2013 preview: Why blinkered austerity politics will ignore Britain’s biggest problems

Impatient speculating about the fate of the coalition and bickering over the economy mask the true scale of the challenge facing Britain's politicians in 2013. It is the national crisis of confidence in the people who run this place which matters most to ordinary voters. But these are problems caused by political elites as much as fixed by them, and MPs and ministers are simply not programmed to address the true scale of the problems facing the UK. British politics in 2013 will be about important issues, but relatively petty ones.

The next 12 months will see the realities of hung parliament bite, as the coalition's midgame turns to endgame. British politics is not really suited to five-year parliaments. The tradition is one of intense anticipation in the buildup to general elections, as newspapers speculate about whether the prime minister will decide to go to the country early. Robbed of this treat by the UK's first fixed parliament, journalists and politicians will instead spend their time impatiently wondering about the potential premature demise of the coalition. The first glimmerings of this – mutterings from the Tory right about a bid to abandon the government in 2014, for example – were detected in 2012. The year to come will see such rumour-mongering becoming endemic in the tearooms and corridors of Westminster.

Coalition governments, unlike single-party governments, tend to drift apart as their time in power continues. The benefits of maintaining stability to safeguard the remaining years in power slowly diminish as the case for the alternative – attacking one's coalition colleagues in a bid to win an overall majority at the next general election – becomes more and more compelling. In the opening half of the current parliament, it was the grassroots who were least invested in the present government; local authority elections were a much more important priority for councillors, many of which have already paid the price with their seats for the Lib Dem-Tory tie-up. 2013 will see Tory MPs begin to shift their focus from this parliament to the next one. The strategic choice they collectively face is an invidious one: either continuing with the present arrangements, and risking a disapproving thumbs-down from voters, or making a drastic break following some sort of trumped-up row – guaranteeing a disapproving thumbs-down from voters.

The likelihood is an unsatisfyingly grim continuation of the status quo. Such a depressing state of affairs will only be shored up by the appearance, early in 2013, of a belated coalition midterm review, in which David Cameron and Nick Clegg will attempt to agree a set of civilised terms to which the coalition will continue to cling for another two years. Despite the never-ending parade of relaunches seen in 2012, the likelihood is this review will give the government enough core stability to resist those manoeuvring for a sudden change of plan. MPs will recognise they have little choice but to stick with the coalition's record – especially when the other big theatrical event of 2013 takes place.

The comprehensive spending review for 2015/16, due to be unveiled by the middle of the year, will commit the Tories and Lib Dems to detailed, department-by-department spending plans for the first year or so of the next parliament. On deficit reduction, the Tories and Lib Dems will become effectively the same party for roughly one-fifth of the time they are asking voters to elect them for. This is closer to the full-scale merger than either Cameron or Clegg would have acknowledged possible in 2010. It clears the way for Labour to make hay on the economy. If 2012 is anything to go by, there is only half a chance they will grab their chance.

Life out of power is proving tough for Ed Miliband and co. They are accused of opportunism at every turn and often find it hard to take the open-goal chances offered to them by the erratic, sloppy nature of coalition politics. Nowhere is this more so than on the economy, where recession and the unpopularity of the government's spending cuts mean it should be easy for Labour. Alas, it is not proving as straightforward as it might be. A large chunk of voters continue to blame Labour for this fine mess, leaving Balls and Miliband fighting for basic credibility. This fundamental rebuilding of confidence in Labour – that the party could be trusted with the economy again – was arguably the biggest single component of Tony Blair's 1997 landslide.

In 2013, the importance of overcoming this hurdle will be treated with a lot more seriousness than the ephemeral nature of Labour's current double-digit lead in opinion polls. Right now, Labour needs to have a 20-point advantage to be sure of an overall majority next time around. Instead, like Cameron, Miliband faces the likelihood of another indecisive verdict from the British public in 2015.

The secret to Miliband's success in 2012 did not lie in the economy, but in his broader interpretation of Britain's woes. The country was bruised and vulnerable throughout the year, and remains ripe for further existential agonising in 2013. With the exception of the happy and glorious monarchy, confidence in the biggest institutions of the state is teetering. Bankers are vilified. Politicians are disgraced. The media are despised – and now the BBC fits into that category, too. This is a period of reassessment and suspicion, where the sensitivities of recession have only increased the susceptibility of every part of British public life to scandal.

The extent of the crisis is not being acknowledged by politicians, who are themselves threatened by its existence. This is the hidden subtext to British politics in the 12 months to come: the economy is the main battleground, but it is a struggle neither side can really win. Instead the areas of greatest concern from voters are only partially being addressed by their elected representatives. Rumbling dissatisfaction with the system is not going to go away in 2013; it will be up to Labour to make the most of the opportunities this creates. If the opposition fails, it could be fringe parties like Ukip, looking ahead to the European elections in May 2014, who reap the biggest reward.

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