Only one contest matters in UK local Elections

UK Local Elections are pretty dull and meaningless affairs, but the vote in Scotland is perhaps an even more important plebiscite than Brexit. If the SNP achieve an absolute majority, then the UK could plunge into more years of uncertainty and distraction – whatever Boris thinks.

Blain’s Morning Porridge – May 6 2021: Only one contest matters in UK local Elections

“All men die, but not all men really live..”

This morning: UK Local Elections are pretty dull and meaningless affairs, but the vote in Scotland is perhaps an even more important plebiscite than Brexit. If the SNP achieve an absolute majority, then the UK could plunge into more years of uncertainty and distraction – whatever Boris thinks.

An interesting day’s play here in prospect” in global markets after Joe Biden socialises the vaccine producers and causes stock markets to tumble as has reveals himself as the Enver Hoxha of US politics… (US Readers – mild sarcasm alert.) Instead let’s think about little things… like UK local elections.. Yawn.

To be blunt: no one gives a fig about UK local elections. The media is trying to whip up a storm about how exciting “Super Thursday” is, but its utter bollchocks.

The reality is no-one in the South of the UK cares who is mayor of some bleak Northern City, and no one in the North is concerned about the parish council elections in Crinkly Bottom. Sadiq Khan looks likely to remain Major of the Peoples Democratic Socialist Republic of London – but since no one lives in London anymore…

One election does matter… and that’s up in Scotland.

Feisty wee Nicola Sturgeon is 100% confident of a tactical victory as she goes into bat on the sticky wicket of Scottish public opinion. The polls say her chances of winning a strategic victory of an outright majority in Hollyrood are too close to call. (Some others say she will be between 3-6 seats short.)

The SNP’s numbers are what anyone invested in UK Inc should be watching. If Sturgeon wins an absolute majority, her claims it’s a mandate for IndyRef 2 gain legitimacy. It won’t help the Scottish Tories tried the scare tactic of tweeting a SNP majority would “guarantee” a second referendum.

The SNP will fight tooth, nail and claymore for their right to another vote. There is no guarantee they will win it, but it will still be a massive distraction and disincentive to UK inward investment. Watch sterling crumble and London tumble if the rebellious Scots give Wee Nicola the numbers she wants. The US investment banks predict between 15-35% chance Scotland will then vote for independence.

While Brexit was about the UK leaving a club of nations we’d historically never really belonged to, a Scottish Independence vote will rend the UK in two. Its more visceral and fundamental than anything any Philippe, Louis, Bonaparte or Hitler ever achieved in terms of stemming UK mercantile strength.

Coming on the back of Brexit, and the last referendum, an Indyref 2 will confirm for many overseas investors a sense the UK is breaking up, it’s no longer a solid entity, its relevance is faltering, and the repercussions in terms of the UK as safe haven investment will no longer hold so true. It will be difficult to justify a long-term investment into the UK’s post Brexit prospects if there is a 35% chance the UK might unravel within a few years – with all the commensurate effects on our global significance and ability to get trade deals done.

What Scotland decides today is significant for the whole UK.

The conventional wisdom in London and the City is the SNP are a bunch of nutters, believing in mythical economic unicorns (which is an emblem of the nation), and likely to evaporate like a highland mist when their illusion is shattered.

That would be a very wrong opinion to take. Despite the recent unpleasantness with her former mentor and sex-pest Alex Salmond, Sturgeon has successfully glossed over the annoying little details of how an independent Scotland will be able to afford the massive deficit it will assume, how to reconcile joining the EU and Euro while Scotland’s largest trading partner is England, and simultaneously declaring how the single purpose SNP’s list of 12 electoral objectives – each one being Independence Now – can solve for the nation’s future prosperity.

The usual criticism of the SNP is how 14 years in Power has achieved little. Again, that’s not true. They have made themselves extremely popular. They have swung enormous numbers of voters behind them, and created confidence. Realistically, none of the UK’s established other parties – the Conservatives or Labour – come close to challenging them. The SNP now defines Scottish Politics!

Its biddable voter policies have boosted support for independence to around 50%. The SNP has used Hollyrood’s revenue and legislative rights to deliver much in terms of vote winning strategies like child care, nurses, and bobbies (Scottish Police) on the beat, free university places and other social trinkets.

They have created voter confidence. Go to Scotland and it doesn’t feel like economic or political collapse is imminent. While the SNP has delivered fripperies – they have played strongly to the agenda a small nation based on the Danish model of high-taxation but strong social inclusion works. Many in Scotland buy it – supporters are confident on the back of it.

It’s too simplistic to say the SNP will fail to deliver. But solving the revenue equation looks impossible. In the past, the SNP’s claim “Its Scotland’s Oil” summed up its revenue policies. Where will the money come from today? It has no chance of meeting EU debt to GDP ratios. That’s a tough question to be asking, which is why the SNP tend to dismiss it and move questions on. Calmly, rationally and carefully explain, with great patience and forbearance, Nicola will explain it’s all Boris’ fault.

In reality, Scotland is an exciting place (and that’s not just because I’m biased by birth). There is fantastic tech being innovated around University campuses, a strong and high quality agri-sector, and nowhere better suited for renewable wind and tide. It’s a nation blessed with beauty and lots of rain –fresh water is the commodity of the future.

It’s easy to say Independence won’t work. Scotland has a deep-rooted historical problem about being overly enthusiastic about promising projects, whether its invading England or carving out our own empire in Central America; the Darien Adventure which bankrupted the nation leading to England bailing us out in 1707. Our history is 1000 years of constant warfare with our worst enemy – ourselves. If its not the Clans vs the Lowlanders, Campbells against everyone else, or Protestants vs Catholics, it’s now Yes vs No.

The English…? They are usually nothing more than a bemused onlookers waiting to pick up the broken pieces…

A SNP Election victory is done and dusted. If they fail to secure an outright majority, then the Greens will support them. It Sturgeon gets the outright majority she’s looking for then the UK will be treated to at least of a year of arguing about her rights to call a second referendum, and then the joys of Scotland polarising itself into Yes/No votes…

If Scotland was a stock – I’d probably be short because no matter how “distruptive” it might be, the numbers don’t stack well. But the damage it will do the UK’s political relevance could be irrecoverable… and I’d be short UK on the basis its relevance is waning..

Meanwhile…. Over the seas tae France

At the other end of the UK, we’ve got the French celebrating the 200th anniversary of the death of the last significant Frenchman by declaring war on Jersey. The Channel Islands are the UK’s guilty little secret, nestled close to the French coast, with an imaginative approach to the financial industry – which is most definitely not about being a tax haven. Ahem.

It’s the usual thing… The French say our fish is their fish and we tell them to go reproduce far away. On the basis perfidious Albion is stealing their fish, the French threaten to cut power to the Islands… Blah blah.

Heard it so many times before. Boris has reacted with his usual finesse and dispatched the Big Lizzy aircraft carrier taskforce, two fishery protection vessels… which to be fair is probably more than enough to achieve the desired effect with the cheese eating ******* monkeys…  (10 points in the spot the missing word competition.)

Five Things To Read This Morning

FT – Big dividend payouts show the value in unloved miners

FT – Lessons in investing from John Maynard Keynes

BBerg – A “very modest” taper is undeserving of a tantrum

WSJ – US backs waiving patent protection for Covid 19 vaccines

WSJ – Biden’s Capital Gains Tax Increases Would Hit Few Americans, Study Says

Out of time and back to the day job…


Bill Blain

Shard Capital


  1. Agree mostly about the elections especially London (democratic peoples republic of). Re jimmy krankie (sturgeon), the risk is not that Scotland goes, it is that the exit occupies too much time and effort like Brexit did. Its <10% of the UK, and less than that in GDP, if she really wants to go, give the English a vote. I think all was well before but mostly we are sick of the Jimmy (Nic) and Alex agenda where they want to be supreme ruler, so i'd be more than happy to wave goodbye, and stop subsidising them just so they can insult us.

    • Oh Harsh.. We love the English. THe sheer joy of the Rugby this year, etc…
      If the SNP really want independence, they should insist the English get the vote..

      But… if the UK fractures.. it will impact everyone…

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