The UK general election: A question of trust

The Tories are going to win the forthcoming British general election on 08 June handsomely if the opinion polls are to be believed. But what British election result would please the instinctively pro-Remain international financial elite?

Warning: landslide coming

When Mrs May called the UK general election on 14 April after a messianic walk through the mountains of Snowdonia, she did so in the spirit of the ancient Chinese general Sun Tzu: She would only fight a battle that she had already won.

If the Tories were ahead of Her Majesty’s Loyal Opposition by a historic margin before Easter, that margin has only widened in the two weeks before the May (no pun intended) bank holiday weekend. Not only is Mrs May likely to win a thumping majority, but she has put such vim in the Tory spirit that she is likely to win seats in places where, until recent memory, a donkey could have stood for Labour and still looked forward to a long and uninterrupted career in the House of Commons.


Wales, which voted Leave last year by a similar margin to England, is a case in point. An ITV Wales-YouGov poll on 24 April put the Tories at 40 percent in Wales against just 30 percent for Labour. That could yield a harvest of 21 Welsh Tory seats in the House of Commons against just 15 for Labour. This would be historically unprecedented – at least since late Georgian times when the Tories were last the dominant party in the land of the Dragon. But in those days their majority was thanks to the hated “rotten boroughs” (seats which were in the pockets of local landowners – which is what the Great Reform Act of 1832 was all about).

And in Scotland the polling news is even more encouraging for the Tories – and somewhat discombobulating for Ms Sturgeon. Tory support has been recorded as high as 33 percent – well behind the SNP (and miles ahead of Labour) but potentially strong enough to win up to 12 seats in the House of Commons – a massive advance from their current historic low of one honourable member. Remember that, under our weird electoral system (which ought to be challenged under the Human Rights Act) the SNP won 56 out of 59 seats in Scotland last time, with just over 50 percent of the vote. The Lib Dems could also make advances on their current level of one in Scotland; but I haven’t come across any forecasts that Labour might regain its sway in Scotland. In fact, its only current seat, Edinburgh Leith, is an SNP target.

As for the north of England the Tories’ prospects have been transformed not just by the increasingly evident eclipse of Labour but by the collapse, since the EU referendum, of UKIP. The Tories won Copeland (in Cumbria) from Labour on 23 February this year – a seat which Labour had held with a majority of over 2,500 in the 2015 general election. The border regions of both England and Scotland could be entirely blue come 09 June.

It seems reasonable to expect that Mrs May will be returned to power with a Conservative majority in the House of Commons of 100 seats and possibly more.

Remember that UKIP took more than 4 million votes in the 2015 general election – more than the Lib Dems. They will be lucky to poll half of that this time in the first post-EU referendum general election – the world has changed. Most, though not all, of the votes they will lose will go back to the Tories. The Tory brand, without liberal, upper class, metropolitan Mr Cameron at the helm and with a leader committed to a clean Brexit, is much more to the taste of UKIP-inclined voters.

An Ipsos Mori poll published in the Daily Telegraph on 27 April put the Conservatives on 49 percent of the vote with Labour on 26 (better than in some previous polls). The Lib Dems were on 13 percent. The minor parties were evidently under pressure with UKIP on just four percent and the Greens on one percent.

Of course, it is still early days but it is doubtful if these polls will change dramatically over the course of the next five weeks. Labour is unlikely to be dislodged from those areas in London, the Midlands and the North East where it piles up huge majorities. But overall it seems reasonable to expect that Mrs May will be returned to power with a Conservative majority in the House of Commons of 100 seats and possibly more.

Of course, the polls could be wrong – as they were in 2015. Their tendency then was to underestimate Tory support because of the “shy Tories” who concealed their voting intentions. I doubt if there are many shy Corbynistas around this time.

Why an election now?

Let’s just step back one moment to ask why this election is taking place at all, two years as it is into the five-year term of the current parliament.

Number one, Mrs May wants to increase her majority in the House of Commons. That is not an ignoble thing for a Prime Minister to desire. Mr Cameron’s majority of about 12 seats could easily have been whittled away over time. Zac Goldsmith’s vainglorious act of protest against the expansion of Heathrow airport had already cost the government a precious seat (compensated, it is true, by the victory in Copeland). But an ambitious Prime Minister with a radical programme requires a majority of at least 30.

In this case the radical programme in question is not just to negotiate Britain’s withdrawal from the European Union on the most favourable terms possible but also to refashion Britain’s trade relations with the world at large. There will be many momentous decisions to be taken and there will be deep controversy. If the Lib Dems are sworn enemies of Brexit, the Labour Party is so equivocal on the matter that from one day to the other we just don’t know which way they will face. What we do know is that they will inflict as much damage on the Government as they can.


Secondly, an electoral endorsement of her government plus a referendum victory will cauterise the House of Lords for good on the issue of Brexit. The role of the Upper House is to review and amend legislation but it is entirely illegitimate for it to oppose policies on which the government has been elected.

Thirdly, Ms Sturgeon will no longer be able to taunt the Prime Minister that she is “unelected”. Mrs May will match a persuasive mandate for a “hard” Brexit against Ms Sturgeon’s supposed mandate for a second referendum on Scottish independence.

Fourthly, there were never going to be any serious Brexit negotiations until after the German elections in September. A general election victory will signal to the new German Government (probably to be led by Merkel IV) that the UK simply cannot be bullied back into line as most other European states are when they misbehave.

Fifthly, if there is no agreement by March 2019 then Britain will leave Europe and begin to trade with the EU on WTO rules. (In popular parlance, the UK will “crash out of Europe”.) It would have been very uncomfortable to have entered a general election scheduled for May 2020 at the moment of maximum fear of uncertainty as to where things are going.

Six: it is a poor gladiator who does not put his or her pitifully inadequate opponent out of their misery. Some people have described the election – pointing towards the Tories’ 20 plus percentage point advantage over Labour in the polls – as opportunistic. But that rather misses the point. It would be better to consider it a surgical strike.

How the markets will react

The markets – or at least the foreign exchange market – would have preferred a zero or at least a soft Brexit. The defenestration of the Pound in the wee hours of 04 June last year suggested that the money men saw Brexit as a leap in the dark. They are still less than happy, but the mood has changed. The panic is over. Many of them even now foresee opportunities.

If a reversal of the EU referendum result were politically possible, as the Blair-Branson-Miller axis argues, the money men would probably root for it. But there is no going back. The idea of wishing the world were back to the status quo ante on 03 June 2017 is delusional, and the markets now understand that.

A Tory victory on 09 June will offer a degree of clarity in future policy that will more than outweigh the markets’ fears about the consequences of Brexit.

The Tory offer, for all its flaws, is pro-business and, despite the burgeoning burden of the national debt, is based on fiscal realism. Labour, which wants to raise corporation tax just as it is about to be slashed in the USA (and elsewhere) has already notionally spent the proceeds of that tax hike twelve times over.

A Tory victory on 09 June will offer a degree of clarity in future policy that will more than outweigh the markets’ fears about the consequences of Brexit. The Pound and the stock market will rise – for now at least.

The Downing Street Sphinx

What is so impressive about Mrs May is that, nine months into an assured premiership in which no one can doubt who is the boss, none of us has the faintest idea about what she really believes. In fact, we know almost nothing about her except that she is the vicar’s daughter who, came the hour, set forth like Boudicca in a chariot to save the realm. In the inscrutability stakes, she makes the Sphinx of Giza look chatty.

We suspect that she is sympathetic to the Somewheres and suspicious of the Nowheres; but we cannot really be sure. Will she insist upon cast iron control of our borders or concede porous borders with our European neighbours in return for “frictionless” trade? Will she demand total control of our fisheries or indulge the Breton fishermen who hoover up our cod off Cornwall? Is she prepared to continue to pay into European coffers in order to “get access” to the European Single Market of which we shall no longer be a member? One suspects that not only do we not know the answers now but that we shall not be any the wiser on 08 June.

And yet, for all that, Mrs May conjures a rare emotion in this cynical world: trust. Maybe it is because she is a strong woman whom even mature men seem to find motherly. In fact, I am sure that virtually all leaders in advanced countries will be emotionally intelligent women from hereon in. The men have had their go and look at the results.

That capacity to inspire trust will see her through this election and beyond. But if she loses that trust by some perceived “sell-out” down the road, even a thumping majority would not save her.