British PM Theresa May calls snap election
Subject to a vote in parliament tomorrow, the UK will hold a June 8 General Election. Polls indicate Prime Minister Theresa May should win an expanded majority. The fact that she is prepared to sacrifice part of the 2Y Brexit window suggests she has confidence in her planning ahead of Brexit negotiations.
Theresa May has announced that the UK will hold a General Election on June 8, contingent on two thirds of MPs voting in favour of dissolving Parliament (under the Fixed Term Parliaments Act of 2011). The vote will be held tomorrow and looks likely to pass – All 330 Conservative will vote in favour, while the Lib Dems (9 seats) are also backing it. Back in December, Labour opposition leader, Jeremy Corbyn, said “if there’s a vote to dissolve Parliament then obviously we will vote with it.” However, he was a little more circumspect in March, saying he would “consider” backing.
This is a complete reversal of policy from the Prime Minister having repeatedly stated she wouldn’t go down this road. However, opinion polls show she is an incredibly strong position to win her own mandate rather than being hamstrung by David Cameron’s 2015 election promises.
A ComRes poll in Sunday’s Mirror and Independent newspapers put the Conservative Party on 46% (21 points ahead of Labour) while an Opinium poll for the Observer newspaper had the Conservatives on 38% (a lead of 9%).
This will obviously eat into the two year window for brexit negotiations, but given the EU is unlikely to be prepared to start face to face negotiations until early June it shouldn’t be too damaging. Instead it perhaps suggests that the Prime minister is confident in her Brexit negotiation strategy and views that a strong performance at the election can give her positive momentum and confidence as the Brexit meetings start.
Some may see this as an opportunity to reverse he Brexit vote, but this seems highly unlikely given support for brexit appears to have increased in various opinion polls. Nonetheless, it could see the pro-EU Lib Dems win some seats, most likely at the expense of Labour and SNP, but no-where near enough to alter the path of the UK out of the EU.
James Knightley, senior economist, UK, US, $ Bloc, at ING
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