WI: The Conservatives win the 2005 (or 06) GE

IOTL, the Conservatives did quite well at the 2005 General Election, recovering from their harrowing results in 1997 and 2001 and winning 198 seats to position the Party on a clear springboard to challenge Labour in 2010.

But what if the Conservatives did better, and won the General Election?

Now, with a POD after the 2001 general election this is quite difficult (although not impossible), so here is a scenario which gives the Conservatives the easiest path back to power:

Let's say that the Conservatives do better in 2001, gaining 20-30 seats rather than the one they did IOTL. William Hague still retires as leader and the Conservatives go through their leadership changes (IDS to Howard) over the subsequent Parliament, during which life is far more difficult for Labour - as well as dealing with the fallout from Iraq, Blair is also faced by a leadership challenge from Brown, who has become irritated at the Prime Minister for failing to abide by the Granita Pact and stand down in his favour after winning two general elections. Such a leadership election is divisive and brings out the worst in both Blair and Brown, with both sides snipping and attacking one another, which leads to the electorate gradually shifting away from Labour. Blair eventually comes out on top, fending off Brown who resigns from the Chancellorship and moves to the backbenches (perhaps some other Brownites, such as Ed Balls, go with him), where he becomes a nuisance for the Government.

With Labour polling poorly ITTL, Blair holds off until 2006 before calling a GE, yet by this point Labour's woes in Government, combined with the lacklustre leadership of the Lib Dems by Ming Campbell, creates a perfect scenario for Howard and the Conservatives, who return to power with a slim, yet workable, majority.

So, now we have the scenario, what would a Howard Government look like? How would the Conservatives handle a financial crisis? Given his old age, would Howard seek re-election in 2011 (or, if the Government has done well, 2010)? What would Trans-Atlantic relations look like? President Bush was actually quite hostile to Howard when he visited America during his leadership of the Conservatives (see this BBC Article), so I imagine meetings between the two would be quite awkward.
 
I'd think the economic situation might be even worse by the end of their term than it was for Brown. The Tories at this time generally believed that the city was if anything too loosely regulated. Plus looking at their plans for spending, they were very much guilty of wanting to have their cake an eat it. They wanted to reduce taxes, but they didn't want to do so whilst making cutting to public services, and so their manifesto pledged to fund £4 billion of tax cuts purely through efficiency savings, whilst at the same time wanting to scrap tuition fees. And you wouldn't have the leadership and experience of Brown on the global stage either.

Then you have the European situation. Howard would definitely hold a referendum on the Lisbon Treaty, the UK public would reject it by a landslide, and that would kill it off across Europe in all probability. Whether there would be a vote on actually leaving is harder to determine. The Tories pledged to renegotiate British membership so that it could opt out of the social chapter (which seems doable) and the common agricultural and fisheries policy (which doesn't). Most likely Howard wins a few concessions, and it is put on the back burner as the financial crisis develops. There is definitely potential for Tory infighting on this issue though.

Against this backdrop, there is no way the Tories hold onto power at the next election, particularly with such a small workable majority. Howard would most likely be forced into retirement toward the end of his term if he wasn't going to do so voluntarily. Who replaces him is a more interesting question. The smart money might be on a eurosceptic, now that that wing of the party has proven itself electable. But Davis would probably find some way to self destruct and end up resigning from government, which would hurt his chances, and a similar thing might happen to Fox. Gove was elected in 2005, maybe he would be a contender by the time a vacancy arises? Otherwise, Cameron still looks quite a strong bet, if he came out against the Lisbon Treaty, which I expect he would for a variety of reasons. Whoever wins will just be minimising the damage before Labour get back in, maybe Brown would take over in this scenario, but the train wreck he created might limit his chances. If not Charles Clarke, John Reid, Jack Straw (probably too damaged by the war though) and Alan Johnson are possibilities, or maybe someone like Harriet Harman, Clare Short or Peter Hain could win as a soft left candidate. They would probably go onto win a strong working majority, though probably not a landslide of Blair style proportions, and the Tories would probably fight each other over Europe again when they return to opposition.
 
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