May 13, 2019
Brexit Party has already changed UK politics
In contrast to several UK commentators we have been arguing persistently that the probability of a no-deal Brexit remains elevated, and our view has not changed for a long time. The main risk is not an accident at the European Council, though views are shifting in the direction of Emmanuel Macron. The main risk is different: a shift in the political consensus in the UK that would make a no-deal outcome possible.
Over the weekend there were two opinion polls that managed to produce a dynamic of their own. The first is an Opinium survey for the Observer, according to which the Brexit Party is set to become the overall winner of the European elections on May 23 with 34% of the votes. Labour is a distant second with 21%, the LibDems get 12%, and the Tories 11%. A ComRes poll has the Brexit Party with a smaller lead of 27% versus Labour's 25%. But we note that the shift in voter preference towards the Brexit Party is fairly recent, and ongoing. Nigel Farage gets more media airtime than any other candidate for the European Parliament, and the Change UK party is completely non-existent. The LibDems are having a relatively good time with their "bollocks to Brexit" campaign. But this is a race between a united Brexit Party and a disunited Labour Party.
Even though the Tories are expecting to lose the European elections, these figures still come as a shock to them. Another opinion poll showed that the Brexit Party is ahead of the Tories even on for national elections, at 20% versus 19%. Obviously the Tories will not go into the next elections with Theresa May as leader. We have no doubt that the Tories will end up electing a eurosceptic as their next leader simply because this is what it will take to neutralise Farage's challenge. His Brexit Party greatly benefits from the system of proportional representation in the European elections, but he will not be nearly as strong in a national poll.
We believe the Tories are very likely to have a new leader in place for the party conference in late September. That new leader would then attend the European Council in October. It is possible, indeed likely, that the UK parliament will try to spring another Cooper bill with a narrow majority, but a prime minister hell-bent on a no-deal Brexit has several wrecking tools at his or her disposal, such as an orchestrated House of Lords filibuster or the prorogation of parliament. Tory candidates are confronted by angry constituents over their failure to deliver Brexit. Can we really rule out a political calculus that the next prime minister would deliver a hard Brexit in October, and then make way for new elections in the spring of 2020 once the initial shock of a hard Brexit is absorbed?
The FT reports that the latest opinion polls have hardened the readiness of the Tories to put the knife into Theresa May. The date to watch out for is this Thursday, the next meeting of the Tory backbench 1922 committee, which May is due to address. The committee wants her to give a binding departure date, Brexit or no Brexit. The possible rule change in relation to the 12-month reprieve for a leader after a confidence vote is still in the cards, but we don't think it will come to that.
We would like to end with the following two observations. In the British first-past-the-post voting system, you can win an election with 35% or 40% of the votes, depending on the other parties. If a new Tory leader manages to unite the pro-Brexit vote, there is a chance they would get to such a level.
We also noted a comment in Die Welt, which interprets the rise of the Brexit Party as confirmation of the referendum and concludes that hopes of a Brexit reversal have been delusional. If Farage's Party were to win the European elections in a landslide, we would expect opinion within the European Council to shift further. Macron will get his I-told-you-so moment.