Theresa May’s announcement of the General Election 2017 on June 8th caught virtually everyone by surprise. But what are we likely to see if she is returned to Downing Street?
Tuesday this week – and the nation was staggering back to work after Easter. News started to filter through about the Prime Minister making a special announcement at 11:15. A new initiative in the war on terror? Or was some medical condition forcing her to stand down? Surely it wasn’t a death in royal family…
The clue, it later emerged, was in the lectern: no official government logo, so it was a party political announcement. And there it was: a General Election on Thursday, June 8th. The country needed “certainty, stability and strong leadership” to cement Brexit, and a General Election was the only way to provide it. “Britain was coming together,” said Mrs May, “But parliament was not.”
The Likely Result of the General Election 2017
The last General Election was held in May 2015: under the Fixed Term Parliament Act, the next one was due to be held in May 2020. Well, the Prime Minister has thrown all that out of the window. Despite repeated denials that she would call a General Election, she apparently changed her mind on a walking holiday in Snowdonia. Now, to provide “certainty and stability for the future” we are all required to troop down to the polling booths on the second Thursday in June.
The conventional wisdom is that voters do not like being dragged to the polls unnecessarily and punish parties that call the election. In reality, there is little evidence to support this view, and if the bookmakers are to be believed then the Conservatives will be returned to power with an increased majority, significantly strengthening the Prime Minister’s hand as she negotiates the terms of Britain’s exit from the European Union. Whether an increased majority for the Tories will lead to a better deal is open to doubt, but it will certainly lead to whatever deal is negotiated being approved by the Commons.
What will 5 years of Theresa May mean for you?
First and foremost Brexit is going to happen. The Conservatives may not get the landslide some pundits are predicting and Labour may not do as badly as under Michael Foot but a solid Conservative majority looks very likely – certainly enough for Theresa May to be able to push through Brexit without undue hindrance from the House of Commons.
But Brexit is not the only game in town: a Conservative majority on June 8th will mean plenty of other changes…
‘Interference’ might be an unkind word, but Theresa May believes it is the Government’s job to drive the economy. Let me go out on a limb here and predict that despite the shambles over Class 4 NIC contributions in the last Budget, Philip Hammond will remain as Chancellor after the election and will continue to promote investment in infrastructure to stimulate the economy.
The International Monetary Fund has recently increased its forecast for UK growth in 2017, lifting it to 2% from the 1.5% growth it forecast in January. This puts the UK among the fastest growing advanced economies this year. The IMF said that
“Growth has remained solid in the UK, with spending resilient in the aftermath of the referendum,”
and the PM believes that the Government’s investment plans are largely responsible for this. So, number one, more ‘interference’ and investment.
But more fairness as well…
Philip Hammond has already given an indication that ‘fairness’ will be central to his economic policies with a commitment to clamp down on “middle-class tax perks.” We may see this fairness rolled out across the generations after the General Election 2017, with an end to the ‘triple lock’ on pensions, a reduction in free bus passes and the winter fuel allowance. Rightly, Hammond will argue that there is no reason why wealthy pensioners should get a handout at the expense of ‘generation rent.’ We can expect the Prime Minister and her Chancellor to take the axe to some previously sacrosanct spending commitments in order to promote this ‘fairness across the generations.’
Quite clearly the UK needs more houses, especially affordable homes for young people. There have been various plans for housebuilding in the past but rather than George Osborne’s previous tinkering, we can expect Theresa May to put a serious plan for affordable homes in place, including sanctions on local councils that do not make land available for house building.
More technical education…
This is another area where Philip Hammond had started to make moves, and we can expect to see steps to switch funding away from the bloated universities sector to more vocational education. The UK clearly needs a better trained and more technically educated workforce, especially as we try to close the ‘productivity gap’ with our industrial competitors.
More Financial Conduct Authority…
Looking at our own industry, we are going to see more and more of the Financial Conduct Authority. It will continue to intervene constantly in the personal finance market – just this week it has announced plans to look at irresponsible lending in the car finance market. But as we wrote earlier this week, what is really needed is the education of the consumer. And despite the good intentions of the FCA, you can be certain that the excessive charges of the banks will survive until the next General Election.
And maybe more Scotland?
At the last General Election, the SNP won 56 of the 59 seats in Scotland. A similar result on June 8th would make it very difficult for Theresa May to resist calls for a second referendum on Scottish Independence – so a gleeful Nicola Sturgeon on election night probably means IndyRef 2 within two to three years.
Even if you are a fan of General Election campaigns the next seven weeks promise to be a hard slog. There will, inevitably, be some twists and turns along the way and microphones left on when they should have been turned off. But I would be very surprised if the BBC exit poll on election night is not forecasting a strong win for the Conservatives. That means Brexit, and with the near-certainty of being in power until June 2022, it means that the Prime Minister will be able to push through many of the changes we have outlined above.