The Daily Reckoning UK

May Poll

Ben Traynor

by

Posted 18th April 2017

You can’t argue with the political logic.

Prime Minister who needs to bolster her mandate? Check.

Official opposition in disarray? Check.

Unanswered questions about what the mythical “will of the people” actually is? Check, check and check again.

I say “mythical” because, as you may recall, last year’s referendum finished 52% to 48% on a binary yes-no question.

That’s not one single “will of the people”, is it? It’s at least two.

Two sets of British people with two diametrically opposed, totally incompatibles “wills”.

Plus – and to state the bleedin’ obvious – you can subdivide these “wills” along myriad dimensions.

For example…

Should we try to stay in the single market?

Just the customs union?

What should happen to British people living on the continent, or continentals living here?

Should we try and get special deals for sectors like financial services, or car manufacturing?

And what concessions might we be willing to make? What should we seek in return?

It turns out – to the surprise of no one who gave it five seconds of thought – that a simple yes/no question last June wasn’t enough to sort this whole thing out.

Traditionally, when the affairs of state get into a right old mess, the solution has been to “go to the country” to try and sort it out.

And so, it’s turned out, the fact that Theresa May had categorically said she wouldn’t call an early general election wasn’t enough to stop her calling an early general election.

Tomorrow she’s going to try and get the two-thirds Commons majority needed to call a general election for 8 June.

Yippee!

The pound rose on the news, reaching a high for the year against the dollar.

It fell just after the “announcement-about-the-announcement” – sparking a flurry of OMG! ultra-short-term charts from wires reporters who didn’t bother pointing out the pound was still above where it was a week ago.

At the time of writing, though, it’s racing higher. Why?

Why indeed.

Attributing neat cause-and-effect for short-term market moves is a mug’s game. Which makes me the perfect player, so I’m going to guess there’s a short squeeze going on.

As the pound has risen, it will have triggered stop losses put in place by traders who’d sold it short. This forces them to buy, adding further momentum to the move.

The FTSE 100 meanwhile has fallen, down more than 2% on the day at the time of writing.

Some of this reflects the pound’s move. The bulk of FTSE 100 earnings come from overseas, and so are worth less translated into sterling the stronger the pound is.

The FTSE 250 – which has a much greater proportion of UK-facing companies – was down around 1% at the time of writing.

That’s still a hit, but hardly a crash.

I respect your privacy and will never pass on your email address to anyone else.

Back to the election itself, and all the fun that’s in store.

May’s determined to make it a Brexit election. A Brexeneral Ebrexion (I vow to overuse and abuse these portmanteaus until they go away forever).

Now…

At the risk of being a Negative Nelly, this might not be such a good thing.

It’s logical, yes. May’s majority is 17. It doesn’t give her a lot of room to make the kind of concessions in the EU negotiations that could seriously cheese off her backbenchers.

And she may see strategic advantage in making such concessions.

Certainly you want to have your options open at the start of a negotiation. An increased majority would give May a bit more room to manoeuvre.

Calling an election also – at least in theory – addresses the many loose ends left over from the referendum.

Our wonderful political parties can now go to the country with their different plans.

And “the people” – that homogenous gloop of flesh and minds to which you and I contribute a few atoms – gets to pick the winner.

It makes sense, and I don’t have a better alternative to suggest.

But here’s why it unsettles me.

General election manifestos cover what parties will do across the whole of government.

Not just how they’ll negotiate the EU exit, but what they’ll do with taxes, education, the NHS, the armed forces, the police, social security, energy, transport, farming… you get the idea.

There’s a real danger here – I’d say a nigh on certainty – that the government will take this as an opportunity to shove a lot of less-than-popular policies into its manifesto and ram them through with a forceful cry of “Brexit!”

And then spend five years disingenuously claiming it’s what people voted for, after they made the narrative all about Brexit.

Prove me wrong, Theresa…

I’d hoped to start the week on a positive note, so let’s take a moment to salivate over all the brilliant Brexitery we can look forward to over the next seven weeks (assuming May gets the Commons vote tomorrow).

Because this is another chance to wade into all the muck and bullets we so much enjoyed wallowing in this time last year.

Another chance for friends and co-workers to fall out over some arcane Brexit subplot they don’t really understand.

Another chance to post stirring-but-irrelevant images on Facebook.

Did you have a futile argument last summer where you wish you’d thought of that clever comeback at the time?

Now you can engineer a re-opening of the wound and get your petty jab in.

And then there are the polls.

Another chance for us all to obsess over polling numbers… then stroke our chins and comment about the unreliability of polls… and then feel our heads explode as we think “Yeah, but even so, Corbyn still doesn’t stand a chance, does he?”

It’s also another chance for professional wordspewers to tell us with far too much confidence about the bad/good things that definitely will/won’t happen in the utterly uncertain post-Brexit future.

Another chance to write a lie on a bus… another chance to throw accusations of racism around like confetti… another chance to make up hilarious playground names like “Remoaner” and “Loony Leaver”… and another chance to reduce complex issues to fundamentally flawed soundbites.

I can’t wait…





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