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Conservatives’ Blockbuster Victory Could Herald Major Changes For UK

Posted  May 8, 2015

A View from Constantine Cannon’s London Office

By James Ashe-Taylor

In a stunning result, the Conservatives under David Cameron have won a slender majority in the UK Parliament, according to final tallies announced today.

In an unexpectedly lopsided victory, the governing Conservatives won 331 of the 650 seats in the House of Commons – a gain 24 seats from the 2010 election.  It was a bitter loss for the Conservatives’ main rival, the Labour Party, which tied the Conservatives in pre-election polls, yet ended up winning only 232 seats, a decline of 26 from the 2010 results.

The other big winner today is the separatist Scottish National Party (“SNP”), which virtually swept the board in Scotland, winning 56 of the 59 Scottish constituencies, mostly at the expense of the Labour Party.  By contrast, the Conservatives’ former coalition partners, the Liberal Democrats, were reduced to eight seats, a big drop from their previous tally of 57 seats.  Not only did a host of prominent Labour and Liberal Democrat politicians lose their seats, but the leaders of both parties have already resigned.

The election result, which no major polling company came close to forecasting, has a number of important consequences for business in the UK.

First, the UK is likely to continue with its current policy stance of gradual deficit reduction, with the emphasis now on reducing spending rather than raising taxes.  Moreover, the new Conservative majority is likely to implement more business-friendly policies than the previous coalition regime.

Second, an “in-out” referendum on the UK’s membership in the European Union is now almost certain to take place, probably in 2017.  Current polls show British voters to be in favour of remaining in the EU, but only by a small margin.

Finally, the SNP’s extraordinary victory in Scotland effectively creates a one-party state within a state.  There is no danger, yet, of a second Scottish independence referendum, but a very difficult negotiation of further devolved powers for Scotland (as well as for England, Wales and Northern Ireland) is not likely to be deferred any longer.

Edited by Gary J. Malone

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