understand how it might, in three weeks’ time, get away with them, let alone promise to make the same mistake again.

The first important point to note is that austerity was not forced on the coalition. There was no market pressure that required it to embark on rapid fiscal tightening. There was a government debt crisis in 2010 but it was confined to a few eurozone countries, for one simple reason: none of those countries has a central bank of its own. If the markets refused to fund their governments they could not ask their own central bank to do so instead. From 2010 until September 2012, the European Central Bank refused to play the role that economists call “lender of last resort” and as a result interest rates on Irish, Portuguese and Spanish government debt increased substantially. In September 2012, the ECB changed its mind and promised (with conditions) to act as a lender of last resort. Interest rates fell and the eurozone debt funding crisis came to an end.

Outside the eurozone, governments had no problem funding their deficits. Interest rates on UK debt and that of other countries fell steadily. Yet to listen to many City economists is to be told that we should not take the markets for granted. Had austerity not been imposed, these markets could have turned on us at any time, and therefore it was right to reduce the deficit sharply as a precautionary measure. There is, unfortunately, a good deal of self-interest in this advice. If we have to fashion our economic policy to appease an unpredictable market, it adds to the influence of those who profess to be able to interpret its mood.

So let us imagine what might have happened, had the UK not undertaken austerity in 2010 and if the markets had started to worry that it might default. That would have put upward pressure on interest rates, as markets required some compensation for the possibility of default. However, the Bank of England was at the same time buying large quantities of UK government debt under its quantitative easing (QE) programme, which was designed to keep rates low. Any market panic would have been quickly offset by the Bank’s actions as it bought more debt. Unlike eurozone countries, the UK can never “run out of money” and so is not at risk of default.

Embarking on austerity was a choice for the coalition, not something it was forced to do. But large deficits cannot be sustained permanently. At some point they need to be reduced. And yet, since the time of Keynes, standard economics has recognised that cutting government spending or raising taxes reduces aggregate demand. So is there ever a good time to reduce the deficit?

There is a simple answer to that question. Although cutting the deficit will reduce demand, this can be offset by the central bank cutting interest rates. Fiscal austerity need not damage the aggregate economy as long as monetary policy is able to push in the other direction. The big problem in 2010 was that this was impossible because interest rates were already as low as the Bank thought prudent. So there is one set of circumstances in which it is unwise to cut the deficit and these circumstances were exactly those that prevailed in 2010.

Although the Bank felt it could not cut interest rates any further, it did have the policy of QE. Could this substitute for the inability to cut short-term interest rates? The answer is that economists had very little idea, essentially because QE had not been tried before. To embark on austerity, and hope that the programme would offset its effects, was therefore a large risk to take.

What happened was that the recovery in output that seemed to be about to occur in 2010 did not materialise. George Osborne would say that this poor performance was the result of things outside his control, such as the eurozone crisis. However, here we can turn to the Office for Budget Responsibility for guidance. The OBR calculates that austerity reduced GDP growth by 1 percentage point in both of the first two years of the coalition government: therefore, the level of GDP was 2 points lower in the second year. As growth did not return until 2013, at the very least that indicates that austerity led to a cumulative output loss of 5 per cent of GDP, which is about £4,000 per household.

How firmly based is the OBR analysis? There are very good reasons for thinking that its numbers are rather conservative. They look at the average effect of austerity over the past but, as has been noted, monetary policy is often able to offset the impact of fiscal consolidation on output, whereas on this occasion monetary policy’s hands were tied. We also have good econometric evidence that austerity has a larger-than-average impact in periods of recession. So, you could easily double the £4,000 number.

Osborne originally intended to eliminate the deficit within five years. However, in 2012, with the recovery nowhere in sight and tax revenues lower than expected, he changed the plan. Since 2012 there has been  much less deficit reduction and, partly as a result, the recovery began – three years late – in 2013.

 

***

 

This is all straightforward economics of the kind taught to every economics undergraduate around the world. The government chose a policy that many economists said in advance would do considerable harm. When that harm materialised it had to change its policy. That should have meant the government suffered a large blow to its reputation. The delayed recovery is one reason why living standards have suffered, so this is hardly an academic issue. A government with this woeful record should not be campaigning on economic competence. So, how has it managed to turn complete failure into the appearance of success?

There are four critical steps in how this was achieved. The first was to equate government budgets with household budgets. A consequence of recession is that many individuals and firms have to tighten their belts, so it seems intuitive that governments should do the same. This will be painful but individuals know that putting off their own adjustment can make things worse. It is part of every economics student’s initial education to learn why this analogy between individuals and governments is wrong – but most people have not studied economics.

A second key step was to blame the deficit on Labour profligacy. You do not need an economist to tell you that the main reason for the increase in the deficit was the recession created by the financial crisis. It is the case that the later years of the Brown chancellorship were not as fiscally prudent as his earlier years. But just before the recession the government debt-to-GDP ratio was lower than in 1997, which hardly indicates profligacy. Some have tried to suggest in hindsight that 2007 was a massive boom year (implying the need to run a budget surplus) but most evidence suggests otherwise and that certainly was not what most people thought at the time. There is enough here to make the profligacy charge vaguely credible, however, to people who do not look at the numbers.

The third stage in the austerity deception was to pretend that the policy change in 2012 was not a change in policy. The truth is plain to see in the data, but it was vital for Osborne not to admit that he was easing up on austerity. If he had admitted to changing his policy, he would have had to say why: austerity was delaying the recovery. All this stuff about a “long-term economic plan” can be seen as part of the effort to cover up the reversal and, therefore, the austerity mistake.

Pretending there had been no change in policy also allowed the fourth and final stage of turning failure into success, which was the most audacious deception of all. This was to claim that the recovery in 2013 vindicated the austerity policy. To see how absurd this claim is, imagine that a government on a whim decided to close down half the economy for a year. That would be a crazy thing to do, and with only half as much produced, everyone would be much poorer. However, a year later when that half of the economy started up again, economic growth would be around 100 per cent. The government could claim that this miraculous recovery vindicated its decision to close half the economy down the previous year. That would be absurd, but it is a pretty good analogy to claiming that the recovery of 2013 vindicated the austerity of 2010.

This was how the government could turn economic failure into apparent political success. The strategy also had one further consequence. It redefined the meaning of what good macroeconomic policy was. If you asked any economist what the aim of government policy should be, he or she would probably say it was to increase the welfare of the public, or, more specifically, to raise standards of living. A government that had presided over the longest fall in real wages in modern UK history would be in deep trouble. However, for much of the media, the goal of macroeconomic policy has been redefined as how effective the government has been at reducing the deficit. Macroeconomics as portrayed by the media is so different from the macroeconomics of the textbooks that I call it “mediamacro”.

Nothing illustrates mediamacro better than Ed Miliband’s 2014 Labour conference speech, in which he forgot to mention the deficit. In terms of what influences national prosperity, the real news over the past five years has been the stagnation in UK productivity. Yet when David Cameron failed to mention the productivity slowdown in his conference speech, hardly any journalist bothered to highlight this huge omission. When Miliband forgot to mention the deficit even Jon Snow lambasted him.

How did the coalition government manage to transform the media debate on macroeconomic policy so comprehensively? I have some idea of the ingredients involved but much less idea of how important each is. Of course having a partisan press is important, if only because it is capable of setting agendas. It also helps that the BBC can be easily intimidated. When its former economics editor Stephanie Flanders dared suggest that a lack of productivity growth might be a problem, Iain Duncan Smith made a formal complaint.

There is a further problem with how the media generally get their economic expertise. The economists you are most likely to see in the media are those who work in the City. It is, after all, part of their job to get media exposure; they’re always on hand to give a reaction. To be fair, when it comes to the daily ups and downs of the market, they are also best qualified to play this role, though in fact no one knows why markets move from day to day. But on issues of macroeconomic policy, City economists can present a biased and distorted view.

At the beginning of 2014, the Financial Times conducted a survey of economists; one of the questions it asked was: “Has George Osborne’s ‘plan A’ been vindicated by the recovery?” As I have already suggested, this question has an obvious answer. The 2013 recovery could not possibly vindicate the 2010 austerity because it is exactly what you would have expected to happen after austerity initially reduced GDP growth and was eased as a result. Among the academics answering this question, there were ten clear nos and only two clear yeses. However, among the many City economists who answered the FT survey, the numbers of yes and no replies were more evenly balanced.

Granted, it is regrettable that academic economists cannot speak with complete unanimity on the matter, but a 2/10 split is as close to a consensus as these things go. It is also the case that almost all academic macroeconomists would argue that the cuts in public investment that occurred in 2010 were a grave mistake. As the New Statesman reported in 2012, many of the minority of economists who originally supported immediate austerity have since acknowledged that cutting public investment in 2010 and 2011 was a grave mistake. It was these cuts, such as halting repairs to schools or reducing spending on flood defences, which most damaged GDP.

The austerity mistake involves basic macroeconomics. Cutting spending will reduce demand and is not to be undertaken when interest rates cannot be cut to offset its impact. The Conservatives, if elected, plan further sharp austerity in the early years of the next parliament, at a time when interest rates are still expected to be at or near their floor. Whatever your views about the desirable size of the state in the long run, to cut spending when the economy is still vulnerable in this way is to take a huge risk. It is exactly the risk that materialised from 2010, except today there is not even a hint of market pressure to cut the deficit quickly. Being able to cover up the earlier mistake is bad enough. Planning to repeat it is pure folly.

Simon Wren-Lewis is a professor of economics at Oxford University

 Simon Wren-Lewis is is Professor of Economic Policy in the Blavatnik School of Government at Oxford University, and a fellow of Merton College. He blogs at mainlymacro.

This article first appeared in the 17 April 2015 issue of the New Statesman, The Election Special

MILES COLE FOR NEW STATESMAN
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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