May 2017

By James Le Grice

This article is a contribution from our UK network partner firm Four Communications based in London.

It’s rare these days to have an election with such a certain outcome.

Such is the current state of UK politics that Prime Minister Theresa May called a snap General Election fully certain that her Conservative Party could substantially increase its Parliamentary majority. Mrs May claims this is necessary to strengthen her hand in the Brexit negotiations; critics call it political opportunism. What is less discussed is that Brexit will require the Prime Minister to make some tough, potentially unpopular decisions on public spending and foreign policy, decisions that will require electoral confidence.

The political opportunity for the Conservatives is historic. The opposition Labour Party is fiercely divided under the leadership of Jeremy Corbyn, a champion of the party’s hard left socialist faction. Corbyn’s views on the role of the state, nuclear disarmament, and combatting terrorism, in particular, have isolated many Labour MPs and party members. Labour’s image has also been tainted over the past year by an anti-Semitism scandal involving members of Corbyn’s faction. This all comes on top of a decline that began prior to Mr Corbyn’s leadership, which saw Labour lose its traditional support base in Scotland to the Scottish National Party (SNP) and support amongst northern working class voters dwindle.

As a result, the Conservatives are enjoying their highest lead over Labour in the opinion polls for nearly a decade. A recent YouGov poll indicated that nearly half of those who voted for Labour in the 2015 General Election could now desert the party. This election could very well mean a reverse of what happened 20 years ago, when Tony Blair won a landslide victory for Labour reducing the number of Conservative seats in Parliament to 165 (versus 418 for Labour, 46 for the Liberal Democrats and 30 for other parties).

The Conservatives have struggled in an uphill battle to regain numbers since this. Even in the 2010 election, when the Conservatives gained an extra 100 seats–their best performance since the 1970s–they still lacked the numbers for a Parliamentary majority forcing David Cameron to enter into a coalition with the Liberal Democrats in order to form a government. The 2017 election could likewise shut Labour out of government for over a decade.

Since Theresa May took over as Prime Minister last July, political commentary has been rife with speculation that she would seize the opportunity and call an early election. Mrs May has always emphatically ruled this out, even as recently as late March.

What has changed? It is perhaps resignation to the unavoidably unpopular decisions that will need to be made to deliver Brexit.

Foremost is the issue of cost. When the Prime Minister revealed her intention to pursue a ‘hard Brexit’, leaving both the Single Market and Customs Union, she negated threats made by EU leaders up to that point that Britain could not remain in the Single Market while rejecting freedom of movement. Since then, attention has turned to the ‘divorce bill’ that EU leaders are demanding Britain to pay in order to leave the EU. This could be as high as €100bn.

For the past month, Theresa May’s government has quarrelled with Brussels over the amount that must be paid and whether trade talks can even begin before the bill has been settled. It appears unlikely that Britain will be able to dodge the bill. Even ex-Prime Minister David Cameron has weighed in to say that the divorce bill needs to be settled before trade talks can begin.

This will come on top of significant longer term costs associated with Brexit, such as extra skills and infrastructure investment to boost business resiliency and the need to fill the void of existing EU funds to the UK. EU agricultural subsidies account for roughly 55 per cent of UK farmers’ incomes, representing a major challenge to the viability of the agricultural sector if this funding dries up. UK universities benefit from around £1 billion a year in EU research grants and Scotland is a significant recipient of money from the European Structural Fund programmes for reducing poverty and social exclusion, boosting skills and increasing employment. Covering the costs of the latter will be a particular priority to counter renewed calls for Scottish independence.

The question of where the money will come from to meet these costs has yet to be answered. It could mean tax hikes, something that Conservative voters will not take kindly to. It could mean increased borrowing, reversing the priority of the past seven years to bring the UK deficit down. Or it could mean very substantial cuts to public spending in other areas. None of these options are vote winners.

Then there is the issue of foreign policy. Theresa May has prioritised Britain’s Transatlantic alliance with the United States as a way of maintaining the UK’s high profile in world affairs post Brexit. Much of the British public have been wary of this due to scepticism about Donald Trump. Supportive words may soon need to be backed up by supportive action. Foreign Secretary Boris Johnson recently said that it would be difficult to deny the U.S. assistance in future airstrikes against the Assad regime and that the Government could take action without a Parliamentary vote. This drew a backlash from MPs.

It is easy to see why so few Conservative MPs were eager to take David Cameron’s job last summer and why those who were quickly gave up the fight. The decision-making that Brexit requires is arguably tougher than any prime minister has faced since Churchill and certainly requires a larger Parliamentary majority than the Conservatives’ current majority of 17. The slim majority currently leaves the Government vulnerable to internal party rebellions and to losses at the next election. By pursuing a large majority, Theresa May is seeking a clear mandate to take decisive and difficult actions and the right numbers to protect the Conservative Party from potential fall-out resulting from those actions.

However, as much as this election’s outcome may seem set in stone, the longer term impacts are less certain. The EU membership referendum caused a political earthquake which saw the majority of the public reject a position advocated by the mainstream political parties. It has also created a situation in which many pro-EU Conservative MPs and Blairite Labour MPs share more in common ideologically with each other than they do with their own parties’ leadership.

Since the referendum there has been speculation over whether a new centrist political party might emerge formed of pro-EU defectors from the Conservative, Labour, and Liberal Democrat parties. That hasn’t materialised yet, but a resounding defeat of Labour in this election could prove to be the catalyst.