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The Conservative leadership contest: why businesses need to prepare for a Labour Government

Lansons’ Head of Public Affairs explains why businesses need to be prepared for a Labour Government

With Theresa May now confirming she will be gone in the next few months, attention turns to the likely path for Brexit under whoever happens to be her successor.  It is expected there will be a new leader and Prime Minister by the end of July, and at present Boris Johnson appears to be the one to beat.  Even if it is one of his current opponents, any Conservative Prime Minister is likely to find themselves in an impasse where calling an election within the next 6-12 months is one of the few routes out of that impasse still available.

Many have deep concerns that Boris Johnson lacks any real capacity to face up to the seriousness of the office of Prime Minister, as demonstrated by his stint as Foreign Secretary.  Others are concerned by his determination to press on with leaving the EU with or without a deal by 31st October.  Consequently, plans are afoot in Parliament for a coalition of MPs from all parties to conspire with the Speaker to prevent a Prime Minister Boris Johnson from leaving without a deal.  On top of this there is also a danger that MPs will gather support for a vote of no confidence.  While Labour did not have the numbers against Theresa May last time round, pushed into deciding between supporting Boris Johnson or the UK leaving the EU without a deal, some previously reticent MPs may make curious choices during that vote.  Current and former members of Change UK, as well as some Tories who are totally opposed to a hard Brexit, may join with those who previously tried to oust the current incumbent of Number 10.  Crucially, if MPs oppose Boris, there’s no obligation on them to support Jeremy Corbyn as he seeks a majority in the Commons, and if no majority can be found in 14 days a General Election must be called.

For those determined to leave on 31st, some have suggested trying to ‘prorogue’ – or freeze – Parliament until after that date so as to prevent it from causing any further delay to plans to leave the EU.  This is massively controversial, but after recent unconventional moves by the Speaker to intervene in the Government’s handling of Brexit nothing seems to be beyond the pale.  Things would quickly come to a head should Boris try this move, and he may find that he has no choice but to seek a mandate from the country via a General Election.  He will hope that he can unite Tory members who have fled to the Brexit Party, while Labour and the Lib Dems split the opposition vote.  It’s important to remember that, while no deal is not the most popular option in Parliament or in the country, it is more popular with the public than it is with MPs, so Boris will hope to capitalise on that.

And what if it’s not Boris?  Some of the other main contenders, such as Michael Gove and Jeremy Hunt, promise to renegotiate the deal to find a better outcome.  But even if there were changes or an entirely different deal, the arithmetic in Parliament is not going to change once Theresa May steps down.  Even if there is an extension to Article 50, eventually the new Prime Minister is going to face the reality that the Commons is unlikely to vote for any deal.  A hypothetical Prime Minister Gove can then either call a second referendum in the hope that Parliament can be overridden, or a General Election to seek Parliamentary approval for a way forward.  Either way he or she will be stuck between the devil and the deep blue sea: a second referendum would destroy the Conservative Party if it failed to get the UK out of the EU, while a General Election against opponents of Brexit might just unite Leavers around the Tories.  A General Election therefore, while not as immediate a threat as is likely under Boris Johnson, must still be a realistic prospect.

So can Jeremy Corbyn win?  The polls continue to show Labour leading the Tories, so there is potential for a Labour Government within the year.  Corbyn and his Shadow Chancellor John McDonnell have been doing a lot of work on domestic policy development to plan for government.  Businesses who are not on top of that detail, or ready for those policies, could quickly find themselves caught out across a whole range of areas, simply because they have been unengaged or do not think a Corbyn Government would come to pass.  This is not a sensible process to follow.

Lansons’ Public Affairs team have undertaken a substantial amount of work to look at all the policies Labour has announced across an array of sectors and policy areas, from taxation and business ownership, to pensions and employee rights – in financial services, utilities, infrastructure and beyond.  We can create a bespoke workshop for your business focused on helping you understand and prepare for those policies, and how to engage.  It is important that any company understands the political and regulatory context it will operate in. 

My question is: are you ready for a Labour Government?  If the answer is no, contact us for support by emailing PublicAffairs@Lansons.com 

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