by Jamie Cater 2nd January, 2018

Predicting the unpredictable: a look ahead to politics in 2018

Over the last three years, political uncertainty and instability has become the new normal.

The ramifications of the vote to leave the EU and the loss of the Conservatives’ majority in the House of Commons in the general election will continue to define the political landscape in 2018. A fragile government led by an unpopular leader facing the most daunting constitutional challenge for the UK in generations, combined with a Labour Party still brimming with confidence from its performance at the ballot box in June, means that we can expect another 12 months of twists and turns in Westminster.

Among the immediate priorities for Theresa May will be a ministerial reshuffle following the sacking of Damian Green as First Secretary of State before Christmas; whatever form this takes, the Prime Minister’s priority will be to ensure that there is still the balance between remainers and leavers around the cabinet table and on the Brexit-related cabinet committees that had been previously struck. There are likely to be few high-profile casualties, but the expectation that May will promote ‘rising stars’ from the Conservatives’ 2015 intake of MPs to junior ministerial posts could lead to some shifts in policy across key areas of government.

On the domestic front, the Government will attempt to bring just about managing voters back to the forefront of its policy-making. The ongoing squeeze on incomes, coupled with rising inflation and increasing concern over levels of household debt, will mean that the Government prioritises interventions that are seen to be on the side of the consumer. There are a number of green papers due to be published in 2018 – including one on ‘making markets fairer’, which will contain measures on energy bills, and one on adult social care – which will seek to address different points around the cost of living; this should be expected to be a recurring theme for the Government over the next few months.

One of the landmark political moments of 2018 will be the introduction of the Immigration Bill to the House of Commons. While it may not take quite as long to clear Parliament as the EU Withdrawal Bill, this is a key piece of Brexit legislation and will put the Government’s strategy to the test in the Commons once again. There is very little detail at the moment as to what a post-Brexit migration system will look like – whether the Government will seek to replicate the existing tier-based visa system for non-EU migrants, or adopt an entirely new approach – and there will be no shortage of wrangling in the Commons over the details of whatever is contained within the Bill. The votes of Labour MPs will be critical, and may be where the party’s leadership runs into difficulty over its current lack of clarity with regard to its position on the single market.

The debate over Brexit is likely to be intensified by the number of high-profile pieces of legislation originating from the EU that will formally come into effect in the UK this year affecting areas such as financial services.

The introduction of MiFID II from January and the passage of the Data Protection Act, incorporating the General Data Protection Regulation (GDPR) have wide-ranging implications for the financial service sector, and the recent argument from lead EU negotiator Michel Barnier that a UK-EU trade agreement could not include financial services will have further added to concerns over the impact of the final Brexit deal on the sector.

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