The unexpected victory of the Leave campaign in Thursday’s referendum on Great Britain’s membership of the European Union has already caused massive political and financial disruption. Here is my take on what to expect in the coming months;
- The Conservative Party has been deeply divided on whether to remain in the EU and it will take years for these divisions to heal. The 1922 Committee has agreed to a quick leadership race with a new leader to be elected by early September. The leading Leave politician and former London Mayor Boris Johnson is the favourite to win the race and is popular among the notoriously Eurosceptic party membership. The Home Secretary Theresa May is likely to be his main opponent even through she backed the Remain campaign. I predict that Boris Johnson will be elected the Conservative Party’s next leader.
- The Labour Party is in the process of implosion with the bulk of the parliamentary Labour Party (PLP) in open revolt against their veteran socialist leader Jeremy Corbyn. It remains to be seen if Corbyn will be automatically added to the leadership ballot or whether he will need to gain the support of 20% of the MP’s and MEP’s in order to stand as a candidate. Should the Labour leader automatically be a candidate in the upcoming Labour leadership race, it will be hard to defeat him, as he still enjoys significant support among the wider Labour activist membership. Should Corbyn manage to get on the leadership ballot, my prediction is that he will narrowly win the Labour Party leadership election.
- Assuming that Jeremy Corbyn survives the challenge to his leadership, a number of fatal consequences will follow for the party. It is likely that the centre-right MP’s within the PLP will formally split from the Labour Party and create a new centrist political group which will be closely aligned with the Liberal Democrats. A vengeful hard left within the Labour Party, in alliance with the trade unions, will start deselecting anti-Corbyn Labour MP’s and replacing them with Corbynistas.
- Assuming that the above scenarios come true, it is a real possibility that a Boris Johnson led Conservative government will trigger an early general election before the end of this year to gain a popular mandate and exploit the chaos in the Labour Party. I would anticipate that the Tories will gain seats at the expense of Labour and secure a 100 seat majority. However, there are real risks of triggering an early general election and whoever is elected the next Tory leader may decide to get on with negotiating the exit of the EU.
- A consensus is emerging within the Conservative Party that the best interests of the country is a “soft Brexit” where Britain will keep access to parts of the single market in return for some controls over EU migration. It is not quite the total control over immigration promised during the referendum campaign and UKIP leader Nigel Farage will exploit this. The cry of betrayal by UKIP will be felt strongly in working class Labour heartlands where the issue of immigration is such a hot topic. UKIP will exploit this cleavage at the next general election and should the Labour Party leadership not oppose a “soft Brexit”, Farage’s UKIP will perform well in the north on their “hard Brexit” platform.
- There is much talk among the Pundocracy about a second Scottish referendum on independence. Although there is much anger among the Scottish electorate, who voted for Remain by a substantial margin, the weaknesses of the Scottish independence campaign hasn’t changed. Indeed, it has got far worse. The oil price has collapsed, North Sea is dying and the fiscal deficit has grown to £15 billion. Once passions have cooled, it is likely that older Scottish voters, who voted for the union out of fear of their state pensions, will grudgingly stay within the union. Should Scotland’s First Minister Nicola Sturgeon decide to take the greatest gamble of her political life, it will be within the next two years, before Britain exits the EU. A second Scottish referendum is a possibility and it will likely happen only if opinion polls show sustained lead for independence over a minimum of six months.