Blain’s Morning Porridge 5^th July 2024: UK Election Special – The real winner was Reform, and that will have massive consequences.

“Populism is not a fad – it’s a peoples’ rebellion against big corporations, the economy, government, the media and the environment.”

Labour got a landslide, but did not win the UK election – the Tories lost it. The result is not what it appears to be…. The real winner was Reform, and that could have massive future consequences for Markets and the UK economy.

Last night a bunch of us gathered in the pub ahead of the UK Election Exit Poll announcement. I asked everyone present to guess the number of predicted Tory seats. The low was 70 and the high an improbable 350. I chose 120 Tory MPs – which was pretty much bang on the money.

This morning it’s all about the Labour Landslide of 410 seats… but that is not the real story or what markets should be watching and considering for the long-term following yesterday’s  election.

• Labour got 3 times as many seats, but did not win – the Conservatives lost, and lost badly, punished by the electorate.
• Reform were the real winners – although they only got 4 seats.

The rise of Reform, the UK’s most successful populist party, will be the critical factor to consider in terms of the UK’s future political slant. Addressing the very real concerns of Reform Voters should be at the forefront of all the traditional parties’ thinking and policy decisions ahead of the next election. How do they claim back disaffected populist voters? By addressing their concerns.

The critical moment of the past election was Nigel Farage changing his mind about not standing as an MP and stepping up to lead Reform. It galvanised a tidal surge of populist support, and translated into a massive vote shift away from the Tories. Take a look at the many big-beasts of the Tories who lost their seats last night – in every single case it was votes that went to Reform that slew them.

In many respects the vote for Reform is little different from the right-wing populist shift that has occurred across Europe. But it is not just a short-lived protest vote. The liberal elites have made the mistake of portraying Reform as ill-informed racists. The Tories’ entitled leadership dismissed Farage and his chums as a peasant rabble.

The reality is very different and likely to prove long-lived.

Don’t make the mistake of writing off Reform as solely an anti-immigration party. The real issues, and the reasons it did so well across all the English parliamentary seats is that disaffected Reform voters have:

1. Lost confidence in the traditional, conventional politicians and party politics.
2. Are mounting a backlash to all the liberal elite themes of wokery, gender politics, diversity and political correctness – which are utterly irrelevant to them.
3. They distrust conventional news and media as part of the perceived liberal elite machine, making them fertile targets for fake-news and manipulation. Young angry men are willing to follow role-models like misogynist Andrew Tate. They are susceptible to get-rich-easy scams like meme-stocks and bitcoin.
4. Although Reform has coalesced around the same themes as right-wing European parties; the perceived immigration threat and distrust of Brussels, their support is very real and much deeper rooted. It stems from multiple frustrations:
   1. For many it’s the lack of opportunity, a sense of economic helplessness, and the soaring cost of living that impacts the poor and disadvantaged, while barely touching the wealthy. In that respect it is no different to Donald Trump’s MAGA which recognised the “Great Divide” in US society between the wealthy and empowered liberal elites and the ignored, decaying small town America.
   2. For others it’s the sense the Conservative Party no longer represents pride in national and Britishness.

I would love to see some analysis of who and what demographics voted for Reform. I suspect the party managers will be shocked at how many young people votes for them – let’s see the data. Had Farage decided not to stand, and focused his energies on supporting Trump (as many expected him to do), then I expect yesterday’s vote would have been a very close run thing.

What happens next will be fascinating – will Reform and the Tories evolve into something new, a party of the right that somehow merges traditional conservative values with the demands for economic betterment and anti-liberal stance of Reform? Or will Reform evolve into a party with a full organisational base and executable policies by the next election?

Watch this space…

Out of time – have a great weekend..

Bill Blain

Author of the Morning Porridge

Wind Shift Capital

www.windshift.capital