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Analysis
No Olympic golds for Cameron

No Olympic golds for Cameron

Campaign for Scottish independence gets more difficult
Good marks for infrastructure investment

by David Marsh, Chairman

Mon 13 Aug 2012

An Olympic miracle. Not just the Brits’ unsuspected capacity for organisation but also their sporting talents. Third in the medal table, outranked only by the superpowers China and the US, more golds than Germany and France together. This is a true success story. The modern Olympics is televisual. At a time of economic hardship, and only a year after well-publicised riots which left parts of British cities in flames, the London Games gave Britain a much-needed psychological boost. Whatever the dire state of the economy, this lends further support, at least temporary, to sterling’s ‘haven’ status outside the euro.

There are other more tangible lessons. As with many medium-sized firms from the celebrated German Mittelstand, the secrets of sporting triumph lie in technical performance, in team spirit, in methodical training, and in concentration on promising niche sectors (such as the triathlon, judo, or canoeing in the case of British sport). Everyone now knows, too, that investments in infrastructure such as the rejuvenated East of London pay off. It helps if you’re an intact, internationally-attractive metropolitan city. Watch out now for more interest from sovereign funds from around the world for UK infrastructure projects.

What are the effects on politics? Conservative prime minister David Cameron will be doing his best to emulate the sporting heroes. In truth, very little of their popularity will rub off on him. There’ll be plenty of photos with the stars. Cameron wants to upgrade sports in school programmes. The London Games may have some long-term political effects. The success of some Scottish athletes – including tennis champion Andy Murray, now seen as an all-British icon – may reduce the chances that the Scots will vote to break free from England in the Scottish independence referendum in 2014.

Otherwise, the London Games will bring only fleeting advantage for Cameron. The Bank of England has just reduced to zero its projection for 2012 UK growth (even though this does imply a speeding up of quarterly growth throughout the year). An Olympic boost to economic activity and revenues has been offset by negative developments in other fields, for example by the absence of many foreign tourists who normally come to the UK in August but decided to stay away this year on account of feared Olympic chaos.

With his coalition government badly split on a host of issues, and the opposition Labour party making waves from the Conservatives’ economic failures, Cameron in the next few months may be tempted to move aside his hapless chancellor of the exchequer George Osborne. As has happened before when UK prime ministers wish to protect themselves from electoral misfortune, the finance minister may have to be sacrificed – perhaps through a sideways move to the foreign ministry. It’s been a great Games for Britain. But it won’t do much good for David Cameron and his coalition that will look increasingly shaky in coming weeks.

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