Posted on September 27, 2016
Both the Conservative government and the Labour opposition have issues over control. While the Prime Minister tries to assert hers, the Labour Leader continues to solidify his.
As expected, the Labour rank and file members have given a resounding victory to Jeremy Corbyn as Labour leader. He has been re-confirmed by 62% of the membership of the Labour Party in a leadership vote on Saturday.
This does two things. Firstly, as he tightens his grip on the executive of the Labour Party, he also silences critics within Labour who have contended that he is unfit to lead the party. Secondly, it pushes the predominately anti-Corbyn moderate Parliamentary Labour Party into a corner. Some have already come out fighting, but it is difficult to see what options they have now that Corbyn’s mandate has been given a huge confidence boost. There has been talk of splitting the Labour party, but that will likely result in a migration of even more traditional Labour voters to the Tories. This is exactly what happened the last time Labour split in 1981 with the creation of the Social Democratic Party (SDP) led by Labour moderates. SDP lasted seven years before being folded into the Liberal Democrats, UK’s third national party.
Whilst Labour still have growing pains in accepting Brexit, their policies remain as unclear as those of the Government. The hard-left supporters of Corbyn are more focused on workers’ rights and ensuring EU money, that currently goes to economically challenged regions of the UK, is replaced by UK Government support post-Brexit.
There are at least four Cabinet voices with their own Brexit timetable. The PM is pragmatically doing what she can to keep focus and stay on message, insomuch as she has a message, whilst trying to control Boris Johnson, Liam Fox and David Davis. Each minister has already said when Brexit negotiations will take place and what is or should be on the table. The PM has slapped them all down, although Boris, who has declared Brexit talks will begin May 2017, remains unmoved by her attempts at boxing him in. Boris will be framing anything he says against the backdrop of a future for him as Leader of the Party and therefore Prime Minister. He has already been goaded by former Chancellor George Osborne, who also clearly sees himself as a future PM. For May, keeping control of these egos in her government will be a tough task, one that the media is not making easier by focusing on Boris’ celebrity status as much as his pronouncements on UK foreign policy.
No10 are trying to keep the messaging clear, although how long the PM can hold her nose should Boris keep on trying to dictate and publicize his own policy views is unclear. Additionally, the PM is under pressure from the right-wing Eurosceptic element of her party to get on with leaving the EU. Given her slim majority in Parliament, these MPs will need close and careful handling. They are pushing her, Europe is pushing her, but the view is that the Government is still not ready in terms of resources to deliver Brexit or its actual policy.
U.S. banks have given her a clear messag: “Give us a clear message and reassurances, or we are out.” There is growing concern in the City of London, the UK’s financial district, that the UK will lose access to the single market, the customs union and financial passporting. This places more pressure on UK-based financial institutions and others to look at their own exit strategies whilst concurrently denting confidence and certainty.
The politics seem to be drifting back to a hard, complete Brexit, once again ignoring or papering over the rational realities of the UK economy. This idea of “doing bilateral trade deals with the rest of the world” still rings in Government, without accounting for how tortuously difficult trade negotiations can be and how long they can take to finalize; even more so if you don’t have experienced trade negotiators.
A pertinent example is that of the Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada. From the negotiations and talks about delivery of CETA, it will be at best nine years before the deal is concluded. Now multiply that from the dozens more the UK would need to complete and you begin to get the picture. If CETA is finally delivered, it is plausible that Canada could well have a free trade deal with the EU with better tariffs than the UK may negotiate.
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