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Learning to expect the unexpected. Resetting the UK political landscape (again)

Written by Matthew Moth, Founding Partner of Madano. 

So, the voting public in the UK have thrown another curve-ball to the politicians, the media, pollsters (generally), businesses – and possibly themselves?  

Days before entering into negotiations with the EU over Brexit - arguably the most important episode in British life since the post-WW2 compact  - Theresa May’s call for larger majority to give a ‘stronger and more stable’ negotiating platform has disintegrated. 

Since 8th June, we’ve had a government reshuffle, two party leaders resign, continuing negotiations over a deal to prop up a minority Conservative government, and all of this with formal Brexit negotiations beginning today. 

An historic Election

In what has rightly been described as an historic Election, the Conservatives led by Theresa May spectacularly gave up a +20 point lead over the Jeremy Corbyn headed Labour Party when the PM announced the snap Election.

Mrs May’s Conservatives came out of the Election with 318 seats out of the 650 available, losing 13 seats and ending the Election eight seats short of an overall majority.

She is clearly significant weakened. Whether she is ‘a dead-woman walking,’ - as Evening Standard editor, George Osborne gleefully described - remains to be seen.

While many commentators have opined at length on the highly ineffective presidential-style Conservative campaign, clearly the Labour Party (and Mr Corbyn in particular) had a great Election, outperforming critics, pundits and many in the Party itself, who had feared the worst – a Conservative landslide. 

In that context, for Labour to have added 30 seats to end the Election at 262 MPs is a considerable achievement. Mr Corbyn engaged with young voters and offered a clear and differentiated vision for a future Britain, irrespective of enduring concerns about it financing.

However, amidst all the present Labour positivity – they did fail to actually win for a third successive Election cycle, and it remains to be seen if the current collective ‘togetherness’ will stay intact, given the deep divisions that have recently existed in the Parliamentary Labour Party.

A return to two party politics

Overall, the Election saw a return to the two party politics of yesteryear, with Labour increasing its vote share to 40% (30.4% in 2015) and the Conservatives, also increasing its share of the popular vote to 42.4% (36.9% in 2015).

UKIP was destroyed. Having polled 12.6% of the popular vote in 2015, it suffered a disasterous night, reduced to 1.8% nationally and its then leader, Paul Nuttall, finishing a distant third in his attempt to win a seat in Boston & Skegness.

The other big losers were the Scottish Nationalists, rowing back from their high-water mark in 2015, down 21 seats to 35, and in the process losing their Westminster leader Angus Robertson and former leader, Alex Salmond.

Nicola Sturgeon’s gamble on a second independence referendum - ‘IndyRef2’-  backfired, giving both Scottish Labour and a resurgent Scottish Conservative Party, led by Ruth Davidson, the opportunity to make significant in-roads, the latter moving from 1 to 13 seats and achieving a vote share not seen since 1983.

A wounded re-shuffle

The Prime Minister has carried out a limited Cabinet reshuffle, with the most senior Ministers remaining in their pre-election posts.

Before the election result, there was speculation that Theresa May would carry out a major reshuffle, moving ministers such as Philip Hammond into different roles or sacking them altogether.

Given her loss of personal credibility post-election, this has not been possible. May’s ally, the moderate ‘remainer’ Damian Green has been promoted to a role which is essentially Deputy Prime Minister, providing a smoother conduit to the Party itself. She was forced to sack her two joint Chiefs of Staff in the face of strong criticism from the Conservative Party, replacing them with former Housing Minister Gavin Barwell.

In terms of other leading roles, Chancellor Philip Hammond, Foreign Secretary Boris Johnson, International Trade Secretary Liam Fox, and Brexit Secretary David Davis retain their previous roles. 

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Greg Clark remains in post as Secretary of State at the Department for Business, Energy and Industrial Strategy (BEIS).

Michael Gove has returned to Cabinet as Environment Secretary, replacing Andrea Leadsom, who moves to become Leader of the House of Commons.

So, what’s happening now?

Prime Minister Theresa May gave a statement on 9th June announcing her intention to form a government, supported by Northern Ireland’s Democratic Unionist Party (DUP) and its 10 MPs in a ‘confidence and supply’ arrangement.

This would not be a formal coalition, with the DUP given ministerial jobs, but rather an arrangement that will most likely see the DUP support the Conservatives on security issues, Budget Statements, or Votes of No Confidence.

The Prime Minister has stated that two parties will work towards a ‘successful Brexit deal’ and secure a new partnership with the EU which guarantees long-term prosperity for the UK.

Of course, a deal with the DUP led by Arlene Foster is not without controversy in itself.

Aside from DUP policy issues in areas such as same-sex marriage and abortion, there are real concerns about the effect an arrangement with the DUP will have on a UK Government’s position as an ‘independent’ arbiter in kick-starting once more the power sharing process in Northern Ireland under the Good Friday Agreement.

With post-Election politics set aside once more as a result of the dreadful fire at the Grenfell Tower, it is now possible that the details of that deal won’t be announced until next week (wc 19th June).

The State Opening of Parliament and delivery of the Queen’s Speech has been delayed.  Originally slated for Monday 19th June 2017 - the same day that formal negotiations with the EU over Brexit were slated to begin – it has been pushed back to Wednesday 21st June.

The State Opening of Parliament marks the formal start of the parliamentary year and the Queen's Speech sets out the government’s agenda for the coming session, outlining proposed policies and legislation. It is the only regular occasion when the three constituent parts of Parliament – the Sovereign, the House of Lords and the House of Commons – meet.

And the near future? 

Well, you won’t be surprised it is very hard to predict the near future… but here goes today’s crystal ball gazing….

  • A compromise deal between the Conservatives and the DUP will be concluded and a minority government formed;
  • A limited legislative agenda for the next Queen’s Speech;
  • Negotiations with the EU will commence with the potential for a less ‘hard’ Brexit stance from the UK Government;
  • The Conservative Party holds off on immediate  demands for Theresa May to step down – the appetite for another General Election, that they may well lose – is low;
  • A new leader for the Liberal Democrats following Tim Farron’s resignation, with newly re-elected Jo Swinson as a leading runner;
  • The phoenix like rebirth of UKIP leader, Nigel Farage, back into the limelight he clearly craves;
  • A secure leader in Jeremy Corbyn and revitalised Labour Party that will offer a real challenge to the Government with continued growth in party membership (for as long as the Parliamentary Labour Party keeps its internal hostilities under control);
  • Significant focus on Northern Ireland and its relationship with Westminster and Dublin.

This is a time of great political change and flux. Being intelligently informed and engaging with a wide spectrum of political stakeholders has arguably been never important.

Originally written for the Canada UK Chamber of Commerce