Not Another One! General Election 2017
Brenda from Bristol spoke for many when she reacted to news of a snap General Election on 8th June with: “You’re joking! Not another one?” This post aims to answer Brenda, explaining why Prime Minister Theresa May called the election, which of the parties are likely to do well and badly, and what it all means for UK business.
Secrets are rare in politics, accounting for the shock of Mrs. May’s announcement, which seemingly had even some of her Cabinet caught off guard. But silently, in the background, a crack Downing Street unit had been evaluating the pros and cons of an early General Election with Prime Minister May reluctantly concluding it was in the national interest to go for one while hiking in Snowdonia over the Easter weekend.
She had previously ruled out going to the polls before 2020, the date set out by the Fixed Term Parliament Act, so what changed her mind? Several factors, some she would be prepared to utter publicly, some privately.
Publicly, the elephant in the room is Brexit. With Article 50 triggered, the clock is now ticking on a two-year long period of negotiation in which to settle both Britain’s future trading relationship with the EU and sort outstanding obligations, the ‘terms of divorce’. May says she that, without an early election, negotiations would conclude in early 2019 right at the time the Government would be preparing to fight an election the next year. This matters because it could mean greater concessions to the EU, which would know the Government wouldn’t want to risk hard choices so close to an election. And there’s also the Government’s majority – at a flimsy 17, a small number of rebel MPs could undercut the official negotiating position.
Privately, a vast 20-point chasm has opened in the opinion polls between May’s Conservative Party and her nearest competitor, the Labour Party led by Jeremy Corbyn. Extending into public perception of the two leaders, May’s popularity is stratospherically higher than Corbyn’s, with more people not knowing who’d make a better Prime Minister than explicitly rooting for Corbyn. Things are seldom so clear cut in politics. The last time the Conservative Party stood at around 50% in the polls was 1955 when Anthony Eden took over from Winston Churchill. Circumstances could change dramatically by 2020 – a bad Brexit deal may be settled, Labour might have a new leader and the country could be in the grips of recession. Better to go for it now when the going seems good.
An early election also gives May her own mandate and frees her from following the 2015 manifesto on which the Government was elected under David Cameron (remember him?). This has already caused trouble insofar that, when May planned to raise National Insurance contributions on the self-employed, she ran into the 2015 manifesto promise not to raise them and had to perform an embarrassing U-turn. Without an election, this issue would undoubtedly recur, limiting her ability to be distinctive all while lacking legitimacy to rule in the eyes of the public (although constitutionally she does not).
Returning to Brexit, it is personal speculation on my part, but a 2017 General Election also raises the likelihood of a transitional or phased exit from the EU May might prefer. The latest the election after next could happen will be 2022. Britain will leave the EU in 2019, but the Government will be in power for another three should it win on June 8th. This allows it to preside over, and ultimately take Britain out of, a transitional arrangement, rather than expose the country to the uncertainty of whether it will potentially drag on under a new Government elected in 2020 were an election in 2017 not to happen.
So, those are the definite public and speculative private reasons for the poll, but will the end of May be in June? How will the parties fare? We’ll look at each.
Excluding a dramatic, ‘black swan’ event over the next six weeks, such as the UK being swept up in unpopular military action against North Korea or Syria, the Conservatives look set to be the main beneficiaries. Given their clear Brexit position, that Britain’s out the EU and the Single Market, they’re sweeping up many former UKIP voters, who now see the Tories as the standard-bearers of their Eurosceptic cause, and Labour voters who voted Leave and don’t trust Corbyn’s Labour Party to carry out their will.
Expect them to make big inroads in Leave-supporting, blue collar areas such as the West Midlands, the North West and Wales. And perhaps even net a few seats in Scotland for a commanding majority of 100 seats or more.
Labour’s prospects are dismal this election. Corbyn rode to victory in two Labour leadership elections thanks to a highly-energised base. But it isn’t representative of the wider country.
Moreover, the Party portrays less than a picture of unity, divided between centrist Blairites and left-wing Corbynistas, has a highly-confused position on Brexit and will be effectively locked out of power as the SNP continues to deny them seats in Scotland, long a Labour power base.
While it’s possible it could gain one or two seats at the margin, they’ll be more than eclipsed by dramatic losses bringing Labour’s total seat count to well under 200, possibly in the 170s, and the lowest for over 80 years.
Having suffered a torrid election in 2015, their seats falling from 57 to just eight, small enough for all their MPs to fit in a reasonable minibus, the Liberal Democrats look set for a modest resurgence.
Skilled local campaigners, who perfected the ability to concentrate their votes under the First Past the Post voting system to win seats in the 1990s, they’ve been bouncing back in local elections to ensure that where they’ve lost MPs their influence has remained. This was underway before the Referendum, likely because of moderate Labour voters shifting alliances in the time of Corbyn, but has been enhanced by the Liberal Democrats’ clear opposition to Brexit.
Where Conservatives unseated Liberal Democrats in 2015, and those seats went Remain, there appears a real chink in the Tories’ armour. White collar, urban constituencies like Twickenham, and Kingston and Surbiton, could turn yellow again.
But there’s an upper limit to the comeback. Plenty of their old seats in the South West went Leave last year and the SNP remain strong in Scotland.
UKIP are facing existential crisis. Founded to get Britain out the EU, their only MP, Douglas Carswell, recently left the party saying that, with Article 50 triggered, it was “job done”. It’s a powerful statement and one shared by many who are returning to the Tory fold now they’re overseeing Brexit.
Add to this chronic infighting, based on personality over principle, inability to convert votes into seats and perilous party finances (it received just £33,000 in donations for 2016’s final quarter), and UKIP looks like a busted flush.
UKIP landed just one seat in the last General Election – we don’t expect them to win any this time.
All but three of Scotland’s seats fell to the SNP last time round, but this may represent a high-water mark for the nationalist party, who’s vulnerable to the Tories’ polling surge north of the border and dissatisfaction with the prospect of a second Sottish independence referendum.
Berwickshire, Roxburgh and Selkirk is held by a wafer-thin SNP majority over the Tories of just 0.6%, for example.
But the overall impact will likely be to shave down SNP representation only modestly – they’ll still claim the overwhelming majority of Scottish seats and remain the third largest party in Westminster.
What does this mean for business?
It looks like politics is undergoing realignment – the Referendum revealed a faultline in British society that was not adequately reflected by the parties whose MPs overwhelmingly backed Remain, the minority position. Nationally, the Conservatives and Liberal Democrats have cornered the Leave and Remain marketspaces respectively. Labour has yet to do so convincingly on either side. And people, perhaps within UKIP itself, don’t know what the party is for.
What it all means is a Conservative Party that’s healed longstanding division over Europe in favour of Euroscepticism, seized UKIP’s mantle, exploited Labour division and become the go-to unionist party in Scotland. In short, a Conservative Party triumphant. And if it goes on to win its 100-seat majority on an increased vote share, the third election in a trot it will have upped its seats and votes, that’ll be an event without parallel in the modern era.
This raises the prospect that Prime Minister May will be able to keep more of her manifesto promises, but also that the Government will enforce unpopular decisions, like raising taxes and ending the pensions triple lock, and become complacent without a strong opposition to hold it in check.
And that strong opposition doesn’t look forthcoming. It’s not a foregone conclusion that Corbyn will resign after a dire result this election, perhaps driving Labour centrists to defect en masse to the Liberal Democrats and splitting the left further, but if he does go, a new leader will still have their work cut out. Labour can’t win outright without Scotland, without seats denied to it by the SNP. Ultimately, only another decade of Tory rule will compel Scots to return to Labour.
But on the macro issues, we think a big Conservative win will likely mean a better Brexit deal with a sensible transition period, slightly lower taxes and less borrowing than otherwise. It also reduces the chance of Scotland breaking away, since voters in a second independence referendum will, we expect, resent being trudged to the polls by the SNP again. And it’ll also become clear that Scotland joining the EU, rather than staying in as the rest of the UK leaves, will be far from easy.
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