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All Over Now

June 24th 2016

With the victory of Vote Leave in the referendum we are living in a political world turned upside down. Nigel Farage has had his Triumph and the political establishment has been dealt a mighty blow. Cameron, known as a lucky politician, yesterday finally came unstuck with the biggest gamble of his life. The UK Is now entering a period of extreme political uncertainty with all that means for the economy. It will take time for the markets to stabilise and there is no knowing how much value will have been destroyed, or what contagion unleashed in other markets. Already the PM has announced his resignation in October as a result of his terrible miscalculation. A Brexit PM will be elected by the Tories in time for their Conference, with the favourite being Boris Johnson. The career of George Osborne is also looking to be at an end. There are calls for Michael Gove to be put in charge of the Brexit negotiations, and for a more Brexit Cabinet.


The closeness of the result will also prove to be a tricky inheritance for the next PM as they seek to negotiate a way out of the EU. Emotional sentiment amongst the public could swing against the Government if the economy stalls. A General Election within a year, maybe in 6 months, may well be needed to give legitimacy to any Brexit regime because currently there is no Brexit majority in the House of Commons. This is a political revolution long in the making and all parties will now try to digest what it means. The Labour heartlands outside London were solidly anti EU because of immigration fears. The leadership of Jeremy Corbyn has not got the intellectual tools to deal with this reality and his vocal support for open borders during the campaign went down very badly.

The tragic death of Jo Cox seemed to stop the Brexit momentum for a few days, but already the damage in Labour areas had been done. Many people think they have voted to stop immigration and may well have a rude awakening in the next few years. How Labour deals with this issue amongst its own base will largely determine whether or not they can become a party of Government again in the medium term. The consequences for the UK could well be existential with calls for further referendums in Scotland on independence, and Northern Ireland on Irish Unity. David Cameron is now a dead man walking in political terms. The reckless promise of a referendum to square off an internal Tory Party dispute has resulted in the UK being plunged into uncertainty for an extended period of time. It is the biggest failure of policy since Suez and this will be his legacy, yet we are only one year into a Government he lead to a stunning overall majority victory.