What Next? A few fundamentals about the government, Prime Minister and the Brexit process

What a week. In the 24 hours or so after the election exit poll was released, British politics seemed to be at the very edge of absolute crisis. It was unclear whether an administration of any coherent form could be found or if Theresa May would be obliged to resign before the House of Commons had even assembled. As matters stand, what the Prime Minister described as “a period of stability” does seem to be forthcoming. The Conservative Party and the Democratic Unionist Party appear to have reached an accord in reasonably swift order (certainly faster than the time that David Cameron and Nick Clegg required to seal the deal after the 2010 election) and for the time being at least the Prime Minister is to remain in her position. She has, though, been through a near-death experience.
These events on their own will have profound implications. Two key aides to Mrs May who until very recently appeared to be less Joint Chiefs of Staff than Joint Deputy Prime Ministers have had to be sacrificed. The Prime Minister found herself obliged to conduct a very different Cabinet reshuffle to the one which she was intended, keeping her Chancellor, appointing Damian Green as First Secretary of State and de facto Deputy PM and including previous sworn enemies such as Michael Gove at the heart of her administration. There will be a Queen’s Speech but it will be a slimmed down version of the one which was anticipated by the Conservative Manifesto, a document that turned out to be close to the second longest suicide note in British political history. Any attempt to reintroduce fox hunting seems to be doomed, grammar schools may have re-entered the deep freeze (because of the opposition of a small but statistically crucial number of Conservative MPs, not the DUP), the high tide of austerity may have been witnessed and the dementia tax will (no pun intended) be forgotten.
In a sense this is a welcome recognition of reality. The blunt truth is that all political parties released manifestos which were incredible because for the next two years at least, possibly longer, most of the legislative agenda will be dominated by Brexit-related initiatives which simply have to become law before March 2019 if a farcical situation of omission and uncertainty is to be averted. This will demand a degree of cross-party consent in terms of the operation of the House of Commons and a wider range of voices will obtain enhanced volume. The business community, which felt that Nick Timothy, the PM’s deposed policy Rasputin, was only marginally more sympathetic to its concerns than Jeremy Corbyn, will sense, correctly, that it will have more access and a better hearing from this administration than its predecessor even if it is in a strict sense a weaker sort of government. There will remain the expectation of a further general election well before the date of June 2022.
What then are the fundamentals that should be concerned as regards the stability of the incoming government, the tenure of the Prime Minister, and the process by which the UK leaves the EU? There has been frenzied speculation on all counts. Most of it is likely to prove to be exaggerated.
The numbers for the government in the House of Commons are more robust than they look
Mark Twain reputedly said of Richard Wagner’s music that it was better than it sounded. In a similar spirit, the numbers for the new government in the House of Commons are more robust than might seem on first appearance. There are 650 MPs, meaning that 326 votes are required for a majority. Sinn Fein does not choose to take up its seats and is not about to reverse a century or more of its stance on this matter. That means the number of functional MPs is 643 and hence 322 constitutes a majority. The Speaker does not vote and neither will the three Deputy Speakers (two of whom will be Labour and one Conservative because John Bercow was previously a Conservative MP before becoming Speaker in 2009) once they are elected either. This means that the real number of functioning MPs in terms of the voting lobbies is 639 and 320 are needed for a majority. The Conservatives will have 317 of them and the DUP another 10 MPs making 327 in total with just 312 for the Opposition. That alone is comfortably enough to run a reasonably stable administration.
Added to this is the fact that the one Independent Unionist is more likely than not to support the Conservatives than Labour. Furthermore, it would not be in the interests of the SNP (in particular) or the Liberal Democrats to force an early election. Both need to lick their wounds and rethink tactics. Barring a sudden series of by-election defeats for the Conservatives, they are safe for some time yet.
If the Prime Minister makes it through the next six months she will probably survive until 2019
The time of greatest vulnerability for the Prime Minister is from here to the end of the year. There are two means by which she could be forced out. One is top-down by a united Cabinet revolt (which is unlikely to occur if the Cabinet thinks Boris Johnson has a decent chance of succeeding her). The other is bottom-up if it is clear that she would lose a vote of confidence brought against her from within the parliamentary Conservative Party, a procedure which would be triggered by 15% of them demanding a poll of her continued leadership.
There are also two logical moments when either of these outcomes might occur. The first is quickly before the House of Commons enters the summer recess if she stumbles over the next few weeks. That would allow time for a new leader to be at the helm for the Conservative Party conference. The second would be almost immediately after that conference with the argument that a new and more credible Prime Minister should be in place as the Brexit deliberations move from the “divorce bill” stage to the more substantive debate about the future relationship between the UK and the EU. That would mean installing a new PM by December.
If Mrs May reached the end of this year then there will be an overwhelming political rationale in her continuing through the Brexit process until the UK departs the European Union. What happens then is a matter of her standing at that moment. What would be absolutely bonkers (even by the recent standards of contemporary British politics) would be to change Prime Minister in the middle of the Brexit negotiations. For a start, who in their right mind would want the role in such circumstances?
We are not necessarily heading towards a “soft” Brexit in a meaningful sense of that term
Much of the media chatter over the past few days is that there is no majority for a hard Brexit in the House of Commons and so the chances of a soft Brexit have increased significantly. There is an element of truth for this but a number of flaws in the argument. For a start, it is not for the UK to choose unilaterally what sort of Brexit it ends up with. There are many other dogs in this fight.
Second, there was not a majority for a hard Brexit in the last Parliament either, a majority of MPs favoured remaining and even after the referendum result most were not wildly enthusiastic about a hard Brexit. That did not stop them from avoiding any action that might leave them open to the charge that they were blocking the expressed will of the people. Next, it should be noted that a real soft Brexit would involve the UK remaining within the single market and the customs union and not even the Labour Party, never mind the Conservatives, are offering that one. In reality, the spectrum here involves the size of the divorce bill that the UK is willing to settle in order to have better rather than worse partial access to the single market and the number of EU rules it will or will not volunteer to follow in perpetuity in order to sell with greater ease to the EU-27. And finally, softer and harder Brexit are not the only possibilities. There is also No Brexit and Total Brexit (no deal, WTO rules) as well. The result last Thursday has, in my view, changed the odds for all four models. No Brexit was a 5% chance and is now a 10% one. Softer Brexit was a 35% chance and is now a 40% one. Harder Brexit was at 45% but has been pegged back to 30% in this new political context. Total Brexit was at 15% a week ago but is today at 20%. Exactly why will be argued in a future edition of BVCA Insight.
Tim Hames
Director General, BVCA