U.K. Finds Its Beppe Grillo

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By Marc Champion

U.K. Prime Minister David Cameron's tactic of pledging to claw back powers from the European Union and then hold a referendum on whether to leave or stay in the bloc has failed its first election test.

That was the general consensus in the U.K. news media this morning, after Cameron's Conservative Party was reduced to a humiliating third place in a by-election in the southern constituency of Eastleigh. The Tories were beaten not only by their coalition partners, the Liberal Democrats (who held on to the seat), but also by the UK Independence Party.

The EU referendum pledge that Cameron made in January was designed precisely to stanch the flow of right-wing Conservatives to the UKIP. This week, it failed. Already this morning, conservative commentators in newspapers such as the Daily Telegraph were saying the result proved that Cameron should hold a referendum on whether to stay in the EU immediately, rather than by 2017; crack down harder on immigration; and abandon recent policies such as legalizing gay marriage.

The result was widely interpreted, too, as a resounding victory for the Liberal Democrats who won with 32 percent of the vote, despite trailing badly in national opinion polls. The UKIP candidate got about 28 percent and the Conservative candidate 25 percent. Labour came in with less than 10 percent.

How you interpret the results depends on how you look at the numbers. One view is that midterm by-elections mean nothing -- the ruling party always does terribly because voters can send a message of protest with little consequence. That's usually and empirically ture, but as Beppe Grillo showed in Italy, politics are changing in Europe. Protest voters may really mean it this time.

More interesting than the raw figures is the change from the last results for Eastleigh, at the 2010 national election. The (pro-EU) Liberal Democrat share of the vote has fallen by 14.5 percentage points, about the same as the (euro-skeptic) Conservatives at minus 14 percentage points. This makes perfect sense to me: Both parties are running the government together and the economy is in terrible shape, so they did as badly as each other. Labour went nowhere, with an increase of 0.2 percentage point. That's a disaster for them, too, because as the main opposition party they need to be making large electoral gains if they hope to win power at the next national election.

The only clear victor was the UKIP, whose vote this week increased 24 percentage points, compared with 2010. I don't see this as a Europe issue, and if Cameron concludes that what he needs to do now is chase the UKIP's policies, he'll still lose at the next election.

That should come as no surprise. When the Ipsos Mori polling group does its monthly survey on what Britons consider the most important issue facing their country, the EU doesn't even make the top 10: In the latest, January poll only 6 percent of Britons ranked the EU as their top concern. The standout winner was the economy, at 52 percent, followed by unemployment, immigration, the National Health Service and crime.

What the by-election probably shows is that in UKIP leader Nigel Farage, the British have found their Beppe Grillo, the stand-up comedian turned politician who won a quarter of the vote in Italy's recent parliamentary election.

Farage was never a professional comedian like Grillo, but he is the nearest thing to it in the European Parliament, where he is a legislator. His party has nationalist roots that are quite different from Grillo's, but Farage seemed to understand that he drew votes from all parties and the cause of his success was the same as Grillo's: protest. He called his party's surge in Eastleigh a rejection of traditional parties and politics.

Cameron and the Tories will succeed only if voters believe the government is looking out for their interests and has found the right policies to restore prosperity to an economy that has yet to recover its size at the start of the financial crisis. The prime minister should spend all of his time worrying about whether he has the right growth and austerity policies; some time on improving immigration policies; and no time at all on showing how tough he's being on the EU -- a strategy that won't get him re-elected, but distracts from policies that might.

(Marc Champion is a member of Bloomberg View's editorial board. Follow him on Twitter.)

-0- Mar/02/2013 00:00 GMT