Two years into a rare coalition government, the United Kingdom continues to face major economic, political, and social challenges.

Background

A parliamentary democracy with a constitutional monarch, the United Kingdom of Great Britain and Northern Ireland is currently governed by a Conservative and Liberal Democrat coalition led by Conservative Prime Minister David Cameron. England is often described as the “Mother of Parliaments”. Parliaments are key political institutions in England and subsequently the United Kingdom since the 13th century. The British model, known as the Westminster system, has been exported across the world, and is used in most former British colonies.

Though common in some other parliamentary democracies, coalition politics is foreign to the UK. The May 2010 election that preceded the current government, resulted in only the second hung parliament (no party winning an absolute majority of seats) since 1929. The only other instance had followed the February 1974 election, which resulted in a coalition government that survived only seven months.

Prior to 2010, the UK experienced two long periods of rule by single parties with large majorities, which significantly reshaped the UK economically and socially. The Labour party ruled from 1997-2010, passing a host of reforms which included major spending increases in health, education, and other social services, the introduction of a minimum wage, granting the Bank of England monetary policy authority, and the introduction of devolved political institutions in Wales, Scotland, and Northern Ireland.

The preceding period of Conservative rule was marked by equally substantial reforms, particularly during the decade of leadership by Margaret Thatcher, who was often considered a political “soul mate” to then US President Ronald Reagan. Thatcher's government attacked inflation by restricting the money supply (at the immediate expense of employment), restructured the British economy into the longer term by cutting subsidies and beginning the process of privatizing state-owned heavy industry, and took a strong line against European integration.

Why is current British reform relevant?

Economic challenges, social unrest, and an uncertain political environment all create a sense that the UK is at a transition point. After adopting austerity measures in 2010 to cut public spending, the UK has been slower to recover from the financial crisis than other major economies, and returned to recession in the first half of 2012. Unemployment remains above 8%, with youth unemployment at 22% – near the EU average, but significantly above other OECD countries. The longer-term trends are the most concerning: in measurements of intergenerational social mobility, the UK ranks among the lowest in the developed world.

The UK’s relationship with Europe is also uncertain. Persistent unemployment has increased popular pressure on the government to limit immigration, with attention drawn to migrants from eastern European EU member states. Limiting such migration would bring the UK into conflict with European Economic Community directives which provide for free movement by EEC citizens, but has been floated as an appropriate policy response during recession. In addition, Conservative Prime Minister David Cameron has faced pressure from his own party to call a referendum on Britain’s relationship with Europe, and announced on July 1st that a European referendum “may be necessary.”

The current coalition government faces these broad challenges, as well as a host of other recent events which have challenged British public trust in politics (an parliamentary expenses scandal), the media (a phone hacking scandal), police, and their own communities (the summer riots of 2011). At a time when the future of the UK looks particularly uncertain, the policies that Cameron’s government pursues deserve particular attention.