Sunak Suffers Twin Election Blows in Effort to Revive Tory Hopes
Comment of the Day

July 21 2023

Commentary by Eoin Treacy

Sunak Suffers Twin Election Blows in Effort to Revive Tory Hopes

This article from Bloomberg may be of interest to subscribers. Here is a section:

Sunak and his team had downplayed their chances in the three special elections in very different districts, arguing that even winning one would represent a victory given governments are often given a kicking in mid-term votes. The prime minister is eyeing holding the next national vote in November 2024 to allow Britain’s ailing economy as much time as possible to recover, a person familiar with his thinking told Bloomberg. 

Economic data has begun to turn this week with a bigger-than-expected inflation drop, while figures published Friday show government borrowing undershot official forecasts — potentially giving Chancellor of the Exchequer Jeremy Hunt room for tax cuts.

The prime minister told reporters in Uxbridge the Conservatives will take encouragement from the result there, arguing it shows the outcome of the general election “is not a done deal.” 

Eoin Treacy's view

Byelections are more like referendums on the performance of the government. Holding a staunch conservative seat in the leafy suburbs of London is not a victory compared to the risk of losing the red wall Boris Johnson successfully enticed into the Conservative fold for the first time by appealing to their nationalism.

The Illegal Migration Act of 2023 was announced a couple of days ago and introduced today. It is a bald attempt to court the affections of the converts to the Conservative Party as both parties prepare for an election next year.

Migration policy is always fraught with political issues. It inevitably boils down to three topics which can be summarised as tight borders, access for the most desirable applications and a dash of humanity for hard cases. When the middle ground is diverged from for a sufficiently long period, the pendulum swings backwards.

The UK has seen mass migration for several decades, with waves of immigrants from every part of the empire turning up. I was one of them. In the race to be as welcoming as possible, scant regard was paid for the value of the domestic culture. That doesn’t tend to affect urban dwellers, but it is a major point of contention for the rural community. It is even more poignant for those who have not been party to the benefits of globalisation but do see global citizens turning up next door.

I remain of the view that multiculturalism only exacerbates racism. The reason people wish to move to another country is because they are afforded better opportunities that at home. That should be recognised and celebrated. It in no way plays down the value of one’s own culture but the logic of “when in Rome, do as romans do” is solid wisdom.

The 10-year Gilt yield failed to sustain the break above 4.5% last week and have pulled back into the range. The UK government will be hoping the good news on inflation will be enough to mend some of the ill feeling that the fruits of Brexit have not be grasped or are not immediately obvious just yet.

Another indication of the stress being felt in the UK economy is the sparce number of tourists in Killarney, Ireland. At this time of the year the town is normally heaving with people. UK visitors are usually in the majority.

Several of the restaurants we have visited said that May was better than normal, but the summer has been very quiet. Usually, older visitors arrive during the school year and take advantage of lower accommodation prices, while families dominate in the summer. The absence of visitors at this time of year suggests mortgage rate resets are hitting families hard.    

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