UK Braces As General Election Fallout Continues
The UK may be set for a substantial shift in policy, as the fallout from the shock General Election result continues. Theresa May’s failure to consolidate her majority in a snap election has cast uncertainty over her position, and a change of direction seems increasingly inevitable.
The Prime Minister found herself undermined in the last days of general election campaigning by accusations of compromising public safety through police cuts, following the tragic events in Manchester and London. Her response to the Grenfell tower fire has compounded this, with further criticism of the government’s slow response, as well as the state of council funding.
This criticism is the latest in a line of barbs thrown at the Prime Minister, whose position seemed unassailable just a couple of months ago. When the snap general election was called, the Conservatives held as much as a 22 point lead in some polls over their chief rivals, the Labour Party.
However, a disastrous campaign in which Mrs. May refused to attend debates saw the opposition leader, Jeremy Corbyn, make significant gains. Mr. Corbyn had previously been dubbed ‘unelectable’ in certain quarters, and was widely criticised by right-leaning newspapers for past connections to extremist organisations.
Labour went on to win 30 seats with 40% of the vote, compared to the Conservatives 42.4%. The closeness of the result led to a ‘hung Parliament’, in which May’s Conservatives were forced to ally themselves with the Northern Irish Democratic Unionist Party (DUP). Several DUP policies are considered controversial by Britain’s main parties, with a platform of pro-life and anti gay marriage views.
While other countries such as Canada frequently function with hung parliaments, there is no great zeal for them in England. The previous instance in 2010 led to an unhappy but stable coalition between the Conservatives and Liberal Democrats, while in 1974 a second election was called within months of the first.
The second case remains a possibility. While the Conservatives now have a majority in Parliament, it is only around 13 seats, and only thanks to an agreement with the DUP. Should a significant number of Conservative or DUP MPs refuse to vote with the government, they could be unable to pass legislation. This could impede the government’s ability to implement its manifesto pledges, and a stabilising second election may be needed.
It’s also possible that Theresa May will step down as Prime Minister in the near future, in order to refresh the Party’s image. Home Secretary Amber Rudd has been touted as a likely candidate, although she only held onto her constituency by a couple of hundred votes. History however suggests that MPs who become Prime Minister tend to increase their vote share significantly.
In the instance of a fresh general election, there is the distinct possibility that Jeremy Corbyn’s Labour would win. This would represent a dramatic policy shift for the UK, and one which would hold mixed blessings for businesses.
While corporation tax would rise slightly, the approach to Brexit negotiations would be softened. They would be handled by experienced barrister Keir Starmer and lawyer Emily Thornberry, who some would suggest are more naturally qualified than Boris Johnson and David Davis.
In the event that the Conservative Party maintains a stable coalition, some form of change seems inevitable. If the Prime Minister remains in power, a move away from ‘austerity politics’ seems inevitable. Chancellor Philip Hammond has stated that “people are tired of the slog”, and Health Secretary Jeremy Hunt has spoken of removing caps on nurses’ wage increases.
While instability and uncertainty are never welcome for the business community, there could yet be positives from this extraordinary election cycle. More money in people’s pockets and a ‘soft Brexit’ would be a welcome tonic, and perhaps a reason to put those plans to move away on ice.
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