As the Prime Minister of Britain caught up in the unenviable position of having to arrange a plan for its exit of the European Union, Theresa May is now at the top of a ‘glass cliff’. Although one can argue that she was aware of the dangers when she took the premiership, circumstances are currently far from ideal.
The ‘Glass Cliff’ was originally put forward in 2005 as an extension of the glass ceiling theory of a metaphorical limit to the ability of women to rise to positions of power and authority.
The study began at theUniversity of Exeter, where data was extracted from a database of 100 companies of the FTSE, and it was found that women are more likely to be appointed to top-level positions at a time when companies are either failing or teetering on the brink.
Admittedly, May was not an unexpected choice for the position of Prime Minister as she came through the ranks at the forefront of the Conservative Party in such positions as overseeing security and counter-terrorism in the position of Home Secretary. Yet before the Brexit vote, May was not seen as the most likely candidate in comparison to George Osbourne, Chancellor of the Exchequer and Boris Johnson, former Mayor of London who himself voted in favour of Brexit. Even Former prime minister David Cameron advocated for Brexit and then retreated at the right time for Theresa’s appointment to come to pass.
Nonetheless, this might not have been intentional. Britain did well under the last female PrimeMinister and as such would not necessarily have been averse to another one during what is viewed by some as a crucial time in Britain’s history.
Some sociologists accredit the glass cliff dilemma to the nature of humans to seek non-stereotypical leadership traits in order to steer the organization in a different direction; a sort of positive discrimination. Unfortunately though, this also often comes with its incumbent opposing sceptical forces and an idealism that promotes heroism which makes the position a lonely and thankless one; not to mention zero-sum game thinking which is rampant in highly competitive environments.
Now, two years after the Brexit vote of 2016, optimism has waned and the overall sentiment has turned to one of trepidation.
In 2016, while the majority of persons voted for Brexit, the market’s response went in the opposite direction and the FTSE 250 Index plummeted. A tentative stability was achieved, albeit a precarious one, but the FTSE has now fallen meaningfully behind the world’s stock markets.
The pound also plunged almost immediately by 25% in comparison to its 2015 peak, and even though a slight improvement of 5% over October 2016 is noted, the masses flocked to the markets on Thursday to trade in their currency in anticipation of the Brexit plan submission to the House of Commons.
Exogenous forces also present their own challenges as the Housing Market has been weakened by low-wage growth which failed to keep pace with prices. Additionally, on the political front, little support is expected from other prominent world leaders such as Trump, Xi, Putin and Erdogan who are all involved in their own dilemmas.
Globally, bank stocks had charged upward with the election of Trump in 2016 on the expectation of better conditions for their demographic, are now 19.5% down. The yield curve has been flattening out since 2014 and the GSIFIs (Globally Systematically ImportantFinancial Institutions), generally upheld to be leading indicators of the sector, are also down 23% from their 12 months high. They are now considered firmly into a bear market.
Additionally, when Britain entered into the Brexit deal, the monetary policy mechanism was much stronger with the capacity to cut interest rates or buy bonds on the open market as necessary. Now it’s leverage is much lower and the Central Bank is operating against its playbook by leaving minimal leeway with interest rates as any sort of insurance for a growth spurt in the event of a satisfactory Brexit deal. ItsGovernor Carney, however, advised that he is willing to withstand the risk and unwilling to succumb to fears regarding the possible outcomes from Brexit.
Amidst all these challenges, May is under tremendous pressure to deliver a Brexit plan which will address the pressing issues such as currency stabilization, continued access to the common market, favourable labour mobility conditions as well as the reality of being at the mercy of the European Union’s regulations while being unable to contribute to them.
Further exacerbating the situation is the stability of the United Kingdom itself as both NorthernIreland and Scotland are both in favour of remaining within the customs union and partly within the single market. Brexit may therefore now mean establishing a border with Northern Ireland. Additionally, Arlene Foster, Head of theDemocratic Unionist Party, a particularly strong Northern Irish Party upon which May relies on for her majority in the House, are insisting that they will oppose any Brexit deal which will differentiate Northern Ireland.
On the other hand,pro-Brexiteers argue that no deal is required and any difficulties experienced by Britain are merely transitional or based on unfounded speculative pessimism. They are of the view that Brexit will open up the borders to other entrants outside of the European Union and free up economic resources from the slowdown of refugees.
Yet those that argued fora hard Brexit, one where there is no deal with the EU are dwindling in number; the tide of opinion has invariably shifted in the opposite direction.
Nonetheless, the prime minister was able to present her plans before Parliament. It basically outlined hard Brexit with a transition period up until December 2020 as well as the option to extend before July 2020. The border problem with Northern Ireland is to be addressed during this period in order to find a way to allow for continuation under the customs union while abiding under the same terms as the rest of the United Kingdom.
This deal was immediately met with the resignation of seven ministers in addition to the submission of a host of letters meant to prompt the expulsion of Theresa May.
Nonetheless, the plan was passed and now the next task is to present it before the European Union for further negotiation.
This seems to be a classic case of Britain wanting to have its cake and eat it too. The vote to leave the European Union should have been on the understanding that leaving would also mean a cessation of enjoying its benefits and there is no reason to believe that Britain would have the necessary bargaining power to negotiate to keep these advantageous terms while leaving the EU. Although leaving was expected to open up the market beyond the EU (which is currently its largest trading partner), it is also abundantly clear for geographic, demographic and economic reasons that the EU will always be the most beneficial market to target.
Notwithstanding any admiration for the British Prime Minister though, it seems that her focus is centred on staving off the rising tide of disenchantment at home. Notwithstanding that the Brexit deal was already decided before she took over the administration, perhaps the better strategy might have been to focus on the best long-term outcome for the nation in its EU deal. Especially since exit negotiations with the EU are bound to be ticklish given that the EU would be naturally averse to the departure of one of its strongest members and would likely want to set an example for any other members considering leaving.
In light of this, perhaps it might have been more beneficial for the nation as a whole, in the long run, to focus on its long-term outlook and start off as high as possible with the EU with whatever tools it can leverage. Let’s face it, while May is now faced with the daunting task of negotiating the most favourable terms for her nation after enough time has passed for the true ramifications to become more apparent and the expectations have changed, it would be far better to leave retaining as many benefits as possible; going in fully expecting some amount of haggling. This, of course, is much easier said than done, given the tide of factors and incidents working against her at home including the Northern Ireland negotiations and her own tenuous position in parliament, after having called an election meant to strengthen her position but which ended in a stalemate leaving her more vulnerable than ever.
All in all, there is something to be said of how May is managing to rally through this situation with her two feet planted firmly on the ground. Circumstances might have opened the door for her appointment however it also makes the perils of the situation just as steep.
So for women everywhere who are ever offered a position that might seem daunting, the point here is to simply be aware of the glass cliff, don’t beware of it!