In a galaxy far, far away

As the EU starts to get serious about dealing with the prospect of the UK’s departure, this week's events suggested that the two sides are as far apart as ever. I was less than encouraged by the comment from an EU diplomat suggesting that the British “are not just on a different planet, they are in a different galaxy.” German Chancellor Merkel also pointed out in a speech in the Bundestag that some British politicians are still living under the “illusion” that the UK will retain most of its rights and privileges once it leaves the EU.

Theresa May’s response to Merkel’s comments was to pull a line from the Alex Ferguson/Jose Mourinho playbook to suggest that the rest of the EU is ganging up on the Brits (“27 other European countries line up to oppose us”). As if this should somehow come as a surprise when all rational people know that the EU’s objective is to maintain its integrity after Brexit. Indeed, we are now entering the business end of the negotiations, with this weekend’s Brussels summit giving the EU27 the chance to thrash out their line of negotiation. It is increasingly evident that the British are not in a good place and matters have clearly not been helped by the delusional approach taken by the British government.

Ironically, with the Conservatives looking likely to win a landslide victory in the 8 June election, Theresa May will take this as vindication of her government’s stance so far. But the government’s efforts since last autumn have been singularly unimpressive. I find it hard to shake off the suspicion that the government is rather unsure of itself, given the narrow margin obtained by the Brexit supporters in last year’s referendum, and has since spent a lot of time trying to convince the country of the rightness of its Brexit course rather than adequately planning its negotiating position.

The lawyer and blogger David Allen Green has pointed out that rather than getting on with the job of providing “strong and stable” leadership, “there are at least three ways in which May’s government has not got on with the job with Brexit and wasted precious time instead.”  In the first instance, she set up two competing government departments from scratch, resulting in turf wars which ate up a lot of government resources. Second, the government wasted time and effort fighting the attempt by Gina Miller to force parliament to vote on Article 50. As I have pointed out (here) the government could have put a simple bill before parliament in the first place which was worded in such a way as to be virtually impossible to reject – as it ultimately did, but only after a huge amount of time (and public money) was spent in the process. Perhaps worst of all, May has called a needless general election, despite promising not to do so, which in effect will result in the loss of two months of valuable negotiation time.

As a piece of anecdotal evidence to demonstrate how much pressure the civil service is currently operating under, HM Treasury has determined that the monthly survey of UK economic forecasts – to which I contribute – will not take place in May. The Treasury cites the election process as the reason for not conducting the survey. But this is the first time I can ever remember it not being conducted in the more than 20 years since I first contributed – and certainly not for electoral reasons. This is a governmental process under strain.

What is likely to happen over the next few months is that the British government will cry foul over the lack of progress on EU negotiations, with suggestions that the EU27 are somehow trying to punish the UK when in reality it is the UK’s own position which forces the EU to adopt the stance which it does. The Brits want to do a deal on trade but it is clear that the EU will first want to discuss the exit strategy. It is looking pretty likely that no deal will be done quickly. Following last week’s meeting between EU Commission President Juncker and PM May, Juncker was apparently taken aback by May’s unwillingness to compromise, and emerged from the meeting saying that he was ten times more sceptical that a deal could be done than before he went in.

The terrible irony is that all this is panning out as I feared. Indeed, I was contacted by one Brexit voter this week who remarked on my prescience and that I must somehow feel vindicated. But I take no pleasure at all from any of this. Even now, there are deals to be done but I fear we are going to get to the cliff edge far sooner than the British government thinks. Frankly, I do not trust the current government to be able to reach a compromise with the EU – and certainly not unless we see a change of tack from the prime minister. Businesses located in Britain may hope for the best but they are increasingly realising they have to prepare for the worst.