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Deal or no deal? DUP confusion weakens May

Theresa May
Theresa May speaks on Downing St steps

Theresa May’s grip on power hung by a thread this weekend as contrary statements emerged over the “deal” with the Democratic Unionist Party in Northern Ireland.

Downing Street initially said a deal had been done, allowing for the Tories to build a “working” majority in the Commons. Hours later the DUP said the talks were continuing.

The 10 DUP MPs would give Mrs May 328 votes, a margin of two over the combined MPs of all other parties.

Even if she secures a deal, Mrs May is being accused of entering dangerous territory by cosying up to the DUP when it has been traditional for UK governments to tread a neutral path in Irish politics.

Some have even suggested that a tie-up with the DUP risks undermining the Good Friday peace agreement.

The DUP is expected to demand more investment in the province and will push hard for changes to Mrs May’s Brexit strategy.

With a number of key policy differences there are doubts that they can fully work together. Scottish Tory leader Ruth Davidson tweeted about a speech she gave about gay marriage, an issue opposed by the DUP. She later received assurances that it will not be a deal breaker, but it exposed the sensitivities that exist.

Mrs May also lost two of her key campaign team who resigned on Saturday amid growing criticism from within her party over the election debacle.

As recriminations continued special advisers Nick Timothy and Fiona Hill resigned. Mr Timothy said: “I take responsibility for my part in the campaign.”

Former Scotsman journalist Mrs Hill and Mr Timothy have been criticised for their role in Mrs May’s centralist style of government.

Dubbed Mrs May’s Praetorian Guard, the pair followed her from the Home Office and have been fiercely protective to the point of having, what critics say, too much influence over decision-making.

One source told Daily Business that Mrs Hill in particular screened all special advisers to other ministers who in previous governments had freely selected their own.

In the end, their control over policy and how it was presented proved their downfall.

In her attempt to project an atmosphere of “business as usual” Mrs May announced that her top team of ministers will remain unchanged as she attempted to bring stability amid calls for her to step down.

She confirmed that Philip Hammond, Chancellor, foreign secretary Boris Johnson, Brexit secretary David Davis, home secretary Amber Rudd and defence secretary, Michael Fallon will all return to their pre-election roles.

Further ministerial appointments are expected over the weekend which will prove the first test for Mrs May who is being widely condemned for calling the snap election which weakened her administration.

On Friday she apologised to those Tory MPs who lost their seats, but she infuriated some party workers for failing to acknowledge the disastrous election result in her speech in Downing Street after returning from Buckingham Palace.

In a television interview, she said: “As I reflect on the results I will reflect on what we need to do in the future to take the party forward.”

While some, including Mr Davis, gave her instant backing to get on with governing and opening the Brexit talks, other speculated that she would not last and that it was possible that she may be forced into another election. Nicky Morgan, who was sacked by Mrs May as education secretary, said: “I think she won’t fight another election. Whether it takes weeks or months we will have to look at the leadership.”

Philip Hammond: markets preferred him to return

Mr Hammond’s return was the most closely watched as there were reports in recent weeks of a rift between him and the Prime Minister. Amber Rudd and Michael Fallon were mentioned as potential replacements.

City analysts said the markets would prefer “spreadsheet” Phil against the others mentioned and the continuity may help calm markets further.

He has caused a division with hardliners in the party who want a complete break with the EU while he has argued the need for a Brexit deal that allows companies to hire the migrant workers they need.

He also has slowed the push to turn Britain’s budget deficit into a surplus, but he is wary about significantly relaxing the government’s grip on spending or cutting taxes.

His reputation took a knock when he was forced into an immediate u-turn over his Budget plans to raise national insurance contributions paid by the self-employed.

He will now return to the Treasury and will have to resurrect the remnants of the Finance Bill, much of which was abandoned when the snap election was called in April.

The election forced the Bill to be rushed and with various measures stripped out it caused uncertainty for tax advisers and taxpayers, who are having to deal with new rules which came into force in April but have not been legislated.

There will be also be further short-term instability in the Treasury as Jane Ellison, Financial Secretary and number three in the department, lost her seat in Battersea. She was responsible for Making Tax Digital.

Mr Hammond said he was “pleased to be re-appointed so we can now get on and negotiate a Brexit deal that supports British jobs, business and prosperity”.

The Conservatives lost their majority and are eight seats short of a majority with 318 against Labour’s 262.

Mrs May faced criticism from within her own party for calling the snap election which saw the Labour party make gains and narrow the gap between them.

The last constituency to declare, the normally safe Kensington & Chelsea seat in central London, with a 7,000 plus majority at the 2015 election, was won by Labour after a third count.

While recriminations began in England about seats lost, Ms Davidson’s Tories had their best result since 1983, rising from one to 13 seats and capturing all south of Scotland seats for the first time since 1952.

Jeremy Corbyn: good campaign

Mr Corbyn’s success was the biggest surprise of the night. He had been expected to lead Labour to one of its worst defeats, but instead was praised for having a good campaign led by an anti-austerity message of hope. It is also thought many UKIP supporters in England reverted to Labour.

Owen Smith, who challenged Mr Corbyn for the leadership, said: “I take my hat off to him”. Chuka Umuna, another who had been tipped as a leadership contender, said he would consider a shadow cabinet post.

Labour made surprise gains in Scotland, adding six MPs to its previous one, as the unionist parties reduced the SNP’s tally of 56 to 35.

·         Around a quarter of Labour’s gains across the UK were in Scotland.

·         Edinburgh South victor Ian Murray secured the largest parliamentary majority in Scotland.

·         Labour won back Glasgow North East 

·         Labour rose in the polls from just 13% in April to 27%.

Scottish Labour leader Kezia Dugdale said: “This was a stunning General Election result that proves Scottish Labour is back.

“Just two years after we were nearly wiped out in Scotland, we have staged a remarkable recovery and overturned some gigantic SNP majorities, and pushed the Nationalists incredibly close in many seats.”

SNP leader Nicola Sturgeon conceded that it had been a “bitterly disappointing” night for her party and that the independence issue played its part. She said there would be a period of reflection on the issue.

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