The party conferences are over, Parliament is back for what passes for its business, the last set of expected by-elections for this year have been held and so the political clock is now ticking. At some point in 2024 a general election is very likely to occur and that is bound to have some impact on the business community. Deals may be rushed through in advance of the hustings or held back because of uncertainties around the outcome. Not for the first time, the CFO will have to do some thinking.
What should they be expecting then? The rules of the game have changed since last time. For a decade or so, the system was structured around the Fixed-Term Parliament Act 2011. This was a piece of legislation inspired by the creation of the Conservative- Liberal Democrat coalition which emerged from the May 2010 election and was designed to reassure Nick Clegg and his crew that David Cameron would not double-cross them by calling an early election if it looked as if he might win an outright majority of his own. The date of May 7th 2015, was settled in legislative stone. This would be the next polling day. A fat lot of good that did Mr Clegg and company as his party fell from 57 seats to eight seats (enough for two black cabs with a little room to spare), while Mr Cameron did acquire a majority of his own but promptly blew himself up by calling a Brexit referendum and losing.
Still, at least the election date was clear. It proved to be a one-off. The Fixed-Term Parliament Act (despite its name) allowed for an early election to be called if two-thirds of MPs voted for one. This was the device by which Theresa May sprung an election on the great British public in June 2017 and, after a huge tussle over extending the deadline for the UK to leave the EU, Boris Johnson had the country turn out for the third time in four and a half years in December 2019 (and retain power).
The Fixed-Term Parliament Act is now history. It was repealed and replaced by the Dissolution and Calling of Parliament Act 2022. Control over the timing of an election has been returned to the Prime Minister of the day, subject only to the proviso that if five years have passed since the date that the House of Commons starting sitting after the last general election (in this case, December 17th 2019) then by force of law the Parliament is automatically dissolved and an election must be held within six weeks of that date. The only way of avoiding this would be to enact completely new legislation.
The Fixed-Term Parliament Act is now history… Control over the timing of an election has been returned to the Prime Minister of the day
So, this offers something for the CFO to work with as they look anxiously at the corporate calendar. Strictly speaking, it is possible that there will not be a general election next year. The last legitimate date is actually January 28th 2025. As that is a Tuesday and for some reason which is not that clear the UK has held its elections only on a Thursday from 1935 onwards (before 1918 they were usually conducted over three successive weekends and if a candidate lost in a seat on the first Saturday they could occasionally pop up in another constituency on the third one and win there instead), which would mean the real final deadline date would, in practice, be Thursday January 23rd 2025.
Stretching it out that long might be moderately convenient for a certain section of the population. It would mean one more term of school fees before the threat of VAT on them being introduced by a Labour Government could materialise. It is not, though (and with apologies to School Bursars) a very likely outcome. It would mean an election campaign which could not start until after the Christmas and New Year season had ended, or which ran through those celebrations. This may not be the kind of Christmas present that the country is collectively enthusiastic for. Indeed, it might be the cause for an even more excessive amount of alcoholic consumption that New Year’s Eve than is standard.
Which takes us back to 2024. When should businesses be expecting it? In many senses, the natural and rational date is May 2nd 2024, when there are extensive local elections scheduled already. That would mean an election was announced in mid-March 2024 and started in earnest after the Easter Monday (April 1st next year). Most recent UK general elections have been seen in a May or June.
If the Conservatives were comfortably ahead in the opinion polls, then UK PLC could be confident of this timetable. This is, however, clearly not the case. The Government has been behind in the polls and by a substantial margin ever since the pantomime in which Boris Johnson imploded as Prime Minister and Liz Truss was in and out of 10 Downing Street in less than seven weeks. Unless there is a massive shift in the polling numbers in less than six months then it is most unlikely that Rishi Sunak will roll the dice in circumstances where defeat was extremely probable. He will hang on instead.
Which means, from the CFO perspective, that the agony will be extended. It is more likely it will be in the final quarter of 2024 instead. When exactly?
That will depend partly on the polling numbers (if they have not improved for the Prime Minister he will wait even longer) but also on another factor, whether to proceed with the party conferences. If Mr Sunak were to come back after the summer break next year and more or less immediately head off to see the King in Buckingham Palace and ask for a dissolution of Parliament, then the election would occur on either Thursday October 10th or Thursday October 17th 2024. Mark your diaries.
The side-effect of this, however, is that the party conferences would need to be curtailed or more probably still cancelled outright. This might not appear to be a tragedy to ordinary British citizens, most of whom have reached the not unreasonable conclusion that party conferences make watching paint dry seem akin to a free ticket to a Rolling Stones concert. For the party leaders, by contrast, these assemblies are (1) the chance to rally your core troops before the battle commences and (2) an absolutely massive (relatively speaking) money-making exercise, corralling cash from sponsors just before the expense of the election. As none of our main political parties are financially flush as of now (the Scottish National Party used to be rolling in money, but it has mysteriously disappeared), there may be an unspoken agreement among the leaders to let the conferences proceed as normal.
All of which means that the most likely outcome is that the election date will be known in the week after the three main UK-wide parties have all concluded their conferences.
That would be the week that starts on Monday October 7th. Technically, the vote could then be as early as Thursday October 31st (that would be the bare minimum period permissible and is Halloween an ideal polling day?). It is more plausible that it will be on one of the Thursdays in November 2024. Exactly which one will depend on whether the Conservatives are more or less confident of ultimate victory. If they are by that stage ahead in the polls then they will want a shorter campaign (so an election on November 7th or 14th), if they are level or behind, then they will be inclined towards a longer campaign in the hope that something will turn up during the contest that helps them out (not much of a strategy it has to said, barely better than adopting a four-leaf clover as your symbol, but such is our political life). If so, then the two logical election dates would be Thursday November 21st or Thursday November 28th.
Armed with this information courtesy of the eternally useful Equity FD blog, CFOs and FDs across the United Kingdom can start planning. Rarely can a holiday abroad, preferably in sunny climes, that will coincide with the October Half Term if there are children involved, have seemed quite so appealing. Book it now while prices are competitive. On your return, review those contingencies that you would surely have already put in place just in case any change of party control in government might have a material effect on the company or its customers. Impress the Board by having all that in place by the time of their September 2024 meeting. Be aware that November 2024 may be slower than is typical. Keep those key dates in mind when thinking about when to have Annual Meetings or other events. It may be better to hold these back a little so that the election result has been realised. Above all else, pray that the result is not inconclusive, which would mean another election still in the Spring of 2025. We really do not want up to end up like Spain which is on the verge of a sixth election in eight years.
