April 18, 2017
The Prime Minister Theresa May has announced that a general election will take place in the United Kingdom on 8th June.
In a statement delivered at Downing Street a few moments ago, the Prime Minister sought to frame the election as an opportunity to “guarantee certainty and stability for the years ahead” and to strengthen the government’s negotiating hand in the advancing Brexit negotiations.
Explaining her dramatic change of heart on an early election – a call she had roundly dismissed as idle speculation only days ago – Theresa May evoked Brexit, saying: “If we don’t hold a general election now, [the opposition’s] political game-playing will continue and the negotiations with the European Union will reach their most difficult stage in the run up to the next general election… So we need a general election and we need one now. We have at this moment a one off chance to get this done”.
The Prime Minister confirmed that she will move a motion for an early general election in the House of Commons tomorrow. If it receives the requisite two thirds majority required, the Prime Minister will request a formal dissolution of Parliament, with a general election taking place on 8th June. While some in the Labour Party could seek to block the Prime Minister’s attempts to call an election by denying her the two-thirds majority required to call an early election under the Fixed Term Parliament Act, this would appear unlikely. In this case, the Prime Minister will need to request that her own Members of Parliament issues a vote of no confidence – a move she will undoubtedly be keen to avoid.
Speaking soon after Prime Minister’s announcement, the BBC’s former Political Correspondent Andrew Marr declared that the battle ahead will be an “election unlike any in modern times”. He’s right.
For a famously-cautious Prime Minister who has long trodden a cautious path, today’s announcement is a gutsy move. While the Conservative Party presently enjoys a 20% lead over Labour in the opinion polls, both Theresa May and her party will now have to weather a six week campaign in which Britain’s post-Brexit future will be debated and poured over in torturous detail.
While an election is undoubtedly a risk for the Conservatives, it also offers the opportunity for incredibly high rewards. At present, the party enjoys a working majority of just 17 seats – a margin that has proved highly susceptible to backbench revolts and coordinated attacks from the Labour Party. If, as the polls presently suggest, the Conservatives dramatically extend their majority, the Prime Minister’s hands will be dramatically strengthened in the field of both domestic and international policy.
Clearly eyeing an opportunity to appeal to voters disillusioned by Brexit, the Liberal Democrat leader Tim Farron has issued a statement declaring that the election is a “chance to change the direction of the country”. The Labour leader Jeremy Corbyn has issued a statement welcoming the election as an opportunity to “offer the country an effective alternative” to Conservative rule. The SNP will likely frame this election as a straight choice between themselves and a Conservative hard Brexit.
As speculation heightened in the run up to the PM’s announcement, the FTSE and pound dipped as potential further political uncertainty over the next quarter began to filter through. However, in the immediate aftermath the pound edged back up and 10-year gilt yields were steady – perhaps reflecting the strong poll lead enjoyed by the Conservatives.
FTI Consulting will be producing ongoing updates as we approach the formal dissolution of Parliament and the spirited battle ahead. If you have any comments or questions, please do get in touch.