Where do you stand on the latest Brexit developments? Shaking your fist at the TV in outrage, or swooning with admiration at the audacity of our prime minister? As some have jokingly observed, with breathtaking twists and a cast of extraordinary characters, it's like a reality television show. And, like a reality show, eventually you will have to cast your vote on the winner, leading to eviction for the unloved.
On Boris Johnson's Brexit Love Island there is a twist, however. The director of the show is one of the players. Johnson is pulling the strings to gain the result he wants. The stars of the show might all be real people in real situations, but their portrayal is confected. Johnson needs you to think that he and only he is on the side of the 52% who voted to leave the European Union three years ago.
So far, his plan is working. With Johnson pivoting towards a departure, Deal-or-No-Deal, he has stolen half the Brexit Party's vote and put the Tories in the lead. But that's not enough. The opposition must be exposed as the enemy of the 52%. That's why every move now is designed to antagonise Remainers and force them to reveal their dastardly plans to stop Brexit. Then Johnson can emerge as "The Hero Of The People", standing up for them against institutions that seek to frustrate their will.
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Rather than delivering this message by text (as the Love Islanders prefer), it will be played out in the courts indeed the latest drama as this magazine goes to press is the decision by the Scottish appeal court that the move to prorogue Parliament was illegal. Constitutional niceties will be bandied about with aplomb. Wasn't Speaker John Bercow breaking precedent by allowing Standing Order Number 24 to lead to a binding motion on the government? Didn't his ruling on Queen's Consent constitute overreach?
Remember the Gina Miller court case three years ago, which allowed Parliament a vote to trigger Article 50 in the first place? A Daily Mail front page printed pictures of the three judges who presided over the ruling, with the simple headline: "Enemies Of The People". Expect more of this. From Bercow, to the Opposition, to the 21 rebels within the government's own party: each must be shown to play their part in frustrating the Brexit vote. In the weeks to come, expect the judiciary and the EU to join their place in Brexit Love Island's Gallery of Villains.
The truth is that nothing can stop Johnson from delivering a "no deal" Brexit if he is hell-bent on doing so. And the truth is that he must deliver a "no deal" Brexit in order to win the next election. To avoid any blame in the pursuit of that goal, he must be pushed into it, first by Parliament, then by the EU. That's why the current turmoil suits him the more snookered he looks now, the more he can argue that the behaviour of others has forced him into extreme action.
An inconvenient truth
More than anything else, for all the talk of cross-party compromise, this is why a deal will remain out of reach. Our MP-by-MP analysis shows that there isn't a majority in Parliament for anything, much as they all like to protest against something. If the deal sells out Northern Ireland, that loses the DUP and the Spartan eurosceptics in the European Research Group. On the other side, Remainer MPs sense that revoking Article 50 is now in sight, with this becoming Lib Dem policy. The ideological extremes have become entrenched. In the middle, there is still the divide of party loyalty. The Tories may be splitting, but the recent Extension Bill only saw two Labour defections, fewer even than the five who voted for Theresa May's deal.
The next election will be fought as "The People versus The Establishment". Each character is now playing their part. Just as reality TV ends up with the characters doing unimaginable things, so we will see with British politics until as in the final stages of any reality TV show voters' choices are narrowed down to two extremes. Soon it will become clear that in this case, the series finale will be "No Deal" versus "Jeremy Corbyn". Neither of which, I believe, would be positive for UK assets (more on that here).
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Helen Thomas CFA has worked in financial markets for over 17 years. She founded her own macroeconomic consulting firm, BlondeMoney, in 2017 providing expert analysis on financial markets and politics.
Before that she was a Partner at a Global Macro hedge fund and Head of Currency Alpha for State Street Global Advisors. She started her career in Foreign Exchange at Merrill Lynch before going on to work for Societe Generale and SEB. She has also worked in politics, as an adviser to former Chancellor of the Exchequer George Osborne during the financial crisis.
She is a CFA Charterholder and holds a degree in Philosophy, Politics and Economics from Oxford University.
She is a Board Member of CFA UK where she is responsible for their sub-committee on the Value of the Investment Profession.
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