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!

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.

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!!

A Bleak-Midwinter Brexit Recession By Christmas

Oo-er, suddenly the UK economy ain’t looking so good!

The news media are full of speculation about Brexit, and not many of the stories are looking forward to how wonderful the country will be once/if Brexit happens. We can expect more of the same for the next twelve weeks until Halloween.

Are we heading for No-Deal?

At the moment, both sides are digging in, trying to create a tough stance for the benefit of their populations (I hesitate to use the word electors when we are discussing the EU, but you know what I mean). Behind the scenes, it can be assumed that the diplomats and civil servants will see themselves as the grown-ups in the room, and thus be at least looking for common ground.

However, it seems unlikely that a comprehensive new Withdrawal Agreement will be crafted by October. But we can expect enough co-operation to keep the world turning.

So what’s the problem?

The problem is that investment is collapsing. The worst thing for businesses in uncertainty. Life has enough risks when it comes to business investment, without an unseeable future being only 12 weeks away. Similarly, house-buying and car buying are likely to miss out on their usual autumn surges this year.

And after Brexit day, will there suddenly be clarity and light? Nope. There will be hysteria in the media for a few weeks as every little shortage and business malady is blamed on you-know-what. And the effect of this – more hand-sitting and less spending.

What else is happening?

Leader of the Free World

The US is starting to suffer from Mr Trump’s tariffs, to the extent that Jerome Powell has cut interest rates despite full employment. Meanwhile, China is suffering a marked slowdown from the trade war. This has now spread to Europe, which is also teetering on the edge of recession.


The UK is heading for recession – and it is difficult to see when it could end. Domestically, we’ll probably pull out next spring…. but that depends on what the rest of the global economy does. If things keep softening elsewhere, it could be a big one!

PS. The slowdown in Q2 announced today was no surprise, given the stockpiling in Q1 for the original Brexit day, and the factory shutdowns brought forward to April in case of Brexit delays.

Theresa the Timid

PPS. The coming recession will be a direct result of Mrs May’s and Parliament’s timidity over Brexit. If they had gone ahead on 29 March, we’d be pulling out of it by now. The delay to October has just increased the uncertainty and halted the economy for 7 months, tipping us into a recession we need never have had.

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.


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.

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.


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

What Should An EU Trade Deal Look Like?

One of the major flaws (of many) in Mrs May’s Withdrawal Bill was that it favoured trade in goods rather than in services. And yet the UK runs a deficit in goods with the EU, and a surplus in services. So having an open market in goods, and accepting restrictions in services would be insane for UK. Why would we want no restrictions on the EU selling goods to UK, where they are strongest, but accept restrictions on us selling services, where we are best? Brilliant for EU, terrible for UK. But that is what Mrs May agreed! (Let’s ignore for now the smorgasbord of other problems with that dead deal.)

We believe that there should be a tariff-free trade agreement with EU. Despite their waning importance in global terms, the EU is a large economy and next door to us. Of course we want open access to it – just not at any price.

So what should an EU Trade Agreement look like?

  1. It must not preclude us making agreements with other countries such as Commonwealth countries, US, China, Japan etc. Therefore a customs union is ruled out.

  2. It cannot tie us to EU standards and ECJ ultimate ruling – this would truly be external control of the UK economy

  3. It must give open access for our financial and legal firms to access EU customers from UK. We have sophisticated financial oversight and regulation, and giving EU firms the ability to trade with London is in their interest too. A refusal by the EU to agree this would be cutting off their nose…..

  4. The transport of goods should be as smooth as possible, with the majority of forms completed online, away from borders. Thus lorries could have number-plate recognition and straight-through passage. Only intelligence-led spot-checks are necessary, as now. This is as true for Dover as it is Derry.

  5. Agricultural products with UK origin should be allowed into EU without restriction or tariffs. Our farm standards are among the highest in the world.

  6. Facilities must be included for freight going to and from Eire to travel through UK without hindrance. Failure to permit this would have a devastating blow to our cousins across the Irish Sea.

This may look to be an ambitious list. In essence, we support trade being as unrestricted as possible. But we do have plenty to offer. We are the EU’s largest export market. With the threat of US tariffs, a slowing EU economy and Italian insurrection against Brussels budgetary control, they need the deal as much as we do.

Can this all be achieved before 31 October? Frankly, No. We will lose the next 2 months in selecting a new PM and cabinet. And Europe will be closed in August with new commissioners to be appointed. Only when both sides are in their swanky offices can negotiating teams be appointed and briefed.

We could extend Article 50 for a year to allow Brexit to happen fully all at one time, or we can take WTO for a while. Either way, making a comprehensive, open and balance free-trade agreement with our friends and neighbours must be the second highest priority of the new Government.

Jeremy Hunt Rides Forth. Which Is Where He Will Finish.

Hunt for fourth

Oh dear for Mr Hunt. His leadership campaign seems to have fallen already. We instinctively like a politician with a business background – especially a successful business background. And yet he has slipped – no, jumped – into the “Continuity May” trap.  This title is so poisonous!  Not only does it reference Mrs May, but the IRA too!

Jeremy Jeremy Jeremy. Your approach didn’t work for Theresa, and it won’t work for you.

His article in the Daily Telegraph, and an interview on the Today Programme this morning, were pushing the scare tactic of saying that expressing belief in No-deal will lead to a vote of No Confidence in Parliament, followed swiftly by an election and Mr Corbyn in No 10 by Christmas.

Such scaremongering didn’t convince the general public, and surely he is not suggesting that Tory MP’s are more gullible than the average voter. Okay, fair point! But even so, it is hard to believe Tory MP’s will vote for losing their jobs this summer any more than they did in the spring. The European Elections cannot have convinced them of the sagacity of returning to the voters any time soon. Taking No-deal off the table at this stage is to tell the EU directly that he will accept whatever terms they choose to impose. And then he will surely fail to get them through – again.

So we see the talented Mr Hunt being relegated to 4th place in the list.

Dominic Raaaab – the politicians’ Tory hopeful

And the top three are likely to be Boris, Dominic Raab and Michael Gove. Boris is a proven election winner but his other policies remain vague. The danger is if he opens his mouth, he will lose support with every word.

Govey is an intelligent man and made artful changes in his briefs so far.  However, the backstabber reputation remains.  Meanwhile,  Dominic Raab seems to have the best Conservative credentials and policies. Not only does the next Tory leader have to deliver Brexit, they have to make a success of it too.  Those cuts to income tax and corporation tax will appeal to his colleagues and supporters. If the rest of his package equally inspires Blue voters and activists, he will be hard to stop, and might just drag enough MPs with him to deliver any Brexit outcome.

Boris – the public’s darling

Meanwhile, the exciting point in this race will be to see if the MP’s dare keep Boris off the final 2 person ticket. We think they won’t. Then he wins. Cripes!

Second Brexit Referendum Required – With a Noel Edmonds Twist

Another referendum could solve this Brexit mess!

Andrea Leadsom – assassin of Mrs May

Clearly Mrs May is toast (thank you Andrea Leadsom for wielding the knife). In a short period of time, we will have a new, dynamic, eager Prime Minister, keen to take their place in history by resolving Brexit – and hopefully by doing some other things as well. (Yes, there is still a country to run!)

Back on 9th May, in our article [The End of May]2 we suggested that Mrs May would be gone by the end of the month (Thank you thank you for your applause), but also that the new leader has some interesting choices for Brexit. To solve the impasse, the obvious choice is to tell the EU that they must give us another year to negotiate a better deal, or prepare for us to leave on 31 October.

Houses of No Decision

However, Mrs May’s departure doesn’t change the maths in the House of Commons. It is still not in favour of anything. Whilst a new improved-recipe deal might gain the parliamentary approval that was so lacking for Mrs May’s Bill, any new deal would be over a year away, and a new leader won’t want to fall into the trap of having Brexit overshadow their entire premiership.

A Second Referendum?

Up to now, a second referendum has been Remainer-speak for reversing democracy, hoping that the foolish voters will take more notice of their betters and vote the right way this time. Unfortunately, this approach is flawed. If the new plebiscite repeated the Leave verdict, the route to leaving is contentious still. If it overturned the earlier decision and went for Remain, then the matter would not be closed for the rest of our lifetimes.  So a second Leave/Remain referendum would not provide a solution.

Here is the Twist!

The people voted to Leave. That is a done decision and cannot be reversed legitimately. Parliament cannot decide how to enact the instruction of the people. So the further referendum must be purely between the deal suggested by the EU – or a WTO-type departure. This would be the Noel Edmonds Referendum: DEAL or NO DEAL

This solution is;-

  1. Democratically valid and consistent

  2. Easy to explain and enact

  3. Does not try to reverse the earlier referendum

  4. Blocks the growth of the Brexit Party (which is scaring the Tories)

  5. Resolves the issue one way or another this summer

  6. Gives businesses and people certainty in a short timeframe

  7. Let’s our politicians get back to what they do best (whatever that may be)

Noel Edmonds, a titan of light entertainment

We commend A Second Referendum to select how we leave the EU: either with the Withdrawal Bill, or trading under WTO Rules (Deal or No Deal)

What drives Mrs May?

Whilst we know WHO drives Mrs May – it will be some highly-trained Met Police driver called Ade or Nick or Brian in that armoured Jaguar XJ8 – we still don’t know WHAT inspires her.

Theresa May in her usual listening mode

What we can see is a determined, resilient and stubborn woman, who appears to find forming widespread relationships difficult and struggles to empathise with people. Without a circle of confidantes, she takes decisions slowly and alone.

These characteristics are unusual (to say the least) for a top politician – and have served her badly during her premiership.

Theresa May’s upbringing as the only child of a vicar is often cited as being a key determinant on her personality. We are economists not psychologists, so whilst we see the effect and possible cause, we are way too cautious to conclude that a determinist link exists. The evidence cited is;

  1. She believes in public service with an old-fashioned sense of duty

  2. Theresa’s lack of empathy could be the result of being an only child who spent much of her childhood in a respectful grown-up world.

  3. She does not undertake the hard-nosed bargaining of a market trader, more the appeasement orientated approach of the middle-class clergy.

However, we don’t buy these arguments.

  1. If she was truly focused on the best outcome for the country, surely she would have gone by now?

  2. We believe personality is almost entirely genetically based. It may well be that Mrs May’s parents were drawn to the cloth due to their personalities – which Theresa inherited. But we do not buy the idea that it was a closeted childhood that turned her into the woman she is today.


In conclusion, we feel that Mrs May is ambitious, hard-working and intelligent. There is no way she could have become Prime Minister without those attributes.

However, Theresa is too much of a loner to negotiate well, to lead a team or to persuade a parliament (or a country) to back her ideas. This all points to a lack of empathy. Her failure now is down to three fatal mistakes;

  • She called an election (a reasonable decision), but blew it with a terrible manifesto which she imposed without consulting her team.

  • She accepted a massively unfavourable, untenable agreement from Brussels

  • She clung to the belief that she could force this awful agreement through Parliament through threats and wrangling.


Enoch Powell famously stated that “All political careers… end in failure”. Mrs May, your Waterloo has happened. (What a bitter-sweet European reference!)

For the sake of yourself, your party and your country, it is time to accept that failure.