1st July 2016
After seven days of political and financial uncertainty, Friday offers us the first real opportunity to reflect on what has taken place since the EU Referendum and consider what next week might hold during this unprecedented period of political upheaval.
On the face of it, Cameron’s capitulation, Boris Johnson’s rise and demise, and Corbyn’s refusal to resign, have fostered an atmosphere that’s pushing even the most stoic Brit to check for Irish ancestry. Amongst this uncertainty it’s important we recognise the possibilities which should be cause for optimism. After plummeting last Friday, the FTSE 100 (at the time of writing) is 220 points up on last Thursday, and even the pound was starting to pick up before Mark Carney’s interest rate announcement yesterday. The Conservative Party may now be on course to elect Theresa May, the longest serving Home Secretary for at least a century, who is recognised by all sides of Parliament as one of Britain’s most competent politicians. Even the Labour Party, rarely a cause for optimism, looks set to overthrow Jeremy Corbyn and install someone intent on holding the Government to account, a task that is more important now than ever before.
Looking ahead to next week however there is plenty to cause concern. The Chilcot report, due to be published on Wednesday, will bring unparalleled condemnation of the British political class. The Conservative leadership race will be whittled down to three and the inevitable horse trading will see the political landscape change yet again. During these turbulent times Grayling Public Affairs is here to support businesses with any concerns about how unfolding events will affect them.
If you have any questions about any of the issues raised email Richard.Jukes@grayling.com who is available to discuss the current situation.
Conservative leadership contest
After years of vociferously denying that he held any ambitions to lead the Conservative party, Michael Gove completed one of the most surprising about-turns in British political history and formally launched his leadership bid today. Gove pitched himself as the radical reformer, as opposed to the steady as she goes candidate, Theresa May. He promised the NHS an extra £100m a week by 2020, as well as bringing about an end to free movement, instead introducing an Australian-style points-based system for immigration. Gove said he was a reluctant candidate but “the best person to lead Britain out of the European Union”.
Only five Tory MPs were at Gove’s launch. Importantly, the Justice Secretary needs MPs that had previously backed Boris Johnson to get behind him if he wants to get down to the final two. This may prove difficult if Andrea Leadsom’s campaign continues to gather momentum. Without yet formally launching, she already has the backing of a number of prominent backbench ‘Leave’ MPs, although, without a natural base in the party, she needs to attract some heavyweight support fast. Arron Banks, the millionaire-backer of Leave.EU, the campaign run by UKIP’s Nigel Farage during the referendum, is perhaps not the support she’s looking for.
Meanwhile, senior Tories Michael Fallon and Patrick McLoughlin have come out for Theresa May, who has also been backed by the Daily Mail. Ken Clarke attacked the “bizarre manoeuvrings” of Gove whom he said “would do us all a favour if he were to stand down now”.
Lest we forget, Dr Liam Fox launched his campaign for PM today as well…
With 199 Tory MPs still to declare, the Home Secretary has a clear lead.
Labour leadership contest
Friday looks to be the first day that will pass without any resignations from Jeremy Corbyn’s frontbench. Owen Smith and Angela Eagle, the two most likely challengers to Crobyn, have stood back, working on the assumption that Corbyn may quit over the weekend, if he receives assurances that a left-wing ally will be on the ballot. Two key Corbyn supporters (Jon Trickett MP and Owen Jones) made clear yesterday that the next Leader could not be someone who supported the Iraq War or voted for intervention in Syria. I think this is preparing the ground for him to quit, on the proviso that the challenger is Owen Smith who is not tainted by either issue.
Over the last couple of days, we have seen Welsh political leaders responding to the referendum outcome differently but the common narrative, whilst calling for calm, is aiming to ensure the best deal for Wales. Writing to the Prime Minister, the First Minister Carwyn Jones has asked Cameron to keep the promise that every single penny Wales loses in European money will be made up by the UK Government and expects this promise to be kept, by whoever is the next Conservative Prime Minister.
Alun Cairns, Secretary of State for Wales, has made assurances that he is feeding into the PM’s specialist unit in Whitehall which is preparing the negotiations for the disentanglement, to ensure the position is in Wales’ interest.
Week in Summary
Who’s Up: Theresa May - Britain’s longest serving Home Secretary since 1892 is favourite for the Tory leadership after picking up 74 declarations of support and seeing her closest rival crashing out of the race.
Who’s Down: Jeremy Corbyn – The Labour leader has lost 52 members of his frontbench and faced calls to quit from MPs, MSPs and MEPs. He may not have resigned yet but his future looks bleak.
Who’s Out: Boris Johnson – At one point the bookies favourite dropped out of the Conservative leadership race after his campaign co-chair abandoned him only three hours before his launch. After the way Bojo treated David Cameron in the run up to EU Referendum not many people were sad to see his demise.
Quote of the week: Jake Berry MP “there is a very deep pit reserved in hell for Michael Gove”
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