In her one speech during the campaign to leave the EU, Theresa May was categorical: the referendum was not about “the kind of country we want to be”. Five months later, having become prime minister, she appears to have changed her mind. In a defining speech this week, Mrs May made clear she wants Britain to be radically different after the vote for Brexit.
“This is a turning point for our country: a once-in-a-generation chance to change the direction of our nation for good,” she told a buoyant Conservative party conference in Birmingham on Wednesday. “A change has got to come.”
Mrs May, the unflashy daughter of a rural vicar, dispensed with the liberal, modernising visions of her predecessor, David Cameron, which have dominated British politics since the election of Labour’s Tony Blair in 1997. Instead she embraced the populist rhetoric of the UK Independence party, with its implicit nostalgia for a less cosmopolitan society. On Brexit, she signalled that Britain would leave the EU as early as 2019 — and in an uncompromising fashion.
“Nobody can be left in any doubt that the UK is leaving the single market and the EU customs union,” concluded Bernard Jenkin, a pro-Brexit Tory MP.
While her message on Brexit won a rapturous reception from her party, investors in Britain’s financial markets appeared to be caught off guard. The pound hit a 31-year low this week, even before the sudden, brief 6 per cent drop on Friday morning. Government bonds also saw a sharp sell-off — pushing the yield on 10-year gilts above 1 per cent for the first time in two months.
“We’ve had a lot of political information in the last few days that has left investors confused,” says Scott Thiel, head of global bonds at BlackRock, the world’s largest asset manager. “And in many respects the ‘hard’ Brexit outcome that the government is putting forward is not the base case scenario investors had in mind.”
David Bloom, chief currencies analyst at HSBC, says the moves signal a politicisation of the pound. “The currency is now the de facto official opposition to the government’s policies,” he wrote.
Mrs May’s good fortune, however, is that the usual sources of political opposition are weak. The Labour party remains consumed by internal divisions: on Thursday, its leader, Jeremy Corbyn further angered his party’s centrist wing with his latest shadow cabinet reshuffle.
Ukip is enduring the most embarrassing and divisive period in its short history. Its leader, Diane James, resigned after just 18 days in the job, citing internal opposition. The initial favourite to succeed her, Steven Woolfe, was taken to hospital on Thursday after a “scuffle” with a fellow Ukip MEP.
By comparison, the Tory conference was designed as a confident show of unity and competence. The question is whether Mrs May can continue to reign supreme as the complex Brexit negotiations get under way.
One early sign of discord is over immigration. The home secretary, Amber Rudd, floated the idea that companies would have to list their number of foreign workers, prompting criticism from business groups and foreign governments. The idea, still in the consultation phase, comes on top of Mrs May’s continued refusal to guarantee the rights of EU citizens living in the UK.
“The referendum ballot had nothing on it about threatening to deport 3m EU citizens or about naming and shaming firms for hiring foreigners,” says Andrew Lilico, a pro-Brexit economist. “I find it literally shaming that our country is adopting this stance.” Others wondered whether Mrs May remembered her own warning in 2002 that the Conservatives were seen as the “nasty party”.
Her calculation is that Britain’s political centre is not socially or economically liberal. At the conference, she played political Twister — putting one foot in Ukip’s camp by bashing the establishment, and another in Labour’s by decrying business and income inequality.
Much of her language aligned neatly with that of Ed Miliband, the former Labour leader, and Nigel Farage, the public face of Ukip. “Virtually everything she said in that speech are things I’ve said to the Ukip conference over the last five or six years,” says Mr Farage, who is acting as Ukip leader once again before a leadership election.
Other centre-right politicians across Europe — including former French president Nicolas Sarkozy — have taken on the far-right’s cultural conservatism. “It’s not me that has become more like Sarkozy,” Jean-Marie Le Pen, the former National Front leader, said this month. “It’s him that has become more like Jean-Marie Le Pen.”
George Osborne, the former chancellor whose deficit-cutting policies are now being unwound, claims there is still a “liberal mainstream majority”. But Mrs May’s vision may be a clearer guide to the new centre ground.
In a YouGov poll, 59 per cent of respondents said they supported Ms Rudd’s proposals to make companies publish a breakdown of foreign employees. Even among Liberal Democrat and Scottish National party supporters, the proportion was nearly half. In addition, 60 per cent of those surveyed said a company should prioritise a British worker over a foreign worker, where two candidates are otherwise equal.
Aside from the tougher line on immigration, and the willingness to talk of the “working class”, Mrs May’s anti-establishment narrative was familiar.
“I feel I’ve heard a lot of this stuff before,” says Tim Bale, a professor of politics at Queen Mary University London. “There’s an extent to which you’re building up capital which you might have to spend. She needs as much in the bank as she can possibly get.”
At a similar stage in his leadership, Mr Cameron attacked the retailer WH Smith for contributing to children’s obesity by selling cheap Chocolate Oranges. Transforming that vision into policy proved harder.
Mrs May’s proposals — such as putting a worker’s representative on company boards, developing an industrial strategy and addressing low pay — could frustrate long-time Conservative supporters. But they are not manifesto commitments, and could be watered down. With conference speeches, “there’s a huge slip between cup and lip”, says Mr Bale. “It doesn’t necessarily result in any policy delivery.”
On Brexit, Mrs May’s blueprint is half-finished. She said Britain will be able to “make our own decisions on a whole host of different matters, from how we label our food to the way in which we choose to control immigration.” She is against the UK remaining under the jurisdiction of the European Court of Justice, a stance that would likely prevent it being part of the single market.
She has not ruled out paying into the EU budget, or detailed the proposed form of future immigration restrictions. Nor has she distinguished between Britain’s ultimate status outside the EU and any transitional arrangements.
‘Not really experts’
Critics worry that Mrs May will steer Britain towards a “hard” Brexit by refusing to compromise on key issues such as immigration, and by misjudging other EU countries.
“Theresa May’s closest advisers may not be great experts on the EU, on economics, on geopolitics and diplomacy,” says Charles Grant of the Centre for European Reform.
“I’m just worried that decisions that are going to affect Britain for years to come are being taken by people who are not really experts.”
Others argue that triggering Article 50 — the exit clause in EU treaties — will make it impossible for Mrs May to deny that Brexit means trade-offs between curbing immigration and keeping market access. “There needs to be a far fuller debate [on immigration],” says one Tory MP. “We can’t just squeeze down the numbers regardless of the consequences.”
Nick Clegg, the Liberal Democrat former deputy prime minister, argues that the Brexit negotiations will expose the faultlines between Conservatives who want free trade and those who prioritise parliamentary sovereignty.
Another problem could be the economy. The decline of sterling has so far not shaken Brexiters. The UK’s FTSE 100 index rose this week as sterling’s weakness encouraged hopes of export sector strength.
“It’s not keeping me awake at night,” said Jonathan Isaby, editor of the Brexit Central website. “I don’t get a feeling at all of people [in the Conservative party] being unsure about economic markets.” But as companies pass on price rises, and if tax revenues fall short, caution may grow.
Having flirted with civil war this year, the Conservative party is not in a rebellious mood. Yet more than half the party’s MPs voted Remain in the referendum, as did 39 per cent of people who voted Conservative last year.
“I was elected on a Conservative manifesto that valued immigration and supported free movement of people and [the] single market,” says Anna Soubry, the former business minister.
Mrs May has promised not to give “a running commentary” on Brexit negotiations; many of her supporters might soon feel no such restraint.
Additional reporting by Elaine Moore
Letter in response to this article:
Wisest advice to the UK on Brexit will come from Japan / From Charlotte Roueché
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