Political uncertainty continues as Theresa May calls snap general election for 8 June

If you thought 2016 was a volatile year politically, with the Brexit vote and the resignation of a prime minister, then 2017 is shaping up to be similarly dramatic following the prime minister’s surprise announcement today that there will be a snap general election on 8 June.

The shock move by Theresa May comes despite the government previously denying it would call a snap election and her administration appearing to concentrating its efforts on the looming Brexit negotiations. In calling a general election three years before one was due, the prime minister said that she was concerned about ongoing uncertainty over the Brexit negotiations and that a general election was needed to remove that.

“The country is coming together, but Westminster is not,” said the prime minister. “Let us remove the risk of uncertainty and instability, and continue to give the country the strong and stable leadership it demands.”

In reality, the coming general election would appear to be all about Brexit and the government’s difficulties with a small majority. Given the current opinion polls, which show the Conservatives well ahead, Theresa May is taking a chance on achieving a larger majority after 8 June versus the certainty of the opposition grinding down the government’s policy on Brexit and other issues.

Irrespective of the political machinations surrounding the general election, the run up to the 8 June poll is likely to mean a further period of uncertainty that could affect business at a time when the country needs a united approach. 

However, Mark Naysmith, UK CEO at WSP | Parsons Brinckerhoff, welcomed the election announcement as a means to end uncertainty. “Recent uncertainty has knocked confidence, particularly in the private sector where investment has stalled and project start-ups delayed. So a new government with a clear mandate should hopefully create a more stable environment that reinvigorates confidence,” he said. 

“With momentum building behind high speed rail, Heathrow, highways and other infrastructure investments, a snap election presents the opportunity for the next government to build a strong mandate for speeding up the delivery of these vital long term projects. We would like to see firm manifesto commitments to these schemes, as well as a determined, clear pledge for producing more of the construction and STEM skills we need for delivery.  

“In the context of Brexit and the nascent industrial strategy, any future government needs to take a joined-up approach so that we can talk about the link between infrastructure investment and economic growth at a higher level. Whilst infrastructure delivery is supported by all main political parties in some form, 80% of the construction industry believes that the public doesn't understand the role it plays in enabling growth. We’ll therefore be looking for parties to explain at a national and regional level why pro-infrastructure policies are good for UK plc, for productivity and for local housing, services and jobs,” said Naysmith.

Nelson Ogunshakin, chief executive of the Association for Consultancy and Engineering (ACE), said: "Theresa May's decision to call a snap general election is contrary to her previous stance on the issue and therefore the reasoning behind going to the country now is somewhat questionable. Regardless of the rationale, further economic and political uncertainty is not good for the UK and should be avoided at all costs. Whilst the election may be welcome to legitimise and strengthen the prime minister's position, the outcome should provide a clear path to position the UK as an attractive destination for inward investment and to secure our international competitiveness.

"Ahead of the general election, ACE will be making its views clear to all the political parties so that they get a strong message about the benefits of infrastructure development in creating economic prosperity. Our manifesto for the general election will also stress the importance of a strong and well-resourced construction sector and a government that is committed to sustainable investment in quality infrastructure.”

Carolyn Fairbairn, director general of the CBI, said: “With a snap general election now called, businesses will be looking to each political party to set out their plans to support economic stability and prosperity over the next parliament in a way that is fair and sustainable for communities across the UK. Distraction from the urgent priorities of seeking the best EU deal and improving UK productivity must be kept to a minimum.”

The immediate effect of an early general election is likely to be a short hiatus in the signing of new public sector contracts during purdah, the six weeks before the election, but given that the election is taking place during the summer, this is unlikely to have a large impact as many contracts have been signed well in advance.

Received wisdom and the opinion polls would suggest that the Conservatives will be returned to office with a significantly increased majority following the 8 June general election. However, the same wisdom and polls suggested that Britain would vote to remain in the European Union and Hilary Clinton would be president of the United States.

It looks like we are in for an interesting six weeks.