UK Ruling Party Loses Majority, Seeks Coalition
UK prime minister Theresa May is to visit the Queen lunchtime June 9 to ask to form a coalition government of her party with the small Northern Ireland-based Democratic Unionist Party (DUP).
May lost her Conservative majority in national elections June 8, leaving the party in need of extra seats which the DUP could provide. But her continued leadership of the party is still seen as in doubt, following a campaign that was undermined by back-tracking and by her preference to act alone or in a close-knit group of advisers. Even the unnecessary decision to hold an election was a U-turn, coming as a surprise to even her own cabinet when it was announced in mid-April after months of rejection of the idea.
A Conservative-DUP coalition, if formed, could now continue to push for a hard Brexit policy in negotiations with the European Union starting June 19, if the EU negotiators decide to stick to the schedule. In practice, May’s party could be volatile after an election that saw the main opposition Labour party increase both parliamentary seats and its overall vote.
Most European politicians were dismayed at the apparently inconclusive nature of the election result, particularly on how Brexit – for which there is no precedent – should be negotiated.
As at 10.30am UK time (9.30 GMT), with one seat as yet undeclared, the Conservatives had 318 parliamentary seats, Labour 261, Scottish National Party (SNP) 35, Liberal Democrats 12, DUP 10, and others 13. Former energy secretary Amber Rudd was narrowly re-elected in her seat.
Paul Nuttall, leader of the strongly pro-Brexit UK Independence Party which lost voters to both main parties, has resigned.
The SNP vote declined from its high-water mark in 2015 of 56 seats, as voters were put off by its call for a third referendum on Scottish independence once a Brexit package is known; the second such referendum occurred only three years ago.
That Labour does not now seem poised to form a rainbow coalition – much as it would like to – may come as a relief to several companies. Labour’s manifesto included pledges to renationalise National Grid and regional energy grid operators although the timeline for doing so was vague, as well as increasing corporation tax rates on all businesses.
More concretely, Labour had promised to ban fracking, just at the moment that firms like Cuadrilla and Ineos seem poised to do so, with IGas looking to drill (though not yet frack) for shale gas. However Labour said its Brexit negotiating stance was that access to the EU single market was essential, an approach perhaps more reassuring to the offshore E&P sector than some remarks from the Conservatives.
Major UK energy retailers like Centrica threatened with tougher retail price controls by the ruling Conservatives may be hoping that the party will now have other priorities, with both the pressures of negotiating Brexit by spring 2019, and of keeping its own party members and DUP partners onside.
Update: 4pm UK time - Theresa May has been reappointed PM and congratulated by EU Council president Donald Tusk with some choice words.
Mark Smedley