The U.K. Conservative Party Once Swore It Was Pro-Business. Thanks to Brexit, Now It’s Just Swearing
When U.K. Finance Chief George Osborne declared five years ago that his Conservative Party was “proud to be the party of firms and of businesses and of peoples’ incomes and peoples’ jobs and peoples’ livelihoods,” the statement was something of a cliché. Tony Blair’s center-left Labour Party may have briefly seized the “party of business” mantle at the turn of the millennium, but everyone knew the garment traditionally belonged to the party of Margaret Thatcher. Osborne—the British chancellor from 2010 to 2016—was just driving that point home.
Then came the Brexit debacle, which has prompted a serious identity crisis in the Conservative Party—and a clash of ideas that’s being conducted in extremely salty terms.
Last week, Prime Minister Theresa May triggered a leadership contest by announcing her imminent resignation. The frontrunner to replace her is former foreign secretary Boris Johnson, who backs the idea of the U.K. leaving the EU with or without a deal (and who is currently being sued for allegedly lying to British public about the benefits of Brexit during the 2016 Brexit referendum campaign. His representative have called the lawsuit a “stunt” that was “brought for political purposes.)
Everyone in the business world knows a no-deal Brexit would be a catastrophe for supply chains, jobs and consumer prices. “Fuck business,” was Johnson’s reported response to those concerns, apparently relayed to a Belgian ambassador in June last year. Johnson has never denied uttering that phrase, and now it is being wielded against him by his rivals.
“To the people who say ‘fuck business,’ I say fuck ‘fuck business,'” proclaimed Matt Hancock, the British health secretary and another leadership candidate, in a Tuesday interview with the Financial Times. He did not name Johnson—the candidates are nominally trying to keep things civil—but the target of his comment was quite clear.
Eyebrow-raising profanities aside, there is a serious ideological contest underway here: is the Conservative Party still about pro-business conservatism, or has Brexit turned it into a radical, populist party?
On the latter side, we have Johnson and other hard-Brexiteers such as Dominic Raab and Esther McVey, both of whom resigned from May’s government in protest of her relatively soft-Brexit stance. These candidates bring with them the promise of pulling back votes from the thoroughly populist Brexit Party of Nigel Farage, which won the most British support in last week’s European Parliament elections (the Tories were trounced with a miserable 8.9% of the vote, while the Brexit Party scored 30.8%.)
More traditional Conservatives gunning for 10 Downing Street include Hancock, Foreign Secretary Jeremy Hunt, and International Development Secretary Rory Stewart.
Hunt recently warned that the pursuit of a no-deal Brexit would be “political suicide” for the Conservative Party, though his point was less about business concerns and more that such a move would probably trigger a general election and end up with Labour taking over.
That fear is real. As much as the hardcore Brexiteers might be comfortable with the no-deal scenario, there is no majority in Parliament on their side, and if lawmakers gang up against a new prime minister to block a no-deal Brexit, then the new prime minister’s authority would be gone almost as soon as it had begun. That would probably trigger a general election, and possibly a victory for Labour, whose leadership is firmly against a no-deal Brexit.
McVey responded to Hunt’s “political suicide” comment by saying there was no way the deal negotiated between May and the EU could be approved by the U.K. Parliament, so the only way to deliver Brexit was “to actively embrace leaving the EU without one.” And here’s Johnson last week: “We will leave the EU on 31 October, deal or no deal.”
This argument is expected to go on until mid-July, when the Conservative Party membership chooses its new leader. In the meantime, the business world is not happy.
The Confederation of British Industry (CBI) said Wednesday that business conditions were worsening in the U.K. services sector. A CBI survey showed that optimism in the sector had fallen for the fourth quarter in a row, and profitability was falling more quickly than at any time since late 2011.
“Brexit paralysis continues to take a toll on the U.K.’s services firms. Profits, optimism and investment spending are falling sharply amidst a torrid operating environment,” said CBI deputy chief economist Anna Leach. “Business and the country need Westminster to rule out No Deal, and deliver an urgent resolution to the Brexit mess.”
The British economy did get a bit of a boost early this year, due to a flurry of stockpiling from businesses that were trying to mitigate the prospect of a no-deal Brexit. But, the CBI reported last week, manufacturers have been holding back on investment and industry desperately needs a viable deal. “With investment down, stockpiling up, and the threat of a no-deal ever present, we desperately need Parliament to thrash out a viable deal in the national interest,” Leach said at the time.
The message couldn’t be clearer. But will the new Conservative prime minister be listening?
More must-read stories from Fortune:
—What killed Jamie Oliver’s restaurant chain?
—Where Google’s ban on Huawei will hurt the most
—Europe’s vacation hot spots have a message for tourists: Sorry, we’re full
—The boom, bust, and rebirth of Perth
—Listen to our new audio briefing, Fortune 500 Daily
Catch up with Data Sheet, Fortune‘s daily digest on the business of tech.