Archive for the 'BREXIT' Category


PB Video Analysis: The UK Economy – It’s Not About The Brexit

Wednesday, November 21st, 2018

From the outside the UK economy looks pretty healthy. Unemployment is low and economic growth has been more consistent than any of its EU peers. Little wonder its politicians regard it as a success story.

There’s only one problem. The UK economy is built on an edifice of consumption and debt. The work we do? It’s selling things to each other that have been made abroad.

It’s a dangerously fragile situation, where we congratulate ourselves on maxing our credit cards out. This video explains where it all went wrong.

Robert Smithson

Robert tweets as ‘@MarketWarbles’


The Adonis assertion that there’s going to be a second referendum fails to convince punters

Tuesday, November 20th, 2018

Mike Smithson


How the “deal” has impacted on the main UK political betting markets

Tuesday, November 20th, 2018

The biggest gamble’s been on TMay surviving the year

The money’s piled on an election next year


Raab soared in the TMay successor betting

All charts based on Betfair exchange prices by

Mike Smithson


Taking stock. Brexit – just where are we and what are the options

Monday, November 19th, 2018

Christmas comes ever earlier each year. When I was a child, we didn’t hear anything about it until 1 December, when Radio 1 broke out the Christmas tracks. Contrast that with this year. Aldi launched their Christmas advert with Kevin the carrot on 9 November. John Lewis unveiled Elton John for their Christmas campaign on 15 November. And poor Theresa May was sledged on 16 November with Donner, Blitzen, Preener, Prancer, Stamper, Stomper, Comic, Stupid and Rudolf the Red-faced Reindeer all putting in their festive letters of no confidence.

What are the self-important ninnies in the ERG trying to achieve?  Let’s say that they get to the 48 letters that they require.  Let’s say that somehow they persuade sufficient numbers of MPs who did not think that the time is right for a contest that they should nevertheless change horses at this stage. 

Stretching still further, let’s assume that they get their chosen candidate (so far unidentified) into the last two and that the membership comes up trumps. What is it that they want the new Prime Minister to do?

For the new Prime Minister will still face the same constraints as the old one. The EU will still take the same negotiating approach and will not budge much. Indeed, they will be unlikely to negotiate at all unless they believe that whatever comes next will stick – the evidence for which is slight at present. 

Parliament will continue to have an absolute majority of MPs who supported Remain at the referendum and who will have the priorities of Remain voters but where a majority of MPs recognise the mandate of the referendum. The Conservative party will remain just as riven on the subject.

Remember, this is the best outcome for the ERGonauts. Far more likely results include advertising the skimpy numbers of true believers (as seems to have happened) or cementing Theresa May in office for another year. 

Replacing the Prime Minister is displacement activity. There are only really three options: fold, stick and twist. The problem that the government, the Conservative party, Parliament and the nation face is that choice has yet to be made by any of them on a collective basis and shows no sign of being made any time soon. 

The ERG should be focussing on that choice. Here they have a stronger hand, in the short term at least, if they want to twist. Other less extreme Leavers detest the draft withdrawal agreement. For that matter, some diehard Remainer Conservatives are opposed to it. The DUP are appalled by it. Labour are opposed to it. The SNP have never knowingly made a Conservative Prime Minister’s life easier. On a first vote at least, the withdrawal agreement at present looks doomed. 

That, however, would almost certainly not be the end of it. The idea that nothing will happen between a vote on the withdrawal agreement and 29 March 2019 looks fanciful. The next move would be the Prime Minister’s and while she would be in a tight spot, she has options.

She could resign. She could put the vote forward again – an option that has been touted on the basis that the markets would go haywire at this point. She could propose a referendum on her deal (probably vs Remain). Or, the draft having been rejected, she could propose a referendum on Remaining after all, as opposed to leaving the EU without a deal. Or, I suppose, she could do nothing. It’s easy to see the negatives of all these options. The bloody difficult woman would have a bloody difficult decision.

Whatever Theresa May chooses she is going to upset a lot of MPs. It’s hard to see how she would avoid a leadership challenge then. Still the question would remain, whether or not she saw that off: what should the Prime Minister do next? 

No policy option looks capable of keeping the Conservative party united. The Conservative party is getting close to ungovernable. Parliament as a whole looks as split. So Theresa May or her successor should look to form a policy that is most likely to keep the country together.

For all its many drawbacks (including one of timetabling), in those circumstances a fresh referendum might be the least bad option. If the country is to endure the privations of No Deal, it should be able to do so with a clear-eyed appreciation of what it is walking into. The decision should not be taken by default.

So perhaps the ERG should back the existing withdrawal agreement after all. It might well be their best outcome from here.

Alastair Meeks


A big reason TMay is defying political gravity is because of the possible alternatives

Monday, November 19th, 2018

Last year my biggest political betting loss was on Theresa May not surviving. Like many others after her disappointing GE2017 outcome I was ready to write off her chances of staying at number 10.

Well 18 months on she is still there and I now approach the end of the year with completely the opposite betting position. My money is on the Prime Minister being the Prime Minister and Tory leader at the end of the year.

This is a market which as seen huge amount of turbulence in the last few days as the political world has digested the draft agreement on Brexit. At one stage on Friday Betfair had her as a 62% chance to be out this year. As I write this post that is now below 30% and could ease even further as we get closer to the year end.

    Whatever Moggsy and the ERG gang might hope I don’t think there is the stomach within the parliamentary Conservative Party for a leadership challenge at this crucial stage.

Even if 48 letters are received by Graham Brady then it still has to come to a vote and it is possible that the detractors would struggle to secure the support of 150 plus MPs which will be required for TMay to be ousted as CON leader.

The above ComRes/Sunday Express polling published yesterday highlights what is proving to be TMay’s firewall – the lack of a consensus amongst voters about a likely successor. All four names polled have big negative figures. If there is a confidence vote then many CON MPs are likely to be concerned that they could be providing the mechanism for someone they don’t want becoming leader and PM.

The other factor that I believe is constraining Tory MPs is that if there was a confidence vote this week that Mrs May won then she would be guaranteed to be able to stay in post free from confidence challenges until November 2019.

The argument for holding their fire until after Brexit in March next year is quite persuasive.

Mike Smithson


The DUP would be taking a big gamble defying Northern Ireland’s farmers on Brexit

Saturday, November 17th, 2018

The assumption that the DUP will automatically oppose TMay’s Brexit deal might not be the case as pressure is building up amongst the Province’s farmers many of whom support the party.

The Observer is reporting that the powerful Northern Ireland Farmer’s Union has told Arlene Foster’s party that its 10 Westminster MPs should vote for the deal. The report goes on:

“The DUP has threatened to pull the plug on May and vote against the withdrawal agreement on the grounds it would create a “vassal state” and break up the UK.

But the UFU chief executive, Wesley Aston, told BBC Radio Ulster: “We want to make sure we avoid a no-deal situation. No deal for Northern Ireland agri-food and farming in particular would be absolutely disastrous and we have made that patently clear over this last while.”

His comments follow those from the UFU’s Ivor Ferguson that the “sheep industry would be finished” if there was no deal.”

This basically totally undermines the DUP rhetoric and will make it much harder for it to pursue their stated course.

My guess is that we’ll see a lot of pressure like this from all sorts of bodies throughout the UK if the threat of a no deal gathers real momentum.

Mike Smithson


So the Deal’s going down. Then what?

Saturday, November 17th, 2018



May’s numbers don’t add up for now. Is the threat of No Deal enough to change minds?

You have to salute her indefatigability. Despite the Prime Minister being just about the only MP prepared to champion the government’s Brexit Deal, despite the loss of another two cabinet ministers, plus various other more junior ones, despite the letters of No Confidence openly going in to the Chairman of the 1922, despite the three hours of parliamentary pummelling she took – mostly from her own side – when reporting the Deal the House, Theresa May soldiers on.

That she does so is down to the fact that while no-one likes what she’s putting forward, she at least does have a plan that doesn’t involve flying unicorns. Rees-Mogg made a serious tactical error when he openly announced his letter being sent, and then failed to trigger the No Confidence motion. His credibility as the voice of the Eurosceptic right – and the threat they pose to the PM – have to be diminished now it’s highly likely that his colleagues have failed to follow his action.

(It is just possible that the 48 letters have gone in and the Graham Brady is waiting for an opportune moment to make the announcement. There’s no obligation for him to announce that the threshold has been met the moment the 48th letter goes in, though the spirit of the rules suggest he should. Some commentators have suggested that he would give May advance notice of the No Confidence vote, were one triggered, and reports this week that he’s already met with her and with the Chief Whip don’t entirely go against him doing so now. However, were she to know that such a vote was imminent, I don’t think the PM would be flat-batting the bowling).

However, while the PM might survive for now, her Deal will not; not in its current shape anyway. Labour is going to vote against, as will the smaller parties, including – thanks to the two-tier backstop – the DUP. That alone would leave the PM in perilous danger, relying on Labour rebels, of whom there are just a handful. Those votes will be far outweighed though by the Tory rebels opposed to the deal, of which there could easily be fifty or more.

The net result is that the government is likely to lose the vote by a hundred or more.

One tactical problem the whips have is that the numbers are so heavily against them that it will be very hard to play to the sense of MPs’ loyalty. If the votes of a few could mean the difference between success and failure then there would be immense pressure on the waverers but that isn’t the case. Those opposed can vote it down with safety in numbers, knowing that theirs wasn’t the crucial vote.

So far, so bad. There are, of course, a small number of MPs and members of the public who actually want for Britain to leave the EU under a No Deal outcome. Some of these genuinely have a fair idea of just how hard the hit to the economy and essential services could be; most almost certainly don’t. The rest of the MPs voting against the Deal, and the members of the public backing that position, are doing so because they think that out of the political chaos that would result, some means to a different outcome would be found – perhaps with the side-dish of a general election, a change of government, a change of PM or whatever else the person in question is apt to desire.

How realistic is that? Perhaps the best way to think about it is to look at each of the options in turn.

A change of PM

In some ways, it’s surprising this hasn’t already happened. As Rees Mogg finally noticed, the policy is a function of the person. As long as May remains in place a deal something like Chequers will be on the table – hence, if you want to replace the policy, you have to replace the person. There are at least four big downsides to that logic though. Firstly, it only really counts if you are really not keen on both the deal and No Deal, both of which are currently on the table and therefore don’t require a change of PM; secondly, even if you can get someone else who will aim for a different policy, it has to be deliverable and it’s pretty clear that the EU is unlikely to budge much; thirdly, elections are inherently unpredictable and there’s no guarantee that you will get the sort of leader you want; and fourthly, the public is unlikely to look kindly on a Tory Party which decides that the best use of half the time left before 29 March 2019 is to engage in an outright civil war.

As on so many occasions so far, May is likely to survive for now because the alternatives are worse.

A change of Deal

The downside to Chequers Plus is that no-one likes it; the upside is that it probably remains less intolerable to more players than any other likely possibility. If it’s voted down, can the government (led by whoever), go back and get something different? Two huge hurdles make that very hard: time and negotiating space. The EU are understandably keen not to give any hint that there are more concessions on the table and that the Deal took them as far as they could go, and that’s probably true. It’s highly unlikely that there could be any looser transitional deal available, so the Brexiteers, it’s this or nothing. For Labour though, or others who want a closer relationship, that might be possible. The EU won’t want to reopen talks but nor will they want Britain to crash out. Of the two, they traditionally prefer putting a crisis off, where possible. In reality, that would need a Labour government though. What I wouldn’t like to guess on is whether there might be a deal where the UK trades a closer relationship for now – putting Britain on the same level of alignment as N Ireland, for example – for either a definite expiry date or a unilateral withdrawal clause. Something like that might satisfy the Tory and DUP MPs.

A genuinely different deal is probably undeliverable while the parliamentary maths remain as they are, though some amendments might be possible.

A change of government

This is Labour’s stated – and probably actual – goal. The problem with it is that it requires either the government to deliberately commit hari kari (as opposed to doing so accidentally), or for Tory MPs to defect, or for the DUP to vote against the government on a confidence vote.

The first two outcomes are highly unlikely. The government is not going to want to call an election when it is so split and when its core policy is so lacking in popularity. To choose to do that would be to invite an even worse election campaign than last time. Nor are defections likely. Rebellions, yes; defections, no. There is still more than enough – not least Corbyn – binding the Tories together.

By contrast, the risk of the DUP voting the Tories out is not inconceivable, though it too is unlikely. In reality, it’s only probable if May’s deal – with the two-tier backstop – goes through. Otherwise, an outcome that preserves N Ireland’s relationship with the EU on the same basis as Britain will satisfy the DUP, even if that’s No Deal. The reality is that the parliamentary maths give the DUP enormous leverage and it’s far more beneficial for them to retain the balance of power than to hand Downing Street to Corbyn – but that doesn’t mean voting against the Tories on key policies.

The Deal v1.0.1

Could May simply bring back the same deal a second time, with only tiny tweaks? Possibly, yes. As time ticks on, renewed negotiations go nowhere and the pressure of time becomes ever more acute, Labour might start to wobble, as might some Tory MPs who’ve currently wavered to opposing it. Come January, or even February, will Labour continue to try to force an election even if all previous efforts have failed, there’s no obvious mechanism and there’s no time left? Perhaps that would be the point where May and the Tory whips could put together 320 votes, banking on a lot of Labour ones. Doing so would seriously risk a split in the Tory Party though.

A second referendum

This is the most popular of a whole herd of unicorns. A second referendum offers no attraction to the government, which would have to advocate the Deal, and which would have no enthusiasm or support in doing so. Leave aside that it could only be delivered now with an A50 extension, which is a questionable proposition – there is no-one to put the legislation forward. Parliament cannot simply force an Act on the government that the government doesn’t want, all the more so if its passage is only a matter of weeks. And even if it could, polling probably means that whatever won would have no stronger mandate than what we have now.


This is a period of extreme volatility and unusually, the rule that Things Usually Don’t Happen doesn’t apply. Something will happen, if only because Brexit is currently hard-wired into the timetable and simply amending that is Something Significant Happening.

However, I don’t think things will simply tick on like that. It is entirely possible that May could be deposed before March next year, in which case the Tories choose a Hard Brexiteer and the UK leaves without a deal – though that will hardly be the end of the affair.

More likely is that May struggles on, loses the vote, goes back to Brussels and tries to get change. Brussels, needing a deal to be signed off in order to protect the Irish, might offer quid pro quo amendments, which could be enough for the Commons to vote it through at a second time of asking. That’s now the best-case scenario.

David Herdson


A massive Westminster day ends with TMay still in place

Thursday, November 15th, 2018

The “bloody difficult woman” will be difficult to shift

Although I disagree with her on so many things you can but admire the way she is holding on and battling forward in spite of all the obstacles and setbacks. This was always going to be a very difficult period for the Prime Minister who took over shortly after the referendum in July 2016 never more so than today.

Throughout she has made as her objective ensuring that the referendum outcome is delivered while at the same time seeking to safeguard the economy. We have seen over the years how Conservative Party can be hideously difficult for a leader to navigate when it comes to things relating to the EU as has been illustrated so much today. This was never going to be easy.

Dominic Raab the Brexit secretary who has quit had a lot of coverage during the day and it is probably the first time many have had a good look at him. I’m less than impressed. He’s a lightweight especially when it comes to comparisons with the Prime Minister. He would have done his position much more good if the resignation has come after last night’s cabinet meeting and not today.

I thought Moggsy’s announcement that he had sent a letter in to the 1922 committee chair would be the trigger for the other 47 letters that would start a leadership process. So far that hasn’t happened and suggests a lack of organisation if indeed there is an ousting plot in place.

Whatever this is all a welcome break from Mr. Trump.

Mike Smithson