Archive for the 'EU matters' Category


UK Euro elections have been no guide to what will happen at the next general election

Thursday, April 18th, 2019

Even under Blair LAB never “won” a Euro election

While everybody is getting over excited at the moment about the prospect of the May 23rd Euro elections we should remind ourselves and how they have been totally non indicative of what’s going to happen at the following general election

Back in 1999, the first General Election after Tony Blair’s landslide, William Hague’s Tories came out as the top party with 33.5% of the vote 7 points ahead of Labour. Two years later at the 2001 general election Tony Blair’s party achieved another landslide which was only a couple of seats off what he had achieved 4 years earlier. Hague had been somewhat misled by the Tory success in the 1999 Euros that he focused almost his whole GE2001 campaign on the issue of the UK’s relationship with the EU. It did him no good.

For the 2004 Euros Blair went to great lengths to try to boost his party. All postal voting took place in several regions in the hope this would boost turnout. On the day the Tories led then by Michael Howard achieved a victory in the Euro elections with a similar sort of margin to William hague’s five years earlier. The following year Tony Blair went on to win a solid working Commons majority that would sustain LAB for 5 years.

In 2009 the Tories topped the aggregate vote total on 25.9% with UKIP on 16%. LAB slipped to third place. A year later at GE2010 UKIP didn’t pick up a single seat.

In 2014 Farage’s UKIP came out top with 27% of the vote winning most MEPs. This was, of course, no indicator to what would happen at GE2015 when the party just picked up one seat – Douglas Carswell’s and losing the other one it held. Carswell later quit UKIP.

This is all down, I’d argue, to two factors – the closed list voting system and voters not really believing that their ballot has an impact like at a general election. The last three UK Euro elections have been held simultaneously with the local elections thus probably boosting turnout. That will not happen on May 23rd because this year’s locals take place a fortnight today.

Mike Smithson


Blow for Change UK as it tried to complete formalities ahead of the possible May Euro elections

Tuesday, April 16th, 2019

As if the people aren’t confused enough as it is

It has just been reported that the new party, change UK, has had its party logo rejected by the Electoral Commission on the grounds that it could “mislead voters”.

Apparently the emblem was a black square with the initials TIG and the hashtag “#change”.  Apparently the Commission took the view that the new party’s chosen emblem was not sufficiently well known.

But Change UK should be registered in time to take part in the coming Euro elections, if those are indeed to be held in the UK, on May 23rd.

In the convoluted voting system devised by Labour for the 1999 Euro elections voters do not choose candidates by name but rather put their cross against one of a range of parties. On the Ballot form each party logo figures above the list of candidates who have been chosen to represent them.

Without a logo the list of names of Change UK hopefuls will appear but will look slightly odd and that might just have an impact on their ability to attract votes in the election.

Ever since the rebel Labour and Conservative MPs left their parties in February the new grouping has had issues with branding.  It initially called itself the Independent group, and it is only been in recent weeks that the new term Change UK has been introduced. You can see the problem because they were known initially as TIG.

So when voters turnout on May 23rd they’re going to be faced with some unfamiliar changes in Britain’s party structure.  For as well as Change UK UKIP which won most MEPs in 2014 has now, of course split, and will remain on the ballot but will have to compete for that area of the vote with Nigel Farage’s the Brexit party.

Mike Smithson


Why I’m taking the 12/1 on the Tories polling under 10% in the European election

Sunday, April 14th, 2019

The YouGov poll published yesterday showed the Conservatives polling 16% in the European election, Opinium had the Conservatives on 17% so it is worth analysing this market from Ladbrokes on what vote share the Conservatives will achieve. I’ll explain why I think the 12/1 is the best option.

I) A polarised electorate and polarising election.

This election will be seen as a de facto referendum on Brexit, Remainers and Leavers will want to utilise their vote to send a message on Brexit. The Conservative party will not appeal to either Remainers or Leavers, Leavers will see the party as failing to deliver Brexit whilst Remainers see the party as the one that got us into this whole Brexit mess, so there’s no real reason to vote for the Blues in this election.

II) The enthusiasm gap.

It has been reported that Conservative party activists will go on strike and refuse to campaign for the European election, this means it will be a struggle to get the Conservative vote out. If the activist base isn’t participating my view is that the Conservatives will do worse than the polls suggest.

III) The enthusiasm gap, part II.

Yesterday it was reported that the man who lies about opinion polls, Boris Johnson, would not campaign in the European election. It shouldn’t be a surprise that the serial adulterer would betray his party like he did wife on many occasions but people like Dominic Raab refused to rule out doing the same. I expect other Leavers to follow suit.

If senior Leaver Conservatives are sitting out the campaign it will only amplify the issues about getting the Conservative vote out as identified in point II)

IV) It is a free hit for right wingers and Leavers as it doesn’t make Corbyn Prime Minister.

Both YouGov and Opinium also polled on voting intention for a general election which saw the Conservatives do better. This shows right wing voters are sophisticated enough to how give the Conservative party a bloody nose without forcing the Conservative party out of office.

V) For the Conservative party things can only get worse.

The 16% and 17% might soon be considered the high point for the Conservative party in this election. Ask yourselves this question, between now and May 23rd can you see anything realistic that will cause the fortunes of the Conservative party to improve?

It is more likely the fault line over Europe gets worse for the Conservative party, the recent fall in Conservative support coincided with a major fracture over Brexit when the ERG and their DUP confederates prevented Brexit happening.

VI) The ERG are turning Japanese.

One of the greatest strategic blunders in human history was when in 1941 the Japanese attacked the American fleet at Pearl Harbour to keep America out of the (Pacific) war. All it did was ‘awaken a sleeping giant and fill him with a terrible resolve.’ Ultimately it did the exact opposite to what the Japanese wanted. Which brings me to the ERG.

If the all of the ERG and DUP had backed meaningful vote 2.5 we would have Brexited by now. By voting to stop Brexit happening all the ERG enabled the chances of No Brexit increasing. Many in the ERG have realised the error of their ways but some have not.

The more we see the likes of Private Francois on television the Conservative poll ratings seems to fall further. The more we don’t Brexit the more we’ll see the Spartan ERGers on television criticising the government and Mrs May, that’s ultimately going to be bad for the Conservative party, history has shown the electorate doesn’t reward divided parties.

Again this is further proof of the ERG turning Japanese. Surely they want the Conservative party to do well in opinion polls and elections but their actions will achieve the opposite.


I think the 12/1 on under 10% in this market by Ladbrokes is value, all of the above will make it value. The favourite is the band just above it, 10% to 20%, so it isn’t difficult to see how my tip could be a winner.

Never did I think in my lifetime I could see the Conservative party poll under 10% in a nationwide election but that’s what I think might happen next month.




The May 23rd Euro elections – how the pollsters did last time

Saturday, April 13th, 2019


With, unless there’s deal with the EU before then, Euro elections taking place in the UK on May 23rd we are going to get a lot of polling on the elections that few expected to take place.

As can be seen in 2074 the Tory share barely varied in the final three weeks while UKIP, then with Nigel Farage, bounced round quite a lot. A few polls had LAB ahead but the majority pointed to a victory for the purples.

This is a much more difficult election to poll than general elections. Overall turnout was 35.6%  five years ago which is little more than half what happens at general elections and assessing turnout is a huge challenge for pollsters.

Also five years ago in large parts of the UK the Euro election took place at the same time as local elections which helps the turnout level.

Mike Smithson


So TIG becomes Change UK in time for the possible Euro Elections

Tuesday, April 2nd, 2019

This could be good branding for possible Euro elections

One of he potentially big developments that came out at the end of last week was the decision by the Independent Group to seek registration as an official party under the name of  Change UK.

The grouping, of course, features the LAB MPs who left Corbyn’s party in February followed by the three women Tory MPs who left their party a few days later. It is the only grouping that has more women than men.

If there are European elections in the UK on May 23rd, and that is very dependent on events over the next 10 days, then the UK would be bound to participate. Its reported that election administrators are taking precautionary steps to ensure that if this does happen that they can make the arrangements in time.

Elections to the European Parliament in the UK take place under a system call the “closed party list.” Unlike general elections where voters indicates the individual of their choice in Euro elections they take a box against a party which field a list in each region. So a party’s name could be crucial.

It is this structure that has been very helpful to UKIP and indeed at the last Euro elections in 2014 the party finished top in the UK.

My guess is that the new party’s planned name Change, if that is acceptable, may be potentially very potent in a European election structure. We’ve all heard at different elections people making the call to “vote for change” and the new party has taken over the phrase. Under this banner it will be able to brand itself as the body that that seeks to do something differently.

I think that is quite smart and could potentially be very useful should the elections take place.

What is really interesting is what the relationship Change UK will have with the Lib Dems. What’ll happen if there is a parliamentary by-election in Brecon a seat at the Lib Dems used to hold – where the MP last month pleaded guilty to expenses fraud. That’s likely to trigger off a recall petition which could open the way for a by-election perhaps in early July. Change UK wouldn’t want its first Westminster by-election standoff be a fight with the LDs

Mike Smithson






The Italian Job – Part Two: Nessun Dorma – sleepless nights in Brussels

Sunday, January 13th, 2019

For most of the modern era Italy has been treated as something of a lightweight in world affairs despite being one of the world’s largest economies. This has often been on the back of weak and unpredictable government which has stopped Italy taking a wider role.

Within the European Union itself Italy has been treated as something inconsequential despite being a founder member. Northern Europeans and especially German politicians have been openly scathing about the country. More recently Emmanuel Macron trying to win some cheap points tried pushing Italy about by making an open attack on Italy and its government. 

All of this comes against a background of a decade where the EU has battered the Italian economy in the name of the Euro and has not been particularly tactful about how it did it. On the sensitive topic of immigration the scorecard is even worse. It is not hard to see why Italian voters are quietly seething with Brussels; it is harder to see how Brussels, Germany and France could let themselves get in to this position.

In “normal” times I would be of no import, but 2018 was a year when the worm started to turn. Firstly the pillars of the EU establishment began to show cracks. German politics took a decidedly “old Italy” turn when the country couldn’t form a sensible government and Frau Merkel had to promise her departure following repeated losses in state elections. 

France descended into chaos on the back of street protests as Emmanuel Macron battled to save his failing presidency. In Brussels too the Commission was looking weakened by growing populism across Europe, a steady stream of disaffected members and a sense of drift as the current commission saw its end in sight.

In Italy the situation was reversed Italy appeared to have a strongish government ready to take the fight to its Northern neighbours and ready to stand up for its citizens. In particular Matteo Salvini stepped up on the parapet and started firing. 

An expansive budget, a crackdown on illegal immigration, attacks on Brussels for a legacy of creaking infrastructure and perhaps most deliciously of all payback on Macron as he wobbles in the Elysee. The Italian public appear to love it.

The government has an approval rating approaching 60% (Macrons is 22%) and more importantly the Lega has now overtaken 5 Star since the election and stands at 33% in the polls.

If this was all simple tubthumping it would be time to buy popcorn. But Salvini appears to be picking his fights – popular issues that have been ignored are to the fore and this keeps the public on side.  On the other hand he’s not afraid to compromise and settle for the good rather than the perfect. The budget fight was a case in point.

While the Eurosceptic blogosphere was predicting an armageddon showdown with Brussels Salvini compromised but still came out better off. This is not dissimilar to the compromise with Matterella. In doing so he keeps the show on the road and moves on to the next issue with his support still growing in background. Likewise he creates a sense of national pride the Italians haven’t seen in years

And so to the European elections.

Perhaps unwisely the EU establishment has demonised Salvini.  This not only has ramped up his credibility but has made him the new focus of the Eurosceptic block. Having already been an MEP Salvini understands Brussels as well as any and is now starting to reach out to other parties and countries to establish a stronger sceptical movement. His timing couldn’t be better.

Returns from across Europe show a wave of populist sympathy in just about every member state including the founding members. Furthermore the Commission’s pariah states like Hungary and Poland are already lining up to change the status quo. Salvini currently sits in the centre of this movement in a way  sceptics like Nigel Farage never could.

For a start off he has shown he is pragmatic something  the ideologues wouldn’t countenance. He is prepared to deal with all ends of the spectrum from the untouchables most mainstream political parties avoid to the direct opposition he in theory should be competing against.

In a much more sceptical EU parliament come May there may just be the chance of a change of regime. At the very least there will be a real opposition. All of this is a nightmare to the federal integrationists as ever closer union comes to a grinding halt. If the UK is still in the EU Parliament in May the chances of this happening become much greater.

Like a lot of continental sceptics Salvini does not wish to leave the EU but to remake it at the service of the nation states. If he succeeds – and it’s a big ask – the European Union will be a very different place 10 years from now. Time to burn some more midnight oil in The Berlaymont.



The Italian Job – Part One: 5 Star and the Lega blow the bloody doors off

Sunday, January 13th, 2019

This is an article about Italian politics.

I have had to stop typing just to double check what I’ve written. Since when has Italian politics been interesting? Italian politicians of course – Berlusconi, bunga bunga, strange men from the Mezzogiorno who sleep with horses heads, big backhanders, ladies with big backsides, Parliamentary punch ups – Italian politicians have fascinated us. But that was entertainment not real politics. 

For most of us modern Italian politics has been a distant background noise of squabbling parties, pick and mix coalitions and inherently unstable governments. Nobody outside Italy worried too much about Italy’s politics as it could all change at the drop of a hat so why invest time and effort?But that might just have changed.

That change has come about primarily from two politicians, Beppe Grillo the leader of the 5 Star movements and Matteo Salvini of the Lega. Both are colourful characters.70 year old Grillo is a kind of activist Billy Connolly who has lambasted the Italian establishment in his blog and stage shows.

Grillo channelled that discontent into the 5 Star movement, a leftish political party championing the concerns of ordinary people. 45 year old Salvini dropped out of Milan University and spent a life in politics in Europe, Lombardy and Italy, eventually moving through the right wing Lega to become its leader.

To Grillo goes the credit of consolidating the Italian left since 2009 into a large and coherent force.Salvini gets the credit for shaking the Lega out of its particularism and moving nationally. Note that’s the Lega no longer the Lega Nord – it’s as if the SNP decided to drop the S and compete across the UK. Both men have advanced on the discontent of voters in Italy with traditional parties, the EU and economic stagnation.

And the voters have much to be discontent about. Joining the Euro has put huge strains on Italy’s businesses which in the past had used the Lira to help keep them competitive. The Teutonic inflexibility of the ECB came as the first shock; the second was the realisation that Italy had locked its currency at a level which caused it harm.

In the first boomy years of the noughties nobody worried too much but once the financial crisis hit the bad news surfaced. Since 2008 the Italian economy has barely grown. Worse, the small businesses which provided much employment and activity suddenly found themselves exposed in a globalised world and struggling to respond. Shoes and handbags could be made much cheaper in Thailand or Vietnam than Treviso or Verona. 

Italy had two recessions in short order, one in 2009 and a second in 2012/13 on the back of an austerity programme designed to placate the EU. This decade of pain has left scars on the country and alienated large sections of the electorate, in particular the young where eye wateringly high levels of youth unemployment blight the country.

And then there’s immigration. No European crisis would be complete without it. In the 10 years of economic stagnation Italy’s migrant population grew by 2 million. Most of these were other Europeans (Romanians make up the largest group) but the headlines went to the dramatic events in the Mediterranean. As the Arab Spring kicked off in nearby Tunisia and Libya Italy found itself on the front line of a refugee crisis.

Whereas maybe 20-30,000 people crossed the Mediterranean or Adriaticillegally up to 2012, from 2013, (smack in the middle ofItaly’s European austerity pain) this number shot up to closer to 200,000 each year.A ruling from the distant ECHR that Italy couldn’t return refuges set the fires burning and Mrs Merkel clumsily added more fuel to the fire in 2015.

Against this background it was inevitable that the protest parties would gain votes but the depth of electoral despair were perhaps underestimated. Italy’s older parties had sacrificed themselves on the altar of Europe and lost support heavily. In the 2018 election 5 Star now led by Grillo’s deputy and nominee Luigi Di Maio topped the poll with 33% of the vote. The Lega cane third with a credible 17% a sizeable improvement on its previous results.

At first it looked like business as usual. Politics in Italy went in to its customary haggle against a background of political numbers which didn’t quite add up. President Matterella lined himself up to name a government; and then something remarkable happened. The two parties which on paper were at either end of the political spectrum, against all the odds, agreed to form a government.

Perhaps it was the realisation that this was their one chance to upset the political apple cart that made them seize it, but whatever it was Italy was entering new territory. Both Di Maio and Salvini showed a level of pragmatism to get to this point. However they are both fairly flexible politicians; Salvini began life as a left winger and ended up leading the Right, Di Maio comes from a far right family and has ended up leading the Left. In those journeys there is perhaps a level of empathy with the other side that makes things work.

The establishment were shocked both in Italy and Brussels. Then the temperature rose further as the new government proposed an openly anti Euro professor as Finance Minister. The President vetoed it and a constitutional crisis ensued with Matterella eventually having to back down after a face saving compromise with the new government. The powers that be had tried to kill the populist government at birth and not only failed but had made actually them more popular.

Once in government 5 Star/Lega have set about delivering their agenda. Reversing austerity, tackling immigration and facing down Brussels and they have seen their approval ratings soar. All of this depends of Di Maio and Salvini staying close enough to see a change in the domestic landscape through and this is the weakness the government faces, but for the first time in ages Italy has a strong and popular government and the rest of Europe has to sit up and take notice. Suddenly Italy has become a player. 



The economics of LICE. How do we deal with parasite taxation ?

Thursday, January 10th, 2019

LICE – Luxembourg, Ireland, Channel Isles, Estonia  we could add others and play alphabet soup, but the basic premise is the same small countries which live well by diverting the tax revenues of their larger neighbours. These are parasites not in the derogatory sense but in the biological sense of entities which live off others. This is not new, tax havens have been around for centuries but largely as an irritant to those next door. However in the last two decades things have changed.

Increasingly it is the corporate sector and multinational corporations (MNC) in particular which is exploiting loopholes in the rules to shelter profits from taxation. Recently the IMF  estimated tax avoidance costs around $600 billion a year in lost taxation worldwide. The true number sits in a grey area but the trend has only been in one direction – upwards.

In times of tight budgets and with growing costs governments of large nations and their electorates are increasingly asking why this should continue. And this is of course a valid stance. MNCs get all the benefits of trading in countries where they avoid paying their fair share of taxation. They get stable currencies, the rule of law, access to millions of consumers and reliable infrastructure to pursue their businesses. All this of course has to be paid for and increasingly it is consumers and domestic businesses who are being forced to pick up the tab.

It’s an unequal fight. A coterie of lawyers and tax advisers keeps  the MNCs ahead of the game. While tax authorities struggle to close off the last loophole the next one is being opened and  governments are left chasing their tails. Businesses with turnover bigger than countries have an interest in keeping it that way.

Elsewhere in the smaller economies the picture is different. Low taxation rates aimed at attracting overseas companies generate jobs, income, tax revenues which otherwise would not exist and keep local tax burdens much lower than they otherwise would be.

Even better the smaller countries avoid some of the costs larger countries must bear like defence – Luxembourg the richest country in the EU pays 0.55% of its spending on defence. That’s up from 0.38% in 2013 and against a target of 2% for all NATO members. Ireland spends 0.3% safe in the knowledge that the yanks and brits will keep them from harm. All in all like a parasite living off its host the smaller economies do very well off their larger neighbours.

For the large nations this is becoming a situation which needs to be addressed. Already moves are afoot to recover lost revenues. Trump’s tax reforms were the first shot in the US recovering around $60+ billion of missing taxation each year. Germany and especially France are likewise pushing to get greater tax equalisation across the EU.

Governments across the world have discussed setting up a common approach to reduce avoidance, but the pace of progress is slow and it’s more like countries will pursue their own immediate and tangible tax recovery programmes.

In the UK there is anywhere from £6-11 billion to be recovered annually depending on whose figures you chose to believe and that’s corporate tax avoidance not evasion. That’s like a 3p tax cut or 100,000 units of social housing each year or half of Mrs May’s NHS funding boost for free. The question is therefore how long will our politicians hold off from addressing the issue ?

The business lobby will of course claim there are benefits and seek to delay change, but this is getting ever harder to prove. This is a time when big business is getting further away from ordinary people, voting itself large salaries and letting funding for services be socialised on to the electorate. The situation is probably at its most  blatant with the Tech MNCs which have tried every trick in the book to minimise their tax bills. But increasingly this may be their weakness, they have plucked the revenue goose to the point when it is starting to hiss.

For the UK this is a real issue just why do we want to impoverish our own people so overseas corporations can walk away from paying their obligations? Why do we need to subsidise Jeff Bezos to empty our tax paying high streets?  In a similar vein why do we  take a benign view of small rich countries which occasionally like to nip in and eat our lunch? In biological terms have the parasites now got to a stage where they are endangering the host?

While Parliament self flagellates on its Brexit fetish, there is some real work to be done and perhaps rewards to be had for those MPs still interested in the day job. The problem is are there any of them left ?

If you want to get a quick overview you can read more about it here.