So, once again politics proves itself the pre-eminent force at springing surprises. As in 2010, we have a hung parliament but, unlike seven years ago, it seems there is little prospect of a formal coalition. 

With the Conservatives still the largest party but short of a working majority, most of the speculation centres around a future minority Conservative government, propped up by the Democratic Unionist Party. We've already started analysing their manifesto to see what they proposed but one clear policy was their support for Brexit.

Brexit will define what happens in the next few hours and days. The UK has critical negotiations starting soon and if it hadn't been for those we would expect the Conservatives to drop their leader, make a swift parliamentary deal and possibly look to another election later in the year. But the feeling will be that Brexit means the country needs stability, something the Conservatives promised but clearly failed to convince the electorate they were capable of delivering. The current view is that Theresa May will stay for the time being but of course, as David Cameron did less than a year ago, she may just cut her losses and run now. . 

It doesn't seem likely that Labour will be at the government negotiating table, but Jeremy Corbyn's extraordinary ability to defy the odds means nothing can be ruled out. He is clearly keen to form a government. Whatever happens, his brand of politics clearly resonated with large parts of the electorate and will be at the centre of Labour policy for quite some time, killing off the final vestiges of Blairism. Those in his party who have derided him over the last 18 months are looking very foolish right now. With a hung parliament and little prospect of a decent working majority, the Left's influence on future government policy will be as strong as it has been since the 1970's.

It wasn't all bad for the Tories, as a second Scottish referendum looks a distant prospect thanks to a haemorrhaging of SNP seats and impressive Conservative gains north of the border. As George Osborne said earlier this morning, this gives Ruth Davidson enormous say over a future Tory policy and possibly leadership, albeit she herself is not an MP so cannot run. The SNP were arguably the second biggest losers last night, with Alex Salmond losing his seat along with Westminster Leader Angus Robertson, further weakening the case for IndyRef2.

And what of the other parties? With both Tories and Labour winning shares of the vote not seen since 1992 and 1997 respectively, we seem to be returning strongly to a two party nation with the other parties being squeezed. The Liberal Democrats had a mixed night with some big guns like Vince Cable, Jo Swinson and Ed Davey returning but Nick Clegg finally paying for his Coalition years. 

So what will this mean for future legislation and the workings of government? May seems to be attempting a 'business as usual' strategy, with cabinet appointments now expected as early as this afternoon (Friday). But they may only be keeping their seats warm until a new Leader emerges. That would precipitate a further re-shuffle, with stability out the window, legislation delayed and authority weakened. If there is a Tory Leadership race, then we would not expect a new leader until the Autumn. Only then would government start to function properly, unless of course we have another election (a prospect that, this morning, looks grimly unappealing to most within Westminster.)

So, once again the political and government pieces are all in the air. For anyone trying to plan for their businesses and organisations for the future, this will be incredibly frustrating. Theresa May did not need to call this election and by doing so and effectively losing, she has only brought in further instability and delay.

At Atlas we will be keeping close to the action so we can keep clients and contacts up to date on what is happening. Unfortunately, it may not be very clear for some time but we will keep you posted. Who knows, perhaps like the pollsters, we will be wrong and everything will run smoothly and government will return to normal in no time…. 

If you have questions, please do get in touch.

Comment