British elections and referenda have recently proved to be anything but boring.
Last week’s general election — called just a few short weeks ago at a time when Theresa May’s Conservative Party had a small but solid majority and the left wing Labour Party appeared in complete disarray — has delivered a crushing defeat for the prime minister’s hard Brexit policy.
The election result has once again thrown wide open the debate on what kind of deal the U.K. will — or even can — seek to strike with the European Union (EU) over the year ahead.
Theresa May called the election to give herself a stronger mandate to argue with the Europeans that no deal — meaning a break with Europe, falling back on basic World Trade Organization (WTO) rules — would be preferable to any kind of compromise the EU tries to impose.
Although not stated, it was tacitly understood the election was also intended to deliver her a larger majority in the House of Commons. That larger majority would have enabled her to ignore disruptive minor elements of her own party who may disagree with elements of a deal as the negotiation process unfolds.
What transpired was a dramatic swing to the left, with the loss of Conservative seats to the Labour Party. The result? No party enjoyed an overall majority.
The Conservatives have therefore been forced into a loose coalition with Northern Ireland’s Democratic Unionist Party (DUP), whose agenda differs from the Conservatives in one significant way.
The economies of Northern Ireland and the Irish Republic are profoundly interdependent. Since Britain joined the EU, the lack of border controls between north and south has allowed the economies to operate almost as one.
Both sides view the possibility of a hard Brexit and the reimposition of hard borders with abhorrence. The impact of border controls between north and south would be a microcosm of the impact of border controls between the U.K. and EU.
So, broadly speaking, what is good for Northern Ireland and the Irish Republic in terms of creating open borders would be good for the U.K. and EU.
The DUP is likely to make the maintenance of free and open trade between the two countries a requirement of their cooperation with the Conservatives.
Scottish MPs Another Challenge for May
Adding to Theresa May’s woes are 13 conservative MPs in Scotland who, while they differ profoundly from the DUP on some cultural issues, are very much of the same school when it comes to a post-Brexit relationship with Europe.
Scotland voted broadly to remain in last year’s referendum. The majority of Scots would like to see as little economic disruption post-Brexit as possible.
Theresa May’s position is hanging by a thread. She could limp on as prime minister for six, or even nine, months, but the consensus is another leadership election is probably inevitable.
Whether it is May or her replacement, the British government is having to come to terms with the changed political landscape this week, which sees the priority not for a hard Brexit, but some form of soft Brexit. The soft Brexit option would possibly include more relaxed immigration policies and a continuation of Britain’s contribution to the EU budget, in return for the maintenance of largely open borders — all options which until last week were firmly off the table.
A new set of priorities is still being discussed and a negotiating stance is at best in its infancy. However, clearly there has been a tectonic shift in political support for the previous hard Brexit policy. The coming weeks are likely to see talk of compromise and alternative priorities.
Broadly, that would probably be good for business, both in the U.K. and with its EU trading partners. Only time will tell if shell-shocked politicians can create a coherent strategy that is both achievable with Brussels and acceptable to competing factions along the Conservative Party’s loose coalition at home.