Conservative strategists seem intent on turning the UK’s General Election into a Presidential style race between Theresa May and Jeremy Corbyn. What does this mean for the likely result, for Brexit and for your money?
Let us gaze into the crystal ball: the local elections have just been held in the UK and the French Presidential election is due on Sunday, with Emmanuel Macron looking almost certain to become the youngest leader of France since Napoleon. So with the UK General Election now just over a month away there are going to be some significant changes in the near future. Let us see what might be in store: but to do that we need to review some of the week’s events.
First, the local elections:
This article was written at 7 am on Friday – the morning after the local council elections. As expected, the Conservatives had done well, Labour had done badly and – in the words of the Daily Telegraph – ‘UKIP had been obliterated.’ The word ‘landslide’ was starting to be used and clearly, in what is comfortably the biggest ‘opinion poll’ ahead of the General Election, the news is all that Theresa May could have hoped for. At the time of writing the Conservatives had gained 113 seats, Labour had lost 58, UKIP had lost all its seats in Lincolnshire, Essex and Hampshire and the supposed Liberal Democrat revival had spectacularly failed to materialise.
Why have the Conservatives done so well and Labour has done so badly? The opposition cannot have been helped by Dianne Abbott’s ‘car crash’ TV interview on the cost of recruiting new police officers. Voters must have seen this as evidence of the opposition having no clear policies, with even Labour Uncut describing it as “not so much a car crash, more like a plane slamming into the side of a mountain.”
But the real plus for the Government is the collapse of UKIP. Brexit may have ‘divided the country’ but it has re-united the right wing, and it has been reunited under the banner of Theresa May.
Will it be ‘President’ May?
Unsurprisingly, Theresa May and her strategists seem intent on turning the UK General Election into a Presidential race. As she rightly said when she came back from Buckingham Place after the formal dissolution of parliament, there are only two people who can possibly be the Prime Minister after June 8th – herself and Jeremy Corbyn. Is she taking her ‘coronation’ too far? Quite possibly: there are many senior Tory MPs supposedly unhappy at being told to describe themselves as ‘Theresa May’s local Conservative candidate.’
Be that as it may, it looks certain that Mrs May will be returned to Downing Street with a substantially increased majority. The Conservatives are ahead in regions where they have not been ahead for generations, and the bookmakers are suggesting a majority of 75 to 124 seats.
What about Brexit?
Meanwhile, the skirmishing over Brexit continues. In many ways this is the ‘phoney war,’ but it is a phoney war which has already brought us “the dinner party from hell” as the tabloids quickly dubbed it – the tag team wrestling between Theresa May and David Davies in one corner, and Jean-Claude Juncker and EU chief negotiator Michel Barnier in the other.
Apparently the dinner started off cordially but very quickly deteriorated, with Jean-Claude Juncker allegedly phoning Angela Merkel after the dinner and again at 7 am the next morning to complain about Theresa May’s negotiating stance (or lack of it) and to say he “left Downing Street ten times more sceptical than when I entered it.”
What was on the menu? Beef in red wine, or – the tabloids again – beef in red whine.
There was a further shock later in the week when the bill for leaving the EU suddenly doubled from €50bn to €100bn – around £92bn at current exchange rates. This was, apparently, a result of France, Germany and Poland “ganging up on the UK” and suddenly adding farm subsidies to the bill. Brexit secretary David Davies has flatly refused to pay the bill. In the opposite corner, Michel Barnier – not someone known for his love of the UK – has warned of ‘explosive consequences’ if the UK does not pay the bill.
But summer is coming…
All of these spats make for great headlines: the simple fact is that there will be no substantive negotiations before the result of the General Election is known – and you would have to wonder how much can be achieved before the summer holidays, and the German elections in mid-September.
The UK is due to leave the EU on March 29th, 2019. Even at this early stage, you would not bet against the negotiations being concluded in a very, very late-night meeting on March 28th, 2019…
What can we expect to see from Theresa May’s new government?
Make no mistake, Brexit is going to happen. Sounding very much like Tony Soprano, Theresa May has repeatedly said that “no deal is better than a bad deal.” It is increasingly looking like a ‘hard Brexit’ with the UK leaving the EU without a trade agreement and – until one is negotiated – conducting its trade with Europe under World Trade Organisation rules.
At home, I strongly suspect that we will see a shake-up in UK pensions regulations. Mrs May has already pledged to protect company schemes against ‘unscrupulous bosses’ and we are likely to see an end to the ‘triple lock’ on pensions. The fact remains though, that people in the UK do not save enough for their retirement: do not be surprised to mandatory increases in pensions contributions for both employers and employees.
We will also see more government investment in the economy, with Philip Hammond – who will probably stay as Chancellor – already congratulating himself on the impact his first raft of investment has had on the growth forecasts for the economy.
There will unquestionably be further crackdowns on ‘middle-class tax perks’ and tax avoidance schemes. Theresa May and Philip Hammond both seem to have an obsession with ‘playing by the rules,’ but this may simply be tinkering at the edges. As we have written previously, we have a 20th Century tax system struggling to cope with a 21st Century economy: it will take more than a crackdown on gym memberships to put that right.
The electoral map of the UK will be re-drawn: there will be fewer MPs and the over-representation of Scotland at Westminster will be scaled back. The Prime Minister will not be doing this to anyone’s advantage but her own, making it significantly more difficult for the other parties to stage a revival.
Will we see a second independence referendum in Scotland – the so-called ‘neverendum?’ At the moment the SNP look to be on course to lose seats in the General Election which will weaken their bargaining position. It may be that they will need to turn their attentions to more pressing domestic problems such as health and education before they are in a position to demand a second bite at the independence cherry.
Final Thoughts on the General Election
There are now less than five weeks to go before the UK General Election on June 8th. After the local council elections, it is impossible to see any other result than Theresa May walking back into 10 Downing Street with her own mandate to pursue Brexit and push through the reforms she sees as necessary. The prospect may gladden your heart or it may terrify you: but make no mistake, it is going to happen…