The fatal mistakes of Sweden’s David Cameron

Cool, calm Sweden can still produce a surprise from time to time. Yes, our economic recovery has been the best of any major European country. Yes, our finance minister, the earringed and formerly pony-tailed Anders Borg, is hailed as the best in the world. And yes, our government has somehow managed to cut taxes so the disposable income of the average Swede is 18 per cent higher than before the crash. But when Swedes were asked to pass verdict on all this, in last weekend’s election, we decided to kick out the government.

David Cameron has had another small northerly country to worry about of late, but the fate of his friend Fredrik Reinfeldt, the now-deposed prime minister, ought to alarm him. Both were elected leader of defeated conservative parties in their late thirties, both billed themselves as modernisers. Reinfeldt was even invited to address the 2006 Tory party conference, conveying the news that Tory modernisation worked. ‘We changed,’ he said, ‘and we won.’ The two keep in touch, and have met regularly at Cameron’s ‘Nordic summits’.

In power, both have been market-liberal tax-cutters keen to open up opportunities for free schools. Yet both are caring, green and with an ambition to represent the whole electorate. Reinfeldt’s ‘liberal-conservative’ Moderates styled themselves as the ‘new workers’ party’. Cameron’s Tories are now using the same slogan. Both talk about the importance of reducing the debt/GDP ratio, but the Swedes actually do it — despite the crisis, public debt has been reduced from 44 to 35 per cent. Sweden had become (as the Washington Post put it) ‘the rock star of the recovery’.

Not that the Swedes seemed very impressed: Reinfeldt’s four-party centre-right alliance has been turned out after eight years and a Social Democratic/Green minority government is now being formed. So what is there to learn from Reinfeldt’s failure to win a third term (apart from the fact that no one ever does, except Merkel)?

It was not that Swedish voters were not impressed with the economy. According to a recent European Commission survey, 97 per cent of Swedes were satisfied with their living standards, a number that would please Kim Jong-un. In the big exit poll, voters said that the Moderates handled the nation’s finances better than any other party. But this success, it seems, was self-defeating. The old law, ‘He who has slaked his thirst turns his back on the well’, seems to have applied. The Swedish Conservatives kindly tidied up the fiscal mess — but why keep the cleaners on after the job is done?

Any country that struggles with financial collapse (and lacklustre recovery) would love to recruit an Anders Borg. But Swedes think they are now out of the woods. They want to talk about other things: the climate, immigration, girl power (the feminist party’s share of the vote rose seven-fold) and the quality of public services.

Reinfelt’s big mistake was to look as if he had finished the job. His coalition seemed out of ideas, with no vision for the future. They had, of course, accomplished most of what they set out to achieve in the first, radical four years — and had also lost their majority in parliament. But the general impression was that they had run out of puff.

It’s not as if Sweden no longer has any problems. There is a highly regulated labour market which favours those with jobs at the expense of those seeking them, mainly the young and immigrants (hence the recent Stockholm riots). Sweden’s housing situation is dismal. While free schools are popular, the performance of council-run schools has become a major concern. But instead of coming up with a new, radical agenda, the government sat back and hoped the economic recovery would speak for itself.

Reinfeldt’s main opponents, the Social Democrats, meanwhile started to converge on his positions. Their route back to power was to narrow their differences with the government, pledging not to reverse the major tax cuts. They hired an appealing new leader: Stefan Löfven, a centrist boss from a pro-growth, pro-globalisation industrial trade union.

And Reinfeldt’s response? To try to copy the party that was copying him — out of fear of being seen as the dangerous alternative. Gone was Borg’s tax-cutting agenda, and they even started talking of raising some taxes and spending more on public services, (albeit not quite as much as the Social Democrats). They could just as well have adopted the slogan ‘a little bit less expensive, a little bit worse’.

In a multi-party system, moving to the centre like this always risks losing votes to smaller parties with clearer positions. And so it proved this time. The two main parties lost voters on all sides. Reinfeldt lost this election, but Stefan Löfven did not win it. His Social Democrats were up by a pathetic 0.5 percentage points from the 2010 election — which was the worst result in their history. Even with its two natural allies, it has nothing close to a majority in parliament.  The big parties copied each other, and in so doing weakened each other. Their electoral campaign recalls a battle description in Macbeth: ‘Doubtful it stood, as two spent swimmers that do cling together and choke their art.’

The only real winners were the populist Sweden Democrats, who demand more benefits and fewer immigrants. Their share of the vote doubled to 13 per cent, and they now stand as third--largest force in politics. Their success can partly be explained by the fact that they have done more than their opponents will admit to in shedding the aggressive image they have had since being formed from 1980s neo-Nazi and racist organisations.

Sweden has a big problem with unemployment among immigrants: it’s so difficult to fire people that employers tend to avoid hiring. This tends to disadvantage the young and the recently arrived. The established parties don’t want to know about this problem because the trade unions control the jobs market. The Sweden Democrats’ slogan — ‘we are the only opposition party’ — would have rung true to many voters. To their supporters, distrust of other politicians is just as pressing an issue as immigration.

Once, it was Reinfeldt who won elections by capturing the imagination and daring to be different. Now, he has played it safe — and lost. Last time, Reinfeldt gave Cameron a masterclass in how to win an election. Now he has given a masterclass in how to lose one.