From a risk-reward perspective, U.K. Prime Minister Theresa May’s decision to call a snap election that will see British voters head back to the polls on June 8 appears to make a lot of sense.
The vote on June 8 would come less than a year after British voters narrowly voted to leave the European Union and will undoubtedly be viewed as a referendum on May’s vision for how that exit should be executed.
Read: Risk of a ‘reversal in the entire Brexit process’—analysts react to U.K. election call
The British pound
soared versus major rivals after initially tanking on the news, while London stocks
See: Why the snap U.K. election is a ‘game-changer’ for the pound
What is it?
A snap election is a foreign concept to American voters who are used to fixed terms and trooping to the polls to fill federal offices in even numbered years. But for much of the world, where some form of parliamentary government reigns, they’re an important feature that can either stir turmoil or calm troubled waters, depending on the circumstances.
In a snap election, parliament is dissolved before the end of its term and voters go back to the polls. A snap election can occur after a ruling government loses a vote of confidence in parliament. Or, as in May’s case, it can occur when an incumbent is seeking to take advantage of favorable polls to strengthen her party’s majority.
Damned if you do…
The danger is that snap elections can backfire.
Take this example, from France. In 1997, the conservatives held the French presidency and were in control of the legislature. Seeking to build support for further austerity measures as France prepared to qualify for participation in the euro currency, President Jacques Chirac dissolved the National Assembly and called for early parliamentary elections.
The bid failed, with French voters rejecting the right and electing the Socialists to a majority in the National Assembly, forcing Chirac to appoint Socialist leader Lionel Jospin as prime minister. Under the shared government, Chirac’s ambitions were significantly constrained.
In the U.K., which doesn’t have a shared presidential-parliamentary system, it’s virtually winner-take-all. Failure to maintain a majority would likely see the Conservatives forced out of government at the hands of the Labour Party or a coalition of Labour and Liberal Democrats. If the Conservatives prevail but see their thin, 17-seat majority shrink, May will find herself under considerable pressure from within her own party.
…damned if you don’t
But the dynamic can work the other way, a well. Former U.K. Prime Minister Gordon Brown made what many political observers view as a fatal strategic blunder in not calling a snap election in 2007 after predecessor Tony Blair stepped down. By failing to take advantage of Labour’s faded but still relatively strong position in the polls at that time, Brown stumbled to the end of the parliamentary term, ultimately leading Labour to defeat at the hands of a Conservative-Liberal Democrat coalition amid the aftermath of the financial crisis in 2010.
For May, the odds appear solidly in favor of a solidly expanded majority. Polls show her Conservatives solidly outrunning the main opposition Labour Party, which is seen as particularly weak at the moment:
With the PM calling a general election for 8 June, here's YouGov's most recent voting intention
Con – 44%
Lab – 23%
LD – 12%
UKIP – 10% pic.twitter.com/t6v36qPSrn
— YouGov (@YouGov) April 18, 2017
Referendum, part deux
There’s no doubt the election will be fought as a referendum on May’s vision of how to proceed with Brexit. A victory will strengthen May’s hand in two ways, notes Mujtaba Rahman, managing director for Europe at Eurasia Group, a risk consulting firm.
For one, party unity will ensure that pro-EU Tories don’t defy May’s calls for a hard Brexit during the election run-up, and will be consequently less able to fight for a “soft Brexit” if she wins a mandate. At the same time, euroskeptic hard-liners will be less able to block May from offering concessions on freedom of movement and other matters she has signaled in negotiations with the EU.
The bottom line, however, is that a Conservative victory will solidify parliamentary support for a “hard Brexit.” From May’s perspective, with polls solidly in her favor, it’s too favorable of a gamble to pass up.