GB Elections Newsletter
Scenarios and commercial impact
Commercial Summary: Leading Brexiteer Nigel Farage announced that he is returning to politics, taking the leadership of the Reform Party, and running for Parliament. A Labour victory, along with a left wing government that imposes new onerous regulations, increases energy bills and possibly opts for a second Brexit referendum, is the most likely outcome.
The unpopularity of record levels of immigration, and of both Labour Leader Keir Starmer and Conservative Prime Minister Rishi Sunak, makes Farage’s entry a potential game changer. Farage, who almost singlehandedly first forced the Brexit vote and then forced an unwilling British establishment to implement Brexit, is not to be underestimated. His attempt to make the election about immigration raises the possibility of the Conservatives being replaced as the official opposition party, as well as the possibility of a hung Parliament. We examine these scenarios below, and their commercial impact.
Farage’s potential path to electoral success, and the pitfalls he faces:
For Reform, success is merely entering Parliament, while winning second place and becoming the official opposition is a complete victory. 41% of Britons view immigration as one of the most important issues facing the UK, second only to the economy and tied with healthcare. 20% of the public view it as the most important issue, period, second only to the economy at 30%. This concern is driven by unprecedented levels of migration, which can be seen from a cursory walk in any city or town.
Farage may be able to tie the economy, healthcare and immigration together, by highlighting that the increased supply of cheap labour through immigration depresses wages, raises the demand for public services - including healthcare - and prevents enough investment in capital that would make labour more productive, thereby depressing economic growth. This narrative has the advantage of being true, with the negative economic impacts of high levels of migration increasingly recognised. This is especially so given that only a small proportion of visas are work visas
The impact of migration is made more insulting to the white British majority by the fact that modern Britain does not tolerate criticism of foreign cultural practices, and by the establishment’s commitment to DEI. It is worth recalling that, outside the West, every diverse country gives preference to the native majority population. It is only in the West that being a recently arrived ethnic minority is an advantage in the eyes of the establishment and the state.
Farage is an extremely effective debater and is highly charismatic. Furthermore, recall that migration is one of those issues where not all respondents may answer honestly, given that, in the West, opposition to migration is highly stigmatised. As such, polling may understate support for Reform.
The problem for Farage is that he has not been able to craft a coherent and relevant message beyond opposition to immigration: Libertarianism and Thatcherism are as dead as liberalism, but he does not see it yet. Moreover, Reform has not got enough of an organisational structure to campaign effectively, relying primarily on Farage’s own charisma.
Scenarios
Scenario 1: Labour wins, the Conservatives are the official opposition (baseline scenario).
In this scenario, Farage’s entry into the arena is nothing more than a storm in a teacup. The Labour Party proceeds to win the elections, with the Conservatives suffering an unprecedented defeat but coming in second place. Britain continues on the path of mismanaged decline.
The size of the Labour majority raises the risk of infighting between those who favour an Islamist identity, those who want to prioritise the environment, supporters of Diversity, Equality and Inclusion, those who want to get on with governing and those, like Starmer himself, who want to consolidate power and secure future victories.
Starmer appeases his various constituencies by imposing more DEI restrictions, environmental regulations, and anti-free speech laws. Starmer also increases funding for far left NGOs focused on his pet ideological projects. Immigration continues at unprecedented levels, crushing the middle and working classes and benefiting the rich. Starmer toys with replacing the first past the post system with proportional representation, with abolishing the House of Lords, and possibly with a second Brexit referendum. Given Starmer’s unwillingness to stick to the promises he made to become Labour leader, there is no reason to take his promises in the upcoming manifesto too seriously. Rather, Starmer is driven by will to power, not electoral promises. We strongly advise you to watch this brief video to understand that Starmer would say anything to gain power.
The post-election chaos in the Conservative Party facilitates Labour’s agenda. The Conservatives spend a significant part of the next five years fighting each other, between those who want to continue the path of Blair and Cameron, and those who want a truly right wing and conservative party that dissociates from liberalism and libertarianism.
This is our baseline scenario.
Scenario 2: Hung Parliament
In this scenario, Labour fails to achieve a majority. Farage’s presence leads to a higher turnout by those who dislike both Labour and the Conservatives. In Brexit-leaning areas, this hurts Labour more than Conservatives. The increased turnout helps the Conservatives win some seats, where tactical voters choose Conservatives. Voters who are not satisfied with Starmer choose the SNP or Greens.
Labour has to enter into a coalition with the SNP, the Liberal Democrats or even the Conservatives. Such a coalition would be chaotic. A second election would be likely relatively soon, with Reform being much more likely to make additional gains, having shown itself to be electorally viable and a ready replacement for the Conservatives. This is our second most likely scenario.
Scenario 3: Labour wins, Farage’s Reform Party are the official opposition
Labour is still divided, as above, and attempts to pursue the same policies. Their majority is smaller, as George Galloway’s pro-Islamist, left-wing party takes away some of their votes in Muslim heavy constituencies, creating openings for Reform. Conservative and Labour constituencies punish the establishment by voting Reform. As the official opposition, Reform are initially clueless and embarrass themselves repeatedly as they try to find their feet - Farage is notorious for his lack of attention to detail. Reform focus their effort on immigration, the “green” agenda, and the DEI agenda, gaining support among working class whites and middle class white men. Depending on whether their parliamentarians have any talent, or are able to recruit talent from the wreckage of the Conservative Party, they slowly rise to the task.
Indicators
Indicators that Reform will overperform, threatening the Conservatives and most likely keeping Labour on path to victory:
Voter registrations rise rapidly and dramatically, indicating a renewed enthusiasm for the elections.
Farage is met with enthusiasm in Red Wall constituencies.
Islamist and/or leftist violence against Reform gives it a boost.
Labour and the Conservatives fumble the debates badly.
The media attacks Farage relentlessly, accusing him of racism and Islamophobia, but also giving him widespread coverage.
Galloway’s Workers’ Party of Britain begins to perform well in polls among Muslims, threatening various safe Labour seats.
Farage hones a message that resonates with different segments of society, including the working classes, the middle class and big corporations, that moves beyond reheated Thatcherism.
Indicators that Reform will underperform, helping the Conservatives and ensuring a Labour victory:
The media avoids covering Farage, mostly ignoring his presence and keeping his message restricted to social media.
Registrations for voting do not rise in any way, indicating lack of enthusiasm, even for Farage.
Indicators that Labour will underperform
Media coverage of the risks of a Starmer government to civil liberties and to social stability increases.
Infighting between the Islamist factions in Labour and the mainstream intensifies and receives more media coverage, resulting in reduced public support outside of those already heavily committed to Labour.
Galloway’s party manages to attract a significant percentage of the Muslim vote and of the Corbyn far left.
Commercial Impact
Scenario 1: Labour wins, the Conservatives are the official opposition.
New regulations relating to diversity and race relations are imposed, significantly increasing compliance costs.
Greater harmonisation with the EU, including on migration issues. However, the EU keeps obstructing British exports of goods, trying to get a second referendum.
Income taxes, national insurance and corporate taxes increase by the second year of a Labour government.