London: Britain’s political future was thrown wide open after a shock exit poll indicated that UK Prime Minister Theresa May might not win a majority after Thursday’s general election, casting doubt over her political future just days before Brexit negotiations were due to begin.
The pound fell to the lowest since April after the BBC and other broadcasters said May’s Conservative Party is on course to win just 314 seats in the 650-strong House of Commons. That’s down from the 330 she held before calling the snap election seven weeks ago and less than the 326 needed for a majority. Jeremy Corbyn’s Labour Party will win 266 seats, compared with 229 before the election, according to the joint exit poll.
Such polls have generally been reliable, although political leaders on both sides immediately said it’s too early to read too much into it. The first two results from northeast England indicated that Labour is not doing as well as the exit poll suggested.
Investors are balking at the prospect of another round of political turmoil less than a year after Britain voted to leave the European Union. While May could still win a majority, attention will turn to her future after the decision to call an early election and strengthen her mandate backfired. She will now need to decide whether to resign or try to form a new government. Another election is also a possibility.
“If the poll is anything like accurate, this is completely catastrophic for the Conservatives and for Theresa May,” said George Osborne, former conservative chancellor of the exchequer, on ITV.
The pound dropped as much as 1.9% to $1.2709, before recovering some of those losses to trade at $1.2807 at 23:55 pm in London.
The exit poll throws up big questions about Brexit. Talks with EU leaders were due to start in less than two weeks and those meetings may now need to be delayed, further eroding the time that Britain has to clinch a deal before it leaves the bloc in March 2019. The initial projections also raise the prospect—albeit a remote one—of Labour leader Jeremy Corbyn becoming prime minister if he can form a government with support from an array of smaller parties.
The SNP were projected to win 34 seats and the Liberal Democrats may get 14, the exit poll showed. John Curtice, professor of politics at the University of Strathclyde, who headed the team behind the exit poll, urged caution over its findings, which have a broad margin of error.
“We certainly, certainly cannot rule out the possibility that the Conservatives will still have an overall majority,” Curtice told BBC TV. “A majority of 30 or 40, I still think we have to regard as possible.”
Even in that scenario, May’s job would still be in jeopardy and uncertainty would surround the future course of Brexit. It would also considerably weaken the hand of the next prime minister—whether it’s May or someone else—in the negotiations with the EU.
May campaigned for a so-called hard Brexit in which the UK would quit the single market in return for reclaiming power over immigration, laws and money. She also declared herself willing to walk away without an agreement if pushed.
If the Conservatives retain power, the Brexit agenda will likely be set by lawmakers who campaigned for the cleanest break with the EU. That would limit room for May or her successor to make concessions, increasing the risk Britain crashes out of the bloc.
On the other hand, a rejuvenated Labour opposition could unite with Liberal Democrats, Scottish Nationalists and pro-EU Tories to soften the government’s approach. Corbyn wants to stay in the EU’s single market for goods and services, as do the Scottish nationalists. The Liberal Democrats want a second referendum on the final deal that Britain negotiates with the EU.