With only four results still to be declared, the outcome of the UK general election is that no party will be able to form a majority government. This means that the ruling Conservatives will try to form a government either by securing the support of a minor party (almost certainly, the Ulster Unionists, the Democratic Unionist Party with 10 MPs) giving then a wafer-thin working majority. Alternatively, they could decide to operate as a minority government, but either solution requires that they get the backing of the Commons. The Labour Party has suggested that it could form a minority administration, but at the moment this is an unlikely scenario.
What does this mean for Brexit? A good question. May’s stated intent was to get a large mandate from the country and a strong parliamentary majority to enable her to negotiate with Brussels from a position of strength. As we pointed out yesterday, this was always nonsense, but a big majority would have enabled her to impose her vision of Brexit, on her terms, as the UK position. Her failure to get such an endorsement weakens her political position domestically, but doesn’t really change things with the EU, as outlined yesterday. Should she form a government, it is likely that the opposition could win concessions over the Brexit process by ruling out her “walking away” from a “bad deal”; insisting on a second referendum on the final deal; and preventing the passage of the “Great Reform Bill” which is intended to place all EU legislation under the UK statute book and then winnow it out at leisure.
Forex reaction to the vote has seen the Pound come under pressure against all major currencies since it has engendered fresh uncertainty (not that anybody knows what “Brexit means Brexit” actually means). It probably means that a “hard Brexit” has become less likely, but not yet that the Brexit folly will be ended.
If a government can be formed, the fixed term parliament bill means that it “ought” to be in power until 2022, right through the Brexit process which ought to be “completed” by March 31st 2019. However, as we have just seen, the act doesn’t stop a majority government from cutting and running – a minority government could fall over a significant hurdle by losing a confidence vote in parliament, so the smart money would be on fresh elections before 2022.
The big question will be how the government interprets “the will of the people” with respect to Brexit in the wake of the election result.