Strange days indeed in Britain as election day looms

When I was an economics student in the 1970s, one of my favourite topics was a phenomenon called the British economic disease. There was much lament and hand wringing about the eclipse of British economic power. It spawned a whole new academic industry called the economics of decline. Culprits ranged from militant trade unions to fuddy-duddy management, the class system, the lack of an enterprise culture, the divide between the interests of finance and industry.

Today one reads with astonishment that Britain is now the world's fifth largest economy. One would have thought they had no industry left. Apparently not. Another fact is that Britain has generated more jobs – some 2 million – than the whole of the European Union. This has attracted plenty of Eastern Europeans, mostly Poles, pouring into Britain, although many of the jobs are at the low end of the market. The jobs bonanza is only because the British labour market is more flexible and less regimented than the European Union's.

Britain still had a major public indebtedness problem to wind down because the Brown Labour government outlaid billions bailing out British banks that had gotten heavily into risky lending. So Labour is still been held accountable for Britain's indebtedness and having light-touch regulation on the financial sector.

The Conservatives are roundly condemned for a bleak austerity program that basically put the economy through the grinder for three years. They imposed heartless work tests on the disabled that were a throwback to the days of Charles Dickens. The Chancellor of the Exchequer, George Osborne, only loosened the fiscal strap once it was realised it was actually pitching the economy back into a slump.

The influx of European job seekers is putting a strain on services such as the National Health Service, housing, transport and other infrastructure.

The two main parties – Labour and Conservative – are neck to neck. The two main protagonists, Prime Minister David Cameron and Opposition Leader Ed Miliband, both look photogenic, young and slick. Neither would look out of place in a mannequin parade. The stand-out performer though, even to English audiences, has been the Scottish National Party SNP leader Nicola Sturgeon and her no-nonsense straight-shooting demeanour.

Her emergence suggests British politics is changing. Labour should have had this election all sewn up, if it was not for the fact that it has almost entirely lost its electoral stronghold base in Scotland. Polls suggest 59 seats that were once traditionally Labour have switched en masse to the SNP. Labour badly needed those seats to form a government in its own right. What has changed?

Since the independence poll last September, the Scots have seemingly become radicalised and assertive and switched their allegiance to the SNP. That is partly because the SNP mounted an appealing and impressive campaign for the "yes" vote last year. The Scots feel their own nationalists can do a better job of safeguarding Scotland's interests than unionist Labour members.

This amounts to a tectonic shift in British politics. It might, in time, spell the end of the union. Miliband has ruled out any coalition with the SNP, because he does not like their view on getting rid of the Trident nuclear deterrent or, more importantly, the idea that Scotland conducts another referendum on independence in a few years. Miliband does not want to go down in history as the man who unwittingly broke a union that had lasted more than 300 years.

Scotland is a no-go zone for the Tories and has been since the days when Margaret Thatcher ruled. She got up the Scots' noses. After the election, we are likely to see a whole bloc of bleating Scottish nationalists at Westminster and Cameron's Conservatives clinging to power with the help of the Liberal Democrats; the same coalition has been in power for the past five years.

Alex Millmow teaches economics at Federation University Australia.