Leadsom fiddles while the City burns

Party Leadership Difficulties

While the United Kingdom faces one of the most severe economic challenges of our lifetimes both the government and the opposition are distracted by their party leadership issues.

The Conservatives

The preliminary sifting of candidates by Conservative MP’s is complete.  The two members to be submitted to the Members for a postal ballot are chosen.  The result of that ballot will be publicly announced on 9th September 2016.

Candidates Ist Round 2nd Round Ballot William Hill
Teresa May 165 199 ? 1/4
Andrea Leadsom 66 84 ? 3/1
Michael Gove 48 46
Stephen Crabb 34
Liam Fox 16

Once the Party Members have selected the next leader, David Cameron will give effect to his resignation and advise the Queen to invite the winner  to form a government.  Meanwhile the present team carries on as a caretaker administration, no doubt trying to postpone any difficult issues until the new administration takes over.

The House of Commons rises for the Summer Recess on 21st July, 2016 and will return on 5th September 2016 and is due to rise again for the Party Conferences on 15th September 2016.  So the formalities of the changeover will  most likely take place between 9th and 15th September 2016.

The Conservatives Party Conference is not until  2-5 October in Birmingham so that will give the new Prime Minister time to sort out the Cabinet and so forth in time for the Conference.

A quick perusal of the front pages of the newspapers:  BBC- The Papers, shows that the Tory leaning titles are at this time supporting Teresa May.  The Financial Times has this amusing account of  what has happened:   “Brexit: a coup by one set of public schoolboys against another (£)

The Labour Party

The rift between the majority of Labour MP’s and their Leader and much of the membership continues unabated– see this in The Guardian: “Jeremy Corbyn stands defiant after Labour membership surge”.

While one hopes that  Labour will get its act together before Parliament resumes, that looks doubtful.   The Labour  Party Conference is scheduled for 25-28 September 1986 in Liverpool and bids fair to be a rather fratricidal gathering.   No doubt,  the local NHS will have contingency plans in place.

Meanwhile, while HM Government and HM Opposition seek to resolve their respective  leadership issues,  the entirely predictable (and, indeed predicted) post Brexit financial consequences are coming home.

The Economy

The Financial Times has this: “Harsh realities of a weakened pound – Sterling’s malaise set to hit households harder than they expect(£)“.   See also this from the BBC: “Business pessimism ‘doubles after Brexit vote’

As we know, Andrea Leadsom, who has likened herself to Margaret Thatcher in her bid to be the next Conservative leader, once said that leaving the European Union would be a “disaster” – despite being one of the leading voices in the Brexit campaign.  See this report in the Independent.  Well she was right then and she was wrong during the Referendum campaign and she remains wrong.  For that reason alone she should not be in charge of the government in the difficult period ahead.  Protection of the economy and, in particular,  of the role of the City has to be paramount.

Households around the country are going to feel a squeeze in the shorter term. Imports are going to cost more as a result of the fall in the value of sterling.  That is going to impact on evereyone’s shopping basket.  But if the outcome of the Brexit talks does not enable the City to passport its services across the EU, the Exchequer is going to  have a big hole in its tax revenues.  That hole is not going to be filled by wishful thinking and it is up to Andrea Leadsom to explain how.  Quickly.

 

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