Ben Blackburn and Constance Azis of Freshwater’s public affairs team consider the lay of the land in the immediate aftermath of the 2017 General Election.
When the exit poll was broadcast at 10pm last night, watchers will have swiftly recalibrated how long they would be able to stay up for.
With most predicting a reasonably straightforward win for the Conservative party, some even a landslide victory, the suggestion that a hung parliament was in the offing made for a fascinating night.
After Newcastle Central won the traditional race with Sunderland South to be the first to complete the count, questions emerged over whether the exit poll was accurate, as the Labour party saw a smaller swing towards them in several north east seats than it predicted.
As the night went on however, it became clear that there would be a repeat of 2010’s hung parliament.
What does the result mean?
By gaining 29 seats and seeing the Tories lose 12 (at the time of writing), this was undoubtedly a momentous night for Labour. In direct battles, the Tories won seven seats from Labour, while Labour gained a huge 27 seats from the Tories. This demonstrates Jeremy Corbyn’s effectiveness as a campaigner and a communicator; in stark contrast with Theresa May, whose approach to campaigning has been heavily criticised.
That said, with 43% of the vote and the largest number seats, the Conservative party is still the victor - just not a very convincing one. Labour’s performance should be put in context too: they have a similar number of seats to Gordon Brown in 2010 - an outcome that was seen as disastrous at the time.
The Conservatives’ performance and perceived ‘success’ should also be considered in light of the fact the whole election was instigated by them. Theresa May called the snap election based on an assumption that their huge lead in the polls would translate into an overwhelming majority in the Commons, giving her the mandate she desired to take Britain through Brexit.
What does the general election result mean for the economy?
The uncertainty prompted by a hung parliament has already hit the currency markets - sterling was trading at about 1.7% down against the dollar. Interestingly, while the FTSE100 dipped slightly at opening this morning, it subsequently rebounded strongly over the course of the morning. Some of this may be due to the benefit that a weak pound brings to many - foreign headquartered - FTSE100 firms.
What next for Theresa May?
Theresa May has already said she will not stand down. But the pressure from within her own party as well as externally to do so will be significant. Her quality of judgement in calling a snap election has been severely called into doubt.
Given the uncertainty of hung parliaments, May will be expected to dig in and play for time - divine the mood of her party and take action accordingly. She will only stand down if her position is clearly untenable.
And if she were to stand down, could the Conservatives stand yet another leadership election? It’s possible that hanging on may be the least disruptive option for her party. But what about the country?
Forming a government – what happens now?
The Tories are still in pole position to lead the next government and Mrs May has reached an agreement with the Democratic Unionist Party (DUP) which will be taken to the Queen.
Whether this would be a formal coalition remains to be seen. The Tories would likely prefer to rule as a minority party with a ‘confidence and supply’ arrangement with the DUP on votes in the Commons. In return, the DUP is likely to push for no special status for Northern Ireland after Brexit, which could leave it with one foot remaining in the EU and potentially pave the way for it to be eventually de-coupled from the rest of the UK altogether.
What are the implications of the general election result for Brexit?
Negotiating an effective Brexit deal is the next government’s number one task. A minority government would make the Conservatives’ negotiation position much more difficult – as they cannot use the mandate of the people to enhance their stance.
There is also the question of the Great Repeal Bill. The next government will want to launch this as soon as possible after the Queen’s Speech on 19 June. But demands of a coalition partner, informal or otherwise, would likely affect its delivery timetable and require elements of the Bill to be re-drafted.
Then there is the balance of power in parliament to consider. Any government would face a huge struggle to progress its legislative agenda, including the Repeal Bill, with such a negligible majority. Opposition parties will be empowered and able to defeat the government time and again.
Remainers will be hopeful that Jeremy Corbyn will use this opportunity to strengthen his stance on Europe and work with the Liberal Democrats and SNP to fight against a ‘hard’ Brexit.
If the government finds it impossible to advance legislation, it will atrophy. This would lead to calls for another general election, with a new programme for government - perhaps within the year.
A silver lining for all?
One of the biggest stories of the election is the increase in turnout. At nearly 69% it’s the highest since 1997 - concerns about election fatigue did not materialise.
There is also a clear relationship between turnout, the Labour party, and voter age. Labour won the majority of seats where turnout was up by more than 5% and it’s likely that Jeremy Corbyn’s popularity with younger voters led to higher turnout and, in many seats, it was this vote which helped the party to succeed.
Irrespective of party political affiliation, more young people engaged in politics is undoubtedly a good thing for UK democracy.
Freshwater will continue its analysis of the general election result - follow along at @FWPublicAffairs.