There has been increased volatility in the value of Sterling against other major currencies with a general trend towards lower values this week. The reason being attributed to this is the less than stellar performance of “Team May” (the party formerly known as the Conservatives) since calling the general election.
At the time when the decision to go to the polls was taken, something Mrs May had categorically ruled out several times since taking over as PM, she enjoyed a vast personal lead over her main rival, Jeremy Corbyn and her party had a lead of 20% in the polls over his Labour Party. The pretext that winning a larger commons majority would strengthen her negotiating position with the EU over Brexit was patently absurd: May would be negotiating as a head of state, nobody would care if she had a fragile majority or a landslide – the only question would be is she the legitimate leader of the UK?
Mrs May has refused to take part in televised leadership debates, preferring to “meet the public” on the election campaign. However, this is absurd because with the best will in the world she could only speak personally to a tiny proportion of the electorate and besides, her forays about the country have been stage managed, closed events for the most part.
The Tory election manifesto was an un-costed document, but included a promise for a free Commons vote on the restoration of fox hunting, a divisive subject at the best of times and hardly a pressing issue as the nation deals with failing public services, cuts and Brexit (amongst many other issues). A second and more costly own goal was a plan to more than quadruple the level of assets that somebody receiving residential care (i.e. the elderly) can retain from £23 000 to £100 000 – so far so good. But this came at the expense of considering property in the assets and extending payments for care to those receiving it in their own home. The cost payable by the individual was to be uncapped. The average UK house costs a shade over £215 000, meaning that an individual could be on the hook for care charges of their assets, plus £115000! Almost as damaging as its inclusion in the manifesto was the climb-down less than 48 hours after its launch to say that a cap (unspecified) would be put on the costs. This did not play well in a campaign claiming that the PM offered “strong, stable leadership”.
The upshot of all this has been a narrowing of the lead with some polls putting it at just 3% which could lead to the fall of the Tory government or them becoming a minority administration. This is why Sterling has come under pressure recently.
Some cynics are wondering aloud if the government is seriously campaigning to win the election. Mrs May was a (subdued) campaigner for remain and the business community from which the Conservative Party draws much of its financial backing is strongly opposed to Brexit. With Jeremy Corbyn’s Labour promised to deliver Brexit, could the PM be tempted to pass the poisonous chalice to him and sit back to enjoy the spectacle from the opposition benches? No Brexit would be seen as a betrayal by many leave supporters; Brexit is a financial train crash in slow motion, so the government delivering it will rapidly lose popularity. Perhaps the idea of throwing the election is not so far-fetched – the alternative is that the ruling Conservative Party is really as inept as it currently appears!