Archive for the 'Article 50' Category


Punters now think it is even less likely that the UK will leave the EU on March 29th

Tuesday, January 15th, 2019

To my mind the most significant thing to come out of the catastrophic defeat for the government on its Brexit deal was the statement by Theresa May that she’ll look to consulting with other parties.

I just wonder if that is paving the way for a second referendum. Clearly the other main parties, LAB after its likely confidence vote failure tomorrow, the SNP, the LDS, PC and the Green are all committed to a second vote.

    It would be politically easier if the the decision to go to the country again was a joint one. The move would also a less difficult time getting through the Commons.

One thing that TMay has been saying repeatedly which is surely right – rejecting the deal makes Brexit happening at all less likely.

It is hard to conclude otherwise that the ERG’s strategy has not been very smart.

Mike Smithson


On the spread betting markets the number of Brexit deal “ayes” for TMay’s deal slips five during the afternoon

Tuesday, January 15th, 2019

For me the most satisfying, if risky, form of political gambling is on the spread betting markets where the more you are right with your prediction the more you win – with, alas, of the converse being the case.

So on SportingIndex this afternoon there has been a lively market on who many MPs are going to vote “Aye” in the voting that starts in less than an hour.

At 3pm you could have “sold” the number at 222 MPs – that’s now slipped to 217.

If you bet at that level and the outcome was, say, 210 MPs then you would win the difference between the actual outcome and your bet – in this case SEVEN, times your stake level. The worse it is for Mrs May the more money you would make.

If you think that it is not going to be as bad for the PM then you “buy”.

Because of the open-ended nature of the outcome spread betting is only for those comfortable with taking big risks.

Mike Smithson


On this day lets not forget the 1998 Good Friday Agreement that brought peace to the troubled province

Tuesday, January 15th, 2019


Let’s not forget either the DUP’s popularity within the province

One of the issues with the politics Northern Ireland is that the Republican party, Sinn Fein, refuses to take up its seven seats at Westminster. This means that of the 18 constituencies in the Province seven do not have active MPs. It also means that the only Westminster representation comes from a party that got just 36% of the vote there in June 2017.

This makes the parliamentary representation of opinion in the province rather distorted but there’s nothing that can be done about it because the Sinn Fein stance is central to its core politics.

Throughout the early part of my career the one massive story that dominated British politics was h troubles in Northern Ireland which lead to many deaths and much destruction. The ending of nearly a third of a century of difficulties as a result of the Good Friday Agreement in 1998 was a major success that both Tony Blair and John Major can claim credit for.

The DUP, it should be noted, was opposed to the agreement and as can be seen the no side got 28.8% of the vote.

A huge problem is that this was all a long time ago and many current politicians have no real knowledge understanding of its significance.

Mike Smithson


If the Article 50 exit date gets deferred it could raise doubts about whether the UK ever leaves

Friday, January 11th, 2019

A deferral on March 29th could lead to similar calls once the extension ends

Lots of talk today about the possibility of the March 29th Brexit deadline being deferred because the UK Parliament does not have the time left to enact the required legislation.

Apparently six bills would have to complete the parliamentary process before the article 50 deadline of March 29 when the country is due automatically under the legislation that allowed the Article 50 notice to be given.

A deferral has a number of implications the first of which is that the country might have to participate in the forthcoming European Parliament elections which take place in May. Clearly if the UK is still in the EU then its representatives will have to be elected in the May elections.

One of the issues here is that the remaining 27 countries have already carved up the UK seats that should become available once the country leaves and candidates have been selected.

A more important element is that once you have delayed the process for a first time then you can see the same issue raising its heads against again once the extension period is over.

Maybe you could even have a situation whereby the UK is permanently in the EU and permanently trying but failing to set up the institutions and other issues that will be required for an actual exit to happen in order to meet the terms of the referendum outcome.

The betting on the Betfair exchange has moved even further towards the UK not leaving on March 29th. It is now a 75% chance that it doesn’t.

Meanwhile a hedge fund manager is betting big that the UK won’t leave.

Mike Smithson


What happens when the anti-Brexiteers are united – those who want it are split

Wednesday, January 9th, 2019

This week’s latest Westminster scorecard : The Executive NIL Parliament TWO

By any standards the events that we are seeing at Westminster over the process of the government’s EU Exit legislation are completely unprecedented. Generally parliament is very much there to follow what the executive rules and Westminster’s structures and rules are designed to achieve that end.

The two defeats for the government that we’ve seen yesterday and today are designed to eat away some of the executive’s power in relation to the biggest constitutional changes in decades

In many ways TMay’s has brought this on itself by seeking to take as much of the decision-making away from Parliament. Her move before Christmas to postpone the vote on the deal has very much raised temperature for this week’s considerations.

This afternoon’s motion was about the control of the timetable for what happens. This was unprecedented in that the Speaker agreed to it apparently against the standard procedures of the House. Its passage means that if, as is likely, TMay’s deal is defeated next Tuesday then she has to bring something back within 3 working days. This is instead of the three weeks that would have happened under normal procedures.

All this is set against a backdrop of the government having no majority on the issues for the deal and not wanting to end up with No Deal

Until this afternoon I thought that this TMay’s strategy of wearing the Commons down until there was no real time left would succeed in getting her deal through. Now I am much less convinced.

    If Brexit was supposed to be about Parliament taking back control well that is exactly what has happened but not in a way that those who invented the slogan might have appreciated at the referendum.

Quite where this goes is hard to predict but we could get to situation where a Commons motion calling for a second referendum is carried. Mrs. May could ignore that but I think she would find it very difficult.

Mike Smithson


After a dramatic day in the Commons punters on Betfair make it a 64% chance that the UK will NOT leave EU by March 29th

Tuesday, January 8th, 2019

The Commons defeat for the government with the almost unprecedented cross-party nature of the vote has seen punters being even less convinced that the UK will leave the EU as planned on March 29th.

The election Maps Tweet above shows the party breakdown which looks set to be a good indicator for future votes.

Quite where this goes now is hard to say but I think that the betting markets have got this right.

Mike Smithson


Trying to work out what is Britain’s European Strategy

Tuesday, January 8th, 2019

Other than, arguably, joining the US in the second Iraq war in 2003, the worst post-war strategic mistake made by any British government was the decision not to join what became the EU in 1958 at the start. Had it done so it would have played a leading role and would have helped shape it into an organisation with rules, aims and a culture with which it could have been much more comfortable. Rather than being seen as a foreign institution, it would have been seen as a British one it helped create, shape and govern. Ah well. All too late now. Does any of this really matter? Yes. Here’s why.

Britain has no European strategy

What’s Brexit, then? Well, whatever it is it is not a strategy. It is a reaction – to problems within the EU itself, globalisation, the faltering of the capitalist model since the financial crash, changed migratory patterns, an uncaring arrogant elite, snotty Londoners, take your pick. But what is the strategy? Why did Britain hold back in the 1950’s, rather reluctantly and sniffily sending a civil servant to Sicily to observe what the Continentals were up to?

Lots of reasons: a desire to retreat home and build Jerusalem (there is an echo in this of Labour’s wish now to concentrate on every day issues rather than Brexit), exhaustion, a mistrust of grand schemes, a political class still in thrall to Imperial and Atlanticist pretensions (another echo there, which even Trump’s evident uninterest in all matters British has done nothing to dispel).

But the overarching reason was that Britain still held onto the European strategy which had more or less served it well since the Middle Ages – ensuring no one power dominated the Continent to Britain’s detriment. With Germany defeated and divided and US forces on European soil to keep Communist Russia at bay, what need was there for Britain to give a moment’s thought to Europe?

Eventually, of course, it decided to join but nearly two decades too late, as a supplicant, from a position of humiliated economic weakness. So, having joined the new dominant European power, what did it think this meant? Was Britain now a European power? Should its focus be on this emerging new organisation? And, if so, what did this mean for Britain itself, for British domestic and foreign policy?

The history of opt outs, of being half in, half out, never really on board with the European destination, of seeing the EU as a foe to be battled with, of cultivating a relationship with the US which was “special” in the way that a besotted fan has a “special” relationship with a celebrity whose film they’ve watched 000’s of times, suggests that an answer to the question of what Britain’s European strategy should be has never been found.

In this it was beautifully mirrored by the EU itself which never properly realised that having a country such as Britain with its different history, political and legal culture and approach as a member required a step change in its approach and thinking, beyond simply shuffling up a bit to make room for a few more chairs round the table.

Why Britain didn’t want a dominant European power

To listen to some Brexiteers now you’d have thought that Britain’s sovereignty was some golden thread running through its history since Alfred the Great and that any diminution or sharing of it is an emasculation of some essential Britishness. But the reason why Britain was concerned about this was because it didn’t want any enemy interfering with its ability to trade, with its trade routes, its control of the seas, its colonies.

Sovereignty was a means to an end. Trade and commerce were what mattered above all.  And they still do matter.  So what happens now given that much of that trade is with Europe and much of Britain’s trade with the rest of the world is mediated through the EU?

The EU is not an enemy

The EU may – at its worst – be many infuriating things: arrogant, complacent, sometimes venal, often deaf to concerns, inflexible, insensitive, self-interested, defensive, obstructive, unimaginative, overly bureaucratic, with a tendency to overreach, sometimes undemocratic etc.  But it is not an enemy. This should not need saying but it does. It is dominant in Europe, likely to remain so for the foreseeable future and, essentially (despite all its faults) friendly and benign. It is certainly in Britain’s interests that it should be so.  How then should Britain interact with it?

A close relationship

Ah yes – the fabled close relationship. What Britain is now realising, very late in the day, is that if the relationship is close, Britain does what it is told by the EU and has no say in the rules it has to follow. If joining an organisation after the rules were written was humiliating and unworkable in the long run, how much more so will such an arrangement be. If it is not close, Britain will need to earn its living elsewhere.

It will end up largely doing what it is told by other countries: China, the US, Asian nations, Pacific nations, even eventually emerging African nations. It will have a bit more say in other negotiations but the days of Britain bestriding the world imposing its rules, its language, its laws, its will on other countries are long gone.

Again, this should not need saying but it does. Britain dominated global trade in centuries past because it was able to dominate, militarily if need be, anyone who stood in its way and could outcompete others. It will be much more of a supplicant now and one without a once winning card, namely, easy entry into the EU market. All of this is doable but it is not an easy cost-free option and will involve trade-offs and sacrifices (ISDS tribunal jurisdiction, anyone?) at least as hard, if not harder, than those required by EU membership.

What now?

Currently Britain’s approach to the EU might best be summed up by Sybil Fawlty’s description of her permanently enraged husband: “You never get it right, do you? You’re either crawling all over them, licking their boots, or spitting poison at them like some Benzedrine puff adder.”

Let’s assume some form of Brexit goes through on 29 March.  A brilliant slogan – “Take Back Control” – will have achieved its aim – departure. What it won’t have achieved is any idea of where next nor what control Britain will be taking back and for what purpose.  What is still missing is a realistic strategy for Britain’s relationship with a dominant Continental power. Departure does not render this question moot. It makes it more urgent than ever. A little late you say?  I agree. Still, if not now, when?



How the EU has bungled Brexit

Monday, January 7th, 2019

As Britain is going through the final stages of a psychiatric breakdown over Brexit, not much attention is being given to our surroundings. Time to take some slow shallow breaths and look around. How does the world look like from the EU?

The EU looks pretty ropey just now. At every level it is enervated. Its Commission is serving out its final months, a lame duck administration. The European Parliament is divided and set to get more so. The national governments are just as weak. Germany has a lame duck Chancellor. France has an unpopular president besieged by extra-Parliamentary protest. Sweden has no government.

Many of those countries with a functioning government are functioning to cause the EU hierarchy serious problems – Italy, Hungary, Poland and Romania are all causing headaches.

And then there is Brexit. The EU is due to lose one of its largest member states. This substantially damages the EU in at least eight ways. 

  1. Reduced heft – in a world of power blocs, the smaller the bloc, the less the power.
  2. Increased division against common adversaries. There’s a reason why Russia is pushing Brexit hard. 
  3. Reduced access to London’s financial markets. This is potentially a further drag on an already-anaemic European economy.
  4. The loss of Britain’s cultural contribution.
  5. Detachment from Britain’s contribution to learning (its universities rank far better than most in the rest of Europe, its Nobel Prize record is outstanding).
  6. Don’t laugh, but loss of access to Britain’s bureaucratic skills.
  7. Loss of Britain’s international connections – Britain is a leading member of many international networks, of which the permanent UN Security Council seat is only the most obvious.
  8. Loss of military puissance. Britain and France dwarf the rest of the EU’s capabilities. An EU army is not going to compensate, especially at a time when the USA is putting the hard squeeze on its NATO allies.

(And all this is without mentioning the loss of Britain’s financial contribution, which in the grand scheme of things is trivial.)

You would have thought that the EU would have approached Brexit negotiations so as to minimise some at least of these downsides. It has done the opposite.

It claims to have prioritised the integrity of the EU as a system in the drawing up of its negotiating position. This would not have been inconsistent with minimising some of these downsides. 

To take a small but telling example, Britain was excluded from nominating European Capitals of Culture for 2023 because it would have been ineligible under existing rules. But non-EU cities were eligible and Istanbul and Reykjavik have already held the title in the past. A minor rule change would have offered a small symbol of continuing cultural links. Instead, the EU chose to symbolise its attachment to mindless bureaucracy.

There was always a high risk of Britain leaving the EU on alienated and hostile terms. By their stance, the EU hierarchy have done their damnedest to ensure it. Even a late reversal of Brexit is likely to cause at least as many problems as it solves. This state of affairs is no more in the EU’s interests than in Britain’s. 

Fortunately, the careers of the culprits on the EU side have suffered appropriately. Jean-Claude Juncker will cease to be President of the European Commission later this year. He will not be missed. Arguably he should have resigned in 2016, as David Cameron did, his authority shot to pieces by the failure of a central plank of his campaign.

Instead he lingered on fairly pointlessly. His most newsworthy interventions in recent months have been to have a needless argument with Theresa May and to paw at a colleague’s hair.

His elevation had been controversial in the first place. Endorsed by the EPP as their Spitzenkandidat (nominee for the presidency) for the last European elections, Jean-Claude Juncker’s lack of suitability had been much-discussed even before the European Council met to consider the appointment. David Cameron had fought a fierce and utterly unsuccessful battle to resist the concept and the man

Ironically, the mood among European leaders seems to be shifting: Emmanuel Macron is in the majority of the European Council that has voiced opposition to the idea of automatically picking the Spitzenkandidat of the leading bloc in the European Parliament. Commission President Juncker has managed to discredit himself to the extent that the mechanism by which he achieved his position is now in serious jeopardy.

His chief Brexit negotiator will be hoping the Spitzenkandidat system does collapse. Michel Barnier had made no secret of his ambition to become Commission President. He had stood against Jean-Claude Juncker in 2014. His ambitions for 2019 were trailed far in advance. As a man in his late 60s, this must be his last chance.

But his failure to promptly agree a Brexit deal wrecked his chances of securing the EPP nomination. His best chance now looks for the 2019 European Parliament election to produce a chaotic result and for him to emerge as a compromise candidate from the mess. The chaotic result looks very possible but with the EPP Spitzenkandidat an ally of the German chancellor, his chances of being the compromise candidate do not seem particularly strong.

The EU will survive the year. It is unlikely particularly to prosper or to finish the year stronger than it started it. It urgently needs to find more visionary leadership.

Alastair Meeks