International readers will be aware that the UK, where Intelligent Sourcing magazine is based, has had a general election. The results were that of the two main parties, Labour has 261 seats in Parliament and the Conservatives, led by Theresa May, have 318. One seat has yet to declare.
International readers might therefore be puzzled that there have been calls for May’s resignation (although she appears to be due at Buckingham Palace in half an hour to request permission to form a new government). This is for two reasons: first, May previously had an outright majority (for which she needs 326 MPs) and she called an early election, after only two years (she had been in the Cabinet when the law enforcing five-year terms was passed), claiming she needed an increased majority for Brexit negotiations.
Manifestly, she failed to deliver. And away from politics, that leaves the business community unsure of what’s happening.
Do you like your Brexit hard or soft?
May had kept her Brexit negotiating tactics close to her chest. The rhetoric was of a “hard” Brexit and a threat of walking away without a deal if necessary.
The business community was concerned enough by that, and by the absence of detail available to them on what May actually wanted to do. Meanwhile in order to get any sort of working majority, May (and she made the campaign about herself rather than her party) needs an alliance; the smart money is saying she’ll talk to the Democratic Unionist Party (DUP) in Northern Ireland. That party has spoken about not wanting a hard border between the two halves of Ireland (the South is an independent country and will remain in the EU).
This would inevitably mean some sort of freedom of movement of people between the north and the south, which would in turn militate against a “hard” Brexit.
It’s day one, and an announcement on the new government is expected later on; the only certainties at the moment (and this will impact the cost of international trade) are first that nobody knows anything, and second, that a prime minister who promises (indeed, demands) an increased majority and instead loses her majority all together has to be considered pretty damaged.