After months of political wrangling with the opposition benches and within the own Conservative party, Prime Minister Boris Johnson, finally, got an approval from the parliament for a pre-Christmas general election. The leader of opposition Jeremy Corbyn acquiesced to the plans of the prime minister, albeit after it was ensured that the country would not be forced out of the European Union without an agreement at place. Election campaigning has begun and it is due to be held on 12 December, which could give the country its fourth prime minister since the results of the 2016 referendum were announced, in which the citizens of the UK marginally voted to leave the European Union after a campaign which was marred by highly partisan support and misleading and false statements.
Jeremy Corbyn had earlier resisted calls by the Tories for an election, as he placed a key demand that the government should extend the earlier deadline of 31 October to ensure Johnson doesn’t take the country out of the bloc without the approval of the parliament, which he resisted, claiming that lawmakers were trying to sabotage his plans. It is ironical that while he resisted and attempted to circumvent the parliament to get Brexit done, he was one of the supporters of this very rule during the tenure of Mrs Theresa May, the previous prime minister. After it became clear that Boris Johnson would be forced to seek an extension and would have to break his promise of getting the Brexit done at any cost, the Labour party agreed to the election. It hopes that this act of reneging on his promise would dent his credibility amongst the voters, especially Brexiteers, which the party hopes to cash on.
However, it is not going to be a smooth ride for the labour party and Jeremy Corbyn, despite a not-so-good impression about the current prime minister and a series of blunders by the Conservative party. Moreover, Tories are widely considered to be inadept to handle the Brexit mess, which was started by the prime minister only; even after more than three years of the referendum results and after missing numerous deadlines, the country is no closer to leaving the European Union. However, Corbyn is amongst the most unpopular opposition leader in the recent history of British politics, as he proposes radically left policies, side-lining the more central policies that many voters would demand and expect. According to the poll of polls, the Conservative party went into the general election campaign with an 11-point lead over Labour, and the gap has waned with less than a month to go before the country elects a new government, showing an apparent dissatisfaction with the policies pursued by the Labour.
The upcoming election could give ‘Remain voters’ a final chance to stop Britain leaving the European Union while the decision by the prime minister to hold a pre-Christmas election before he has delivered on his promise of Brexit is considered as a huge political gamble, which could see him leave the office within months of getting elected by a handful of the population. Claiming that Jeremy Corbyn would plunge the country back into another year of Brexit extensions and arguments, Boris Johnson has said that, if he wins the election, he will take Britain out of the bloc by the end of January, though it remains far from clear that he will secure the convincing House of Commons majority that he needs to push through his plan. However, such assurances from the prime minister are beginning to lose their value as he had previously promised to take Britain out of the EU on 31 October, though the PM argues that his exit deal had already been negotiated and awaited a Tory parliamentary majority to ratify it.
In a sharply different position, promises to hold a second EU referendum before next summer to give the British public a clear choice on the future relationship of the country with the EU and claims that he can renegotiate a better exit deal in Brussels, along with a pledge to get Brexit sorted within six months. He said that he would be offering the country a choice between leaving with a sensible deal or remaining in the European Union and claimed that the proposed Brexit referendum would not be a rerun of 2016, describing it as a simple, straightforward solution in contrast to continuing negotiations and uncertainty from another Tory government. Moreover, even if the result comes a wafer-thin vote for Remain, he said that he would respect the outcome of a second referendum, though his stance on the Brexit issue seems to be indecisive as he has not specified how his party would campaign in such a referendum. The party has also dismissed the idea that the EU would not agree to a fresh renegotiation and has said that depending on what deal they are able to secure; the party could then campaign for either Leave or Remain.
Recently, Boris Johnson received a shot in the arm following a decision by Nigel Farage that his Brexit party will not contest in any of the 317 parliamentary constituencies won by the Conservatives at the last UK general election, after he had earlier pronounced that no such leave-alliance was in the offing, and his party would fight in every seat. This could have potentially derailed the plans of Tories to win a majority as the pro-Brexit votes could have split between the Conservative party, which vows to leave with the agreement at hand, and the more radical Brexit party, which seeks to leave without any deal in place, aiming for a hard-Brexit. Mr Farage also said that his decision was intended to ensure that the prime minister was able to deliver Brexit, and he also hinted he could yet withdraw more parliamentary candidates as he has come under renewed pressure to give Boris Johnson a clear run at Labour in key marginal seats. In a move that could undermine hopes by Conservatives of winning a House of Commons majority by splitting the Leave vote in key target seats for the Tories, Mr Farage said his party would contest Labour-held constituencies at the 12 December election, though he can still tone down his rhetoric.
However, support and bonhomie amongst pro-EU parties have also started to emerge as the Liberal Democrats, Plaid Cymru and Green party along with some independent MPs hope to unveil a Remain election pact as early as Thursday to maximise chances of Remain candidates, under which they will step aside for each other in dozens of constituencies. They believe that a single Remain candidate could galvanise quite a few Remain Labour and other party voters to come across as efforts are underway to persuade people to vote tactically, but officials said that this was not a done deal. The promise by the Liberal Democrats to revoke the Article 50 divorce process altogether seems a bit too radical for some parties and supporters and backing for a second referendum is considered to be a more realistic proposition by pro-EU figures inside Labour. However, in contrast to ideas floated by many experts to explore the possibility of post-election pacts with the two biggest parties, the Liberal Democrats ruled out propping up a government led by Labour leader Jeremy Corbyn in the event of a hung parliament, with insiders suggesting that the party could look to do a deal with opposition parties to secure a referendum.
Many experts reckon that the upcoming election is one of the most unpredictable in the modern history of the country as voters are more ready to vote across their party affiliation and identify themselves more as Remainers and Leavers. So, while the possible outcomes are easy to identify, their relative likelihood is not, and confident predictions about the UK election seems to be impossible at the moment. During the election called by Theresa May, she started her campaign with a respectable lead but went on to lose her majority in the house.
As UK government bonds are often seen as a safe investment in times of market stress, the heightened-uncertainty of an election campaign should be supportive for the asset class, while many expect sterling to remain volatile as it might be influenced by the irregular surprises that increased frequency polling results will likely deliver. While a non-Conservative government would come with considerable uncertainty, but it could throw open chance of a market-friendly softer or cancelled Brexit, while a Tory majority would boost the pound in the short-run as it would at least offer a clear way ahead over Brexit.
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