Reuters: Prime Minister Theresa May reappointed most of her ministers on Sunday but brought a Brexit campaigner and party rival into government to try to unite her Conservatives after a disastrous election sapped her authority, days before Brexit talks begin.

The 60-year-old leader said she had tapped experience across the “whole of the Conservative Party” when she appointed Michael Gove, a long-serving cabinet minister who had clashed with May when she was home secretary, as agriculture minister.

It was a surprise move - Gove was sacked as justice minister by May last year after his bid to become party leader forced now-foreign minister Boris Johnson from the race, amid accusations of treachery and political backstabbing.

But after gambling away a majority in parliament in an election she did not need to call, May needs to unite a disillusioned party around her to not only support her in the Brexit talks but also to strike a deal with a small Northern Irish party that will enable her to stay in power.

“What I’m doing now is actually getting on with the immediate job. And I think that’s what’s important, I think that’s what the public would expect. They want to see government providing that certainty and stability,” she said.

“What I’ve done today is see people from across the party accepting the invitation to be in my cabinet, and crucially I’ve brought in talent from across the whole of the Conservative Party. I believe that’s important.”

Weakened stature

May formed her cabinet despite failing to win a majority in Thursday’s parliamentary election, when her Conservatives won 318 House of Commons seats. Labour, the main opposition party, won 262.

Labour leader Jeremy Corbyn said he could still be prime minister, although his party has no obvious way to build a majority coalition. He said a new election might be necessary later this year or early in 2018.

Apart from Gove and her close ally Damian Green, promoted to Cabinet Office minister to oversee the day-to-day running of the government, May confirmed most of the ministers from her previous cabinet.

This marked an apparent reversal of plans to turf out those considered less than loyal – a sign of her weakened stature in a party that traditionally craves strong leaders.

In return, she won effusive pledges of loyalty, but she will have to sell her premiership to Conservative lawmakers at a meeting on Monday.

“I am going to be backing her, and absolutely everybody I’m talking to is going to be backing her too,” said Johnson, who had been touted as a possible successor to May. Liam Fox, trade minister, also said that May was the only person to take Britain out of the European Union.

The political turmoil comes a week before Britain is due to start negotiating the terms of its exit from the European Union in talks of unprecedented complexity that are supposed to wrap up by the end of March 2019, when Britain actually leaves. That timeline now looks even more ambitious than before, not least because May’s electoral debacle has emboldened those within her own party who object to her “hard Brexit” approach of leaving the European single market and customs union.

Britain’s Prime Minister Theresa May alongside Foreign Secretary Boris Johnson – REUTERS

UK business confidence slumps after election: IoD survey

Reuters: British business confidence has fallen sharply since last Thursday’s inconclusive election that left Prime Minister Theresa May weakened ahead of Brexit talks, according to a survey by the Institute of Directors published on Monday.

The survey of nearly 700 members of the business group also exposed deep concern over the political uncertainty and its impact on Britain’s economy.

May failed to win a parliamentary majority in the election. Her hopes of forming a government now lie with winning support from Northern Ireland’s Democratic Unionist Party, which won 10 seats in the election. 

The IoD found a negative swing of 34 points in confidence in the UK economy from its last survey in May.

While 20% of members were optimistic about the economy over the next 12 months, some 57% were either quite or very pessimistic – a -37 “net confidence” score. That compares with a -3% score in May.

“It is hard to overstate what a dramatic impact the current political uncertainty is having on business leaders, and the consequences could – if not addressed immediately – be disastrous for the UK economy,” said Stephen Martin, director general of the IoD.

“The needs of business and discussion of the economy were largely absent from the campaign, but this crash in confidence shows how urgently that must change in the new government.”

The IoD survey said its members saw no clear way to quickly resolve the political situation, feeling that a further election this year would have a negative impact on the economy.

They are keen to see quick agreement with the European Union on transitional arrangements for the UK’s withdrawal from the bloc, and clarity on the status of EU workers in Britain.

Business need

Also on Monday, Carolyn Fairbairn, director general of the Confederation of British Industry, said there was now a risk that businesses would cut back on investment which has largely held up since last year’s Brexit vote.

“When uncertainty reaches such a level then you get pause buttons beginning to be pressed and we don’t want to see that,” she told the BBC.

“So I think it’s time for a bit of a reset, a bit of a mindset change to listen really well to what businesses need.”

Fairbairn said she hoped to see the Brexit negotiations on “a really positive track so we can see an outcome on really good access to the single market.”

Earlier on Monday, figures from credit card firm Visa showed British consumers turned more cautious even before the shock election result. The data found households cut their spending for the first time in nearly four years last month.