UK stocks and the pound surged when it became clear that Boris Johnson’s Conservatives had romped to a 76-seat electoral majority, the biggest since Margaret Thatcher’s 1987 triumph. That means Johnson, who campaigned on one slogan, “Get Brexit Done,” can do just that by the January 31 deadline. The big task, though, still lies ahead — striking a deal with the EU that’s satisfactory for both sides by the end of 2020, an extremely tight time-frame. EU leaders hope that with his thumping mandate, Johnson will have the political freedom to move to a softer Brexit involving a close EU economic relationship, rather than the hard Brexit or no-deal Brexit demanded by ardent Brexiteers, which would entail trading under WTO rules and punishing tariffs for both sides.
Thursday’s election sent messages to both the Conservatives and Labour parties. For Jeremy Corbyn, whose plans for a return to 1970s-style socialism was soundly rejected by voters, it spells the end of a political career. The central message was that the declining industrial regions which voted for Brexit in the 2016 referendum still wanted it, despite strong economic arguments advanced against it over the last three years. Voters also clearly preferred Johnson’s charm to Corbyn’s lack of it and opted to ignore the Tory leader’s reputation as a lightweight and a liar. The Conservatives walked away with a string of traditionally staunch Labour seats like Sedgefield, once held by ex-prime minister Tony Blair. Similarly, a string of northern England Labour mining strongholds voted Conservative. Conversely, affluent parts of London like Putney, where voters opposed Brexit, slipped from the Conservatives’ grip. One prediction is that the Conservatives will have to reorient their policies to please their new supporters. In particular, they’ll have to make fresh attempts to restore economic growth to northern England, the heartland of the Industrial Revolution, which has become extremely deprived in recent decades. There’s also the matter of Scotland. It was swept by the ardently anti-Brexit Scottish National Party, which wants a new independence referendum, saying England and Scotland are on “divergent” paths.
Brexit has had a global impact and affected anyone with investments in Britain or Europe. Indian companies heading to Europe often choose the UK as their base, but some with businesses in mainland Europe might have to rethink this. TCS chief Rajesh Gopinathan told the Financial Times the company might transfer around 1,000 employees from Britain if Brexit happened. The Tata Group, which has large UK operations, will also be watching the Brexit negotiations anxiously. Britain has changed in many other ways too. There are now a record 65 ethnic-minority MPs in Parliament. Home Secretary Priti Patel is likely to return to high office. Another man to watch will be Rishi Sunak, Treasury Chief Secretary in the last government. The election may have finally closed the debate about Brexit, but the future looks very uncertain.
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