Explaining UK Politics and Why Brexit is the Real Hurdle

Politics matter in markets – and despite a new Premier, the UK will likely remain far from fixed and a long way from political stablity. The problem is finding a pragmatic approach to Brexit.

Blain’s Porridge Extra 14th July – Explaining UK Politics and Why Brexit is the Real Hurdle

To my great surprise a couple of American chums have asked me to explain what is going on in UK Politics re replacing Boris..

It’s fascinating… and more than a little mad. So let me get out my crystal ball to outline how UK politics might just play out. Politics matter in markets – and my conclusion is the UK is far from fixed and long way from stable.

The 360 odd Tory MPs each get a vote in deciding which two candidates for leader will be put in front of the 200,000 members of the whole Conservative Party. The contenders are being whittled down over  the next few days. What you need to understand about the Tory party is it is highly factional, and riven by personalities – but really everything boils down to a core tenant of faith – Brexit.

Yep, Brexit will remains the cancer that keeps on taking… More about that below, but whatever happens arguments about Brexit will likely hold back UK growth for years to come. (And that’s from a man who voted to leave..) We don’t need to abandon Brexit – just refine it and make it fit for purpose in a changing Global and European economy.  Any politician who can move forward on Brexit – gets my vote. But they are unlikely to be a Tory.

The race for the premiership is turning into a very interesting battle between 3 contestants. By this time next week two of them will face the whole party – although the two winners could agree to work together, negating the need for a member vote. (Boris would love that – it will enable him, Trump like, to claim his successor has no mandate to lead.)

Rishi Sunak – “Dishi Rishi” is the former Chancellor of the Exchequer who rose without trace in the party he joined in 2015 becoming an MP for the UKs safest Tory seat when the sitting MP suddenly resigned. After Chancellor Sajid Javid was sacked by Boris in 2019, the former Goldman hedge funder got the second most powerful job in the land to do what Boris and Dominic Cumming told him to do. He made himself popular with pandemic giveaways, and less popular with subsequent tax rises. It’s been clear for a long time Boris feared Sunak’s rising star and popularity, and was briefing against him – revealing Sunak’s wife (daughter of an Indian billionaire) was registered as Non Dom for tax purposes. Interestingly Sunak registered the website for his current leadership campaign way back in November 2021.  Sunak is seen as a Brexiteer and moderate, but has peeved many party members for not being a tough conservative in terms of low taxes.

Penny Mordaunt – Is a tough talking, hardline, Royal Navy Reservist. She was briefly defence minister, before being sacked by Boris after she didn’t resign from former premier Theresa May’s cabinet when he did. He later brought her back into government with a junior role of for trade policy. She is very popular among Tory rank & file and does a nice line in patriotism involving film of Spitfires, Lancasters and Royal Navy Carriers. (Great story about her: in 2014 she had to pay a forfeit for some Royal Navy training indiscretion, her punishment being to use the word “cock” in a parliamentary speech. She did – 6 times! Respect.) She is favourite to win because she spans the Tory Right Wing, is very popular at Party level, and is said to be pragmatic over Brexit – but no one really knows, and no candidate can risk saying “we need to think about `Brexit” .

Liz Truss – “Tank Girl” – is UK Foreign Secretary and the preferred candidate of the Tory Right Wing. Although a Remainer in the referendum, she is now a hard-line Brexiteer. She has had very public support from Jacob Rees-Mogg (minister for the 16th century) and Nadine Dorries, (who are so far to the right they are practically Communists, but with an aristocratic bent). She is seen as the Boris “continuity candidate”, a proper Eurosceptic who many centrist Tories think will do whatever Rees-Mogg tells her to do.

Likely Result:

My guess it will go to a vote between Mordant and Sunak. Mordaunt will win, and Sunak will disappear from the scene, resigning and using his green card to go hedge funding in California.

At that point it gets very interesting…

The next week will see further division in the party. Tank Girl’s strategy is to get on the member ballot by playing the right-wing Tory MP vote. The European Reform Group of the hardline Brexiteers will not surrender any aspect of Brexit. They will insist on breaking the Northern Irish agreement with Europe, and may even threaten a vote of no confidence if any aspect of Brexit is threatened. Truss will campaign by appealing to hardline Brexit party members with Brexit Plus rhetoric to attract MP votes.

If Mordaunt even hints hard Brexit needs pragmatic consideration, she becomes toast. Tory MPs have to decide in the next few days if they support Mordant on the basis their constituency parties love her – who doesn’t like her 1940s vibe in the Tory Shires..? But the Tory Shires are Brexit hotbeds.

However, Sunak and Mordaunt are no so stupid as to miss the reality – Brexit has not worked. Brexit got done, but needs tweaking.

Brexit has been disappointing. The opportunity to seize new opportunities was missed by political incompetence and the Pandemic. Now the UK needs a rejig, reassessment of the real opportunities – limited by issues like geopolitical crisis and change, and the US’ increasing isolationism. We need for a new post Brexit relationship/accommodation with Europe. We need that not just in terms of the economy, but from a defence perspective also.

Boris did some good things for the UK. He kept the country going through Covid. But let’s face it, all that Boris leaves us with is what he brought to the table in terms of his hostility and contempt for Europe. A new premier – with genuine new ideas on how to improve the UK, can move beyond that. The departure of Boris gives the UK a chance to reset the dialog with Europe over future trade with the UK.

That would enable the next government to not only make a success of Brexit, but to address the key UK issues like productivity, the economy, infrastructure, welfare, poverty, NHS reform, state rollback and state pensions, education, devolution and the rest. But it won’t happen. These are all critical policies the nation needs to resolve, but they barely register ahead of brexit with the constituency party, and not high on the priority list, except in the Red Wall seats the Tories won from Labour in 2019.

The Tory right wing will demand a further breach with Europe by insisting we go to economic war over the Northern Ireland agreement, thus making sure the new administration is quickly forced into a “no-negotiation with Yoorp” default mode. It will ensure Boris’ lasting legacy – being unnecessarily rude to our largest trading partner – is carried forward.

If the new Tory Leader and Prime Minister even suggest a rethink, the Tory Right Wing could precipitate a no-confidence vote and a UK General Election – to protect Brexit. It’s a bit lemming-like, but they have the brains to do it.

The reality is whoever wins the Tory leadership election remains in thrall of the Brexiteering Taliban of the ERG.

Maybe a general election would be better?

I am not a Tory supporter. I voted for Boris in 2019 as a vote against Labour extremist Jeremy Corbyn. I am tempted to suggest 12 years of Tory rule is probably enough. It hasn’t been great – a hopeless Cabal with the hopeless liberals, David Cameron’s fall over Brexit, Lame Duck Theresa May, Boris and now this.

It’s time for a political reset.

A couple of years of equally incompetent Labour will throw all the pieces back in the air, let the Tories learn about themselves and why voters matter, let the Brexit fixation burn itself out, and then let’s do it all again..

Who knows.. maybe the UK will sort it out.. eventually..

Bill Blain

Strategist, Shard Capital.


  1. Bill
    I’m afraid to say that you have probably confused your American friends no end with your references to the TRG, when one presumes you mean the ERG ( “European Research Group”). Whilst the TRG doesn’t define solely by reference to Brexit, it’s membership is “one nation” Conservatives, many of whom are antipathetic to Brexit. It is the ERG grouping who are the Brexiteers.

  2. “He kept the country going through Covid.”

    What? With all those lockdowns?

    The lying puppet is disgraced. Long lie the next puppet.

  3. The mechanism is also a bit odd. 360 MPs will choose 2 candidates by removing them one at a time through lots of ballots (why they cannot do it in one using an alternative vote system I don’t know, probably too complicated for most of them, or maybe they just like being asked lots of times). Some of these MPs will be choosing on merit but many (most) are more concerned with what they will get from the final winner: they will be trying to guess who wins so that they can show how loyal they are, tempered by knowing that they might be wrong. Then, to show how democratic we are, the Conservative party membership (a tiny percentage of the population) votes between the 2 to give a winner. This has nothing to do with democracy or what the country needs, lots to do with MPs actually being asked something.

    This ‘election’ is for the leader of the Conservative Party, not for Prime Minister. That the party leader will become PM is an oddity of our unwritten constitution. The position is that Her Majesty invites an individual to form an administration, if s/he can do so s/he is appointed as First Lord of the Admiralty which is the official title of the PM. The PM is not elected but appointed, which is why s/he can be changed without an election. It also means that until Boris gives his resignation to HM he is still PM. If he decides not to hand in his resignation, a vote of no-confidence by the House of Commons is needed – although Her Majesty could probably have him executed under some forgotten piece of 13th century legislation (there was a lot of stuff about executions in the 13th C and later, before that the didn’t bother with legislation, too busy chopping heads off).

    I am not surprised that our US friends find this confusing, it is bonkers.

      • I think you’re wrong on that, even though I’d be entitled to Scottish, and thus Euro, citizenship through a grandmother born 1.5 miles the right side of the Tweed (that’s the *Northern* side). There was an interesting piece of analysis a few months back by John Curtice (aka Professor Branestawm) about how the rise in SNP support over the last five to six years has been driven mainly by middle to older age voters who would normally vote Labour but were alienated by Corbyn. Their attachment to the SNP was thus very sensitive to how well Labour was doing in England. Looking at the polls for the last 12 months one can see how the easing of support for the SNP has coincided with the recovery of Labour’s position in them. And its not just coincidence.

    • I meant First Lord of the Treasury is the PM. Bill is First Lord of the Admiralty.

  4. Thank you for the feet on the ground tutorial on the state of British politics. One thing confuses this geezer from across the waters however.

    “Jacob Rees-Mogg (minister for the 16th century) and Nadine Dorries, (who are so far to the right they are practically Communists, but with an aristocratic bent)”

    I always placed the Marists and Communists on the left of the spectrum. Leninists are anarchists so they might be consigned to the right in America as they have morphed into Anarcho-capitalists such as Steve Bannon.

    Any further detail would be appreciated.

    • Politics is a circular spectrum…
      Eventually the far left and far right collide and merge – Steve Bannon is Dave Sprats (Eye-passim) cousin.

      • Fascinating premise, I look forward to the day when Nicola Ferguson Sturgeon and the Scottish National Party become Monarchists.

        • When England decapitated the monarchy, literally and metaphorically, Scotland crowned James the second as King and remained an unbroken monarchy. After 11 years as a republic England crowned him too.

  5. Bill
    Thanks for your nicely concise and useful explanation of the UK electoral situation.
    What lies behind the current worrisome situation, where, notably, candidates show little sign of altruism, but nationalism rather than patriotism? It is all ‘me, me, me’: prejudice, populism, unholy accommodations – always a feature in politics, are completely dominant. The narcissists Trump and Johnson have left deep destructive marks behind them: both thumbed their noses at democracy and its protective institutions. The ‘lesser’ of the two, Boris Johnson – has made his way throughout his career by sneering at ‘the other’, inventing stories such as EU plans to mandate straight bananas, offering few if any positives, cheered on by a large and cynical section of the national press. Brexit has become a massive obstacle or hindrance, not just by its existence, but by becoming a holy cow that may not be questioned.
    In all the talk of Brexit, one heard little of those thousands of motivated and capable Brits who performed sterling (no pun intended) work over the years within the EU. Britain has made a formative but unrecognised stamp on EU values, policies and procedures that would and could have continued. This remains (another unintended) a major need as the continentals tend to be attracted to a dirigisme that Britain can moderate or blunt.
    This aspect of the British contribution and its importance to the EU has never been highlighted in the British press. Had it been, I suggest Brexit might have been more amicable and even trouble-free. But Boris and his cronies weaponised Brexit to their own ends, without scruple (viz. the ON/OFF relationship with the DUP, to be a harder and less effective Brexit than even Theresa May had within her grasp.
    Now Brexit has become one of those obstacles that make transition to a better world almost impossible.
    And all quite unnecessarily so…

  6. The maths of the latest round of voting mean this could be close in terms of Mordaunt or Truss in the final two.
    Tank Girl Truss is the favoured talking head of the Tory Right WIng. She stands to win 77 votes from Braverman and Badenoch. Not sure Tom Tugendhat’s 30 odd votes will go to Mordaunt.
    This means Rishi Sunak could yet the win in a dance-off versus Tank Girl in front of the whole Tory Electorate.. (Yes, democracy is served by 200,000 Tory Members chosing the UK’s Prime Minister.)

    Can I have a Scottish Passport please?

  7. Bill,

    A quick question – If an MP is require to have 20 MP backers to enter the race for party leadership how did Jeremy Hunt end up with 18 votes?

  8. This period has parallels to 1973-1979. A period driven by a referenda, commodity crises, inflation and an inability to solidly benefit/sell the result of the EU referendum. A change of government and style of leadership shook the country into a rennaissance. Because things aren’ (arguably) so critical as they were in 77/78, we are in danger of a period of introspection and vying for accommodative middle ground politics which is resulting in the muddle of the leadership election. No stand out leader exists on any shade of the political spectrum.
    An escalation of the Ukraine crisis either on the ground or in the pipes leaves us dangerously exposed to making the wrong leadership choice both for the Conservative election and what may be not too far around the corner – a General Election.
    I fear the UK will bumble into some very bad choices before the proverbial hits the fan and an unlikely saviour emerges to the tune of the Great Escape.
    Hopefully the damage will be minimized during this time and the opportunities that Brexit offer, not lost in this muddled period.

    • Doug
      I suspect this ends badly:

      I am off sailing for a few weeks, but I am wondering what kind of England I shall return to. The Tory insurrection is looking increasingly fractured – party civil war feels imminent. My contacts are increasingly concerned. My read is as follows:

      The Tory ERG realises they are going to lose the leadership election. Liz “Tank Girl” Truss is bad, weak candidate. They are now openly briefing against Penny Mordaunt and Rishi Sunak. Accusing them of non-Tory values plus conspiracy and treason against Boris – well informed piece in Daily Mail is just one example. (Its laughable.)

      There is an ERG campaign underway to “reinstate” Boris – based on the electorate choosing him in Dec 2019 and not been given a chance to de-choose him! (Our unwritten constitution clearly states (!) it’s the party not the leader you vote for..) Jacob Rees-Mogg and Nadine Dorries are the leading lights – taking their playbook straight off Rudy Guilliani.

      I believe the ERG have a notion to keep Boris in Downing Steet by denying the election was “free and fair” with lots of intimidation – and that Boris can only be dismissed by the people. One fear is that could be used to justify a no-confidence vote if Mordaunt and Sunak win the top two place and agree an alliance next week. (That could mean Sunak as Prime Minister as early as Friday – if they reach agreement.) It will be fascinating to hear how Lord Rees-Mogg will weasel-word the need for an election after accepting a party vote earlier. (In order to save the party, we had to destroy the country.. or something similar.)
      Plunging the UK into a summer election would devastate Tories, but the carnage could enable ERG to establish post defeat hegemony over party.
      If Mordaunt is as smart as we are told she should offered a counter deal – to reinstate Sunak as Chancellor if agrees to her being Prime Minister. It would be the right game-theory choice for Sunak to accept because he won’t win the membership vote against her, but he will turn it down on basis its all or nothing for him. (In which case, you get him back in the USA!)

      Poker all round. Some good and bad hands.

      Extraordinary times as the Tory party fractures in a most bitter and disturbing way – a small coterie of hard line Brexiteers willing to bring down the state. Eventually a new leader will emerge.

      Watch the European crisis unfold as Italy crumbles.

      Can I urge all readers to try not to break the UK while I’m out..

  9. There’s plenty of creative positive thinking being done . . . But by the SDP, who realistically can’t compete yet, despite being probably the fastest growing party by membership.

  10. I appreciate this may not be the time or place, Bill, and I appreciate we voted differently in the referendum, but the upsides you allude to – “making a success of Brexit” – really do appear to be vanishingly, well, vanishing. The Brexiteers in the Tory Party sound much like the old Soviet apologists (“The socialist experiment is failing because it’s not being done properly.”) and I expect they will still be talking of missed opportunities in 2035.
    I count good friends and family among ‘Leavers’ but, six years on, I have yet to hear a single concrete example of what Brexit might offer the UK by way of upside. Identifying the EU’s many faults does not make a positive case for leaving a flawed but productive union. So I’d genuinely welcome your thoughts on how and why Brexit – Done Right – would bring us the net benefits that presently elude us. The Tory leadership candidates – like everyone else – can’t articulate any benefits beyond slogans.

    • I made the mistake of voting with my heart for Brexit. It should have been in a head decision. I suspect I am not the only Libtard that now regrets that mistake.
      We call it the Webster Question: Name one thing that is better after Brexit or been improved by it. Answer: Jacob Rees-Moggs’ influence.
      If Brexit had been “done right” – whatever that means – perhaps better trade deals (from where – the world closed it doors to post Brexit UK) or freerer industry (meaning we could not sell into Europe!).. Who knows..
      Perhaps a small benefit.
      Now we have to limit the damage.

  11. Bill,

    I’m sure Jacob Rees-Mogg was the member for the 18th Century. Has he slipped back a couple of hundred years in his policies? Does he now endorse war with Spain instead of opposing independence for our North American colonies?

    Asking on behalf of our US friends who must be confused on this point.

    • Fair question – the Rees Moggs were originally a clan of velicoraptors living on the South Dorset Coast. They evolved parallel to mankind and have adapted as parasitic species and now holding positions of power in media and politics. As Lizardmen they live for centuries – but Jacob can’t really recall if its the French, Spaniards or Yanks we’re actually against.
      He has never acknowledged recent modern European history – like the risorgomento in Italy or German Unification in the 19th C. His standard reference to diplomacy is the Treat of Westphalia – https://www.youtube.com/watch?v=8Dy-CeKgPa8

  12. Dear Bill,
    I’m an American residing currently in Germany. So, one of the ingredients I treasure in your porridge is the smattering of Anglo Saxon humor (humour, for you); Germans just don’t get it, most of the time.
    I am quite often aligned with your thinking (?) in Porridge, and I usually understand where you are going with your thinking. So, I was gobsmacked when you said you voted to leave the EU. What The FuddleDuddle (Ala Trudeau) were/are you thinking? Maybe you covered this §%#* in a previous Blog which I missed. Sometime in the future (not on the boat) please enlighten me/others as to your logic in Brexiting the huge common market next to you. Thanks in advance, ’cause I’m hoping to hear something new.

  13. Excellent analysis and excellent comments.

    I am not British and I have been living in London for 40 years. I have always been a bit befuddled by UK politics starting when the Tories quick Maggie out.

    But the point I want to make is that the world today is an “extremely dangerous” place and all the PM contenders seem to be “extremely lightweight”.

    Whoever wins will have to deal with Putin, Lavrov, Xi and will be eaten by ( this is on purpose ) breakfast.

    And the other Europeans are not better. So I am a bit scared

  14. The opportunity of Brexit for Britain was to enable it to pivot towards the resource rich Eastern Europe and dynamic markets of China and India and away from Mainland Western Europe. Unfortunately we have done the opposite.

  15. Bill
    I’ve enjoyed your recent posts as much as ever and returned from my own vacation to read this one. I suspect you are now safely transported to the water and hope you enjoy your sailing this summer.
    Your commentary and those related from others make difficult reading. The sense of helplessness over being held hostage by the ERG and our political process is palpable. I think I share the view of many of your readers that Brexit did seem a little Trojan and, despite the many significant attractions of our country, we are now struggling with toxic political direction and a potential split of the union at a time when Putin has forced us all to realise that self-sufficiency is crucial and that reconciling differences with those who hold aligned values is becoming more and more important.
    We still live in a democracy I believe. Is there no route to over-riding our ERG lords and masters to reassessing the public appetite with this experiment. Re-joining the EU may be tricky and we will likely be forced to lose many of the attractive concessions we previously enjoyed, including our currency. The EU is also once again showing it’s systematic, structural flaws; but maybe this, together with the situation in Ukraine may offer a route to rejoining in the form of a complete reset back to 2015?
    What does it require for another Brexit vote?

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