Politics in 2012: what would Margaret do? Plan B, of course - The Guardian

Even more than 12 months ago, the fate of David Cameron's coalition in 2012 lies in the grip of forces far beyond its control. As an economic and political threat, the single word eurozone encompasses the peril facing the political elite in 2012, a year which could prove as dangerous to the British state as any since 1940.

From George Osborne's embattled austerity programme, known as his plan A, through the much-disrupted NHS to the 300-year-old union between England and Scotland and – at a stretch – elections in France and the US, it will be a test of political character and resolve. How will the politicians cope? Who will crack or be brushed aside? Who will measure up to the scale of events?

In his Conservative party conference speech in October, Cameron signalled Churchillian optimism in defiance of gloomy facts. Voters respond to leadership. Much of his party does not love him, but there is no visible alternative (Boris Johnson will be busy getting re-elected as London's mayor) and the PM won credit with the disaffected right of his party by using his veto – which may prove to have been premature – at the EU's December summit.

Short of disaster it is hard to imagine Cameron leaving No 10 this year, hard to imagine a Greek-style technocratic regime or an all-party government unless there is economic collapse and social disorder. Despite the ferocious squeeze on living standards (Ed Miliband's notion of the "squeezed middle" is starting to look prescient) the PM's position is reinforced by the Labour leader's failure to click with voters and the opposition's unresolved search for a credible economic policy that addresses past failings.

Yet Miliband too will still be in his job in January 2013, as will his most controversial and energetic lieutenant, the shadow chancellor, Ed Balls, now consort to his wife, rising star Yvette Cooper, and slowly being encircled by hungry younger talent, the likes of Chuka Umunna and Rachel Reeves.

In a world where policies must adapt to changing realities – even if ministers never call them plan B – stability in personnel has value. The same calculation applies to most cabinet heavyweights. William Hague enjoys being foreign secretary and provides ballast. Theresa May is not universally admired by fellow Tories, but the home secretary has gender balance on her side.

Osborne, Brown to Cameron's Blair, must feel less cocky than he often sounds as double dip recession looms. His relentlessly political take on everything (Brown again) may be storing up trouble if his promised economic recovery fails to materialise. He cannot blame Labour or the eurozone for ever, yet feels he deserves more credit for sticking to his guns.

Cameron will stage his first unforced reshuffle, more probably in July than at Easter, ministers suspect. But coalition reshuffles are three-dimensional chess. Will he confine his attention to Tory ministers and leave the 21 Lib Dem ministers in place – or shake them up with Nick Clegg's consent? No one knows, including Cameron, though Osborne, whose fingerprints were all over the post-Liam Fox reshuffle (the promoted Phil Hammond and Justine Greening are both his allies), may be on the case. Will he and Cameron decide that NHS staff and patients need a blood sacrifice – Andrew Lansley? Some think so, others that the health secretary's poor communication skills do not mean he is taking the NHS the wrong way to better value for money.

The justice secretary, the loved-and-loathed Ken Clarke, who is 72 this summer, is a likelier departure. "Eric Pickles has one more year's shelf-life," says one minister. Caroline Spelman's aborted forestry sell-off damaged her, but Tory unpopularity with women shields her.

And the Lib Dems? Some MPs on both sides think Chris Huhne is their most effective cabinet member and that Nick Clegg is lucky that the energy secretary's speeding points problem with Essex police – a saga which must be resolved in 2012 – prevents him destablising his leader.

Vince Cable will be 69 in May and is a diminished figure. If he or Huhne quit or were forced out, would Cameron be obliged to promote another Lib Dem? Probably. Nick Harvey (defence), Jeremy Browne (Foreign Office) or Ed Davey (business) are acknowledged by Conservative colleagues – some through gritted teeth – to be good enough for the promotion they themselves would like.

If the coalition falters it will most likely be the Tory right that wields the dagger, ostensibly over Europe, in reality over pinko Lib Dem influence, more imagined than real, on coalition policy. With their poll ratings on life support, the Lib Dems dare not strike; like Macbeth they are steeped too much in coalition blood.

If Cameron can, he may make 2012 a minor reshuffle (stability again), leaving a big makeover until 2013 or even 2014 to bring on Cameroon talent. That would help retain loyalty among young hopefuls and old disappointed alike.

Just as events beyond Westminster will shape coalition politics in 2012, so will politicians beyond London SW1. Not just Angela Merkel, Nicolas Sarkozy (or who?) and Barack Obama (or who?), but four British politicians who remain charismatic threats to their old comrades. If Johnson beats Ken Livingstone again for mayor, his restless ambition may turn to unfinished business upstream from City Hall. If Ken beats Boris he will make Miliband's task harder.

Alex Salmond, another wily regional politician who (like them) was never a good team fit at Westminster, will spend 2012 using his position as Scotland's first minister to ensure that, when the referendum comes (24 June 2014, the 700th anniversary of Bannockburn, may be his target date) Cameron is remembered as the English Tory who lost the Union of 1707.

Even he may not be the gravest threat to No 10. Still both revered and hated, Margaret Thatcher's apotheosis will get Hollywood's seal of approval when The Iron Lady opens in British cinemas. Thatcher was a more cautious and pragmatic leader than legend insists. But old hands also know that legends are easily adapted to current needs. In dangerous times the tempting and misleading question may become: "What would Margaret have done?"