What lies ahead: 12 predictions for 2017

Contents

• The economy / Catherine Colebrook
• Wages and earnings / Laura Gardiner
• The labour market / Gavin Kelly
• Universal credit / Rita Griffiths
• France / Robert Gildea
• The ‘refugee tech’ movement / Alex Glennie
• Iran / Massoumeh Torfeh
• South Africa / Pierre De Vos
• Germany / Silke Breimaier
• UK politics / Matthew Taylor
• Immigration and security / Chris Murray
• Syria / Bissan Fakih

THE ECONOMY: 2017

Catherine Colebrook is chief economist and associate director for economy and housing at the Institute for Public Policy Research (IPPR).

The economist Robert Solow famously said in 1987: ‘You can see the computer age everywhere except in the productivity statistics’. Six months on from the EU referendum and the UK’s vote to leave, it could be said that its impact can be seen everywhere except the economic statistics. The economy has confounded the overwhelmingly morbid predictions made prior to the vote (although most were made on an assumption of an immediate triggering of article 50), and – with the notable exception of the fall in the value of sterling – the statistics telling us the state of the ‘real’ economy reveal very little evidence of a referendum impact. The first full quarter of post-Brexit GDP growth suggested the economy had experienced minimal slowing; employment has continued to rise and unemployment to fall; and rapid house price growth continues unabated.

Will this continue into 2017, as article 50 is triggered, and negotiations on the exact nature of Brexit get under way? A look across the latest growth forecasts suggests that most expect a modest slowdown, but not a sudden stop: HM Treasury’s latest compilation of independent economic forecasts gives an average GPD growth expectation for 2017 of 1.2 per cent – undoubtedly a weaker forecast than the 2 per cent expected by the same group for 2016, but far from a catastrophe. The Bank of England picked up on a weakening of investment intentions in its latest forecast – a portent of slower business expansion and therefore job creation – but it still expects the economy to grow by 1.4 per cent in 2017, as does the OBR.

That we will experience higher inflation in 2017 is not really in doubt: the predictable way in which exchange rate movements are passed through to consumer prices means higher inflation is now ‘baked in’ to the numbers for next year – even if the pound were to stabilise or even rise in the coming months. Expect consumer price inflation to head above 2 per cent for at least some of 2017 – not a disturbingly high inflation rate, but certainly higher than we’re used to.

A much greater unknown – and a big downside risk to the growth forecast – is the reaction of businesses – both domestic and international – as the process of Brexit gets under way. It may become clear at a relatively early stage of the ‘negotiations’ that the UK isn’t going to be able to secure continued access to the single market – including preferential access for UK-based financial firms – without accepting continued free movement of workers. That would constitute an economic shock: much of the business world in the UK and abroad is currently in ‘wait and see’ mode and not yet convinced that single market access will be lost. A crystallisation of the deal we’re likely to strike with the EU would prompt action, and in the case of international firms based in the UK, that could include pressing ahead with plans to relocate to alternative locations within the EU, to retain the same level of market access. Such a development would hit business investment and therefore economic growth hard.

The UK economy is also vulnerable to political developments in other European countries. If the Front National were to be elected in France in the Spring, French exit from the EU would start to look more likely, and the EU would face an existential crisis. This could impact on negotiators’ attitudes towards the UK, and worsen the exit deal the UK could expect – producing a similar result for business investment and growth to that described above.

There is a more optimistic possibility, however: faced with a groundswell of discontent across Europe, the remaining EU27 countries could conclude that they would prefer to relax their adherence to the four freedoms – freedom of goods, services, capital and people – rather than risk collapse of the Union altogether. In this scenario, a deal where we are allowed to restrict free movement in a sensible way while retaining access to the single market starts to look possible. It may be a hopelessly Panglossian scenario at this point, but it would be the best of all possible worlds from an economic perspective.

WAGES AND EARNINGS: 2017

Laura Gardiner is a senior research and policy analyst at the Resolution Foundation.

Making economic predictions is normally considered a fool’s game, and given the uncertainty provoked by the EU referendum, it is fair to assume that forecasters will be wiping even more egg off their faces in coming years. However, if we stick to earnings and focus just on the next 12 months, there are two things we can be fairly confident about: first, that real wage growth will be much less impressive than this year; and second, that it will be similarly progressive.

Turning to the first of these predictions – that the rate of growth will ease substantially in 2017 – it is important to recognise that this is partly because the early part of 2016 looked quite positive. Typical real hourly earnings were 2.6 per cent higher in April 2016 than a year earlier, the fastest growth rate for seven years (or 15 if we ignore 2009, when the inflation measure briefly turned negative due to falling mortgage costs). Low inflation played a big role, but underlying (nominal) growth also improved.

However, the pessimism about 2017 is not just because 2016 set a high bar. It reflects the consensus that the economic outlook has worsened since the EU referendum. Some elements of this consensus – like slower increases in the nominal value of pay packets – are less certain. But what looks beyond doubt is that inflation will rise much more quickly following sterling’s sharp decline. Even if the improved nominal pay increases we have had this year persisted, the inflation effect alone would drag typical real pay growth down to 1.5 per cent in 2017, well below the pre-crisis average. Add in the less certain parts of the forecast and pay could even start falling in real terms again.

As an antidote to this gloom, the second prediction is that pay growth will continue to be progressively skewed. In 2016, pay one-tenth of the way up the earnings distribution rose more than twice as quickly as pay in the middle, meaning women, part-time employees and those in cleaning and customer service jobs gained most.

This was no lucky accident: it was due to the introduction of the ‘national living wage’ (NLW), a new higher minimum for employees aged 25 and over. The government has set a trajectory for the NLW to rise more quickly than typical pay over this parliament to reach a target value that will make the UK a veritable world leader on wage floor levels. This means that however much the headline picture sours, we should expect a ‘low-paid bias’ to persist in wage improvements in 2017 and beyond.

This second confident prediction necessitates a final word on something we can be less confident about: the extent to which progressive hourly pay growth will translate into weekly earnings. Although often overplayed, the growth of non-standard and short-hours contracts looks to be a permanent feature of the modern labour market. With more uncertainty ahead, the feed-through from work to living standards will depend not just on the distribution of pay but on the distribution of job quality too.

THE LABOUR MARKET: 2017

Gavin Kelly is chief executive of the Resolution Trust.

2017 will not be a good year for workers’ wages: that we can say with a depressing degree of confidence. But might that bad news be offset at least partially by some progress in relation to worker protection – particularly for the self-employed and those working in the so-called gig economy?

There are three sources of hope. First, the courts. This time last year my bet on the year ahead was that it would see a major debate about the whole issue of employment classification within the gig economy (and beyond). Well, 2017 might be the moment when the law – or more accurately the application of existing law by the courts and tribunals in changing circumstances – is firmed up. In addition to the appeal by Uber (against an employment tribunal that ruled its drivers are not self-employed), the case brought by the IWGB union on behalf of courier cyclists should reach a resolution and it is a racing certainty that other cases will follow. If (still a big if) these verdicts broadly fall into line with that of the recent Uber case then the implications for the gig economy, and self-employment more widely, will be genuinely far-reaching. This isn’t to say that businesses will suddenly seek to redesignate all those affected as ‘employees’ and start paying them the minimum wage. But if they don’t, they’ll need to change their management practice and reduce the degree of control they seek to exercise over ‘contractors’.

The second ray of hope comes from possible policy shifts on the horizon. One of the most promising vehicles for fresh thinking on worker protection over recent years is the review commissioned by Theresa May, and led by the RSA’s Matthew Taylor, looking at the changing nature of work and the rise of new forms of employment. It provides a rare opportunity to move towards a coherent legal and fiscal framework for different forms of 21st-century work, not least self-employment, that moves us on from the current mess of legal uncertainty, skewed tax incentives and unenforced rights. We don’t know what it will propose – less still how the government will respond (recall the PM’s recent reversal on her commitment to workers on boards, so let’s not get carried away). But it has the potential to be a standout moment.

Third, unions, together with civil society, may rouse themselves. They certainly need to: there are all too few examples of innovation in how the workforce is organised and represented. The backdrop is steadily declining union membership rates: government figures show that among those in their late twenties rates are currently 18 per cent compared with 27 per cent two decades ago. Moreover, there are huge inequalities between private and public sectors, high and low earners and older and younger workers. Consider this: someone aged over 50 working in a high-paid role in the public sector is now more than 25 times as likely to be in a union than someone under 30, working in the private sector on low pay. This chasm in representation is one of the starkest – and most overlooked – generational and occupational inequalities in contemporary Britain.

The hope here – and it may be no more than that – is that 2017 brings with it some new points of light. One is that the big unions build on the victories scored over the last year – such as Unite over Sports Direct, the GMB over Uber, and Unison over various care providers – and start to reach further into the insecure workforce. Another is that we see more verve emerging from the union sector via new entrants like IWGB and established small unions like Community, who are radically rethinking their role. Finally, civil society could start to step up and back workforce innovation, drawing inspiration from the US and elsewhere. An example is the launch of the WorkerTech partnership between the Resolution Trust and Bethnal Green Ventures, which will develop and launch civic ventures in 2017 using tech in innovative ways to bolster the low-wage workforce.

Over the last generation the labour movement has been experiencing its own version of secular stagnation. That isn’t about to suddenly turn around. Yet in 2016 the issue of the quality, security and dignity of work moved into public consciousness. This creates a very rare moment of opportunity: 2017 could see legal, policy and civic shifts that help secure much-needed advances for labour. It’s a possibility that needs to be seized.

UNIVERSAL CREDIT: 2017

Rita Griffiths is research programme lead at the Institute for Policy Research, University of Bath.

What will the future hold for universal credit (UC) in 2017? Its rollout to date has largely been restricted to single applicants, many of whom have no housing costs because they are still living at home. Next year, UC will be increasingly extended to couples and families with children whose needs and circumstances will be considerably more complex, thus presenting the policy – and the households receiving it – with many more challenges to negotiate.

This expansion will begin to test more rigorously the extent to which UC’s much-lauded real-time information system is genuinely fit for purpose. Some predict this will be the policy’s ultimate downfall – the system will collapse under the weight of administrative complexity, unable to cope with fluctuations in earnings and the messiness of people’s lives and changing circumstances. This may well be UC’s destiny. A not dissimilar fate awaited the first incarnation of tax credits, working families tax credit. Introduced in 1999, it underwent radical reform barely three years after implementation due in large part to the inability of the system to respond flexibly and fast enough to people’s changing circumstances.

However, another no less significant design flaw lies waiting in the wings: the removal of the administrative distinction between being in and out of work. Unlike the current tax credit system, entitlement to UC for working people begins with just a single hour of work. By linking means-tested financial help to earnings rather than hours worked, this design feature is intended to smooth the fluctuations in income arising from movements into and out of employment, with the aim of reducing financial uncertainty and risk when people make the transition from benefits to work – an admirable goal. The system has also been deliberately designed to ensure that unemployed people and those working only a small number of hours will always be incentivised to work more – a similarly laudable objective (though justifiably not without its critics, given the risk of simply oiling the wheels of an increasingly casualised labour force).

Merging in-work and out-of-work benefits into a seamless, unified system may seem like an elegant policy but the problem is that the trade-off needed to achieve it involves extending the reach of universal credit further and deeper into the working population than any other social security system or earnings top-up scheme has ever ventured – anywhere in the world. An estimated three million low-income working households – the very hard working and ‘just about managing’ families that Theresa May’s government is meant to be helping, and who would formerly have remained outside the system of behavioural conditionality – will be drawn into its unyielding embrace.

With entitlement to UC comes a new raft of mandatory obligations. Work conditionality will be extended to low-paid working adults and their partners for the first time. Those whose earnings fail to reach the minimum earnings threshold – equivalent to 35 hours’ work at the national minimum wage for single adults and both members of a couple with children over the age of 11 – will be required to attend mandatory Jobcentre Plus meetings where they must demonstrate they are actively seeking to find more hours, better-paid work, or a second job. Only designated carers of children under the age of one will be exempt from this. Fines and sanctions for non-compliance accompany these rules. For couples, the hours of work, earnings and compliance of one partner will crucially affect the conditionality requirements imposed on the other.

While, therefore, it is legitimate to challenge claims of ‘simplification’, promoting ‘independence’ and ‘making work pay’ as hubris, we should not be lulled into thinking UC is simply old wine in new bottles. Make no mistake: in-work conditionality really is new and different. Crucially, it turns on its head the policy intent of working tax credit, designed as remuneration and a reward for work rather than a state benefit. Paid directly into the wage packet via the employer, the aim was precisely to avoid state interference in family life and to distance the payment from the stigma attached to claiming out-of-work benefits. No one yet knows how the requirement to attend mandatory jobcentre meetings, work longer hours or get a second job will be greeted by people who are already working, or the female partners of low-earning men who would prefer to stay home to look after their children. Randomised control trials currently under way are shrouded in secrecy, and with good reason if media reports of a working mother sanctioned for going on holiday are to be believed.

Only time will tell, but my prediction for 2017 is that without a radical rethink, current proposals for in-work conditionality may well prove to be universal credit’s undoing.

FRANCE: 2017

Robert Gildea is professor of modern history at Worcester College, University of Oxford, working on French and European history in the 19th and 20th centuries.

7 May 2017. Marine Le Pen is elected President of the French Republic. After a hard-fought runoff with centre-right candidate François Fillon, the leader of the Front National completes the hat-trick of national populist breakthroughs over the last year that began with Brexit and continued with the election of Donald Trump.

Hostility to immigration and radical Islam, anger at the arrogance of supranational institutions and the failures of the political class has provoked a backlash by hard-pressed voters who feel that their country – whether Britain, America or France – no longer belongs to them.

In her first broadcast, President Le Pen paid tribute to her 88-year-old father, who as a soldier experienced the defeat of France in Vietnam and then Algeria and began his campaign around the motto ‘Les Français d’abord’ in 1972. She vowed to fight globalisation and bring jobs back to the rust belt of north and eastern France, to check the tide of immigration, to close radical mosques and expel ‘foreign Islamists’. She said that she would renegotiate a new deal with Europe as a prelude to an in/out referendum on Frexit. In her peroration, predictably, she promised to make France great again.

This may be dismissed as a pessimistic prediction, but if one thing has been learned in 2016 it is that the political class in the west has lost credibility with angry and frustrated voters and that opinion polls that predict business as usual have repeatedly been proved wrong. The French left is in disarray and, as in 2002, it may be that a Socialist candidate does not make it to the second round of the presidential elections. François Hollande, widely regarded as the most ineffectual president of modern times, will not run for a second term. None of the alternatives look promising: Manuel Valls, who has been criticised for not securing France against terrorist attacks, the liberal Emmanuel Macron, denounced as ‘the gravedigger of the left’, and Jean-Luc Mélenchon, a French Jeremy Corbyn or Bernie Sanders who generates more heat than light. The runoff is likely to be between Marine Le Pen and François Fillon, who in the primaries of the Republican party saw off challenges from the shameless former president Nicholas Sarkozy and Alain Juppé, who in 2004 was convicted of political corruption. In 2002, after their candidate Lionel Jospin crashed out in the first round, socialists held their noses and voted en masse for Jacques Chirac to keep out Jean-Marie Le Pen. Whether this time the mass of left and undecided voters will bother to turn out to vote for Fillon, who has been dubbed a French Mrs Thatcher, is not at all certain.

With Frexit on the horizon the future of the European Union is thrown into doubt. It is ironic that the heartland of Nazi and Facist power – Germany, Austria and Italy, remain as the defenders of the liberal European project.

Meanwhile it is clear, however, that no French president will deal seriously and imaginatively with what has been called the ‘colonial fracture’, the alienation of France’s six million Muslims, overwhelmingly of North African immigrant origin, who are constantly stigmatised as not integrating into the Republic while suffering discrimination in education, jobs and even on French beaches. This alienation was at the roots of the 2005 riots in the banlieues and the terrorist attacks of 2015 and 2016. Whichever candidate wins, it is likely that the French culture war – which is in effect a continuation of the 1954–1962 Algerian war on French soil – will intensify, with more tragic results.

THE ‘REFUGEE TECH’ MOVEMENT WILL GAIN MOMENTUM IN 2017

Alex Glennie is a principal researcher in the international innovation team at Nesta.

2016 saw a continuation and deepening of the global refugee crisis. The UN Refugee Agency estimates that more than 65 million people are now displaced worldwide – a staggering one in every 113 people on Earth. International agencies, charities, religious groups and others who support asylum seekers have struggled to keep up with the scale of human need prompted by these movements. Yet recently they have been given a boost by the emergence of a ‘tech civil society’, which is bringing new skills and enthusiasm to the search for innovative solutions.

The first ‘Techfugees’ conference was held in London in October 2015, gathering together prominent figures from the tech industry to start developing new products to help refugees. It’s a movement that has spread rapidly: there are now more than 15,000 members of the Techfugees community, located in nearly 30 countries. These entrepreneurs have already created useful innovations designed to support refugees along every stage of their journey to settle in a new country.

There has also been considerable duplication of effort and not enough of a push to connect new tools with existing mainstream services. However, it is likely that 2017 will bring greater coordination within the ‘refugee tech’ sector. Indeed, the Techfugees hub has already started to drive this process, particularly through its advocacy for projects that involve refugees directly in designing new tools and services. New methods for generating and supporting good ideas, such as challenge prizes (the European Social Innovation Competition being one example) and crowdfunding will start to play more of a role too.

2017 will also see a greater emphasis on innovations that support the longer-term needs of refugees and the communities that receive them. Germany is a key country to watch here. Angela Merkel’s decision to welcome hundreds of thousands of asylum seekers was politically controversial but has stimulated a huge amount of technological innovation. This includes apps designed to provide German language courses and information about public services (such as Ankommen, or ‘Arrive’), community-based housing platforms like ‘Refugees Welcome’ that match refugees with people willing to offer flatshares, and free ‘blended’ education systems like Kiron, which give refugees the chance to work towards accredited university degrees with online and offline support. In the year ahead, the successes – and failures – of these efforts will start to provide inspiration and guidance to other countries grappling with these issues.

The tech sector cannot solve the complex set of challenges facing refugees and their host communities on its own. But the efforts of these innovators are bringing fresh ideas to an area of policy that is badly in need of them. If the sector and policymakers start collaborating more effectively, 2017 could be the year that we see technological innovation starting to make a real difference to the way in which refugees settle and start rebuilding their lives.

IRAN: 2017

Massoumeh Torfeh is a research associate in the department of international development at the London School of Economics and Political Science.

The ultra-right-wing team selected by the US president-elect Donald Trump will probably match the aspirations of the hardline leadership in Iran. The supreme leader Ayatollah Ali Khamenei, and his loyal array of hardline advisers and officials in the Revolutionary Guards Corp (IRGC), in the judiciary and in the security apparatus, have been waiting for this moment to arrive.

The year 2017, in which Iran will be holding presidential and provincial elections, will be dominated by a heated debate between the country’s hardliners and centrists on how to handle the new US presidency and the nuclear deal signed with the so-called P5+1 (the UN Security Council’s five permanent members plus Germany), endorsed by the UN Security Council as international law. Iranian hardliners share their dislike of the deal with the Republican members of the US congress who agree with the president-elect’s words that it is the ‘worst deal ever negotiated’.

The 10-year reauthorisation of the Iran Sanctions Act (ISA) by the house of representatives on 15 November, however, angered Iran’s hardliners. ISA was first adopted in 1996 to punish investments in Iran’s energy industry. Due to expire at the end of 2016, its renewal must still be passed by the senate and signed by President Barack Obama in order to become law. ‘Extension of anti-Iran sanctions by the US equals a breach of the Joint Comprehensive Plan of Action [JCPOA],’ said Ali Shamkhani, the secretary of Iran’s supreme national security council, adding that Iran would carry out a prepared technical package immediately in return. Ayatollah Khamenei has also threatened that if Trump ‘tears up’ the JCPOA, Iran will ‘set fire to it’. In March, Trump declared that his number-one priority would be to dismantle what he called the ‘disastrous’ deal with Iran.

Iranian hardliners have already dismissed Trump’s idea of ‘renegotiating’. And now they would use the renewal of sanctions as an excuse to opt out of the JCPOA and return to uranium enrichment. President Hassan Rouhani, currently running for a second term, would be sidelined and discredited.

We will have to wait and see the list of presidential candidates for the June elections but there is a chance that a popular hardline personality like General Qassem Soleimani, with his proven track record in Syria and Iraq, would be nominated and then supported by the supreme leader. We also need to see who would be selected as the US secretary of state; some of the top nominees like John Bolton and Newt Gingrich are fiercely anti-Iran and this could accentuate the situation.

These developments would further discourage European and American companies from expanding trade and investment in Iran. This year alone BP, Total, Airbus and Boeing have all restarted their trade deals with Iran but cautiously.

Thus in 2017 Iran and the P5+1 may see their hard-fought achievements reversed. The only hope is that Mr Trump, described by his close associates as a pragmatic businessman, will act wisely.

SOUTH AFRICA: 2017

Pierre de Vos is Claude Leon Foundation chair in constitutional governance at the University of Cape Town.

In South Africa it often feels as if an entire year’s-worth of political news is crammed into one week. In such a volatile environment it might be imprudent to try to predict the direction the country will take in 2017. But as imprudence is something of a national sport, I will have a go.

In 2017 President Jacob Zuma is likely to limp on, politically wounded by allegations that he has allowed the Gupta family (whom he counts among his friends) to play a decisive role in the appointment and removal of cabinet ministers to ensure that government departments act in ways to benefit the Gupta business empire. Zuma will survive the scandal because he is a street fighter and because he knows how to use his power as leader of the governing party to neutralise or destroy his opponents.

Neither Zuma on the one hand, nor the minister of finance Pravin Gordhan and those aligned with him on the other, has the power to deliver the coup-de-grace in the fight for control of South Africa’s Treasury. This means that Gordhan is likely to remain in his position – although a campaign to discredit him will continue – by spreading rumours about his ties to big business and by using the elite crime fighting unit the Hawks to pursue criminal investigations against him.

But as the governing party prepares for its elective conference at the end of 2017 and as the possibility increase that President Zuma and the faction he leads will lose control over the governing ANC, efforts by those aligned with the Zuma faction to extract as much monetary benefit out of the state as quickly as possible will intensify.

The higher education landscape will remain extremely volatile. As the government neither has the political imagination nor the resources to deal in a constructive manner with the demands of the Fees Must Fall student movement for ‘free, quality, decolonised education for all’, sporadic protests will continue. However, internal disagreement has weakened the student movement considerably, which means the protests might attract less support than they did at the movement’s height towards the end of 2015.

The fortunes of the second-largest party, the right-of-centre Democratic Alliance (DA), and the third-largest party, the populist Economic Freedom Fighters (EFF), are intricately linked to the results of the ANC elective conference at the end of 2017. If the Zuma-aligned candidate (most probably Zuma’s ex-wife Nkosazana Dlamini-Zuma) is elected as the new ANC president, this is unlikely to halt the steady erosion of the electoral fortunes of the ANC. This is likely to benefit the DA disproportionately, as former ANC voters disillusioned with increased corruption turn away from the ANC.

However, if the anti-Zuma candidate (most likely current deputy president Cyril Ramaphosa) is elected president of the ANC, this may disproportionately benefit the EFF as it has argued that Rampahosa is tainted by his alleged involvement in the Marikana massacre in which the South African police shot and killed 34 miners. As the EFF conducts a kind of anti-politics, it may benefit from having a new ‘villain’ to rail against.

GERMANY: 2017

Silke Breimaier works for the Friedrich­Ebert­Stiftung. She writes in a personal capacity.

When Germany goes to the polls in September next year, the election could become a vote on Angela Merkel who has been chancellor for the last 11 years. Merkel just announced that she would be standing for a fourth term. Her Social Democratic counterpart isn’t decided yet: The longstanding party leader and deputy chancellor, Sigmar Gabriel, would be the obvious choice but he dithers over the decision, as his popularity among the German public is low, and not even all of his comrades are convinced he should run for chancellor.

Many Social Democrats would like to see Martin Schulz as the Spitzenkandidat of the SPD. The current president of the European parliament just declared his move from Brussels to Berlin in order to stand for a seat next year. He would present a fresh face.

After four years of governing in a grand coalition with Merkel’s CDU, the SPD will have a hard time distinguishing itself from the Conservatives. The Social Democrats have pushed the majority of policies, yet they are not getting any credit for it. Currently, the party polls around 22 per cent. The CDU, on the other side, has experienced a sharp drop in popularity since summer 2015 – when thousands of refugees arrived in Germany each day.

Merkel’s uncompromising stance in welcoming over a million refugees in 2015 has cost her party support in the polls and damaged her personal popularity. Many voters have turned to the AfD, the ‘Alternative for Germany’, a party that offers little more than anti-Islamic populist rhetoric.

The election campaign will most likely be focusing on domestic issues: the intake of refugees and their integration on the one hand and ‘classic issues’ such as a long overdue reform of the pension system on the other. Discussions around fiscal discipline vs investments in infrastructure will move up the agenda. The SPD will try to run a policy-focused campaign. By contrast, the Conservatives so far rely on Merkel’s standing as a credible leader in uncertain times – for an election that might come down to a vote over her refugee policy only, that’s a risk.

The CDU’s Bavarian sister party, CSU, is threatening to line up their own candidate, trying to up the ante in forcing a change of policy on migration. The party has been critical towards the unrestricted influx of refugees calling relentlessly for a ‘maximum cap’ of people, an approach not supported by Merkel nor the SPD. The deal with Turkey reduced the numbers of refugees and calmed minds, but this situation could prove unstable.

It has always been the strategy of the two conservative parties to assign the CSU the role of the ‘bad cop’, appealing to voters on the far right. The rise of the AfD has reinforced this attempt. But voters might just turn to the original this time. The right-wing populists have been triumphant in all recent local elections and no one doubts that they will enter the Bundestag.

Coalition arithmetic is a strong topic for discussion already. Parliamentarians and the people are tired of the grand coalition, and yet the numbers might not allow for any other outcome. The SPD leadership knows that their members most likely wouldn’t support yet another forced marriage with the Conservatives in fear of total marginalisation. So, both big parties look for alternative alliances. While the AfD has been ruled out as a possible partner, its share in votes might nonetheless determine which majorities are achievable.

Within the past months, talks have intensified between the SPD, the Green party, and The Left (Die Linke), testing the water for what many see as the only long-term solution for a progressive majority in Germany: a coalition of red-red-green. The relationship of the SPD with parts of the Die Linke has traditionally been difficult – and some in the Green party would rather see a black-green coalition with the Conservatives as a way to future power. The liberal FDP, eliminated in 2013 after 64 years in the Bundestag and four years as coalition partner for Merkel and her party, could make its comeback and shake up the numbers even more.

Will any of these scenarios change Germany’s position on Europe? Most likely not that much. Big parts of Germany’s views on the EU belong to German ‘Staatsräson’, the conviction that seeking European cooperation and compromise is the only way forward for the Union and the country at its heart.

With a red-red-green government one could expect a shift in rhetoric from austerity measures to more solidarity with the European south and a new emphasis on a more social Europe.

For the UK and the Brexit negotiations, it won’t make much of a difference if Germany is governed by a Social Democratic chancellor or Angela Merkel. Both parties agree on the current government’s line that negotiations won’t start before article 50 is triggered and that everything that could attract ‘copycats’ in other EU countries needs to be avoided.

UK POLITICS: 2017

Matthew Taylor is chief executive of the RSA, but writes here in a personal capacity.

After 2016 the very idea of making predictions seems like folly. Surely almost anything is possible: ‘2017, the year of international peril’ in the face of a geopolitics characterised by suspicion, competition and confusion; ‘2017, the year of betrayal’ as Brexit voters realise how few of their hopes will be fulfilled and Trump supporters see the limitations of populism as a method of government; ‘2017, the UK’s lost year’ as government is paralysed by the process of leaving Europe while the economy and living standards stagnate.

A key question is whether 2017 sees any signs of the centre and centre-left of politics developing a coherent strategy. It is unlikely there will be much encouragement from other parts of the world with social democrats on course to fail badly in general elections in France, Germany and now Italy, with the failure of Renzi’s constitutional gamble. Nor is it likely that Theresa May will provide the catalyst of an early election in the UK, something which will be a relief to most incumbent Labour MPs.

As is invariably the case when the Labour party seems unlikely to win nationally there will be growing enthusiasm among progressives for realignment and devolution. Talk of rainbow alliances and electoral pacts will continue, but don’t expect them to turn into action. Successes for Labour in mayoral and local government elections will serve to highlight the contrast between the party’s largely irrelevant manoeuvring in Westminster and the practical work of its city leaders. But the weakness of local government in the Labour party’s power structure means little energy flows upwards.

With Theresa May engaging with issues like corporate responsibility, industrial strategy and exploitation at work, with the Liberal Democrats shrewdly targeting remain voters, and with UKIP determined to break through in northern heartlands, 2017 could be the year UK Labour reaches the point of no return passed a few years ago in Scotland.

Given how close their party is to disaster, my bold prediction is that in 2017 an unstoppable fightback will be mounted by Labour progressives. Combining a thoughtful analysis of technological possibility, a new style of emotionally intelligent and authentic politics and a commitment to eye-catching modern ideas like the basic income and a radically reformed tax base, Labour will once again become the party of aspiration and the future.

‘Do you really believe that?’ I hear you ask incredulously. Of course not – but in these dark times, perhaps we have no choice but to rely more on hope than on expectation.

IMMIGRATION AND SECURITY: 2017

Chris Murray is a research fellow at the Institute for Public Policy Research (IPPR). He writes in a personal capacity.

‘Everything must change for everything to say the same.’ So reflects Tancredi in The Leopard, surveying the decline of the aristocracy. Officials in the Home Office will be ruefully familiar with the sentiment, as they ponder how to manage Britain’s immigration and security policy as the country heads towards Brexit. For they have good reasons to hope that many things will stay the same, and to think that much will have to change.

Most urgently, the government in 2017 will have to devise a successor to free movement. The debate thus far has focused on the change being sought: substantial reductions in migration. But even Nigel Farage will accept that there are large parts that we wish to see preserved in the new order. British people will continue to marry Europeans, for example, and they will come and live here. EU migrants will continue to work in the NHS. We will still want Europeans to set up shop in Britain. The Home Office must now design a brand new way to do this. For an administration that grew by increments, this represents the biggest shift in immigration policy since the end of empire.

Solving this problem would be a test for the most well-resourced administration. Pity, then, the Home Office, which also has a daunting set of tasks in the year ahead.

First, much of Britain’s security apparatus hinges on the current EU setup, given crime and security threats are increasingly cross-border. The European Arrest Warrant, that swiftly extradites suspected criminals, is one good example, as is Europol, which facilitates cooperation and intelligence sharing. Tip-offs and flash warnings flow between capitals. The prime minister understands this. Her sole substantive intervention in the referendum was a heavyweight speech in which she explained that her experience as home secretary persuaded her to vote Remain. To maintain the current level of protection and security from crime and protection, the Home Office will need to find creative ways to stay in the current arrangements after we leave.

Another looming issue lies at the border. As hysterical headlines continually remind the government, securing the border is a first-order duty. But maintaining current security levels after Brexit without wholesale change will be highly difficult. Take Calais, the UK’s second-busiest entry point after Heathrow. Since 2003, UK border controls have been carried out on French soil. This is understandably unpopular with local residents. Local politicians routinely call for the border to be sent back to England. François Fillon is a sceptic and Marine Le Pen overtly hostile. The calculus is changing in France, as Brexit bites and their elections approach; the Home Office has its work cut out just to keep the show on the road. The issue is not just one of managing asylum flows. While not directly predicated on Britain’s EU membership, a thicket of joint operations has developed to fight illegal immigration, smuggling, organised crime and terrorism. Restructuring this to maintain the current security level in a chillier political climate is a tall order.

A bigger challenge lies at the Irish border. Since the Good Friday agreement, the physical border has largely disappeared – a so-called ‘soft border’. Almost everyone advocates as soft a border as possible after Brexit. Yet two mutually incompatible forces work against that. On the one hand, Ireland’s continued EU membership represents an immovable object: Ireland remains bound to the free movement of people, goods, services and capital, and remains in the customs union. Without checks at the Northern Irish border, that would be an unacceptable hole in the EU’s defences and a back door to the UK for anyone who had entered the EU. An alternative is to institute checks on people and goods moving between Northern Ireland and the rest of Britain. But that would surely be unconscionable to those who wish Northern Ireland to remain wholly part of the UK. Maintaining the status quo of a soft border will require brainpower and diplomacy.

For Amber Rudd, the home secretary, 2017 is fraught with risk. Fumble, and she might leave Britain with a dysfunctional immigration system, a less secure border, and less able to protect itself. Even maintaining the status quo will require more ingenuity than has been demanded of any of her recent predecessors. All but the most burn-the-house-down Hard Brexiteer would sense that rash action is ill-advised. In 2017, most of her energies will be dedicated to devising ways to safeguard as much of the status quo as possible. Never mind moving forward. At most, 2017 will be spent trying to stay where we are.

SYRIA: 2017

Bissan Fakih is deputy campaign director of the the Syria Campaign.

Hope is a currency in short supply for supporters of a free and peaceful Syria. 2017 looks to be another year of war waged against civilians. As this year draws to a close, the Assad regime looks set to massacre its way into the city of Aleppo, retaking full control of this much-coveted prize from Syrian rebels.

2017 cannot undo what many American diplomats and Syrian human rights activists have gone blue in the face attempting to argue to the Obama administration: allowing red lines to be crossed by the Syrian regime and Russia would pose a long-term threat to global security and allow the bloodshed in Syria to continue. Now, the Geneva conventions find their burial ground in Syria along with long-established international laws and norms; and the bombardment of hospitals, chlorine gas attacks, starvation, mass detention and torture programmes are likely to continue unabated in the coming year. For millions of Syrians, this will be Obama’s legacy.

If the Syrian regime’s ‘submit or starve’ policy continues with the same ruthlessness as in 2016, the besieged and rebel-held towns in rural Damascus and rural Homs could also fall back into regime control.

There is increasing chatter of Assad ‘winning’ the war if he retakes control of rebel-held territory, but this misunderstands that the conflict did not begin as a war of territory and it will not end that way. Even with every weapon laid down in Syria, a great number of Syrians will continue to strive to kick Assad out, more so perhaps than in 2011 when the revolution began, because of the bombardment and torture of their family members. Without justice, there will be no peace. The greatest evidence of this is shown whenever a short-lived ceasefire takes place and Syrians take to the streets once again in their tens of thousands. The issue of Syria’s disappeared masses will gain prominence in 2017 as Syrian groups, and women in particular, gear up for a year of campaigning for the release of their family members from regime detention.

Raqqa, the capital of the Islamic State will likely be wrested away from the group as the international offensive against them continues. Even then, Syria will remain a cradle for extremism if no peaceful and just solution to the conflict is pursued. It is the city of Idlib, however, that must be watched in 2017. Armed fighters and populations of besieged towns, forced to surrender to the regime due to starvation, were frequently relocated to rebel-held Idlib. Activists predict that Idlib, host now to hundreds of thousands of displaced Syrians, will be the place where warnings of Srebrenica-style atrocities may come true.

It will be for the Nobel peace prize-nominated volunteer rescue workers of the White Helmets to pick up the pieces. As this year draws to a close, they have saved more than 73,000 Syrians through their heroic actions. Perhaps by 2017 that number will grow to 100,000.

Syrian activists in the diaspora and their allies, exhausted and traumatised by years of protesting, campaigning and lobbying, will have no choice in 2017 but to try to engage constructively with the Trump Administration. It does not look promising. The president-elect has spoken of closer ties with Russia, perhaps leading to pursuit of rapprochement with Assad unless wiser heads at the State Department and among America’s allies prevail. A rapprochement will do nothing to stem the violence and would ensure long-term instability with growing extremism and refugee flows. We can only hope to see a similar u-turn to that committed by Boris Johnson, who used to argue that Assad should be an ally only to see later that he never could be.

Whether or not Trump decides to support Putin and Assad in Syria or not, Europe must focus on its own interests. Ultimately these are as a neighbour confronted by the greatest mass movement of people since the second world war and a refugee crisis that will not end so long as Assad is in power. Syrians’ demands for freedom and dignity will not go quietly into the night. The sooner the world realises this the better.

This article appears in edition 23.3 of Juncture, IPPR's quarterly journal of politics and ideas, published by Wiley.