As political uncertainty mounts in the UK, the pound sterling is faced with significant headwind at the start of the week. The pressure on prime minister Theresa May has meanwhile reached a new dimension. The latest chain of negative headlines for the head of government started with the resignation of two cabinet members. Foreign Secretary Boris Johnson is also facing mounting criticism following the clumsy manner in which he commented on the situation concerning a dual British-Iranian woman being detained in Iran on espionage charges. Calls for his resignation have not stopped Johnson together with Environment Secretary Michael Gove from formulating a “secret letter” to the prime minister, in which the two Brexit hardliners demand that the UK puts better preparations in place to deal with a failure to negotiate an agreement with Brussels. A potential transitional phase should also be limited to a maximum of two years. The two authors must have been clearly aware beforehand that this letter would be leaked sooner or later.
Similarly, Theresa May can’t have been too happy with the media reports that 40 MPs out of just over 300 in the House of Commons are prepared to sign a letter of no confidence. If these reports prove accurate, it would only take another eight party members to initiate a new election for leadership of the Conservative Party. Alternatively, May could resign voluntarily and pave the way to elect a new party leader. In view of the constant headwind from her own party, this step could be quite plausible, regardless of May’s combative stance in recent months.
Irrespective of Theresa May herself, the Tories are also up against a deep split within the party. Advocates of a clear separation from the European Union and representatives who want to continue forging close ties with Brussels, Berlin and Paris appear to be irreconcilable and are publicly stirring up the tense situation time and time again. If May is actually forced to step aside, a successor would face what is presumably the impossible task of uniting the party behind him/her. This is no doubt clear to all candidates and a key reason why Theresa May has not yet had to give up her leadership role.
It will probably be decided in the coming weeks whether she can still hold her position as head of the party. Domestically, it is a matter of wrapping up the EU (withdrawal) bill, whereby existing EU laws should be transposed to national law on the day of the exit. May’s coalition government not only has a very slim majority in the House of Commons. The opposition has also tabled diverse amendments, some of which are likely to be approved by moderate conservatives. The many ballots threaten to become a nail-biting affair.
The second-largest hurdle facing Theresa May is the negotiations with the European Union that are dragging on – a development she is being admonished on by the two internal party ranks. The EU meanwhile also appears to have lost patience. According to EU chief negotiator Barnier, the UK has just shy of two weeks to issue a clear statement on the EU “divorce” bill. Failure to do so means that the go ahead cannot be given at the EU summit in December to commence talks on future trade relations. Theresa May is undoubtedly very aware of the fact that she will not be able to “sell” the amounts currently demanded by the EU to parliament.
It is now a matter for her to pass the EU withdrawal bill in the next few days in the House of Commons with her slim majority and to convince the EU that the talks about a future relationship can start. She will otherwise probably find it difficult to make the next New Year’s address as acting party leader.