The Prime Minister’s plea to be given the strongest hand in leading Brexit negotiations has seemingly backfired as Labour capitalise on drawing out younger voters and gaining votes from those shying away from UKIP.
The announced results throughout the night brought some unexpected crushing defeats and strong victories across the UK, leaving the Tories short of a majority vote and a resultant hung Parliament.
The effect on Markets
The pound saw a drop against the dollar, down almost 2%, which in turn will help benchmarks such as the FTSE 100, which opened up 1%. This added layer of uncertainty is to be expected with knee jerk reactions previously witnessed post Brexit – if hindsight is something to go by, it will be business as usual once the dust settles.
But what about Brexit?
“Perhaps the most obvious conclusion is that the likelihood of the UK needing to request a delay in the Brexit process has risen substantially, given the chance that political developments in the UK disturb what is already a time-compressed process,” said Malcolm Barr, economist at JPMorgan, in a research note.
Evidently, a period of unknowns will now follow as we await developments on who will be leading said negotiations.
(Source: BBC News)
Will the party with the most MPs form the next government?
Not necessarily. The party with the most MPs, when the votes have been counted in all 650 constituencies, is normally described as the winner and its leader nearly always goes on to become the next prime minister.
But that might not happen this time with an inconclusive result. It is possible for the party that came second to form a government with the help of other parties.
How does someone win the election?
The easiest way to become prime minister is to win what is called a majority in the House of Commons – a majority is where your party has more MPs than all the other parties put together.
The finishing line is 326. That would be enough for a government to vote through new laws without being defeated by their opponents. If they don’t reach that number we have got what is called a hung Parliament.
What is a hung Parliament?
When no single party can get enough MPs to form a majority on its own the Parliament is said to be “hung”. This happened at the 2010 general election.
What happens now?
In a hung parliament, the Conservative government will remain in office – and Theresa May can live in Downing Street – until it is decided who will attempt to form a new government or unless she decides to resign.
There may be a frenzied round of talks between the party leaders and their negotiating teams, as they try to put together another coalition government or a looser deal to put either Mrs May or Labour leader Jeremy Corbyn (the only two people with a realistic chance) into power as prime minister.
Or one of the two party leaders could opt to go it alone and try to run a minority government, relying on the support of smaller parties when needed to get their laws passed.
Who gets the first go at putting together a deal?
Theresa May, whose party looks set to get 318 seats, can stay on as prime minister while she tries to put a majority together.
If it becomes clear that she can’t and Jeremy Corbyn can then she will be expected to resign. Mr Corbyn would then become the prime minister.
But the Labour leader does not have to wait until Mrs May has exhausted all her options before he starts trying to put a deal of his own together. He can hold talks with potential partners at the same time as Mrs May. They may even be talking to the same people.
How long will it take?
There is no official time limit. It took five days to put the coalition together in 2010 but it is generally expected to take longer than that.
Negotiations can’t go on indefinitely, surely?
At the moment the first deadline is Tuesday 13 June, when the new Parliament meets for the first time. Mrs May has until this date to put together a deal to keep herself in power or resign, according to official guidance issued by the Cabinet Office.
But Mrs May must be clear that Jeremy Corbyn can form a government and that she can’t. She is entitled to wait until the new Parliament to see if she has the confidence of the House of Commons.
What if it is still not clear a new government can be formed?
The government needs to see if it can assemble the votes it needs to get its programme of proposed new laws passed in the Queen’s Speech, which is scheduled for Monday 19 June.
Theresa May can opt to remain in power and gamble on getting enough votes from other parties to get her programme passed. If she has already resigned and handed over to Mr Corbyn, this will be the key test of whether the Labour leader can form a government.
What will happen to the Brexit talks?
They could be delayed if there is a hung Parliament or Jeremy Corbyn becomes PM. The talks are currently due to begin on 19 June but if it takes a while to form a government it could ask the EU for a delay.
What role does the Queen play?
The leader of the party that can tell the Queen they have a workable Commons majority is the one Her Majesty will authorise to form a government.
By convention, the Queen does not get involved in party politics, so there are no circumstances in which she would choose the prime minister.
There have been suggestions that she may not deliver the Queen’s Speech in person if there’s a question mark over whether it will get voted through.
What we’ll be doing for our clients
As always, Moorland Mayfair will aim to provide clarity on developments and the effective result on any market or investment, by way of regular updates and communication.