Boris’ Historic Election – Thank You EU

Congratulations to Boris! Now perhaps we can go back to having too much food, too much drink and too much indulgence over the Christmas break, without having politics upsetting us all?

Johnson this morning – photo from BBC

This huge victory will set the direction of politics for the next 10 years. Yes, we predict another term for BoJo starting in 2024. I am indebted to my older contact who has already pointed out that by December 2024, Labour will have only had one election-winning leader in 50 years. FIFTY YEARS!!! Step forward Tony Blair. You achieved the success that eluded Jim Callaghan, Michael Foot, Neil Kinnock, Gordon Brown, Ed Milliband and now Jeremy Corbyn. Oh, and John Smith too…… Did I miss any?

Jim Callaghan – never won
Michael Foot – never won
John Smith – never won (though to be fair he never tried)
Neil Kinnock – never won
Gordon Brown – never won
Ed Milliband – never won
Mr Corbyn – he didn’t win either (twice)
Tony Blair – the only one to win in 50 years – and yet they hate him!

And to what can we allocate this massive swing in the vote for the Tory Party? Why, the EU!! What a change for the European project to be assisting the blues! It was the disdainful response of Frau Merkel to David Cameron’s pleas for moderating change that set the ball rolling towards a leave vote. This was compounded by the EU inaction during the referendum campaign. Where were Messrs Junckers and Tusk during the lead up to the vote? They were not in UK sharing the vision and love were they? Their next mistake was to play hardball too much with Mrs May, forcing her on to the defensive at home. One has to surmise that they thought a Remainer-Parliament was their best hope of keeping the UK on board. But they overplayed their hand, sending Theresa back with too much of a surrender bill. This off-hand treatment was compounded by the humiliation and shunning that Mrs May received from the other EU leaders at Salzburg. So the scene was set for Parliament to respond to the lack of co-operation… which led to Boris becoming leader…. which led to the election. One has to hope that they will work with Boris as an equal!

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Boris to Win 43 Seat Majority Says Meta-Poll

You’ve heard of meta-analyses, where academics who can’t be bothered to do their own research just nick everyone else’s hard work, crunch the numbers a bit, and come out with a super-accurate result? Well here is our META-POLL. After much reading of the papers, surfing the net, and even talking to people, we have concluded that the Tory party will win. (Bet you saw that coming eh?)

Why do we think that?

  1. Farage folded, as predicted here recently, avoided splitting the leave vote, and crowned the Tories as winners

  2. The Labour manifesto was written to appeal to hard-line left wingers – who would have voted for Jeremy anyway. Only the naïve or those too young to remember the 1970s could think that nationalisation is the answer. (See our earlier report on rail user numbers pre- and post – nationalisation). The “free” broadband idea went down well, but the practicalities are horrible. By the time it is built, at five times the original cost, technology will have made it obsolete. And the big beneficiaries will be the farmers and isolated rural communities – who will not be voting Labour under any circumstances. Meanwhile, their fence-sitting on Brexit feels a bit like “Follow Me….. I don’t know where we are going, but Follow Me!”

  3. The Liberal Democrats have shown themselves to be neither liberal nor democratic. Their reverse Article 50 campaign can only appeal to the most die-hard europhiles. Meanwhile, Jo Swinson has not done well. Her claims to be PM in waiting invite the retort that she’ll be waiting a very long time.

  4. The Tories have avoided a May-style manifesto-suicide-note. Divisive figures such as Rees-Mogg have been kept out of the limelight. Boris himself has picked his battles carefully, with more to lose than win.

So what happens now?

There are still considerable risks for Mr Johnson. Will the left-leaning students be too busy recovering from their end-of-term parties to vote?

Students preparing to oversleep and miss voting

Just how many people were too embarrassed to tell pollsters that they would vote Tory (but will anyway)? Will tactical voting have any impact? Will Mr Trump try to intervene? He is not great at keeping his thoughts to himself is he? That could hurt Boris. In this last week, we expect the Tories to try to refocus on Brexit as the major issue – and Labour to try to talk about virtually anything else!

What does it all mean for Asset Prices?

The market had a lost year in 2019, with too much uncertainty. A Tory win is about 70% baked into the market, so we expect a moderate bounce on 13 December. This will be most pronounced for the likes of BT and other nationalisation victims. Despite longer term trading arrangements still being in the air, we feel that 2020 will turn into a log bull run for equities and commercial property, as investors get back to the serious business of making money.

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Farage Must Fold

Gosh, there are so many pics out there of Mr Farage with a pint!

Much as we admire Nigel Farage’s consistency in supporting his cause, his present political positioning is just madness.

Clearly, he could never have thought that Boris would tear up his deal just because it is not No Deal – which seems to be Farage’s target, So what does Nigel want? Most Brexiteers can live with Boris’ deal – and many remainers can live with the withdrawal, as it least it isn’t a crash, and it moves the topic on. The Brexit Party have no chance of power, and in many close marginals, they risk drawing just enough voters away from the Tories to gift the seat to Labour or the Liberals.

Just as in Peterborough and Brecon by-elections, they could well split the leave vote, and let one of the other parties to win, with many fewer than half of the votes cast. Does Nigel really want to be the man who let Jeremy Corbyn into Number 10? We think not. So the only conclusion is that he thinks there may be a peerage in it for him if he backs down. There can be no other logical motivation for Mr Farage to take such an extreme position.

Our Forecast

The Brexit Party will withdraw from all seats except those where the Tories have no chance anyway – ie Northern Labour-held seats. Nigel will magnanimously agree to back Boris’s deal as being better than any of the plausible alternatives. In due time, Mr Farage will enter the House of Lords.

Lord Farage of England! You heard it here first.

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What is Boris’s Plan for Brexit?

We are three weeks away from Brexit Day, and yet there is no clarity. This is starting to look eerily familiar!

Boris; buffoon or battler?

We have a PM who is trapped in office, but with no majority he is completely powerless. Meanwhile, the opposition is scared of an election, and is rather enjoying the discomfort of Boris.

It seems that the key date will be 19 October, a week on Saturday, the day when Boris is legally ordered by Parliament to write the letter asking for an extension.

Leo Varadker, Irish Taoiseach

Will he do it? We think not. Since the Benn Act (aka the Surrender Act) was rushed through, Boris has been at pains not to retreat from his ‘do or die’ message about 31 October. We can see why he would do that as background to his negotiations. If EU actually thought he could push through No Deal, then they would be much more keen to negotiate. This has to be true of Leo Varadker, Irish Taoiseach, who has most to lose from a No Deal. Clearly, they have not bought into that idea though.

 

How can these facts co-exist;-

  1. Boris claims we will leave on 31 October, deal or no deal,

  2. The Benn Act says he must ask for an extension in the event of no deal

  3. The Conservatives have stated that they will not break the law

  4. A deal looks extremely unlikely

  5. The EU will agree to any extension request

  6. Parliament will not let BoJo call a quick election?

It seems Boris must believe that there is a mechanism to spring free from the trap. Here is what we think could happen (yep, “could” implies our low level of confidence in our prediction).

The Queen’s Speech next week will essentially be the Conservative manifesto for an autumn election. It will get voted down, but still the opposition will not allow an election.

The big day will be 19 October, in the special Saturday Parliamentary session called by the Government. We see the following votes;-

  1. A vote to lift the Benn Act and allow a No Deal to happen. This will be designed and phrased in terms of progressing or overturning the referendum result, to try to make the opposition look like it is ignoring the plebiscite. Narrowly, we think this will be voted down.

  2. A vote to call a General Election. This will be designed to make the opposition look like it is scared of facing the electorate, especially given that they have earlier voted to “ignore the referendum”.

  3. This is when Boris Johnson resigns as Prime Minister, and where he states that he will not do the usual caretaking role until a new one is appointed. We feel that BoJo has too much political capital tied up to write that letter. It would be interesting if Parliament voted to make him personally write a letter in which he does not  believe. If he does not resign, I see him taking a jail sentence as less politically damaging than writing a letter.

  4. If we have no Prime Minister – and hence no Government – then there will inevitably be a court case as to who can write the letter.

  5. Then there is 14 days for a new Government to be formed. We do not think Mr Corbyn could attract enough support, as the LibDems will see little advantage of positioning themselves as Labour’s poodle.

  6. A government of “National Unity”, which even the media have Christened “National Remainers” also seems unlikely, given how the various factions of the remainers struggle to agree on anything.

  7. Another Conservative would be the natural choice, as they have the largest party…. could that be dragged out for the remaining 12 days?

  8. So we drift towards 31 October……. no Prime Minister, no Government, political chaos.

  9. Away from Westminster, the negative respect for the political classes plumbs new depths.

When the referendum result was declared, the best outcome would have been a clear, firm date three years (or even five years) ahead, for which everyone could plan and prepare, leading to the most seamless transition possible. Instead of which the political classes in London, Brussels and Dublin have screwed it up right royally. By their constant bickering and game-playing, we are now in the worst possible situation. It is no wonder that the general public is coming to despise politicians.

 

Oh, and as for the details of Boris’s Plan, we don’t know.  We’re not even sure that he knows……

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Scottish Parliament is Rubbish

For once we don’t mean the politicians in Scotland – though as an aside, why is Scottish Nationalism tied up with left-wing policies, when nationalists in other countries are more to the extreme right: eg National Front in France, or EDL in England?

However, this time we are reviewing the building completed in 2004 to house the  Scottish Parliament.

The Parliamentary buildings were ten times over budget. Not ten percent, but a multiple of ten! That is the outcome of public management of projects, spending Government money. To all those thinking that Mr Corbyn has it right in letting the Government run anything to do with construction or businesses, there can be no finer example of why it is such a bad idea.

The build budget was £30mio – £40mio. The final outcome £414million. That is just a mind-boggling variance. Could part of the reason behind the vast overspend be that the builders were Scottish, but they knew it would be the English tax-payers picking up the bill? There may be one or two people in Scotland to whom that would appeal.

Ugly Frontage to the Royal Mile

And so to the design. This must be one of the best locations in Edinburgh, on the Royal Mile, opposite Holyroodhouse Palace, and backing on to the rugged mountainous Arthur’s Seat. Like most architectural observers, we do not advocate a pastiche of earlier designs. A modern design is more honest. But we do believe in respecting materials and blocking forms.

Google Earth of Scottish Parliament

The exhibition inside explained that the buildings in the complex were designed to represent the human body, or groups of people standing around in a form of government discussion. Who bought into these ideas? Even seen from a helicopter (okay, let’s be truthful, even seen from Google Earth), it is hard to make any simile from the mish-mash of weird shapes. Observed from the Royal Mile, the concrete wall with convex and concave horizontal curves – pictured above -just looks a mess, and totally out of place. What an eyesore on the most important street in Scotland. Instead of render or attractive stone, we see bare concrete, enlivened by rusty steel poles.

Unnecessarily complex and expensive details

The Scottish Parliament Building could have been attractive, eye-catching and uplifting. Instead it is jarring and rude. Shame.

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Brexit Election Double Bluff Could Avoid No-Deal

Cripes, doesn’t Boris love poking the hornets’ nest with a sharp stick?

Boris – back on the front foot

The reality of his decision to close this Parliamentary session and arrange a Queen’s Speech to initiate a new Parliament is relatively small. Instead of Parliament having a recess for three and a half weeks over the party conference season, the break is five weeks. However, it has acted as a lightning rod for all of the pent up frustration and anger of the Remainers. Suddenly, they can see their case is lost. It was lost before, but now they can no longer pretend to themselves that they still have a chance.

Guy Verhofstadt, with name label to prove it

The greatest endorsement came from Guy Verhofstadt, Chief EU Brexit Negotiator, who branded it a ‘sinister development’. Clearly, many in Brussels have been relying on the Remainers to weaken the UK position. The strength of Boris’s move is reflected in their dislike of it.

The Nuclear Option

So now the Remainers have only one option left – win a vote of No Confidence next week and force an election before the end of October. This would be welcomed by the Boris team, as discussed yesterday, who have developed a suite of policies on which to campaign, and have clearly judged that such a poll would be winnable.

Our view is that;-

  1. The Remainers will not be able to win a vote of No Confidence

  2. It is far from clear that Mr Corbyn will even dare to call one (see 1. above)

  3. The EU will have to sit up and realise that the Remainers will not postpone Brexit

  4. The EU needs to avoid blame for No-Deal, and so see a deal as necessary.

 

Suddenly, to us, a No-Deal Brexit seems less likely than it did 24 hours ago.

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Brexit Election Bluff or Double Bluff

We enjoyed the great mutterings in the press since the weekend about whether the Tories secretly want to have an election BEFORE Brexit day on Halloween.

It appears to have been started by Tim Shipman in the Sunday Times, who suggested that the Government would quite like to have an election on 17 October. However, recognising voter-fatigue, they want Labour to take the hit from the Brenda-of-Bristols who are annoyed at “Not Another One”. The thinking goes that Boris is far ahead in the polls, and so could attend the Euro summit the next day with more power to his elbow, and really give the EU leaders what-for!

The polite word to describe these rumours is bunkum. (The less-polite word also begins with B and has two syllables.) There are two major flaws with the plan. The first is that 18 October is way too close to Brexit day, and so no matter how much power there is at Boris’s elbow (or anywhere else on his anatomy) there just isn’t time for a deal to be pulled together and approved in all the places in which it needs to be passed. Also, two weeks before B-day is just about the worst time to be holding an election – project fear will be in full swing and the media will be full of the impending doom. Boris and his team certainly need to be planning on how to win the peace after B day at that point, but the public may have more pressing matters on their minds.

The Anti-Brexit Forces Are Too Split to Perform

Another week and another proposal from the anti-Brexit brigade. Part of their problem is that they all have agendas so different that they cannot agree on a shared approach.

Mr Corbyn has dreams of No 10

Last week, it was J Corbyn’s dream of rounding up support to propel him into No 10. That wasted another 7 days of precious time. However, putting Mr Corbyn into No 10 was a suitable objective for only Mr Corbyn.

This week, the rebels seem to have dropped the idea of an early no-confidence motion. So perhaps the Sunday papers’ double bluff about the Tories wanting such a thing was successful after all? The latest plan is to take control of Parliament and pass legislation to force Mr Johnson to extend Brexit. The trouble is, all of the people involved are playing politics, working out whether such a step helps their own person ambitions. However, despite Mr Bercow’s self-belief, the Government controls order papers, and can easily string out any arguments about procedure – perhaps reminding Parliament that they are not in the business of dis-obeying instructions from the electorate.

Frau Merkel in better health

Meanwhile, Frau Merkel’s sarcastic comment to Boris suggesting he should try to solve the Irish backstop in 30 days (when it hasn’t been closed down in over 30 months) has held open the prospect of a last minute deal, taking away some fire from the stop-No-deal faction of the anti-Brexit rabble.

 

 

What Will Happen?

In our view – remember, we are almost as clueless as the next person, depending on who that next person happens to be – Boris has got B-day in the bag for 31 October. It feels like there will be too much egg-on-face for the EU to renegotiate, and so a No-deal Brexit seems the most likely outcome. However, this time there has been ample warning, and so trade will keep flowing, people will continue to travel, and most of the strain will happen behind the scenes. This is kind of the inverse of the fig-leaf Brexit we forecast in the spring, when we thought a net-curtain of a deal would happen to save face. Now it looks like both sides will rush towards No-Deal, for the message that will send to their own electorates, but behind the scenes everything will function!

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Corbyn for PM – The Ultimate Silly Season Story

Corbyn the great statesman

Hahahahahahahhahahahahha. Hats off to whoever thought of proposing Jeremy Corbyn to be Prime Minister. Perhaps the most fundamental question about having the Labour leader in charge of a “Government of National Unity” to solve the Brexit dilemma is, does anybody know what Mr Corbyn’s ideal Brexit would look like? So far the only clear Labour policy has been to oppose whatever Mrs May tried to get through Parliament. That was opportunistic politics, not conviction-based positioning. It is widely believed that Jeremy himself is in favour of Brexit, but it appears from the sketchy plans seen so far that the National Unity Government would actually be a Parliamentary Unity Government whose sole purpose was to delay Brexit and call a General Election. It is tough to see how frustrating again the 52% of leavers would lead to any unity within the country.

There cannot be many Tory MPs who want an election: and there must be even fewer who would want to face even their constituency party, let alone the electorate, after putting a Marxist in No 10. Then there is the difficult issue of Scottish Nationalism. Would Corbyn and Co be prepared to sanction another Scottish referendum as the price of SNP support? That would make the £1bn bung to Northern Ireland to buy DUP support look rather cheap. Even with the SNP, there is zero chance of Mr Corbyn building a parliamentary majority. Even some of his own MPs wouldn’t back him.

What is most revealing about this whole farrago is that St Jeremy bought into the idea hook, line and sinker. He truly believed it could work. Like a first year schoolboy persuaded by the sixth form to stand for Head Boy, he seemed to genuinely hope that it could happen. Oh yes, come to think of it, that’s how he became Labour leader – the outsider added to the ballot paper for a laugh.

 

Silly Season Story No.2 – Ken Clarke for PM

Ken Clarke after 49 years in Parliament

Come on Ken, surely you must have seen that one coming through the cigar smoke? At least you had the nous to claim no involvement until the fuss died down. Thus you saved some of your dignity.

 

Silly Season Story No. 3 – Donald Trump Wants to Buy a Country

Leader of the Free World

Well it would be the real-estate deal of the century – and you know what, he could still pull it off. Going public may well be a tactic to soften up the Danish people into selling off an asset they cannot exploit to someone who can!

Hey….. wait a minute. If Donald J wants to buy a rugged, freezing, mountainous country with too much snow and ice…… well we know he loves Scotland! Call Boris, I’ve got an idea!!

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Brave Bold Boris Boosts Britain

Boris’s First Cabinet. (Photo by Aaron Chown – WPA Pool/Getty Images)

What a great start he has made! Mr Johnson has his critics, not to mention his complex private life. But the change of mood since Wednesday has been palpable. It feels like a spring back from the doom, gloom and managed decline of the 1970’s (Mrs May’s dour attitude) to the sunlit uplands of Tony Blair’s Cool Britannia in the 1990’s. For an in-depth review of the new cabinet, we recommend the Politico website.

 

This is what we see Boris as having done well;-

  1. A wholesale new government, with everyone pulling in the same direction. This is quite a change from the try-to-appease everyone approach of the May administration.

  2. Stamping his authority on the cabinet from Day 1 by standing up to Jeremy Hunt

  3. Putting Michael Gove in charge of No Deal preparations and funding him properly. This is a sign to all that the new Government will take No Deal if a better alternative is not forthcoming.

  4. Surrounding himself by a team of advisers who are known to mean business.

  5. Announcing a raft of other policy initiatives – for example putting money into extra police, focussing on the Northern Powerhouse, and spending on defence. Suddenly, it looks like the Tories have spending plans based on conviction rather than just trying to react to Mr Corbyn’s ideas. This is signalling also that if a General Election comes, the Conservatives have a manifesto in waiting.

  6. Keeping Carrie out of the limelight to avoid distracting headlines.

  7. A bravado performance in Parliament, answering questions assuredly for more than two hours. Boris seemed positive, competent and inspiring. We can only imagine his political opponents were downcast, and several of his doubters in the Conservatives were starting to be won over. Nothing improves one’s political fortunes as much as appearing to be a winner!

  8. Making telephone calls to other World Leaders, but travelling first around the UK to ensure his interest in the provinces can be seen.

We agree with the Team Boris analysis that there can only be one of three outcomes over the next 4 months;

  1. No Deal Brexit

  2. The EU blinks and negotiates

  3. A general election.

Opening deep talks with the US at this stage shows a much more determined approach to negotiating with EU. Brussels clearly has disdain for the choice of the British people, but they will not want the UK moving from the EU’s orbit into that of the Americans. So playing off the two powers against each other is a very smart move. Suddenly, No Deal has a geo-political angle rather than just being a punishment for UK.

Summary

Boris has had a great start and now has the political momentum (with a small M!!). He could well prove unstoppable by the time Parliament reconvenes in September if he keeps this going over the summer.

Unlike most of the media, we see Boris’s start as making No Deal less probable, because his strength will more-likely make the EU re-open talks.

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Tory Blind Date Ends in Frustration

Blind Date – without the entertainment value

Did you watch the BBC’s “Heated Debate” last night? Five Candidates trying to win affection, but with fewer witticisms or clever answers than Cilla’s script-writers provided for the callow applicants on Blind Date. Here’s how we think they performed.

  1. Boris Johnson

    BoJo had everything to lose, but managed to avoid any foot-in-mouth moments. He was distinguished by being the only candidate to push for 31 October, Deal or No Deal, which will play well with the Tory Party members in a few weeks time. However, his approach to everything else was bluster and bumble. A missed opportunity for statesmanship.

  2. Jeremy Hunt

    Mr Hunt came over as less continuity-May than earlier in his campaign. However, his refusal to set 31 October in stone “if a deal is in the offing” will be taken as showing that he is back in the avoid-No-Deal, Delay-and-Faff camp. We now see Mr Hunt getting on to the ticket as the stop Boris candidate.

  3. Michael Gove

    The Govester had a snortingly(!) good evening, and in our opinion won the debate and rescued his future political career. He showed greater intellectual weight than the other candidates, which we feel guarantees him a top job in the next government. However, he too shared Mr Hunt’s openness to can-kicking Brexit. Thus we think he will not pick up many Brexiteer MPs, who will fall in behind Boris, whilst the more moderate will go to Mr Hunt.

  4. Sajid Javid

    The Saj came over as moderate and thoughtful, with the potential to be more inclusive. He was charming, and could extend the reach of the Tories to those with less-privileged backgrounds. However, he had no distinctive policy on Brexit, and came over as more of a team-player than an inspiring leader. We think Sajid will be voted out today.

  5. Rory Stewart

    Ahhhhh, Mr Stewart. Suddenly he has become Mrs May in a suit and less colourful shoes. He used the challenges of managing Parliament to advocate the weakest of Brexit approaches, and took No-Deal completely off the table. That will gain him support from the Remainers in the Tory party, but there will not be enough of them to get him on to the ticket. It does cross our mind that a few Boris supporters may back Mr Stewart, knowing that the membership will never vote for him – and so guaranteeing that Boris wins. Though that’s how Mr Corbyn got in, so we would urge great care in that game. Overall, Rory looked like a First Year Schoolboy who had somehow found himself in the Sixth Form Debating Society. Unfortunately, the rest of them looked the part as Sixth Formers.

Were there any funny moments? The closest time for any amusement was when Scottish teenager Erin asked them to commit to zero carbon emissions by 2025 rather than 2050. Clearly, all of them were struggling to avoid the obvious answer that a) such a target in just six years is cloud cuckoo land, and b) they might still be around to face the music when it doesn’t happen. However, they did all manage to bumble through, and so our entertainment was short-lived.

Conclusion

Boris will pull ahead, Jeremy will come second. Which come to think of it, is where we see the next election too!

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