We’re so back

The grown ups are returning

When Americans voted for Trump, there were perhaps two things they didn’t expect.

The first was that their savings would be decimated - 62% of Americans hold stock and the S&P500 is still down substantially on the start of the year. In the days after the announcement, stocks saw their worst performance since the pandemic: and Trump has indicated the tariff war is not over yet.

The second is that it might just spell the end of populism in the US and around the world.

That may sound counterintuitive.

But wait, I hear you ask, have you not been paying attention during your hiatus? The recent local elections in the UK should be proving that populism and the far-right is firmly landing on our shores.

And yet I am increasingly confident that the Trump effect is one that will push the world back to the centre, away from the extreme right. I think Trump has opened the door to put liberals back at the centre of the world order.

O Canada

The Liberal Party in Canada was set to be decimated in this election.

Justin Trudeau, after nine years at the helm of Canada, was deeply unpopular. After his resignation in January, his party continued to trail behind the Conservatives in the polls. Public services were under strain, prices were skyrocketing, and immigration levels seemed out of controls. The country was ready for change.

Canada, it seemed clear, would soon follow in the footsteps of America and put a right-winger in charge.

When the Liberal Party selected Mark Carney as its next leader. Mark Carney is the establishment personified, as a former governor of two central banks (including the Bank of England). Yet Canada seemed to rally around him.

They were united not for Carney, but against Trump. His threats of tariffs and rhetoric around annexing Canada was enough for the Canadians to put the country in the hands of a grown-up. Meanwhile Conservative leader Pierre Poilievre lost a 27-point lead, and his own seat.

And it was the same story in Australia. The Liberal Party (which is economically liberal, but not socially liberal - more akin to a conservative party) took a bruising: its leader, Peter Dutton, lost his lead and his own seat.

Peter Dutton was seen by many Australians as their own Trump. He pledged tough immigration policies, and huge cuts to the public sector.

As the world has watched Trump slash the American economy and cause division and chaos, it seems countries are turning their back on their local Trumps.

The Farage Factor

Nigel Farage is the British Trump. He has a somewhat inexplicable allure for huge swathes of the country. He’s clearly an enigmatic and engaging figure and, like all populists, he promises easy answers to big questions.

His Reform Party has exceeded even ambitious predictions in the local elections: winning 10 local councils, 2 mayoral races and 1 by-election in Runcorn and Helsby.

But I suspect this result will serve as a poisoned chalice for the Reform project, and possibly hand the next General Election back to Starmer at the next election.

Farage’s poisoned chalice

Firstly, Reform and their supporters will be badly let down by their new councillors. These wide-eyed new politicians have promised to cut council budgets and curtail immigration. They will struggle - councils are already spread thin, with most of their funds going on already inadequate social care. And, they may be surprised to discover, local councils don’t control immigration policy.

Voters will be disenfranchised by an incompetent, overambitious Reform UK, and perhaps realise something important: governments don’t move slow because they want to, they move slow because changing entire countries is hard. It is better to have effective operators than loud-mouthed agitators.

Reform UK will also face internal and external pressures. With hundreds of new politicians, they are sure to face scandal after scandal. Scandal isn’t what it used to be - getting hot mic’d calling someone a bigot probably wouldn’t change the trajectory of an election, these days. But some scandals are still unforgivable to the public. Holding a party during lockdown, for example, marked the beginning of the end for Boris. With hundreds of, often quite eccentric and poorly vetted, new politicians - Reform UK may just have one of these unforgivable sins lurking within their midst.

And finally, the Tories will evolve. Kemi Badenoch is doing a terrible job as Tory leader, but the Tories will let her stay as a caretaker. They know that their best shot at winning in 2029 will be to have a relatively fresh faced candidate promise change. That candidate, possibly Jenrick or more likely Cleverly, will have the charisma and talent to take on Farage.

The effect will be a divided right that hands the keys to Number 10 back to Starmer.

The same thing could even happen in the US. The Trump Effect is dependent on Trump’s personality: he does not have a natural successor. When his term ends (and it will, despite posturing that he’ll go on - he will be too old), no Republican will be able to create chaos and retain likeability in the way Trump can. Populists depend on personality, and those personalities are rare. America will almost certainly elect a boring Democrat to clean up the mess.

Nature is healing and the grown ups are slowly getting back in charge.