General Election Initial Overview
The votes have been counted and the key outcome is that business needs clarity and certainty – almost irrespective of the result a clear and decisive answer is absent. This is clearly an evolving situation and we will keep you updated on Twitter and via ezines.
Here are our initial thoughts….
This is the most spectacular political own goal – far surpassing that of David Cameron in calling the EU referendum – but borne of that decision. People have moved on from the referendum vote (a touch alarmingly, given that the negotiations have not even started) and they shrugged their shoulders at the central proposition of the Tory campaign – the need for a strong negotiator in Brussels.
The Conservatives will remain the biggest part with a 43% vote share – far surpassing the 36% achieved in 2015 – but that has not translated into an outright majority. They are on track to win 318 seats and with formal and ongoing discussions already in play between them and the DUP/UUP in Northern Ireland and the decision by Sinn Fein not to take their seats could have an effective working majority of 8-12.
The Labour Party is continuing to talk about a minority Government, but with a collapse in SNP votes, the arithmetic simply does not add up; even with all progressive votes added together, Corbyn only commands 300 votes. What it does mean is that Labour’s populist concerns around spending cuts and priorities will need to be reflected in policy making, particularly on young people. The high turnout of young voters – pro remain and progressive – has been decisive.
What Next For Brexit?
The pressure for a snap election came from the Leavers and arch-Brexiteers who wanted a strong working majority to ignore the voices of pro-remain Tories, who were also being restive in other areas. In fact, the result leaves that unchanged and makes a softer Brexit, particularly around migration – where Labour had a much more pragmatic approach to economic need – more likely. While the DUP shares the Tories Brexit position, it prioritises trade and single market. No future PM can ignore the surge in the youth vote, more pro-remain, either.
As for the negotiations, we are in unchartered territory. Due to start on 19 June, it will depend on how quickly a government can be formed as to whether they can.
What about other policies?
There is little difference in policy between the Conservatives and Unionists and if they can continue or formalise their existing cooperation, then the broad platform outlined in the manifesto could be taken forward. But, as with the 2010 coalition, if there is any formalisation then a new policy framework could emerge.
The key issue of difference between Labour and the Conservatives was around NLW and this is where our attention will be principally focused. The IFS costed the Labour policy of £10 for all over 18s by 2020 as being £1.4bn for the sector. There is nothing, as yet, which suggests that there will be any move away from the current policy of 60% median earnings, but equally any weakening of policy is unlikely. There was broad political consensus around the need for business rates reform and Labour had also supported a VAT cut to stimulate demand.
We have good contacts in the main parties and crucially with our sister organisations in Northern Ireland and Scotland and will be continuing to work closely with them to ensure the needs and concerns of hospitality re reflected going forward.
This is undoubtedly a result which took the markets by surprise and which stunned businesses. We need a swift resolution to the question of who will govern – the need for a new government of whatever colour to be in place and addressing the priorities we face is immediate. We need a strong signal that Britain we are pro-enterprise and open for business
We expect events to continue to unfold over the next couple of days and we will provide further analysis as they do.