The UK now faces uncertainty over who would form the next government, days ahead of the start of talks on its exit from the EU.
London: British voters dealt Prime Minister Theresa May a devastating blow in a snap election she had called to strengthen her hand in Brexit talks, wiping out her parliamentary majority and throwing the country into political turmoil.
With no clear winner emerging from Thursday’s election, a wounded May signalled she would fight on. Her Labour rival Jeremy Corbyn, once written off by his opponents as a no-hoper, said she should step down.
In the aftermath of one of the most sensational nights in British electoral history, politicians and commentators called her decision to hold the election a colossal mistake and derided her performance on the campaign trail.
The BBC reported, however, that May did not plan to resign.
“Theresa May has no intention of announcing her resignation later today,” BBC political editor Laura Kuenssberg told BBC radio, adding, however: “It’s not clear to me whether they’re trying to kill the rumours off before she truly makes her mind up.”
With 647 of 650 seats declared, the Conservatives had won 316 seats. Though the biggest single winner, they failed to reach the 326-mark they would need to command a parliamentary majority. Labour had won 261 seats.
With talks of unprecedented complexity on Britain’s departure from the EU due to start in just ten days’ time, the pound sterling was hit by uncertainty over who would form the next government and over the fundamental direction Brexit would take.
“At this time, more than anything else this country needs a period of stability,” a grim-faced May said after winning her own parliamentary seat of Maidenhead, near London.
“If … the Conservative Party has won the most seats and probably the most votes then it will be incumbent on us to ensure that we have that period of stability and that is exactly what we will do.”
After winning his own seat in north London, Corbyn said May’s attempt to win a bigger mandate had backfired.
“The mandate she’s got is lost Conservative seats, lost votes, lost support and lost confidence,” he said.
“I would have thought that’s enough to go, actually, and make way for a government that will be truly representative of all of the people of this country.”
Conservative MP Anna Soubry was the first in the party to break cover, calling on May to “consider her position”.
“I’m afraid we ran a pretty dreadful campaign,” Soubry said.
May had unexpectedly called the snap election seven weeks ago, even though no vote was due until 2020. At that point, polls predicted she would massively increase the slim majority she had inherited from predecessor David Cameron.
Instead, she risks an ignominious exit after just 11 months at Number 10 Downing Street, which would be the shortest tenure of any prime minister for almost a century.
“Perhaps the most obvious conclusion is that the likelihood of the UK needing to request a delay in the Brexit process has risen substantially,” JPMorgan said in a note.
“May is toast”
“Whatever happens, Theresa May is toast,” said Nigel Farage, former leader of the anti-EU party UKIP.
May had spent the campaign denouncing Corbyn as the weak leader of a spendthrift party that would crash Britain’s economy and flounder in Brexit talks, while she would provide “strong and stable leadership” to clinch a good deal for Britain.
But her campaign unravelled after a major policy u-turn on care for the elderly, while Corbyn’s old-school socialist platform and more impassioned campaigning style won wider support than anyone had foreseen.
Political turmoil in Britain is the worst-case scenario for EU leaders who want to press ahead quickly with Brexit talks. These are due to start on June 19 but now risk being delayed – narrowing the window of time available to clinch a deal before a March 2019 deadline.
“Could be messy for the United Kingdom in the years ahead. One mess risks following another. Price to be paid for lack of true leadership,” tweeted former Swedish Prime Minister Carl Bildt, one of the EU’s elder statesmen.
Sterling fell by more than two cents against the US dollar after an exit poll showed May losing her majority, though it later recovered some of its losses.
“A hung parliament is the worst outcome from a markets perspective as it creates another layer of uncertainty ahead of the Brexit negotiations and chips away at what is already a short timeline to secure a deal for Britain,” said Craig Erlam, an analyst with brokerage Oanda in London.
With the smaller parties more closely aligned with Labour than with the Conservatives, the prospect of Corbyn becoming prime minister no longer seems fanciful.
That would make the course of Brexit even harder to predict. During his three decades on Labour’s leftist fringe, Corbyn consistently opposed European integration and denounced the EU as a corporate, capitalist body.
As party leader, Corbyn unenthusiastically campaigned for Britain to remain in the bloc, but has said that Labour would deliver Brexit if in power, albeit with very different priorities from those stated by May.
“What tonight is about is the rejection of Theresa May’s version of extreme Brexit,” said Keir Starmer, Labour’s policy chief on Brexit, saying his party wanted to retain the benefits of the European single market and customs union.
On a nerve-racking night for the Conservatives, interior minister Amber Rudd held on to her seat by a whisker, while several junior ministers were swept away. In one of many striking moments, the party lost the seat of Canterbury for the first time in a century.
The Conservatives could potentially turn for support to Northern Ireland’s Democratic Unionist Party (DUP), a natural ally, projected to win 10 seats.
But Labour had potential allies too, not least the Scottish National Party (SNP) who suffered major setbacks but still won a majority of Scottish seats.
The pro-EU, centre-left Liberal Democrats were having a mixed night. Their former leader, Nick Clegg, who was deputy prime minister from 2010 to 2015, lost his seat. But former business minister Vince Cable won his back, and party leader Tim Farron held on.
In domestic policy, Labour proposes raising taxes for the richest 5 percent of Britons, scrapping university tuition fees, investing 250 billion pounds ($315 billion) in infrastructure plans and re-nationalising the railways and postal service.
Analysis suggested that Labour had benefited from a strong turnout among young voters. UKIP saw a collapse in its support, shedding votes evenly to the two major parties instead of overwhelmingly to the Conservatives, as pundits had expected.
“UKIP voters wanted Brexit but they also want change,” Farage said.
“They are fundamentally anti-establishment in their attitudes and the vicar’s daughter (May) is very pro-establishment. And I think she came across in the campaign as not only as wooden and robotic but actually pretty insincere.”
In Scotland, the pro-independence SNP were in retreat despite winning most seats. Having won all but three of Scotland’s 59 seats in the British parliament in 2015, their share of the vote fell sharply and they lost seats to the Conservatives, Labour and the Liberal Democrats.
The campaign had played out differently in Scotland than elsewhere, the main faultline being the SNP’s drive for a second referendum on independence from Britain, having lost a previous plebiscite in 2014.
SNP leader and First Minister Nicola Sturgeon said it had been a disappointing night for her party, while Scottish Conservative leader Ruth Davidson said Sturgeon should take the prospect of a new independence referendum off the table.
EU fears Brexit delay
European Union leaders fear May’s shock loss of her majority in the snap British election will delay Brexit talks due to start this month and raise the risk of negotiations failing.
Guenther Oettinger, the German member of the European Commission, said it was unclear if negotiations could be launched on Monday, June 19, as planned. The talks, which the EU wants to ensure a legally smooth British departure in March 2019, would be more uncertain without a strong negotiating partner, he said.
“We need a government that can act,” Oettinger told German broadcaster Deutschlandfunk. “With a weak negotiating partner, there’s the danger than the negotiations will turn out badly for both sides…I expect more more uncertainty now.”
His French colleague Pierre Moscovici said the result would affect the negotiations but declined to be drawn on whether the EU executive hoped Britain might ask to stay. He told Europe 1 radio that Brexit was supported by most of the last parliament following the referendum a year ago and that the timetable for leaving in 2019 was not “optional” but fixed in treaty law.
Former Finnish Premier Alexander Stubb was a rare senior commentator. He tweeted: “Looks like we might need a time-out in the Brexit negotiations. Time for everyone to regroup.”
May, who had campaigned against Brexit last year but took over the Conservative party after David Cameron lost last June’s Brexit referendum, delivered her terms for withdrawal in March.
These include a clean break from the EU’s single market and customs union. May then called a snap election hoping for a bigger majority to strengthen her hand in negotiations.
That was also the broadly desired outcome in Brussels, where leaders believed that a stronger May would be better able to cut compromise deals with the EU and resist pressure from hardline pro-Brexit factions in her party which have called for Britain to reject EU terms and, possibly, walk out without a deal.
Elmar Brok, a prominent German conservative member of the EU parliament, said Europeans would be disappointed May had failed to gain the majority that could have helped her override her party hardliners: “Now no prime minister will have that room for manoeuvre,” he said. “Which is what makes things so difficult.”
European leaders have largely given up considering the possibility that Britain might change its mind and ask to stay. Most now appear to prefer that the bloc’s second-biggest economy leave smoothly and quickly. To halt the Brexit process now would require the consent of the other member states.
Fear of collapse
The other 27 governments are particularly concerned that a breakdown in negotiations could lead to Britain ceasing to be a member on March 30, 2019, as laid out in Article 50 of the EU treaty, without negotiating the kind of divorce terms that would avoid a chaotic legal limbo for people and businesses. That would also make it improbable that Britain could secure the rapid free trade agreement it wants with the EU after it leaves.
In a note to clients, UBS wrote that the relative strength of hardline pro-Brexit groups in a weak Conservative government could make a breakdown in talks more likely and make it harder to reach a trade deal: “A tighter political balance could make it easier for Eurosceptics … to prevent the government from offering the compromises needed to secure a trade deal.”
Talk in Britain that a different ruling coalition could seek a “softer” Brexit than May has proposed, possibly seeking to remain in the single market, is also problematic for the EU.
While the 27 would quite possibly be willing to extend to Britain the same kind of access to EU markets that they offer to Norway or Switzerland, they have made clear that that would mean Britain continuing to pay into the EU budget and obey EU rules, including on free migration across the bloc, while no longer having any say in how the Union’s policies are set.
EU leaders question how any British government could persuade voters to accept such an outcome and so would be wary of starting down the path of negotiating it for fear of ending up without a deal that both sides could ratify in 2019.
Siegfried Muresan, spokesman for the European centre-right party whose dominant leader is German Chancellor Angela Merkel, was scathing, saying on Twitter that May had followed Cameron in risking the “future of the country for personal political gain”.
She had, he said, “played with fire” in binding Britain to the two-year deadline for Brexit talks and had now “got burned”.