There can be little doubt that we have just witnessed a historically bad performance by the incumbent government, not quite a defeat for Mrs May, but a resounding discord from the people of the UK, for the second time in a year telling politicians that they cannot take for granted the views of the people.
I have heard it said that it was a choice between austerity and less state intervention on the one hand juxtaposed with big state and big spending on the other. I doubt it is that simple. Mrs May is, as I write, off to the Palace to propose her new government, but we should not think for a second that her policy is one of shrinking government. That is not an option for any government anymore, and with such a marginal position, we face a period of mediocrity in terms of government policy. That is what we voted for and what we will get.
The question is, does it matter? Regarding policy, we can hope that Mrs May takes heed that the country has not fallen firmly behind her leadership. She announced the election as being about getting a strong mandate from the people so that she could be strong in her Brexit negotiations. She was riding high in the polls, and even our UK200Group Survey had her ranking as by far the most well regarded player in the Brexit field. She did not get her mandate.
For many people, it seems, there was far more on the table than Brexit. Her opponents took control of the agenda and made it about domestic and social policy, where they were able to offer enticing options. We hardly heard a word about Brexit through the campaign – in fact people seemed just to be getting tired of it.
Despite making the thrust of her campaign about who was most fit to lead Brexit talks, Mrs May’s aversion to public debate and her tactical silence did her no favours. Her main rival, Mr Corbyn, on the other hand was in his element. Rattling his non-nuclear sabre, orating, speaking to adoring crowds in idealistic slogans, Mr Corbyn gained ground. We cannot avoid the fact that the despicable acts of terrorism in Manchester and then London will have had an effect on some people’s thinking, and in that sense, sadly, the terrorists achieved their aim of disruption.
While, on a simplistic level, Mrs May did not get her mandate, and her task will now be more difficult, we must remember that only 52% of the voters chose Brexit; 48% did not. Many of the 48% have not accepted that Brexit is inevitable – 67% of SME’s surveyed by UK200Group said they would now vote Remain. How ironic that the last time we had a true minority government, if that is where we end up, rather than a coalition, was, funnily enough, around a year after we voted to enter the EU. That government did not last too long.
For businesses, for our clients, there will be probably be worry. We have an unstable government, and instability at the centre is not good for business. That, alongside Brexit negotiations, will be great for the Press but hard for people making medium term decisions in business.
However, the result of this election may well be to create a more balanced, more humble stance, which might sit well with the other EU nations when it comes to Brexit negotiations. The UK200Group Survey indicated clearly that most SME businesses did not want a “hard Brexit”; they want the movement of people for their workforces and they want to work in the Single Market and Customs Union.
As I pointed out a couple of days ago, all outcomes of this election were likely to result in many similar impacts: higher taxation overall, ever poorer public services, and ever more government interference, with greater powers to HMRC. No Party put up solutions that would avoid these things. Yet we are nowadays a part of a global economy and the evidence is unequivocal: businesses need to look beyond our borders and enter into the wider global markets in a positive and constructive manner. It is a form of diversification because businesses that do this are less dependent on the ecomony of just the UK. The election outcome is not what either side would have wanted, whatever spin they put out in public, but it reflects the views of the people, despite all the limitations of democracy, and if the politicians listen, we might end up with something good.
If the government is a lame duck, it will not last too long, and there will be another election. And what happens then is anyone’s guess.