Comment: Time to accept political risk as the ‘new normal’

Various factors signal that we have entered a period of prolonged political change, says Henderson. Picture: AP Photo/Frank Augstein.
Various factors signal that we have entered a period of prolonged political change, says Henderson. Picture: AP Photo/Frank Augstein.
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A second extension to the Brexit deadline – this time to Halloween – may have spared the cliff edge for now, but it remains far from certain that government and parliament will be able break the impasse in the extra time they have been afforded by Europe.

Talks between Labour and the Conservatives have continued longer than many first expected, but the prospect of these yielding a deal that could satisfy a sufficient number of MPs from the two increasingly divided parties appears slim.

The Prime Minister will take her Withdrawal Bill back to the Commons for a fourth (and if defeated, likely final) time next month. Speculation abounds over whether a Labour abstention might finally edge Theresa May’s deal over the line, but even if this were to happen, it would be far from the end of the Brexit saga. How, then, should business respond to the multi-faceted crisis that has consumed our political establishment, and which shows no sign of abating any time soon?

Watching from the sidelines as UK parliamentary politics descends in a tailspin, business could be forgiven for hankering after a return to simpler times.

There seems no prospect of our politics returning to anything like “normal” in the near term, though. If anything, greater change is in the post.

This month’s European elections will prove highly significant, even if the MEPs we elect serve out only a fraction of their terms due to the UK departing the EU.

Success for Nigel Farage’s nascent Brexit Party, already topping the polls due to its apparent ability to unite a significant portion of the “Leave” vote, will undoubtedly colour the future direction of the Conservative Party. With candidates to succeed Theresa May now in full campaign mode (before the starting gun has even been fired), electing a candidate of the right, one who advocates a far harder Brexit than Mrs May, could be seen by many in the party as the only means of shooting Farage’s fox and preventing him from replicating his potential EU election success at Westminster.

Nicola Sturgeon has outlined a roadmap towards a second independence referendum, in the event of Scotland leaving the EU this side of the next Holyrood election in 2021. The First Minister envisages Indyref2 within the next two years, though this path is far from obstacle-free. Layered together, these factors signal that we have entered a period of prolonged political change. That is before even considering the prospect of another out-of-cycle general election, and the change that could bring to the Brexit process and the domestic political agenda if, for example, a Corbyn-led Government were elected.

To make sense of the multiple factors at play, and to gauge how best to respond, business would be best-served by acknowledging political change as the “new normal”, rather than expecting any return to a more traditional political dynamic in the foreseeable future. By viewing political change as an evolving dynamic rather than a series of distinct events with defined start and end dates, firms can better prepare themselves for the “unknown unknowns” that our new politics will doubtless throw up in coming months and years.

Only a very brave or foolish commentator would put their head above the parapet to predict where our politics will net out next year, let alone in five or ten years’ time.

The environment in which businesses operate will undoubtedly change as a result of this political evolution – be it through Brexit, the future of the UK, or the direction and fortunes of our individual political parties. Businesses that recognise and respond to political uncertainty as a prolonged process, as opposed to a temporary break from the “normal”, stand the best chance of effectively navigating the challenges, and capitalising on the opportunities this new era will present.

Andrew Henderson, director of public policy at legal firm Pinsent Masons