Brexit: gut feeling, still close, anybody’s call

June 1, 2016 admin

This will be the last blog post from me ahead of the United Kingdom’s June 23 referendum on membership of the European Union. The “Remain” and “Leave” positions have become better understood as campaigners articulate the arguments better, but the outcome continues to be impossible to predict.

Let’s continue to stick with the Brexit poll tracker in The Financial Times that I used before to show how close the two sides are. At the time of writing, the poll tracker shows an overall 46 percent in favor of staying in the E.U. and 43 percent in favor of leaving, with 11 percent undecided. So, we are still in margin-of-error country and one where the error could be hugely significant. Of 80 polls carried out so far this year, 46 found a majority for remaining and 25 for leaving. Nine were tied. It bears repeating that a simple majority on the day is all that is needed. So I will repeat it — a simple majority on the day is all that is needed.

We will have to await events. Some things have become clearer, though. A consensus is emerging and it seems to be leaning toward “Remain.” For some, despite well-grounded views, the risks and uncertainties of “Leave” are seen as too great. They would like to do it, but they daren’t. It’s a bit like the probable choice in the U.S. presidential election between Donald Trump and Hillary Clinton; an unpalatable choice for many voters, which may drive them to a v e r y reluctant decision to go for the lesser of two evils. You want an evil for U.S. president? Is that better than an alien or a Muslim?

Also emerging is a view that if the Brexit vote is anything less than 60/40 for “Remain,” then the issue is resolved for now, but not for all time. Brexit will come back to bite in that event, particularly if the E.U. starts behaving boorishly toward the United Kingdom for (a) daring to have a membership referendum and (b) deciding that it did want to stay in the club after all. We only have to look at the Scottish National Party to see how the 55/45 “No” vote in the 2014 Scottish independence referendum — with a massive 84.6 percent turnout — was accepted graciously at the time, only to be denigrated and disregarded subsequently. We are now seeing rising SNP agitation for a second independence referendum.

Woe betide the “united” in United Kingdom if England votes “Leave” in the E.U. referendum, Scotland votes “Remain,” and “Leave” wins overall. That would certainly trigger an SNP demand for a second independence referendum. Possibly also an early application by Scotland to join the European Union (which would be rejected; the goldplate-pensioned, vested-interest E.U. technocrats may be many things, but they’re not stupid.)

Woe betide U.K. prime minister David Cameron and finance minister George Osborne if the vote for “Remain” is between, say, 53/47 and 50/50, for the Conservative Party knives will be out, with calls for regime change at the top and a second Brexit vote. If “Leave” wins, and that is entirely possible, the British government’s position will become untenable, signaling a period of political volatility and instability and economic symptoms to match.

But wouldn’t that partly be the E.U.’s fault for not giving the “Remain” camp anything to play with in this referendum apart from vague mentions of possible future E.U. reforms? This is the E.U. that when it doesn’t like the way that national votes have gone — as in Ireland in 2008 on the Treaty of Lisbon — strongly suggests that the people should vote again until they come up with the desired answer. It’s called democracy and self-determination, an alien concept in the Brussels technocracy that prefers diktat-solidarity and subsidiarity. And it’s at the heart of what the United Kingdom’s E.U. referendum is all about.

RichardFlemingThe views, statements and opinions expressed in this article are those of the author and are not necessarily those of Institutional Real Estate, Inc.

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Richard Fleming is editor of Institutional Real Estate Europe.

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