Europe / United Kingdom

Theresa May After Brexit: A Rock and a Hard Place?

On June 23, 2016, the United Kingdom voted to leave the European Union. For the United Kingdom, the Brexit vote represents one of the most cataclysmic shifts in British politics – the relatively stable years of David Cameron’s tenure as Prime Minister quickly shifted to a more uncertain future under Theresa May. Initially, May looked to be a safe bet for the Conservatives after such a shift – she talked much about providing “calm leadership” and how she was “getting on with the job”.

Yet, Theresa May has suffered many blows throughout her tenure as prime minister and leader of the Conservative Party. The first was the general election of 2017, which Theresa May did win, with 317 seats out of the 650 in the House of Commons (the lower house, where the British people elect local members of parliament). To gain a majority in Parliament, a party must have at least 326 seats, so the solution was a confidence and supply deal (where a minority partner will vote with the main partner on important issues like Brexit and budgets) between the Conservatives and the Democratic Unionist Party (DUP), a Northern Irish party, which has ten seats in Parliament. At the end of the day, this process left May with an extremely slim majority of 327.

A right-wing, highly socially conservative party, the DUP may not agree with the Conservatives on many issues (such as abortion and same-sex marriage). However, there are many reasons why May has decided to make the deal: first, as the DUP also supports Brexit, May could have some confidence in pushing through Brexit laws, and it also meant that the Labour Party under Jeremy Corbyn will not be able to form a more progressive, left-wing government.

If Theresa May won the election, how has she lost? In 2015, under David Cameron, the Conservatives had 330 seats, so May actually lost thirteen seats. It is clear May treated this election like a gamble: she wanted to “strengthen her hand” in Europe and crush Corbyn’s Labour party by gaining a large majority, yet by losing seats, the gamble did not pay off.

The natural result, then, of May’s gamble is a potential leadership challenge. There is not an official leadership contest yet within the Tory party, but there is talk of one happening. The two main contenders are Boris Johnson, the current Foreign Secretary, and Jacob Rees-Mogg, an MP who doesn’t hold a governmental office. Both are controversial choices: while Johnson has an entertaining and humorous image, many have called him a “clown, racist, and bigot”, and he could potentially be a polarizing figure for the party. Rees-Mogg is also a polarising figure: again, he has mannerisms that are popular, with a certain 19th century tone that is popular in Britain, but has views that could be described as traditional, such as opposing gay marriage and calling for abolition of environmental protections, which are opposed to May’s more liberal views. May is facing a difficult decision: either wait it out and keep going with her leadership that is losing popularity, or face a leadership contest and potentially lose to someone who will take the party in a completely different direction.

Brexit could also pose a huge problem for May’s leadership. May is pursuing what is known as a “hard” Brexit, where there would be no deal between the UK and the EU. This would appease people who dislike EU control over British laws or immigration, but would mean that the UK would leave the free-trade area between all European nations – the European Economic Area (EEA). The other option that would still result in Britain leaving the EU would be a soft Brexit, where Britain remains in the EEA. While this would mean Britain could still trade freely with European nations, but Britain would also have to accept some EU laws, plus they would have to accept the EU’s freedom of movement provisions.

According to John van Reenen, the Gordon Y. Billard Professor of Management and Economics at MIT, Brexit will make Britain worse off even if Britain chooses a soft Brexit, as it will still cost more to trade between Britain and Europe, reducing the British income from trade. This poses a problem for May, as the question will now be how Britain is going to help itself economically when there could be a 1.37 to 2.92% drop in trade income. For many Conservatives, the answer will be more austerity – reducing government spending to help counteract the decrease in income.

Austerity could, however, prove politically toxic to the Conservatives. The fact that the Labour party currently leads in the polls with Corbyn, who has anti-austerity policies, shows that if Theresa May pursues an austerity approach to help cure the economic effects of Brexit, then it could lead to the Conservatives being in the wilderness. The other option would be to adopt a more Keynesian economic approach, with higher taxation and higher government spending. However, low taxation is a key Conservative policy, and if the Conservatives raise taxes, then it would result in the Conservatives backtracking on one of their key manifesto pledges.

It is also important to remember that when the Conservative Party was elected in 2010, one of the key reasons people voted for them was because of their reputation for economic competency. While voters may be willing to endure a small economic slump post-Brexit, possibly recognising that there will be short-term economic losses, if a short-term economic slump results in a post-Brexit recession, then it could quite simply mean that the Tories’ reputation for economic competency could potentially be destroyed. This could destroy any economic-based electoral advantages, and force many voters to look for alternatives.

The more economically sound option, then, would be to not carry out Brexit, or to have a “soft” Brexit where Britain would remain a member of the EEA. However, as May is clearly a Brexit supporter, any change to her stance will render her looking hypocritical, so whichever way Brexit will go, her credibility will be damaged.

It is also important to remember that the Labour Party, the official opposition, is doing well, with most recent opinion polls showing Labour neck-and-neck with the Conservatives, or even Labour being a few percentage points ahead. Jeremy Corbyn, the leader of the Labour Party, has turned around the party’s electoral fortunes by adopting a progressive-populist approach in the vein of Bernie Sanders in the USA. Despite constant media negativity, Corbyn is clearly popular among voters, with many of his policies, such as putting the railways into public ownership and reforming the welfare system, being clearly popular with voters. Corbyn’s popularity puts May in a clearly diminished position, as she now must contend with a stronger opposition.

There was real symbolism in May’s appearance at the Conservative Party conference, where she meant to promise to give “a voice to the voiceless”, but instead letters of her slogan “A Country that works for Everyone” fell off the stage and she was presented with a P45 – a employment termination notice. May’s days are numbered – Brexit is going to present her with huge difficulties, not to mention a strong opposition, a slim majority and a leadership challenge. To this author, the takeaway is clear: Theresa May is definitely stuck “between a rock and a hard place.”