A new Prime Minister is on her way, starting tomorrow. This is the latest chapter in the political turmoil that has engulfed the UK since the vote for Brexit a few weeks ago. Theresa May, formerly the Home Secretary, is to become the UK’s second female PM. Now I am not a great supporter of things Tory, at least from the perspective of economic policy, but I was interested to read some excerpts from May’s speech which formally launched her campaign to become the next leader of her party. Of course, this was before the dramatic withdrawal of her only remaining opponent in the contest, Andrea Leadsom.
Some of the details of the speech can be found here. I know that skilled politicians are good at making the right noises to attract voters and ultimately win power. Her bid was to unite her party and the country in the aftermath of Brexit, which will be hard going. But some of the quotes from her speech could have been taken from speeches by Ed Miliband, the former Labour leader. Miliband championed a ‘One Nation’ Labour party, and policies which would aim to promote his centre left, social democratic vision of Britain. This was especially important in the aftermath of the Financial Crisis and subsequent weak recovery which have become associated in the minds of many with irresponsible elites, from bankers to regulators. With the imposition of austerity it seemed that the poorest members of society have suffered the most since then, surely the height of injustice.
Theresa May’s speech was a clear attempt to position herself on the centre right of British politics, which is probably the best that can be expected from a Tory leader. But once again, some of the details are straight out of ideas developed by the centre left: changes in corporate governance, including worker representation on company boards, stronger shareholder oversight and greater transparency of executive pay; a desire to spread the fruits of economic growth far more widely than has recently been the case; a stronger industrial strategy; and fighting against social injustice, in areas such as criminal justice, education and mental health.
This is all to the good if it comes to pass in the form of new policies. And while the Tories seem to be on the path to some sort of unity, Labour could be facing a split after a vote of no confidence in their leader, Jeremy Corbyn, who has refused to stand down despite a challenge to his leadership and the loss of support among his MPs. Whoever is in charge of Labour, this country needs a strong, credible and well-led opposition. While Labour does have some interesting policies which are clearly different from those of the government, particularly on a major programme of public investment in contrast with mindless austerity, this could easily be stolen by the government, if the fallout from Brexit proves damaging to the economy.
As predicted by some of those who tried to make the case for remaining in the EU, a vote to leave seems to be leading to a period of significant uncertainty for the economy. Consumer confidence has fallen sharply, and many businesses could postpone plans to invest and create new jobs. The rapid installation of a new Prime Minister will help to reduce some of this uncertainty, and a lower value for the pound may help to rebalance the economy away from debt-fuelled consumption and imports and towards production for export. This would be welcome, but as the pound has fallen further against the dollar than the euro, the latter our largest trading partner, even this is by no means certain.
I would prefer a government of the centre left, but I shall be watching the incoming PM with some interest, and even a little hope.