The European elections mattered a lot more than you think

The European elections revealed nothing more than that the country is still as divided as ever about Brexit. So, what's changed? Well, says John Stepek – quite a lot actually.


Nigel Farage's Brexit Party topped the polls
(Image credit: 2019 Getty Images)

So that was quite a busy week in politics.

The prime minister finally called it quits. She didn't achieve much while she was in power. So her successor still has to deal with Brexit. Not to mention the unhelpful parliamentary arithmetic that she's left behind her.

Meanwhile, the European elections revealed nothing more than that the country is still as divided as ever about Brexit.

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So for all this sound and fury, has anything changed?

Well, despite appearances to the contrary, I suspect it has...

No one has changed their minds on Brexit...

First things first: you will read lots of "hot takes" on this, but all the European elections revealed is that, on balance, no one has changed their mind about Brexit. The Brexit Party got lots of votes, but it was roughly as many as expected. On the other side, the Lib Dems and the Greens got lots of votes. Turnout was on the high side for a European election, but not stunningly so.

So if you wanted to see this as a re-run of the Brexit referendum, you'd have been frustrated it came out with a very similar result.

Secondly, and more importantly, both the Tories and Labour got slaughtered. That's putting it gently. It was entirely deserved, frankly, and not that surprising given that European elections are even more of a protest vote than local elections. But even taking that into account, this was a terrible result for the main political parties.

The Brexit Party came in first place with a 30% share of the vote. The Lib Dems came second on 20%. Labour managed 14% and third place, but only just beat the Green Party on 12%. The Conservatives were squeezed into fifth place, winning just 9% of the vote. That's their worst result since 1832, apparently (and at that point, they weren't the incumbents).

Why does this matter? Well, it matters for two main reasons. Firstly, the Conservative party will avoid a general election like the plague, certainly before they've put Brexit behind them. Clearly, if they do have an election before then, then Nigel Farage will steal a big chunk of their electoral base and most of them will be thrown out of parliament, never to return. That's a pretty big incentive to fall into line (though we'll soon see if it's big enough).

So if there is any way on this earth to avoid going to the polls before May 5 2022 (which is when the next election is due, under the Fixed-term Parliaments Act 2011), then they'll take it.

except maybe Jeremy Corbyn

Secondly, it's now very clear to Labour that sitting on the fence is no longer a sensible position (if it ever was). By trying to have his cake and eat it, Jeremy Corbyn has alienated both Leave voters and Remain voters, and has also left his MPs looking extremely pained any time they are asked about it on telly (which I guess is what comes of sitting on the fence for so long).

So now it looks as though the comrades are revolting. Here's John McDonnell, shadow chancellor and the closest thing Corbyn has to a right-hand man, telling the BBC that he now supports a second referendum, regardless of what happens:

"Of course we want a general election but realistically... there aren't many MPs who will vote for an election it will be like turkeys voting for Christmas. So our best way of doing that is by going back to the people in a referendum, and I think that's what our members want.

"If there can be a deal, great, but it needs to go back to the people. If it's a no-deal, we've got to block it and the one way of doing that is going back to the people and arguing the case against it because it could be catastrophic for our economy."

Now, I don't know how much of that will survive contact with his next meeting with Corbyn, but that's pretty unequivocal to me. If there's no deal we need a referendum. If there's a deal we need a referendum.

Of course, there is one glitch here. If you can't get a general election, how do you hope to get a second referendum?

Good question. And that makes me wonder if perhaps just perhaps what Labour is doing here is quite canny.

Think about it. Who do they need to convince that they stand for a second referendum? It's not the electorate. We don't get a say until May 2022, if the government gets its way. That's almost three years away. By then, Brexit will surely have been dealt with, one way or another.

No. What Labour needs to do right now is to appeal to the hardcore Remain contingent among the nation's MPs right now (which is quite extensive). It needs to unite that lot to the extent that their craving for a second referendum versus the "No Deal" currently being proposed by the leading Tory leadership candidates will persuade them to back a "no confidence" vote in the government, thus forcing a general election.

Our politicians may not always be the brightest bunch, but you can rely on them for low animal cunning. (Remember, coming from a journalist, that's a back-handed compliment.)

To sum up Labour wants to force a general election. The Tories want to avoid one. If Labour can convince the rest of parliament that they want a second referendum, then that puts the Tories in a tricky spot. Boris Johnson is their "big beast". But he's also a politician who really divides people.

If you have Johnson in charge, while Corbyn voices a full-throated siren song to the Tory Remainers left chafing under the leadership of the hapless blonde bombshell is that a recipe for stability? I'll need convincing, put it that way.

We'll be writing about what a Corbyn government would mean for your money in this Friday's issue of MoneyWeek magazine. I suggest you subscribe now if you haven't already. Forewarned is, after all, forearmed. Get your first six issues free here.

John Stepek

John is the executive editor of MoneyWeek and writes our daily investment email, Money Morning. John graduated from Strathclyde University with a degree in psychology in 1996 and has always been fascinated by the gap between the way the market works in theory and the way it works in practice, and by how our deep-rooted instincts work against our best interests as investors.

He started out in journalism by writing articles about the specific business challenges facing family firms. In 2003, he took a job on the finance desk of Teletext, where he spent two years covering the markets and breaking financial news. John joined MoneyWeek in 2005.

His work has been published in Families in Business, Shares magazine, Spear's Magazine, The Sunday Times, and The Spectator among others. He has also appeared as an expert commentator on BBC Radio 4's Today programme, BBC Radio Scotland, Newsnight, Daily Politics and Bloomberg. His first book, on contrarian investing, The Sceptical Investor, was released in March 2019. You can follow John on Twitter at @john_stepek.