Theresa May Calls Snap Election
Theresa Mays decision to request a vote for a snap general election for 8 June raises a heap of new unthought about possibilities. In her speech she explicitly declared that this vote has been called “to shore up parliamentary support for her vision of Brexit and that the election would be, therefore, largely a second referendum on Brexit”. Assuming, as we do, that the Tories win the election, the Tories will argue for Theresa May’s “deep and special” relationship with the EU, and to strengthen her hand in negotiations with the EU. Corbyn and Labour will argue for a ‘soft’ Brexit that talks about the benefits of the UK’s existing relationship with the EU, while the Liberal Democrats will probably campaign for a second referendum on the deal itself. As we are essentially having one with an election that will fall on deaf ears. As regards to the SNP and Nicola Sturgeon, that one is going to be very interesting to watch as it will either strengthen her position or weaken it as the electorate in Scotland will effectively be voting for a further referendum or not. It is despite the polls all to be won and lost and I for one never expected this to happen.
Unlike a normal election, we see the following issues:-
- We may see a significant proportion of the electorate voting tactically, based on their preferences for Brexit. Tactical voting will apply mainly in the major cities (which typically voted to Remain during the referendum), and the fallout from this will depend on how much the urban, Tory voters care about Brexit versus other political issues.
- We may also see a very different turnout from the 2015 general election, as the referendum has stirred up political emotions among younger citizens, who historically have been less likely to vote. This is their chance to reverse or, at least, restrain Brexit.
- The behaviour of UKIP is another wildcard. Will UKIP see the election as an opportunity to bolster its parliamentary credentials, at the risk of taking pro-Brexit voters away from the government? Or could UKIP stand down its candidates, realising that a vote for the Tories is the best chance that they have of a clean break with the EU? With about 13% of the vote at the last election, UKIP voters swinging to or from the government would be significant.
- The Labour leadership is another conundrum. Given the overwhelming evidence that few voters seem to want Jeremy Corbyn as Prime Minister, the opportunity of a general election (and the opportunity for success as well as for self-destruction), could encourage Labour to get its act together. Moreover, Labour could further stir things up by changing its position on Brexit – for example, by echoing the Lib-Dems’ call for a second referendum on the outcome of Brexit negotiations. Of course, we shouldn’t forget that the government can also change its position, and so the behaviour of incumbent Conservative MPs in Remain-leaning constituencies could be another surprise element.
Brexit is a highly complex problem that was never going to be a straightforward process, but this was unexpected and we will wait and see what the impact is. Today it has benefitted sterling and been bad for the FTSE 100 as the strengthening sterling is bad for overseas earnings. One days movements does not though set the trade for the coming six months and nothing has in reality changed today in the medium term bar Teresa May, is looking to pop a few balloons and take back the advantage over the Scots and the Tory rebels. If she can at the same time get a greater majority in the houses of parliament which improves her negotiating position so we get a better deal, then go for it girl!
Jason Stather-Lodge CFP, MCSI, APFS
CEO & Founder
Chartered & Certified Financial Planner
Chartered Wealth Manager