Since she took office as British prime minister in July last year, Theresa May had repeatedly said she would not seek a general election before the scheduled 2020 poll.
But she went back on her word and surprised markets on Tuesday this week by announcing that she had decided to call a snap election for June 8 in order to secure political unity in the parliament to support her Brexit plan.
Hours before May’s office announced that she would address the nation and make an important statement without indicating what exactly it was about, rumors had been flying across Britain that the Queen might have died or that London might impose direct rule on Northern Ireland.
Amid all the fear and speculation, the pound plummeted against other major currencies at one point during the early hours on Tuesday.
However, after May announced her decision to call an early election, clearing all the uncertainties, the value of the pound bounced back dramatically and smashed US$1.285 against the dollar on Wednesday, hitting its highest level since last October.
The prime minister’s bold decision to bet her entire political career on a snap election just nine months into her term of office may indicate that she must be highly confident and optimistic about the outcome.
And her optimism may be well-founded, as the Tories are currently having a 20-plus point lead over the Labour Party in every major poll.
May’s decision to call a snap election in June and its final outcome will definitely have far-reaching implications for the upcoming Brexit negotiations with the European Union.
There are three things about this snap election that we believe people should take note of.
Firstly, if Theresa May is able to pull off a landslide victory for the Conservative Party in June, it will not only allow her to cast off the shadow of her predecessor David Cameron and significantly boost her own credibility and prestige as prime minister; it will also give her an ultimate popular mandate which can enable her to negotiate terms for leaving the EU with Brussels in a position of relative strength.
As the Labour Party is seriously split under the leadership of the ultra-left Jeremy Corbyn and lags far behind the Tories in all major polls, there is simply no better time to call an early election than now.
Secondly, as May put it in her statement on Tuesday, “the country is coming together [over Brexit] but Westminster is not … and parliamentary division will risk our ability to make a success of Brexit”.
Indeed, she has every reason to call a snap election to expand the majority of her party in the parliament so as to secure passage of her Brexit plan through the legislature.
It is because on one hand, the opposition has been standing in the way of May’s Brexit plan ever since the referendum last year, and on the other, at present the Tories only have a fragile working majority of 17 seats in the House of Commons.
If a substantial number of her partymates suddenly refuse to fall into line and break ranks, it might derail her entire Brexit initiative.
And the only way for May to prevent that scenario from taking place is undoubtedly to gain more seats in the parliament.
May has been taking a tough stance on the EU over Brexit since she took office.
Once the Tories sweep to a landslide victory in the upcoming election as expected, we will be able to tell whether it is truly her genuine attitude, or she is just posing as a hardliner to please the Euroskeptics within her party.
Lastly, while the outcome of the early election in Britain will determine whether London will go for a “hard” or “soft” Brexit, the result of the upcoming French presidential election will also have significant implications for the Brexit negotiation.
If the French people eventually choose an ultra-right Euroskeptic (i.e., Marine Le Pen) or an ultra-left populist (i.e., Jean-Luc Melenchon) to be their next president, either way it will inevitably further undermine the unity within the EU.
As London is in a tough spot of trying to negotiate favorable terms with Brussels over Brexit, a weakened EU will certainly work in Britain’s favor and boost its bargaining power.
But still, it remains premature to conclude that a Tory victory is sealed, given the major upsets of the Brexit referendum and the US presidential election.
If Theresa May fails to achieve what she wants in June, perhaps investors around the world will have to recalculate their risks.
This article appeared in the Hong Kong Economic Journal on April 20
Translation by Alan Lee
[Chinese version 中文版]
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