Alec Hogg on Winslyn: Why Theresa May crashed and burned in the UK election

JOHANNESBURG — Despite having the momentum on her side, Theresa May still managed to crash and burn in the snap vote she called earlier this year. The Tories are now in a weaker position owing to her failure to impress voters and they are scrambling to put together a coalition government amid a hung Parliament. Interestingly, the big winner out of the vote was Labour leader Jeremy Corbyn – a man who had nothing to lose and who pushed a very radical and incredibly leftist manifesto. BizNews publisher and editor, Alec Hogg, who currently resides in the UK and on a short visit to South Africa, spoke to Kyknet’s Winslyn about the ramifications of the recent UK election. – Gareth van Zyl

Dit was verlede week die Britse verkiesing waarin Eerste Minister Theresa May nie die volstrekte meerderheid vir haar party kon oplewer nie. Alec Hogg wat deesdae – gelukkig genoeg – in Engeland bly, is vanaand in die ateljee om oor die impak van hierdie uitkoms te gesels. Hallo, Alec.

It’s nice to see you, Devon.

Alec, Theresa May felt quite emboldened. This didn’t go her way at all. What’s your view?

No, it was a complete mess. She looked like she was going to get a huge majority. At one stage they were talking about a landslide. You had the local elections where everything went the Tories way and then between the local elections and the actual election day, she fell off a cliff. They tried to position her as a personality. She isn’t a personality. They tried to cash in on this strong, stable government ahead of Brexit. They gave completely the wrong message and the British people are smart. This is an old democracy, they saw through the smoke and mirrors and they voted accordingly.

So, interestingly enough, she ran on a ticket that spoke about a hard Brexit exit. What exactly was a hard exit, what did she campaign for?

Well, she made some assumptions that were completely out of court. If you remember, Brexit was a shock, 54%/46%. It’s not a big margin and many people are still unhappy that Britain is leaving the EU anyway. They’ve come to terms with it. The latest figures say that 22% now only feel that you should stay in the EU, but she was talking about, or going into negotiations on the basis that we’ll do a deal and if we don’t do a deal, well we’re going to leave the EU anyway. She came from the wrong base, from a wrong starting point. Instead of negotiating, it was almost being prescriptive and those 27 European nations were not going to take that.

Young voters played a big role in this election. Why was that the case?

Well, they like free things and Jeremy Corbyn offered them a lot of free things, lots of goodies. What had happened was that in the run-up to the election, the Conservative Party was so dominant that the Labour Party just had to go for desperation in a way, in their manifesto and they threw in impossible prospects. As I say, a lot of free things. They were going to fix the national health, they were going to tax the rich, tax the companies, and grow the economy. Now you can’t do all of that at once, but they knew they weren’t ever going to get into power anyway, so why not promise it when you don’t have to deliver. That’s what happened.

Yes, let’s talk about a soft exit. At the moment, Theresa May is actually battling to form a government. How are the next three or four weeks going to look like?

Well, the Conservative Party don’t like leaders who disappoint and they are something like 30 MPs who are not going back to Parliament again because she called an election that she didn’t have to. There’s no way she can survive this. It isn’t possible given the way that the democratic structures work there, but at the moment, there’s no obvious person to take over. I like very much what the Economist Magazine said when they, in one of their comment pieces this week.

Theresa May, U.K. prime minister, arrives to announce a general election outside 10 Downing Street in London, U.K., on Tuesday, April 18, 2017. Photographer: Chris Ratcliffe/Bloomberg

They called it “The politicians today are the second eleven, so it’s like your first team have left; they’re in business and academia”. The people who are left in politics today are the second eleven because the politicians are not well paid, they are hugely overworked, and they are given a lot of pressure. If anything goes wrong in their personal lives or in the party, they’re out of a job. So it hasn’t been attracting the cream of the crop like it used to. Not just in Britain, by the way.

So, you live in England, what’s the perception of the current business community? In London specifically a big financial hub, what’s, what are they talking about?

Well, there are lots of nerves, but there’s also a realisation that a hard Brexit was not going to be in anyone’s interest, but a soft Brexit or a more pliable or more negotiated decision will actually serve the country better. There is a belief amongst most people in Britain that it is the right thing not to get sucked into the bureaucracy that is the EU, but on the other hand it’s the biggest trading partner, you can’t alienate it.

Let’s take it back home. They said that Theresa May would actually be good for the Rand and it’s actually good for the South African economy. Do you agree?

Theresa May would be good for the Rand?

Yes.

An employee holds South African Rand notes in this arranged photograph in London, U.K. Photographer: Jason Alden/Bloomberg

She has been good for the Rand. The Rand has strengthened enormously since her mess that she made, but that’s more a question of international currency traders hitting the Pound, which already at the beginning of the year, was the best and the cheapest currency on earth. If you take a three to five-year view, it isn’t a single long-term investor today who would say to you that you shouldn’t be buying the Pound. So, it’s a great opportunity for South Africans who –

That’s what I wanted to ask you. A South African said, “No, I’m going to diversify my risk, take all of my capital globally. What’s your advice to South Africans at this stage because if the Pound just keeps depreciating, that’s not a safe bet?

Well, it’s gone as far, it might go further. You can never say never, but it’s offering unbelievable value against all other currencies, let alone the Rand. You’re looking at very smart South Africans, amongst our best entrepreneurs who’ve invested heavily in the UK, a good way for instance to have a bet on the Pound rebounding, which is inevitable, is to look at Christo Wiese and Brait. The share price has halved in the last year. Now, if you wanted to get onto the coattails of somebody who knows what he’s doing and then also have the uptick from the Pound into the future, that’s a good stop for instance. But from a longer-term perspective you’re not going to be sorry, I don’t think, by investing in the Pound now. You ride through the fears and the shake out. In the longer-term the diversification will serve you well.

Awesome, Alec, thank you so much.

It’s my pleasure.

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