May be or maybe not

British Prime Minister Theresa May’s decision to call a snap general election is a curious contradiction: it is in some senses inspired and brave and in others forced and opportunistic.

Ever since the Brexit referendum, May has been in the invidious position of having to implement a policy that she did not support. But having committed herself to implementing the outcome of the vote, she lacked credibility as the genuine owner of the decision.

The election, assuming she wins, will solve that problem with emphasis. It will finally shut the door on those who claim Brexit was won largely on the basis of a protest vote rather than a genuine desire to break with the EU.

And a victory at the polls for the Tories is a pretty easy assumption at this point. The Labour Party is in calamitous disarray — so much so that the polls suggest that in a straight choice between May and Labour leader Jeremy Corbyn she would win five times as many votes as her opponent. Support for the Conservatives is running at double that of Labour. Almost never in recent history has the gap been so large.

Even the Eurosceptic party Ukip is in crisis, having just lost its only seat in parliament. The only question mark is by how much Liberal Democrats would increase their vote, and the current betting is that they would win some but it would be outweighed by Tory gains in the north.

Yet this vote will not be foregrounded on British politics; it is targeted very explicitly at the coming Brexit negotiations with the EU. May’s aim is essentially to send a message to Europe that the UK’s position is firm, backed by the electorate and not open for second-guessing. In this sense, the decision to call an election is inexorable, which makes her denial only a few weeks ago that no election was in the offing harder to understand.

Under the brave exterior lies a more troubled interior. As the specific ramifications of the decision to leave the EU have become clearer, it’s obvious the decision will hurt economically much more than its advocates suggested during the Brexit campaign. Some of the more dubious promises of the Brexit camp didn’t last a day after the result was announced. But beyond these, the longer-term consequences of leaving the union are going to be harsh, and that realisation must be dawning on the inner core of Brexit supporters.

The EU, never an organisation to turn on a dime, normally takes five years or more to negotiate a free-trade deal, as South Africans know all too well. The notion that the UK would continue to have unimpeded access to its biggest market was always naive, but now the question is whether it will have preferential access at all for years after the exit is formalised.

The other thorny question is what to do about foreigners working in the UK and British citizens working in Europe. The proponents of Brexit just assumed both sides would simply agree to a set-off arrangement. But this would mean the preponderance of healthcare costs would fall on European countries so such a simple arrangement, it now appears, is unlikely.

The judgment of the markets was instantly positive, with the pound jumping against the euro, partly on the basis that anything that results in a better negotiating position for the UK would tip the balance slightly its way. But even after this rise, the pound is still trading way under its historical average. The low pound has helped the UK economy and has underpinned the stock market.

But, as South Africans know, an undervalued currency is not a long-term solution to a crisis that has its roots in a productivity deficit. The Economist magazine recently taunted the prime minister as “Theresa Maybe”. In the event, maybe not.

A VICTORY AT THE POLLS FOR THE TORIES IS A PRETTY EASY ASSUMPTION AT THIS POINT