Just under three weeks on from the General Election that resulted in a hung Parliament and the seemingly long-awaited deal between the Arlene Foster’s Democratic Unionist Party and Theresa May’s Conservatives has been agreed and signed. May can now continue leading the country with a Minority Government relatively safe in the knowledge that she will have support from the DUP in a Confidence and Supply agreement.

What is Confidence and Supply?

Under a Confidence and a Supply agreement, the junior party (the DUP in this case) agrees to support the senior party (Conservatives) on issues that are integral to the successful operation of the government and that could otherwise be liable to uncertainty or failure if a Minority Government were attempted. Examples of such Confidence and Supply support include: Bills on budgets, and voting in support of the Government if an Opposition party were to try to pass a Motion of No Confidence. In return, the junior party will receive policy concessions, and retain their ability to vote on all other matters as they wish outside of the Confidence and Supply arrangement.

What is in the DUP – Conservative Deal?

There has been concessions with regards to the Conservative’s election pledges of scrapping the triple lock on pensions and means testing winter fuel payments, things that the DUP opposed. Devolution of Corporation Tax – something Northern Ireland’s Executive has long wanted – has also been agreed. A number of additional funds have also been announced for Northern Ireland equating to £1 billion over a period of five years, with the majority being made available in the first two years. Further information on the allocation of these funds and expenditure can be found in the official deal document here. The general feel is that the DUP have done extremely well for delivering Theresa May just 10 extra votes.

What Happens After Two Years?

Many within the media have commented on the possibility that this is not the end of DUP demands in return for support. With the majority of the funds being made available over the next two years, it is more than possible that after that date further concessions could be made – monetary or policy wise – if the DUP are still in a position to provide support and the Conservatives are in a position to need it.

It surely cannot be coincidence that the deadline for the UK’s withdrawal from the European Union is in just under two years’ time. Combined with a longer than usual Parliamentary session consisting of two years with the majority of its agenda dominated by Brexit Bills, what could be May’s play here? An early election in 2019? May first came to power shortly after the road to Brexit begun following the referendum and David Cameron’s resignation, it is not beyond the realm of possibility she could bow out upon its completion allowing a new Conservative leader to fight an election. After all, following the Conservative’s performance during June’s General Election, there are not many who believe May could lead the party into another.

 

What does Increased Funding for Northern Ireland Mean for the Rest of the UK?

The sum of an extra £1 billion for Northern Ireland has unsurprisingly been met with anger by those Wales, Scotland, and regions across England. First Minister of Scotland Nicola Sturgeon has said that under the Barnett Formula Scotland should also receive increased funding. This echoes Conservative MP and Secretary of State for Scotland David Mundell who previously declared he would vote against any such monetary deal with the DUP that gave additional funds to NI without also increasing spending for Scotland.

Carwyn Jones – First Minister of Wales and leader of the Welsh Labour party – claimed the deal “kills the idea of fair funding”, with Westminster Plaid Cymru leader Liz Saville Roberts demanding extra funding for NI “be replicated on a pro-rata basis for Wales”. There have even been rumblings from the backbenches with Conservative MP for South Cambridgeshire Heidi Allen saying public sector pay and funding must now be reviewed for the whole of the UK following the deal.

It appears a free-for-all has now begun with parties and MPs across the UK beginning to demand more funding. Realistically speaking, the Barnett Formula is a convention, not a law or requirement, and it would harm May and her Government more if she gave in to these demands. The DUP secured such a deal because they held monumentally valuable bargaining chips whilst the other parties did not. The leaders of other parties cannot really influence the outcome of legislative votes The danger for May is twofold. Firstly, on a political level, parties in Wales, Scotland and Labour in cities and regions in England will cry that they have been treated unfairly, and this could damage the Conservative vote. Secondly, MPs on all sides of the House have already started to say that the age of ‘austerity’ should end and that if the Government has found £1 billion for the DUP it is proof there is more money to spend on the rest of the country. Can the economy stand an opening of the Treasury floodgates? There is also then a knock-on danger that if spending is increased across the rest of the UK, the DUP’s gains are then comparatively diminished. How would they then react if they felt the spirit of their deal was being undone?

Why Is a Deal With the DUP Necessary?

Taken at face value, an official written deal technically is not necessary. Whilst the Conservatives failed to win the required 326 seats for a Parliamentary majority, they are still the largest party with 317 seats to Labour’s 262. She could have governed on a Minority basis or hoped that the DUP would support her outside of a formal framework. The DUP are relatively close to the Conservatives as a Unionist party and pro-business outlook, and are unlikely to want to see Jeremy Corbyn become PM given his and others in his party’s historical support for Sinn Fein/IRA..

It could be that May opted for a formal deal for an extra layer of security, or to increase certainty in a period of uncertain times.  It could also be that she is pre-empting possible by-election losses that might occur in the short-term. Look at the constituency of South Thanet in Kent, currently held by Conservative Craig Mackinlay, first elected in 2015. Just days before the 2017 General Election it was announced Mackinlay has been charged with offences under the Representation of the People Act 1983 in relation to an investigation into possible election fraud during the 2015 General Election. If prosecuted then the election result could be voided, leading to a by-election.

A by-election would be a battleground for all parties, with no party wielding a majority every seat counts, and in the event the Conservatives were to lose a seat, it would probably be helpful to the economic and political stability of the country that there is a formal deal in place.

Does the Deal Mean May Is Safe?

As long as the DUP support the Government on the important issues, and there are no significant backbench rebellions May can rest assured she is safe…ish. Combined with the 10 DUP MPs the Conservative Government has a working majority of 13, just four less than the working majority of 17 pre-election. One of the reasons – it was believed – an early election was called was to shore up support of May’s Government, hopefully increase the relatively slim working majority, and quiet the backbench naysayers that could have caused May swathes of embarrassment if they so wished. As things now stand, the complete opposite has happened, it would take just a handful of backbench Conservative MPs to refuse to tow the party line and bring May down. The Prime Minister that wanted to wield enough power to quash any backbench derision is now, ironically, more dependent on them than ever. Gone is the election mantra of Theresa May and her team, it has been replaced with the words she is reported to have spoken to the influential group of Conservative backbench MPs during a meeting of the 1922 Committee – “I’ve served this party since I was 12 years old, and I’ll continue to serve as long as you want me”.

If you are interested in a more detailed briefing and to hear more about our Public Affairs Practice, please contact David Park (Partner) at david@nudgefactory.co.uk