The Ghost of Future Politics: Disclaimer Predicts What May Be
A Weak and Stable Government - and Opposition
One thing is certain in 2018: hysteria. There will not be a setback for the government where someone does not predict a snap election or the collapse of the government. The prime minister will not stumble without a chorus of “Crisis!” Every Remain-inclined poll will be met with predictions that the tide has turned and every government negotiating concession with warnings of betryal.
For all the noise, what really changed in 2017? A divided country remains divided. A government intent on Brexit is still intent on Brexit. His supporters call him Prime Minister but what has Jeremy Corbyn actually achieved?
The truths that stood in the way of the hysteria remained and will remain despite the hysteria.
Theresa May begins the year in a stronger position now that at any time since the election. Expect a New Year reshuffle from a prime minister who - without an obvious successor - expects to be in office at least until March 2019.
Labour have made hay at the government's troubles. They will do so but their own weaknesses will probably prevent them breaking free of the government in opinion polls.
Corbyn will not suddenly become prime minister because the DUP will not give him a parliamentary majority and will vote against an early election. Corbyn’s allure has been kept alive by that mirage. The vanishing prospect of imminent power in 2018 can only erode the moral authority he won in 2017. Et tu, Emily?
Yet, like the government, his leadership is weak and stable.
And Brexit will remain Brexit unless the opposition begins to lead public opinion. Until that happens we have Tory Brexit and its ugly Labour sibling. Nothing will come from nothing. Public opinion will not shift towards a second referendum without high-profile supporters arguing for it. The unelected Lords would face Tory wrath should they try to force it on the government without the public on their side.
Hysteria to the left. Hysteria to the right. Meanwhile, the country will remain the dead man walking.
Happy New Year.
A Reckoning for Trump and Brexit
2016 was defined by the triumph of the Donald Trump and Brexit campaigns while 2017 was dominated by the aftermath, but as we move into the new year the destination of the victors is uncertain.
In the 2018 midterm elections, the Democratic Party aims to inflict a huge blow to Trump by taking control of US Congress.
The Democrats only have to gain two Senate seats to win a majority. The caveat is that nearly all of their defences are in states won by Trump in 2016. Democrats also have to gain at least 24 seats in the House of Representatives, where gerrymandering of constituencies benefits the Republican Party.
However, the Republican agenda - including dismantling Obamacare and gifting tax cuts to the wealthy - is proving as unpopular as Trump, whose support has fallen the most in Republican voting states.
This gives the Democrats a serious chance of winning either or even both congressional chambers, eroding the president’s power over national policy.
In Britain, Theresa May has defied low expectations by progressing to stage two of the Brexit negotiations, but the Prime Minister’s authority is far from secure.
The Conservative Party is split between hard-line Brexiters - who will be dismayed by May’s inevitable compromises at Brussels - and pro-Europeans who threaten more parliamentary defeats. May’s DUP allies barely accepted the deal on the Irish border. The bartering on trade and migration policy will be even more complicated.
Labour has a slim lead in the opinion polls, but they cannot just depend on government unpopularity or the goodwill of Remainers to increase it.
Jeremy Corbyn predicts another snap general election, which cannot be ruled out given Brexit's volatility. But Corbyn will be challenged on the detail of his Brexit policy and even on a second EU referendum, especially if the negotiations go haywire and threaten a no deal departure.
2018 will see economics come to the fore
Whether you believe that the UK economy, once released from Brussels’s deadly grip, will find a new nirvana of growth and trade, or whether you dread that it will slip down the global pecking order as business goes elsewhere, 2018 will be year of reckoning.
That is because banks, farmers, manufacturers and service companies — aka Britons’ employers — are not interested in the hurly burly of emotional politics, but in the financial bottom line. As we approach the 29 March 2019 departure deadline, these firms will need to make practical decisions, almost certainly this year.
Banks and other financial services companies may start to open or expand their European operations. The Bank of England (BoE) has tried to mollify their concerns with an offer to EU firms with financial passports to apply for “licences”. The EU has been lukewarm, saying it does not go much further than its offer of “equivalence” (that can be revoked, by the way).
The BoE has retained the right to impose tougher supervision on banks with balance sheets of more than £15bn, which covers Deutsche Bank, SocGen and BNP Paribas, who are the major employers among EU banks. US banks, which have already started to rattle their sabres, will also start to make their plans clear.
This autumn’s harvest will offer a real test for farmers who rely on a workforce of EU nationals willing to do the backbreaking work us Brits won’t. There have already been warnings that a combination of the fall in the value of the pound, growing hostility towards EU workers, and concern that it will be harder for Europeans to come here for work, could see crops rotting in the field this autumn.
Finally, there is the threat to the UK’s supply chains with Europe. The British economy is highly dependent on its relationship with the EU. Depending on what trade agreement is put in place during the divorce proceedings, British businesses face huge uncertainty over the supply chains to import raw materials and components from the rest of the EU.
It is already clear that companies are preparing to sever supply chain ties between the UK and the EU to avoid Brexit tariffs. Nearly half (46%) of European businesses expect to reduce their use of UK suppliers, according to a survey of the people whose job it is to buy in components.
Forgot the argy bargy — look out for an exodus of bank staff, crops rotting in the fields, £350 million a week going on Brexit costs rather than on the NHS, and factories shuttering as business goes elsewhere. Perhaps at that point, to echo Johnny Rotten, people who voted for Brexit will realise they have been cheated.
The EU will Extract Its Pound of Flesh
2017 was certainly not a dull year. The beginning of Trump’s first term has seen failure in healthcare reform and in Senatorial elections as well as controversial decisions in terms of tax changes, Israel, North Korea and Iran. Theresa May bungled an early election but finished stage one of the EU withdrawal negotiations – admittedly mostly in the EU’s favour.
Around the world the populist tide of 2016 seems to have peaked, with Macron’s victory in France typifying the current trend for young mainstream leaders, repeated in New Zealand and Austria (although with some shaky allies). Although the likes of Geert Wilders, Marine La Pen and the leaders of Alternative for Deutschland had some of their best showings in terms of results, they failed to capitalise on what remained of public anger against the establishment.
2018 will probably follow similar trends, building on what has already happened rather than seeing any cataclysmic changes. Trump will see reversals in the midterm elections as his popularity continues to falter – although he will retain a fanatical core of support. Whether it is enough to flip both the Senate and the House is another matter, probably one rather than both.
In the same vein the EU negotiations will continue, but the mathematics of negotiating with a bloc of 27 will lead to a deal that is entirely in the favour of the larger party.
Don’t expect a political realignment in Britain yet, even with continuing dissatisfaction with the reality of Brexit as the sluggish economy limps on and the EU continues to extract its pound of flesh.
The least surprising prediction will be Putin’s re-election in 2018, although there will probably be some controversy at the World Cup. The diplomatic situation will remain fraught but don’t expect any great upsets. With the current crop of leaders the political and economic direction of the globe is firmly set for the next year and probably the immediate few years beyond.
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