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politicalbetting.com » Blog Archive » Alastair Meeks on How Conservative Leavers could gift Labour the next election
The 2015 general election result was a surprise to almost everyone. After the event, those who had not predicted the Conservative overall majority hastened to explain why it had happened. One of the prime underlying causes alighted upon after the event was Labour’s catastrophic reputation on economic competence. Labour’s own pollsters found that Labour had a 39% deficit behind the Co…
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Am i not understanding something? Have there been referenda where the pro-EU side has won (other than in impoverished prospective members waiting for hand outs) ? I'm thinking of votes like the recent Swiss slap in the face to the EU, the Norway vote, the iceland vote, the various countries who all slapped the EU in the face over the EU Constitution. I can't come up with examples where a pro-EU side beat an anti-EU side anywhere.
What is it I am missing?
What did for the Tories on Black Wednesday was not the devaluation of the pound or us leaving the ERM. It was the interest rate rises that hit (wait for it!) hard working families. The irony, of course, is that Mr Meeks is drawing a parallel with a disastrous set of decisions taken by Europhilic Tories. Once out of the ERM things turned out okay for Britain, though not so well for Mr Major.
If we vote Brexit, the nature of British politics will have changed so much that forecasting becomes very difficult. A cock up like the ERM fiasco can very easily be blamed on the government of the day. Difficulties caused by a majority of the public voting to Leave are much less easily blamed on the government of the day.
e.g. the Orb weekly phone polls that started three weeks ago.
Orb this week = Remain lead 1%
Orb last week = Remain lead 5%
Orb two weeks ago = Remain lead 13%
Orb three weeks ago = Remain lead 15%
Conversely if it goes well they will probably get credit for it. However that means, among other things, no discernible economic pain.
But this is not true of everybody who is leaning towards Leave.
Some elements may happen immediately (e.g. uncertainty about what sort of deal UK will go for)... but other bits (reduced trade with EU- if it happens) would take longer and would depend on the deal negotiated.
If the Tories are clever about timing the general election and timing the negotiation- they could minimize the effect any economic damage does to their political prospects.
http://labour-uncut.co.uk/2016/06/06/snp-2014-labour-2015-vote-leave-2016/
https://en.wikipedia.org/wiki/Referendums_related_to_the_European_Union
How many of the other votes were actually they Status Quo vs Change?
On the main topic, I doubt that the public will be able to tell the difference between a 'Leave the EU' shock and wider economic effects. So to that end, it probably turns on whether there'll be a standard recession or not - and even then, on whether Labour would be any more trusted.
I agree. The public will vote for who will make things better, not so much whose fault it is, although if both appear equally competent it is reasonable to expect people to think it is time for a change. The problem with the hypothesis in the header is whatever the public think of what happens post referendum, whoever wins, Corbyn isn't the answer, and we have had no suggestion that he is not going to be leading Labour into the 2020 election. If we are in recession, however is came about, magic money trees, open borders and pissing cash against the wall are not the answer.
But then I've voted ld three times in a row, do what do I know.
2015 SNP wipeout Scot Lab
2015 Corbyn becomes Labour leader in a landslide.
The public have shown their hand. Leave is matter of when rather than if.
Mr. Meeks, I'm reminded of a comment I made a few days ago, recalling Portillo (on This Week) wondering [about a decade ago] why the crashing pound hadn't destroyed the government.
It'd get more coverage this time due to the campaigns, but I'm not sure it matters as much as it might have in the past (in an electoral sense).
Whatever the result now, the Tories are a Corbyn replacement away from a very nasty future. Labour members are detached and very stupid, but it is possible that even they may at some stage begin to understand just what a gift the Tories have created for them.
You could just as easily make a case that the Great British Public - in their infinite wisdom - knew precisely what they were doing in voting Leave (this economic scaremongering hasn't exactly been off the news, has it?) and trust the Conservatives to steer a path through it all to even greater prosperity far more so than Labour.
Alastair is underestimating the public and his prejudices are showing through here with phrases like "hobby horse". As per usual.
The difference with the ERM was that the Conservatives publicly shot themselves in the foot with a europhile hobby horse, which no-one voted for, then told everyone it was good for them.
In pledging the status quo Remain claim never ending 0.5% interest rates, record employment etc. It's obviously stupid to believe that will persist in perpetuity.
The US are again raising interest rates this summer.
All this tortuous argument is nothing more than a holding action, within the next ten years we are going to be out anyway. This won't be a good vs evil argument, and xenophobes vs internationalists argument or any of that crap, it will be an economic or political necessity argument.
The Remain argument is that now is not the time, but are we even remotely sure that the times when we get forced out will be any better ? All we know for sure is we are going to be more integrated by then, and its going to be more painful and more difficult to extract ourselves.
It's staggering just how much money Leavers are prepared to allocate to their pet project at a time when public budgets are under such strain.
As for the Tories there is no gluing them back together. Unless it's a big win for remain Cameron will be gone and quickly - his authority and credibility have gone. I tipped Boris to lead Leave, leave to win, Boris to become leader on New Year's Day (on Facebook...) and I'm confident that's going to transpire. How he is able to pull together the broken ruin of the parliamentary Tory party remains to be seen. An election within 12 months seems likely.
Secondly, a new PM calling an early GE will avoid all the grief of those pesky economic warning bells. We all know that nothing unites the Tory party more than a GE. Of course it would require two-thirds of Parliament to support it.
In practise we will save more than that because we won't be sending a percentage of all our VAT payments to the EU, or 75% of any trade tariffs.
It's staggering that Remain continues to justify spending money that way whilst we are fed tales of crisis in housing, education, healthcare, social care etc.
He went into politics, because he thought he might be quite good at it, and I suspect the legacy he has chosen is the EU. I'm sure he could well have chosen another party to join, but his background always suggested the Tories
But Jezza is just for Christmas - in 2020 he may be facing McDonnell. And he may end up losing both.
I noticed that the FTSE went up yesterday when Sterling went down. They are both gambles and will rise and fall from day to day. Sustained bad economic news will hurt the pound and if we could predict the economic future, the gamblers would always win. Do they?
http://www.ifs.org.uk/about/blog/346
Post-Brexit, I'd expect acres and acres of hyperbole in the media about every teeny-weeny change - with everything blamed on the Leave vote. A bit like global warming back in the late 00s. And then it'll calm down, and we'll get on with things.
In my lifetime, I can only recall perhaps two or three things that really tipped the scales - such as 9/11 or global crash. Brexit is 90% boring paperwork changes and 10% hard-nosed negotiation. I'm a bit of worrier by nature - and it doesn't concern me at all.
That is the choice Leavers are making. Don't be surprised when Labour argue that the money should have been spent on more practical priorities.
The Great British Public thought that seemed a risk worth taking to fix a bigger problem. And after a bit of a wobbly start, trade and jobs picked up. I expect much of the same re Brexit, it's a calculated risk. And I'd expect the Tories to win against a Corbynite Opposition.
So what?
Destruction of value, jobs lost, are always difficult to drop on your foot unless they are directly affecting you, and are certainly near impossible to connect to some larger exogenous event.
The tragedy for me for a Brexit, however, will be exactly that value destroyed, the wealth not created and, oh the irony, the almost certain increase in number and complexity of hoops which businesses will have to jump through to comply with whatever new regulatory environment we find ourselves in. All of which will come at a cost. We could have grown by X, it turns out we will grow by 0.yX.
Just as if we vote in Labour governments, we will survive, it is just a shame at the needless waste and opportunity cost the people who will to a smaller or greater extent, pay for it. As @SouthamObserver notes, usually the people who can least afford it.
Why didnt Carney raise rates 7 weeks ago when STG vs a basket of currencies other than the USD was around 6% lower than today. For example £ was 1.82 vs the AUD
vs 1.96 now.
We have a floating currency. I agree that currency flows in the event of Brexit are likely to be disrupted for awhile but we have not seen a great rush to the financial exits yet which considering the polling you would have thought may have happened.
Sell the rumour buy the fact used to be the old adage. Wonder if that will be the case here.
"It found in its central range of estimates that the economy was still likely to be bigger in 2019-20 than today, but there might be a recession and overall growth would be between 2.1 per cent and 3.5 per cent lower than if Britain stayed in the EU.
This level of disappointment would leave the budget deficit in 2019-20 about £20bn-£40bn higher than otherwise, the IFS said. In calculating that figure, it took account of gains from Britain no longer paying into the EU budget, finding these were more than offset by the effects of a weaker economy on tax revenues."
So the model (which incidentally was not the IFS's own model but someone else's) assumes continued growth but at a more modest level. How on earth is anyone ever going to know whether this model was correct in either scenario? There will be no comparator in or out.
It is likely over that period that the UK will remain one of the faster growing economies in Europe in or out of the EU. It is also likely that by 2019 there will have been an election and a new government will be in place. That is looking increasingly likely regardless of the result.
1992 was a cataclysmic event that scored the public consciousness. I am not aware of any serious commentator that is suggesting anything similar in the event of Brexit. At worst there is a majority view that over an extended period (and the leave path itself will take at least 2 years) that not being in the single market, if that is what happens, will reduce long term growth by this amount. I think we will have access to the single market although I accept that the terms of that access remain uncertain at this point. If that is the case this model is simply not applicable.
All this handwringing about you wont notice it until it affects you is true about almost every government policy that involves money and yet you supported all of those. When the government introduced the benefit cap, plenty of people felt that, a lot of them considerably more than they are going to feel the results of BrExit, and yet that was fine with you.
But regardless, leaving the EU will come at some cost and I don't happen to think it is necessary.
Isolation is permanently entrenching yourself into an inward-looking regional bloc of countries that are in decline.
Europe is a small - and (in relative terms) getting smaller - part of the world.
Britain is a global player, a great power... time to revert to the long-term norm (we joined the EEC at our post-War low point in the 1970s). As Dan Hannan keeps saying.. "how big do we have to be?" in order for people to consider being an independent player on the world stage?!
A little like the famous Horace Bachelor of yore who claimed to be able to predict the Pools. Yet he never retired on the profits he should have made.
I understand economics as an academic exercise - a little like a language. It's useful when you talk to others. And some of the basics are axiomatic in a market, but as a predictive exercise, it all seems pointless.
As long as we can trade freely with it, the economic effects of Brexit are negligible.
But even if I did, this argument falls down presently because Labour do not have practical priorities which chime with the public mood. UBI is pie in the sky, not a popular alternative to austerity.
That is very different from a wholly unnecessary disruption to relations with our largest trading partner.