Sophie Jarvis, research associate at The Entrepreneurs Network, breaks down what happened in the 2017 general election, what the result means and what we can expect for UK businesses going forward.
Britain has seen its second political jolt in a year. Following Brexit, we now have a hung parliament. Negotiations with Europe commence in 10 days, and Britain’s Prime Minister is far from strong and stable.
It’s too early to speak of the specific impact on the tech industry, but a softer Brexit is no longer inconceivable.
The result
Despite losing 12 seats, the Tories were only four seats and a mere 287 votes away from a working majority of 322. And 1,688 votes away from a proper majority of 326. Nonetheless, the Conservatives were expecting a landslide, and they got a trickle.
Theresa May will remain the Prime Minister for the foreseeable future; the cabinet have insisted she remains at Number 10 to avoid further instability. But May and Mayism are completely discredited. She has run out of political capital.
What’s next?
It’s looking like the Conservative Party will remain in power with a semi-stable working majority of 16: the Conservatives plus Democratic Unionist Party (DUP) seats, minus Sinn Fein and the Speaker.
So who are the DUP? Many Labour and Lib Dem voters will be frustrated that they’re less socially liberal than the Conservative Party. The DUP presumably won’t get in the way of the Conservatives, perhaps only on issues of foreign policy, but expect more money to be heading their way. It’s presumed they will let the Conservatives get on with their Brexit plans and won’t interfere too much.
Alternative futures
The main negative this morning’s news brings for UK businesses owners is the uncertainty and weakness of May. They don’t want to be thinking about the economic ramifications of the various scenarios. The markets have held up today, albeit with the pound dropping. If the pound remains low that will clearly impact importers and exporters, but it isn’t the time to make strategic decisions based on short-term fluctuations.
On average, businesses favour a softer Brexit – principally for access to markets and talent. And it looks like a soft Brexit is now much more likely. Last night showed the public have rejected May and her “no deal is better than a bad deal” approach.
There are calls from within the Conservative Party as well for a more open Brexit: Ruth Davidson – an ever-growing force in Conservative politics – says we must now “seek an open Brexit” putting the economy first. Optimists hoping for a softer Brexit may also look to DUP leader Arlene Foster, who has previously spoken out against a hard Brexit: “No-one wants to see a hard’ Brexit, what we want to see is a workable plan to leave the European Union, and that’s what the national vote was about – therefore we need to get on with that.”
So we now have a coalition between the Conservatives and a party many people in the country have never even heard of. Currently the most uncertain aspect of the Conservative Party ship is it’s captain. The Conservative Party is notoriously ruthless in getting rid of weak leaders, and the bookie’s current favourite will be familiar to the whole country. Admiral Boris?