WeeklyWorker

27.10.2016
Danger for Labour of an early election

Who is the real Theresa May?

The prime minister will probably go for an early general election, writes Eddie Ford - Brexit troubles lie ahead

Theresa May must have enjoyed reading the papers last week. According to the Mori opinion poll published on October 19, if an election were held today then the Tories would be on 47%, Labour would get 29%, the Liberal Democrats 7% (a ‘recovery’ from the previous 6%), the UK Independence Party a fairly miserable 6% (as opposed to the near 13% it enjoyed last year). These results echo an ICM poll out earlier this month, which put the Conservatives 17% ahead.

But it gets even worse for Labour. Using the Electoral Calculus method, generally regarded as the best vote/seat predictor available,1 on a uniform swing under the new boundaries proposed by the government (reducing the number of MPs from 650 to 600) such a vote share would give the Conservatives 371 seats and Labour 159 - ie, a majority of over 200, instead of the current 11, following Zac Goldsmith’s resignation as MP for Richmond Park over the Heathrow expansion decision. Indeed, if anything, the Mori poll overestimates Labour support - or, to be more exact, the number of seats it will gain under the wretched first-past-the-post electoral system.

What about Scotland - will Labour sweep back to power? No, of course not - the Scottish National Party is riding high and there is no reason to think that will change in the immediate future, with Nicola Sturgeon threatening another referendum on independence. How about the Lib Dems undergoing a resurgence? Even if they did do quite well in David Cameron’s old seat of Witney by flooding it with activists on a ‘soft Brexit’ ticket, nobody seriously believes that this will be replicated on a national level.

In other words, it is Theresa May and her ‘hard Brexit’ rhetoric that is benefiting from the collapse of Ukip. Significantly, the same Mori poll tells us that nearly half of Ukip voters said they were “satisfied” with how the prime minister was doing - meaning that among supporters of a supposedly rival party, May enjoys a net positive approval rating. Something virtually unimaginable when Cameron was Tory leader - 10 years ago he famously described Ukip as a bunch of “fruitcakes, loonies and closet racists” (though he might have had a point when you consider the mysterious “altercation” between Ukip’s once heir apparent, Steven Wolfe, and his fellow MEP, Mike ‘hook him’ Hookem).

Weird

It is important to emphasise these opinion polls for two reasons. Firstly, they should serve as a warning to the left that Labour could be heading for a massive electoral defeat - the obvious danger being that it will produce mass demoralisation, with the right providing the common-sense answer: we need a ‘moderate’ leader, not a leftwinger like Jeremy Corbyn. Secondly, and more centrally for the purposes of this article, it has a direct impact on the Brexit talks and negotiations - perhaps even as to whether Brexit will ever happen.

Increasing numbers of people are telling May what she already knows in her own head - better to go earlier rather than later for a general election. Troubles lie ahead, so do not bank on 2020, when in 2017 you could score a monumental victory, judging by every poll. Why wait? In fact, she needs to go early. Diane James, who was Ukip leader for nearly as long as Sam Allardyce was England’s football manager, used the phrase “Magpie May” to characterise the prime minister’s annoying habit of stealing the party’s policies - like on grammar schools, for instance.

But, unlike Ukip, within the Tory Party establishment the reintroduction of grammar schools is not a popular policy. Just listen to the former education secretary, Nicky Morgan, who thinks the idea is “very weird” and could have an overall “detrimental” effect on the economy - “an increase in pupil segregation” on the basis of academic selection “would be at best a distraction from crucial reforms to raise standards” and “at worse risk actively undermining six years of progressive education reform”.2 Kenneth Clarke, of course, has made similar comments about the “very considerable dangers” of expanding selective education, when instead we need to “reduce barriers and improve contacts and integration between people of all faiths” - and like a host of other Tories, the current education secretary, Justine Greening, seems less than enthusiastic about the plan.

Therefore you have to seriously ask if May could command a House of Commons majority for bringing back grammar schools - as Morgan put it, she could not say “hand on heart” that she would vote for the plans and thinks it “touch and go” whether the prime minister would get the education bill through parliament. May could easily lose the vote on that issue and, more importantly still, she is in deep waters when it comes to the entire matter of Brexit and article 50 - an incendiary question. More and more people are demanding a parliamentary vote on the issue in order to get some sort of control over the agenda - for one, Sir Simon Fraser, a former top civil servant at the foreign office, has said it is “inconceivable” that parliament could be prevented from voting on the terms of Brexit before 2019, believing that Britain is going to need some sort of “interim relationship” with the European Union, even if Brexit is negotiated within two years of triggering article 50.3 After all, during the referendum campaign, the majority of MPs were for ‘remain’ - thus if May does go for a hard Brexit, it is extremely doubtful that she will win a vote in the House of Commons. Indeed, this writer would bet on her failing to secure a parliamentary majority.

Then we have the additional warnings from the Institute of Government (IoG) and others about a “full-blown constitutional crisis” unless agreement on the terms of Brexit can be reached between the government and the UK’s devolved administrations - something to be heeded following the “deeply frustrating” talks on October 24 between May and the leaders of Scotland, Wales and Northern Ireland.4 May is offering them a “direct line” to the Brexit secretary, David Davis, supposedly allowing them to help shape Britain’s EU exit strategy - but Nicola Sturgeon, of course, is heavily pressing May to give Scotland continued access to the EU single market even if the rest of the UK opts to leave, as she is not prepared to “watch Scotland be driven off a hard-Brexit cliff edge”. Hence in a letter to the prime minister, Sturgeon formally endorsed a proposal from Carwyn Jones, the Welsh first minister, that any planned negotiating package should be subject to a vote in all four UK parliaments and assemblies. The IoG notes that the UK parliament remains sovereign and could “legally ignore” the views of Holyrood, Cardiff Bay and Stormont, but this would be a “reckless strategy for a government committed to the union”.

Clearly, problems are piling up for May. But, with an early general election, she will have an opportunity to smash the Labour opposition, deal with her backbench critics and go to Brussels next time with a commanding mandate - just look at my majority, the British people back me as the most popular prime minister since Baldwin. If she still has any doubts about pursuing such a course of action, and it is hard to see why she would, then take a quick look at Europe - where it was announced last week that after seven years of negotiations, talks between Canada and the EU about the Comprehensive Economic and Trade Agreement (Ceta) have gone off the rails. This failure was not down to German or French objections, but because the French-speaking region of Wallonia in Belgium exercised its right of veto - a right granted to three other areas by the central government in a desperate attempt to prevent the break-up of the country.

Anyway, if the EU elite were not aware of this clause or right before, they are now. Angry and disappointed, the Canadian trade minister, Chrystia Freeland, went home early, telling reporters in Ottawa that the “ball is in Europe’s court”. It is still expected that Justin Trudeau will sign the deal at some point, but Ceta must be ratified by all 28 member-states before it can take effect.

Hard stance

Ceta graphically illustrates the problems facing May and the ‘three Brexiteers’ when they trigger article 50. Even more so, given the embarrassing fact that the improbable foreign secretary, Boris Johnson, cited Canada as an example for the UK to follow, adding: “It’s a very, very bright future I see” - and David Davis too called Ceta the “perfect starting point for our discussions with the commission”.

Such comments led one senior Canadian government official to say: “How they think Ceta is the panacea, I’m confused.” He went on to point out: “We still don’t get complete access to the EU market the way the Brits currently have as a member-state. So I don’t understand this looking towards Ceta as the answer to Brexit, when they will be taking a 43-year step backwards in terms of the current access they have to the European Union.”5 Yes, it is a bit baffling.

As things stand now, May has no choice but to go into the negotiations with her hard Brexit stance, seeing how she has sought to champion Ukip and Labour Brexit voters. But what about the actual, final deal, when it finally emerges, rather than the fantasy deal we read about in the rightwing press? In reality, bluster aside, May is coming out with mixed messages - saying, on the one hand, that Britain needs control over migration, therefore no free movement of people. On the other hand though, she also wants unrestricted access to the single market. But the simple truth is that she will not get both, as she well knows.

Meanwhile, the markets are voting on this issue - over the last month there was a further sharp fall in the value of the pound. Against the dollar, the pound is hovering around the $1.22 mark - which is about 18% lower than on June 23, the day of the referendum. And at one point, of course, a “flash crash” in the currency markets pushed the pound briefly to about $1.15 - it quickly recovered, but the underlying pressure on the currency still remains following May’s declaration at the Tory Party conference that she will trigger article 50 before the end of March 2017.

Various manufacturers have openly agonised about whether to further invest in Britain or not, and in general think Brexit uncertainty is “undermining confidence” - a recent CBI survey revealing that 47% cited sterling’s depreciation as having a “negative” impact, with 15% of manufacturers expecting to cut jobs over the coming quarter. Businesses, we read, were “wary” of Britain closing its borders to skilled workers from the EU and failing to win barrier-free access to EU markets, despite taking the opportunity to boost exports after the pound’s fall against the dollar.

Furthermore, we had the slightly apocalyptic forecast from the British Bankers Association that the country’s biggest banks are preparing to “relocate” next year to Frankfurt or Paris, with some smaller ones allegedly making plans to get out before Christmas.6 Anthony Browne, chief executive of the BBA, slammed British and European politicians who appeared to be pursuing “anti-trade” goals - when they need to recognise that “putting up barriers to the trade in financial services across the Channel will make us all worse off”. He also warned the EU that banks based in the UK are currently lending £1.1 trillion, therefore “keeping the continent afloat financially”, and this arrangement is at risk. Concerning Britain, he reminded the May government that banking is the country’s biggest export industry by far and the current trajectory threatens not just tariff-free trade, but the legal right of banks to provide services - most international banks now have project teams “working out which operations they need to move to ensure they can continue serving customers”.

What we are actually seeing with all these warnings is that big business is finally getting its act together. During the referendum campaign many large companies were remarkably quiet, much to David Cameron’s frustration - presumably on the basis that they did not want to alienate half of their customers. But what we are seeing now is the beginning of a campaign by big business to change people’s minds.

But there is no immediate hurry - something that Theresa May can utilise. Ukip will continue to disintegrate, meaning that at some point after her magnificent election victory she can start to shed the hard Brexit posturing - job done - and go for something more business-friendly, like a soft, Norway-type deal or some arrangement that effectively keeps the UK within the EU.

Interestingly, on October 26 The Guardian published an ‘exclusive’ about a “secret” audio tape of May talking on May 25 at the Goldman Sachs bank - where she warned that companies would leave the UK if there was a Brexit vote. “I think the economic arguments are clear,” she said - being “part of a 500-million trading bloc is significant for us”. The reason why a “lot of people will invest here in the UK” is because the UK is in the EU, and if Britain “were not in Europe” then there would be firms and companies that would start to “develop a mainland Europe presence rather than a UK presence”.

In many respects, this is the ‘real’ Theresa May talking, not the recent Ukip impersonator. Disappointing some but delighting others, she will seek to get her deal ratified, whether by a parliamentary vote or even a second referendum - something that is not beyond the bounds of possibility. Brexit might not mean Brexit after all l

Notes

1. www.electoralcalculus.co.uk/bdy06_method.html.

2. www.independent.co.uk/news/education/education-news/nicky-morgan-theresa-may-former-education-secretary-grammar-schools-weird-a7235731.html.

3. www.theguardian.com/politics/2016/oct/24/sir-simon-fraser-uk-interim-deal-eu-brexit-negotiations-foreign-office-article-50.

4. www.theguardian.com/politics/2016/oct/24/theresa-may-constitutional-crisis-brexit-deal-institute-for-government.

5. www.theguardian.com/world/2016/aug/15/brexit-canada-trade-deal-eu-model-next-steps.

6. www.theguardian.com/politics/2016/oct/22/leading-banks-set-to-pull-out-of-brexit-uk.