In a move that surprised markets on Tuesday, UK Prime Minister Theresa May has called for a snap election in June. The move is aimed at trying to strengthen the Conservative Party’s control of how Brexit is managed as polls show her party has a more than 20 points lead ahead of the opposition, presenting a possible opportunity to beef up her party’s power. Interestingly, May more recently dismissed calls for a snap election, but she has clearly had another think about the snap election and its strategic implications. The call for a snap election further comes amid renewed pressure on Labour Party leader Jeremy Corbyn, who is again facing calls to quit. – Gareth van Zyl.
By Robert Hutton, Alex Morales and Tim Ross
Bloomberg – UK Prime Minister Theresa May said she will seek an early election on June 8, in an unexpected gamble aimed at strengthening her hand going into talks on leaving the European Union.
The surprise statement came less than a month after she triggered the formal start of Brexit and marks a reversal of her position before the Easter break, when her office insisted an early election wasn’t on the cards.
An election isn’t due until 2020 though her popularity – polls show her Conservative Party is more than 20 points ahead of the main opposition – give her an opening to consolidate her power.
Early election transforms Brexit talks. 1) Mandate 2) More transition options 3) More time for trade deal. Shifts pol judgement day to 2022
— Alex Barker (@alexebarker) April 18, 2017
The announcement indicates that May has decided she cannot get the Brexit legislation she needs through the House of Commons with the slim majority she inherited from David Cameron.
All About Brexit
“There should be unity here in Westminster but instead there is division,” she said in a statement outside her Downing Street residence on Tuesday.
“The country is coming together but Westminster is not.”
A rift in Parliament will damage the government’s ability to make a success of Brexit, she said.
Her current polling lead over Jeremy Corbyn’s Labour Party means she can be fairly confident of increasing her majority, and bringing Tory lawmakers into Parliament who will back her on the flavour of Brexit that she prefers. Moreover, a survey last week by Orb International showed that 55% of Britons support her handling of Brexit talks.
I welcome the PM’s decision to give the British people the chance to vote for a government that will put the interests of the majority first pic.twitter.com/9P3X6A2Zpw
— Jeremy Corbyn MP (@jeremycorbyn) April 18, 2017
“This is Theresa May’s attempt to free herself from some of the constraints she’s under and get the mandate to execute the hard Brexit she’s been talking about,” said Mujtaba Rahman, managing director of the Eurasia Group.
“She sees an opportunity to win the election, secure a bigger mandate and execute the hard Brexit.”
A poll on Monday gave the Conservatives a 21-point lead over Labour for the first time in nine years, according to the Times newspaper. May’s party would win 44 percent of the vote, compared with 23 percent for Labour and 12 percent for the Liberal Democrats, the Times said, citing a poll by YouGov.
However, a 2011 law passed by Cameron during his coalition government with the Liberal Democrats has complicated matters. It means there are two circumstances in which there could be an early election: If two-thirds of the House of Commons votes for one or if the government loses a no-confidence vote and a new administration fails to win a confidence motion within 14 days.
In her statement May said she was taking the first course of action. “Tomorrow I will move a motion in the House of Commons calling for a general election to be held on the 8th of June,” she said.
The vote will need the backing of a substantial number of opposition lawmakers, including many from Labour. For the Liberal Democrats, leader Tim Farron signaled he’d support the motion and urged voters who oppose leaving the EU to back his party.
“If you want to avoid a disastrous hard Brexit, if you want to keep Britain in the single market, if you want a Britain that is open, tolerant and united, this is your chance,” he said.
Labour’s Corbyn has previously said his party would back an early election.
Pound rises as May calls election; stocks drop: markets wrap
By V. Ramakrishnan
Bloomberg – The British pound gained with bonds as Prime Minister Theresa May announced an early general election. European stocks declined as traders caught up with a swathe of geopolitical events following the long weekend.
— BBC Breaking News (@BBCBreaking) April 18, 2017
Sterling swung from gain to loss and back again versus the dollar before May set the vote for June 8. UK stocks fell by the most since January. Meanwhile, the Stoxx Europe 600 Index dropped to the lowest level in about three weeks as mining shares plunged, and government bonds in the region mostly rose as the build up to the French election intensified. Iron ore reeled as Citigroup said it’s bearish on the raw material’s outlook.
A bounce in US stocks Monday failed to cheer investors in the European session, as the standoff over North Korea’s nuclear weapons program rumbles on and the French presidential vote looms. Two candidates who want to take the country out of Europe’s common currency remain in contention in the most unpredictable race in recent history.
“Expect a lot of noise and probably elevated volatility this week” as the first round of voting approaches, Jim Reid, a strategist at Deutsche Bank AG in London, wrote in a note.