Brexit Thoughts II


Philip Stephens column in the FT today addresses the Brexit question and the strategy of new Prime Minister, Theresa May. His conclusion is that we should take our time to invoke Article 50 and play a long game; his hope is that over time what seems politically impossible today will become achievable. I know Philip and have a considerable respect for his judgment but I disagree on one level with taking the negotiations slowly.

Of course it is possible that we might get the best result that way, but the fear is that in the meantime, our economy may suffer. Investment could grind to a halt, if business has no clarity on the likely potential outcomes.

The best strategy, I suspect, would be for May to agree with senior EU leaders like Merkel, Renzi and Hollande a reasonable set of proposals, trying quickly to arrange a say 10 year deal that perhaps defers the final decisions but gives us a certain interim future – a Norway-style solution with free access to the single market for our service industries, a cap on immigration (and outward migration from the UK to the EU), a standstill on existing immigrants, and a generous (but still reduced) contribution to the EU budget.

Meanwhile, I believe our new PM May is misguided in shaking up the whole Government. I have always thought the policy of changing ministers was odd – when a new CEO takes over at a FTSE 100 company, if (s)he fired all the divisional managers and replaced them with people with no experience, then investors would be extremely worried.

Terminating the energy department and merging it with business is an unusual decision, in my view – it’s too important and large a portfolio, and it de-emphasises climate change, which our partners overseas will likely question. In my view, May should have said that the Government has ONE priority and that’s Brexit – she could therefore have left everyone in charge as is, and asked them to determine what were the key issues and how their department would be affected; that could then be developed into a negotiation strategy. Instead, the Cabinet will spend the next month learning new acronyms.

As an aside, can anyone explain why Theresa May arrived at Buckingham Palace in a BMW 7-Series, made as far as I know in Germany? They should have made her get out and walk. At least she now seems to be using Cameron’s Jag, but both Hammond and Boris seems to have 7-Series BMWs;  why can they not have a British manufactured car? Presumably Boris will require the comfort of a limo as he cannot move around London as the traffic grinds to a halt, disrupted by his bike lanes.

Picture source: Daily Mirror