Tomorrow’s UK general election was called to bring about policy certainty and stability and yet it threatens the opposite. If the latest YouGov MRP survey is accurate, the Conservatives could secure anything from 311 to 367 seats.
If their seat number is at the top of that range, phase one of Brexit will be completed within weeks. Mr Johnson will be lauded and we will likely see a ‘Boris bounce’ in the markets. If at the lower end, the leading five outcomes promise political turmoil.
1. Brexit Deal Collapses
Boris Johnson’s minority government will be the prisoner of parliament. He may try to pass his Brexit ‘Deal’. But, without the support of Labour MPs (from ‘Leave’ seats) it is all but dead. ‘Remainer’ MPs will collaborate and seek to control the government’s Brexit policy. It will be Groundhog Day.
2. A New Brexit Policy and PM
The ‘hung parliament’ commentary is only half the story. At 311 Mr Johnson struggles to form a Government. If he cannot command the confidence of the House, the Leader of HM Opposition, currently Labour Party leader Jeremy Corbyn, is asked to try and form one. Given the Labour policy to deliver a 2nd EU Referendum they can probably count on the tacit support from the other parties.
3. A Change of Labour Leader
Labour MPs may come under pressure to remove and replace Jeremy Corbyn, as it could pave the way for a more stable and positive arrangement with the Lib Dem’s (and the Scottish National Party). Labour could install a centrist figure, but it is likely that the successful candidate will represent a high-degree of policy continuity with Jeremy Corbyn, whilst being more media-friendly.
4. A 2nd EU Referendum
If Conservative MPs are in the minority – in or out of office – they will struggle to stop MPs pushing through a bill for a 2nd EU Referendum. Which would be a highly contentious process and democratic event should it ever take place.
5. Two General Elections
Any minority Government is inherently unstable. Such an outcome in 2019 means there is a high chance of a General Election (GE) in 2020. This prospect may act as a brake on those Labour MPs – who represent ‘Leave’ seats – from supporting a 2nd EU Referendum (for fear of alienating their constituents). Without a 2nd EU Referendum a GE is even more likely. However, if Parliament coalesced around a 2nd Ref, it is likely that a GE would follow quickly thereafter.
These scenarios will compound concerns about the political class and economic performance, as the UK endures a sustained and elevated degree of policy volatility.
Malcolm Gooderham is Executive Director at The Economist Intelligence Unit (EIU)