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The post-Election environment

The dust is only beginning to settle after an astonishing election. There is a Conservative majority government. This week, 56 Scottish National Party MPs took their seats in the House of Commons. An EU referendum is almost certain.

So what can we expect from the next five years?

You might assume that the best way to find out is to flick through the Conservative Party manifesto. However, it reads more like the starting point of a Coalition negotiation than an achievable list of policies: a wish list that you expect to have to cross a few things off from. They promise to balance the books, but also pledge billions of pounds for the NHS and billions of pounds in tax cuts.

There's two things, however, that look almost certain.

Firstly: help for home buyers. Help to Buy ISAs available from Autumn 2015 for first time buyers, and Extending the Right to Buy to 1.3 million housing association homes are expected to boost the market. For David Cameron, home ownership is at the heart of aspiration. He calls it the “dream of a property owning democracy." George Osborne – who is really the more calculating and politically aware of the two - sees a thriving housing market as absolutely key for a successful economy.

The one thing in the Conservative manifesto that looks almost inevitable is a referendum on Britain’s membership of the European Union. The only question is whether it will happen in 2016 or 2017. That - by far - could have greater consequences for building societies and the financial service industry than anything else the government will do.

But there is one potential consequence of an EU referendum that perhaps hasn’t had the attention it deserves: the break-up of the UK.

Nicola Sturgeon has always denied the success of the SNP at the election makes another referendum more likely. She’s been asked directly about this and has always said no. But a more accurate answer would be – not yet. Because Nicola Sturgeon has also consistently said, for another Scottish referendum to happen – something material would have to change. Something big – a bit like the UK leaving the EU?

Now, most experts – whether they’re pollsters or political correspondents - will tell you that's unlikely. According to the polls, people will probably vote to stay in the European Union, which means there probably won’t be another Scottish referendum (at least not yet). But then – just remember – for months, pollsters have been confidently saying the election is neck and neck and a hung parliament is by far the most likely outcome.

So if they are equally confident that in five years’ time, Britain will still be a member of the EU and Scotland will still be part of the UK, ask yourself this – how much faith do you have right now in their opinions?

Posted by Katie Wise on 26 May 2015