Then There Were Two: Tory Race Narrows as Pound Takes a Beating

The Poisoned Brexit Chalice Waiting for Britain's New PM
  • Second round of voting in leadership race takes place Thursday
  • May and Leadsom tipped to face run-off ballot of Tory members

The race to be Britain’s next prime minister will narrow to two on Thursday with Home Secretary Theresa May and Energy Minister Andrea Leadsom the favorites to face off in a battle to decide who leads exit negotiations with the European Union.

QuickTake Britain and the EU

Justice Secretary Michael Gove is also running in the second-round ballot for the Conservative Party leadership. The result will be announced in London shortly after voting ends around 4 p.m. The two contenders with the most votes will then be put to the party’s wider membership and the new leader will be declared by Sept. 9.

The vote could produce the U.K.’s first female premier since Margaret Thatcher and takes place against a backdrop of growing economic uncertainty. The winner inherits a country still reeling from a referendum where a majority voted to bow out of the 28-nation bloc. The pound sank to a 31-year low yesterday, U.K. business confidence fell to a 4 1/2-year low in the days after the vote and at least seven firms have frozen withdrawals from property funds as investors tried to offload real estate holdings.

Two Women

So far, the two women are in the lead, with 165 and 66 endorsements respectively in the first vote on Tuesday among Tory members of Parliament. Gove took 48. Former Defence Secretary Liam Fox was eliminated after coming last and Work and Pensions Secretary Stephen Crabb dropped out. Both came out in support of May.  

British Conservative party leadership candidate Andrea Leadsom.
British Conservative party leadership candidate Andrea Leadsom.
Photographer: Chris J. Ratcliffe/AFP via Getty Images

Leadsom, a Christian who says she didn’t like the government’s legislation allowing gay marriage, is vying with Gove to be the pro-Brexit candidate. That label may be valuable in a run-off as Tory supporters tend to be more Euro-skeptic than the general public. May sided with the “Remain’ camp, although she kept a low profile in the campaign.

May, the most powerful woman in the government over the past six years, has also kept a low profile when it comes to her views on economic policy. An exception was a speech last week, when she said the U.K. should abandon its goal to run a budget surplus by 2020, an approach publicly adopted the next day by Chancellor of the Exchequer George Osborne.


Wrong Forecasts

Leadsom’s campaign has been dogged by questions over whether her resume exaggerates her experience in the financial sector -- questions she says are unfounded.  She is also the only candidate who hasn’t run a government department. At a speech today on the economy, she said “forecasts of a disaster” for sterling had been proved wrong, and the decline in the currency was good for exports. She shunned “pessimism,” said the country should maintain tariff-free access to European markets and said “prosperity should be our goal, not austerity.”

A senior Conservative lawmaker called on the party to bring forward the run-off so a leader could be elected by the end of the month, instead of waiting until September, the Guardian reported. Grant Shapps, a former Tory chairman and minister, wrote in a letter to the party management that the political vacuum could have “real-life consequences for jobs, livelihoods and the security of families across Britain,” the newspaper reported.

Bookmaker William Hill Plc has May as the front-runner to become premier, offering odds of 1-5, or one pound for every five bet. Leadsom is on 4-1, with Gove a 14-1 outsider.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE