09 June 2017

OMFIF: Time for UK to practise humility

The UK election result – a lost majority for the Conservative party, with Theresa May as a tarnished prime minister possibly heading for an exit – may increase the chances of a 'softer' withdrawal from the European Union, writes Joergen Oerstroem Moeller.

There are several possibilities, including a hung parliament with no party able to form a stable majority, a second general election in coming months and even an outcome that appeared impossible a few months ago – a second referendum on EU membership. 

All this heralds volatile UK-EU divorce negotiations, and instability for sterling and on financial markets.

May's failure to weigh up correctly the risks and rewards of an early election, and to consult properly with party allies over the key social aspects of the Conservative election manifesto, seems likely to strengthen the hand of parliament against the government. [...]

Jeremy Corbyn, the much-denigrated Labour leader, emerged as the underlying victor during a night of extraordinary voting swings. He could even have the chance of forming a coalition government if May (or a Conservative successor if she is dispossessed in the next few weeks) loses a vote of confidence in parliament. [...]

To trigger Article 50 of the Lisbon treaty at the end of March and less than three weeks later call a general election always looked to me like ill-conceived timing. The rest of the EU saw it as a deliberate snub, showing how Britain subordinated Brexit negotiations to domestic politics.

Voters may have believed that the prime minister was better qualified than Corbyn to lead Britain, but they disagreed that she had the right to command them how to vote. The terrorist attacks failed to galvanise support for the Conservatives. May was haunted by close to 20,000 police jobs cut during her previous six years as home secretary.

The outgoing legislature displayed a strong majority for a comparatively soft Brexit, in particular over keeping Britain in the single market. Even if the position of new members of the Commons is not fully known, the same is likely to be true for the incoming parliament.

Knowing the results of the UK-EU divorce negotiations must be put before parliament, the government may trim its hard position on the single market and the linkage to immigration. That would require difficult compromises on accommodating EU conditions on freedom of movement and on UK payments into the Brussels budget.

Scotland's position will be crucial. The Scottish Nationalist party – which suffered severe losses in yesterday's polling – has repeatedly stated it wishes to stay in the single market. If this option starts to look more realistic, English-Scottish relations may improve; calls for a second referendum on Scottish independence anyway look likely to wane. This would be helpful for the stability of the UK and for the chances of success for the EU talks.

The UK government might be able to use these openings to unlock Brexit negotiations. However, tumult in the UK political landscape may delay the start of substantive talks.

Rather than repeating that 'no deal is better than a bad deal', whoever is in charge of UK talks will have to look for compromise. The optimal solution would be neither good nor bad for any particular faction, but would reflect a reasonable sharing of the costs embedded in an undertaking many British people did not actually want.

When the UK prime minister next goes to Brussels, the rest of the EU will be in the ascendancy. After last night's result, it is time for Britain to practise a little humility.

Full article on OMFIF

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