{UAH} Disaster for Theresa May and the Conservatives; uncertainty for the UK

Disaster for Theresa May and the Conservatives; uncertainty for the UK

By Professor Andrew Walter. Interim Director, Melbourne School of Government

No matter how Tory partisans try to spin it, the UK election results are a disaster for Prime Minister Theresa May and the incumbent Conservative government.

It is too soon to know the full consequences of this election, but a few things may be said:

• Brexit: Britain's next government will find it very difficult to achieve internal consensus in the upcoming divorce negotiations with the EU-27. It will increase the ability of opposing domestic factions to veto any agreement and probably makes the timetable to reach a deal with EU partners by mid-to-late 2018 completely unrealistic. This increases the chance of a no-deal outcome, but since this would be unacceptable to a majority of British voters and parliamentarians, it could make an interim deal to extend the timetable for negotiation more likely.
• Theresa May's future: May's tenure as party leader and Prime Minister is now highly uncertain, while Jeremy Corbyn's position as Labour leader seems far more assured.
• Scottish independence referendum less likely: The greater uncertainty surrounding Britain's future and the dramatic loss of SNP seats makes a second Scottish referendum less likely.
• Weakened Conservatives: The Tories will be less likely to be able to push various pet policies such as grammar schools and NHS reform.

No one, almost certainly including Labour Leader Jeremy Corbyn, thought that anything but a landslide win for the Conservatives was likely three weeks ago.

When the Party manifestos were launched, the Conservatives were at an average of about 17 percentage points ahead in the polls. A week later, the Tories had an average seven per cent lead -- still large, but some polls began to suggest that Labour might even be able to form a minority government. This was always an unlikely outcome, but the unexpected effect of the campaign was dramatically to diminish Theresa May and to revive Jeremy Corbyn's standing as party leader.

The terrorist attacks hurt the Conservatives

Normally, we would have expected the Manchester and London terrorist attacks to shift the ground in favour of the political Right, but they did not. Theresa May, the candidate offering little else but "Strong and Stable" leadership, turned out to be very vulnerable, given her record as Home Secretary presiding over significant police cuts. And of course, the attacks happened on the watch of the Conservatives.

The Conservatives' strategy backfired

One can understand why Theresa May called this election. She lacked a popular mandate, having triumphed unexpectedly in a bruising post-referendum Tory leadership struggle, after having campaigned weakly for the "Remain" camp in the Brexit referendum.

The polls only a month ago continued to suggest that Jeremy Corbyn would make Labour unelectable and a Conservative landslide inevitable, which would have strengthened her hand in dealing with intra-party opponents as much as the rest of Europe in the Brexit negotiations to come. Three weeks ago, it also seemed inevitable that the three-quarters of Corbyn's parliamentary colleagues who did not support him as leader would finally find a way of ditching him after the elections.

Low expectations certainly have worked in his favour, but Corbyn ran a strong campaign. Labour opted to accept the result of the Brexit referendum and to campaign in favour of getting a good deal for Britain from the EU, trying to reassure voters that they would not lose some of the major benefits of EU membership, such as minimum social standards and continued access to the world's largest single market.

Most voters agree that Britain should not become a low-tax, low-wage haven separated from Europe, as some Conservatives recklessly threatened. Britain has serious economic and social problems. Productivity in the UK has essentially stagnated since the mid-2000s and Labour's arguments for substantial new infrastructure investment has some appeal as a response to a real and pressing problem. Labour also offered a clear alternative to the Conservatives in proposing to pay for this significant boost in welfare and infrastructure spending with increased taxes on the wealthy and on business.

May, somewhat contradictorily, stuck to her simple mantra that she would be a strong negotiator and get the best possible deal, while also seeking to appeal to former UKIP voters by saying she would "walk away" from a bad deal – although this would in fact be the worst of all plausible outcomes. Labour successfully exploited this contradiction.

Rising social and economic inequality

The relative appeal of Corbyn's argument, even if it remains largely aspirational, also reflects something deeper. Real incomes are still lower today than they were in 2007 for most people in the UK. There is a deep seated anxiety about the economic future and the state of public services in Britain, factors that played a significant role in the Brexit referendum outcome. After winning the prime ministership, May seemed to signal that she grasped that large parts of the British electorate were alienated by the past three or more decades of neoliberalism, by the rising social and economic inequality commonly associated with it, and by years of post-crisis fiscal austerity. Her speeches sought to revive pre-Thatcherite ideas of "One Nation" Toryism, of community cohesion, of industrial policy, and an appeal to innate "British" values.

But the Tory campaign and manifesto seemed to reveal the shallowness of this rhetoric and May's understanding of the problem. It presumed that "Strong and Stable" leadership in the Brexit negotiations would be sufficient to win the hearts and minds of voters across traditional party divides, ignoring the continuing strong public support for social services including the NHS and fairness of access to good public education. The proposed "dementia tax" on elderly owners of housing assets – withdrawn hastily in only four days – revealed a tin ear towards the preferences of a core Tory constituency and indicated that May's leadership might be anything but strong and stable in the years to come.

We also witnessed this Conservative weakness on the question of terrorism and policing, which Labour managed to reframe as linked to Tory spending cuts. In another area of traditional Conservative strength, migration policy, Labour was also able to raise doubts by arguing that the dependence of the NHS on imported nurses from the West Indies, Africa and elsewhere is threatened by May's pledge that she will finally meet her stringent targets for reducing net immigration.

In short, there are indications that what we may be seeing is the demise of the neo-liberal project, associated since Thatcher with rising global economic integration, limited social protection, deregulated finance, privatisation and the quasi-marketization of public services. Today, both Labour and the Conservatives in their own ways have stepped back from the Thatcherite consensus.

It is too early to tell at present, but the evident disaffection of younger British voters with neoliberal policies may have been an important factor in the failure of the Conservatives' electoral strategy. The Tories clearly understood that about 70% of under-25s favoured Labour, but they were counting on them voting at the low levels that have prevailed since the 1980s. But contemporary politics is unpredictable, and the disappointment of many of Britain's younger voters in the Brexit referendum result as well as recent efforts to register and mobilise younger voters may have upset this expectation.

These new developments in British politics may also have global consequences. Certainly, Emanuel Macron's victory in France's recent elections can be seen as a victory of moderate version of neoliberalism, but France is in a very different place to Britain today and arguably closer to where Britain was when Thatcher came into power in 1979. Bernie Sanders' campaign last year in the United States resonated among surprisingly large numbers of people, who remain mobilized by the Trump presidency, which is itself in sharp retreat from the neoliberal project. Over the long term, it may even bring Britain back towards the European consensus, but not in time to prevent a very messy exit from the EU.

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