New PM will face a divided nation
Brexit not the only challenge for U.K.
It was meant to be a defining moment, a U.K. election to unite a confident nation behind their leader before she negotiates a deal to leave the European Union.
Instead, the campaign exposed a very different Britain for Conservative Prime Minister Theresa May and Labour opposition leader Jeremy Corbyn.
The disunited kingdom on display is divided among English and Scottish nationalists, young and old, migrants and natives, London and the rest, and is deeply unsure of its political and economic future. It’s also enduring a terrorist campaign of a frequency and scale not seen for decades, with two attacks in London, a deadlier one in Manchester and five foiled plots in less than three months.
The new prime minister must govern a country that agrees on little while facing an unprecedented array of hard choices. From trade, tax and debt to immigration and security policy, they come with the U.K. adrift between an estranged EU and unpredictable U.S.
“The country is facing an existential challenge of the kind it faced in 1940,” when confidence collapsed in the government to lead the nation in World War II and Winston Churchill took over, said Hugh Pemberton, a historian of contemporary Britain at Bristol University. “And yet it is busy pretending that challenge does not exist.”
May, 60, declared the core issue of the election to be picking a team and vision to negotiate Brexit, a process due to begin this month. Yet neither her Conservatives nor the Labour Party have said anything of substance about it.
Not only have the ranks of both parties been divided over Europe since before Britain joined the European Economic Community in 1973, said Pemberton, but “it’s in neither of their interests to reveal that they fundamentally don’t know what to do.”
Brexit remained the top issue people in Britain say will dictate how they vote after funding the state-run National Health Service. That institution, once referred to by a Conservative grandee as the closest thing the English have to a religion, faces an estimated $52 billion deficit.
The picture, though, is likely to change after Friday. A GfK consumer survey has seen Brexit and immigration disappear as significant concerns since last year’s referendum on whether to leave the EU. Terrorism and the cost of living have risen to the top alongside health.
The result may well be decided by how many young voters, who overwhelmingly support Labour, make it to the polling stations. In a vast manifesto, Corbyn pledged re-distributive economic policies that hark back to the 1970s, taxing the better off to spend liberally on students and others who lost out from the years of austerity measures that followed the financial crisis. Pensioners, who tend to vote — and vote Tory — were protected.
May’s big misstep came when she tried to address the growing wealth divide between the generations.
She threatened her most loyal supporters, the elderly, with losing their homes to pay for long-term care rather than burden younger tax payers. Branded the “dementia tax” by opponents, Corbyn responded by saying that May’s “only offer to pensioners is insecurity and cuts.”
After leading the Group of Seven economies in growth last year, the U.K. was at the bottom of the pile in the first quarter of 2017. The euro region, particularly derided in Britain, is finally picking up. Inflation, stoked by a sharp drop in the value of the pound after last year’s Brexit referendum, is eating away at disposable income as wage growth fails to keep up. The housing market, a key ingredient for consumer confidence in the propertyloving U.K., is stagnant amid falling prices.
“The outlook for the U.K. economy is dire, and the election is unlikely to change that meaningfully,” begins a stark June 1 research note from Fathom in London. “Brexit in our view will just weigh further on the economy,” said Joanna Davies, a senior economist at the consultancy firm.
Of course, economists and historians have in the past proved poor soothsayers. The U.K. economy survived the decision to leave the EU better than most expected, including the Bank of England.
“People know Brexit is important, but they also know we are leaving so the question becomes: Whom do you trust to protect your personal interests?” said Peter Mandler, professor of modern cultural history at Cambridge University. “That seems to reflect the reality of this election campaign, which was supposed to be about Brexit, but turned out to be about austerity.”