New Times, 19 September 1997
If all that mattered in politics was the state of the economy, this month's general election in Norway would have been a walkover for the Labour Party, in government as a minority administration since 1986, latterly under Thorbjorn Jagland . Unemployment is below 5 per cent and falling, inflation is just over 2 per cent, and interest rates are low. Largely because of a dramatic growth in North Sea oil revenues, Norway's gross domestic product grew last year by more than 5 per cent. Norway has never had it so good.
Yet far from expressing their gratitude by backing Labour, Norway's voters decided to give Jagland a bloody nose. Before the election, he had stupidly announced that he would resign if his party did not better the 36.9 per cent of the vote it took in 1993. In the event, Labour managed only 35.1 per cent, and Jagland had no option but to go – even though his party remains by far the biggest party in the Storting (parliament), with 65 of its 165 seats. He left Kjell Magne Bondevik, leader of the Christian Democratic Party, to try to put together a minority centrist coalition government with the Liberals and the anti-EU Centre Party.
There are several reasons that Labour lost support. Jagland is a lacklustre figure by comparison with Gro Harlem Brundtland, his predecessor as party leader and prime minister - his television performances during the campaign were particularly mediocre – and his government had acquired a reputation for arrogance that was exacerbated by his turning the election into a vote of confidence.
More important by far, however, was Labour's failure to persuade voters of the wisdom of its welfare policies. Norway's oil revenues are set to decline in the early years of the next century, just as demography suggests that the country's spending on pensions and healthcare for the elderly will have to rise. In government, Labour followed a prudent policy of restricting current welfare spending and investing Norway's oil revenues in equities to ensure that there will still be the means to pay for a comprehensive welfare state in the middle of the 21st century.
But the election result showed that many voters want to have their cake and eat it. The two parties that are most pleased with the election result, Bondevik's Christian Democrats and the far-right populist Progress Party, led by Carl Hagen, both argued for using oil revenues for increased welfare spending now. The Progress Party's gains were particularly spectacular: standing on an anti-immigration law-and-order platform, it took more than 15 per cent of the vote (up nine points on 1993) and equalled the Christian Democrats' haul of 25 Storting seats.
Apart from Labour, the main losers were the Centre Party (which slumped to 8 per cent of the vote from 17 per cent), the Socialist Left Party (down two points to 6 per cent) and the Conservatives (down three to 14 per cent, their worst result since 1945). Both the Centre Party and the Socialist Left Party had more often than not given Labour parliamentary support.
Most commentators believe that Labour will be back in office before long because of the instability of the centre coalition and its weakness in the Storting. But there can be no doubt that Labour has been rattled by the experience of parties to its right gaining by promising more generous welfare provision. Despite all the differences between Norwegian and British politics, there is a salutory warning here for Tony Blair and Gordon Brown.