I noted three days ago how pro-Brexit campaigners appear to be
distancing themselves from the whole idea. Since then, more evidence has come
to light suggesting that British businesses are not being listened to by
government. This matters. Many people might see businesses as insatiable users
of human resources, chewing people up and spitting them out at a whim. But they
are the providers of jobs and income for the vast majority of us. If businesses
are not going to get a Brexit which works for them, in whose name are we doing
this? A Brexit which does not work for business will not work for the UK
economy.
Only last week, the CBI called for the UK to remain within
the single market and customs union until such times as the shape of the final
deal was clear. But British government officials torpedoed that option because,
according to observers present, Brexit Secretary David Davis fears a political
backlash if the UK is seen to be backtracking on its commitment to leave. He is
concerned that politicians would be judged harshly if it opts for what can best
be described as the Hotel California option – having checked out it, it can
never leave. In my view this is to misread the domestic political runes. And it
would not be the first time this year that the Conservatives have done so. Indeed,
Davis is said to have been instrumental in persuading Theresa May to call the
spring election, so I am not sure I would necessarily trust his political
judgement. Moreover, surveys suggest that the electorate is not in favour of a hard Brexit.
The election was a warning shot across the bows of a party which
campaigned on the basis of “no deal is better than a bad deal” and was punished
at the ballot box. And if “taking back control” was so important to the
electorate, why did UKIP – the party which pushed so hard for it – take such an
electoral hammering?
This morning’s story from The Observer warning that the UK cannot expect any help from German business in securing a
favourable Brexit deal is further evidence of the delusions under which too
many UK politicians are operating. Senior representatives of German industry
bodies have repeated what I (and many others) have said all along, namely that
the main objective for the EU is to maintain the integrity of the single
market. A few months back I had a meeting with a group of senior German
politicians, some of whom told me very firmly that Germany would not go out of
its way to help the UK if it meant sacrificing relationships with other EU
members. I am sure they have said the same things to their British
counterparts, but too many British politicians appear to have selective hearing
(or should that be understanding) when it comes to Brexit issues.
It is this attitude which brought to mind the Bagehot column in The Economist a couple of weeks ago.
The article criticised the government for dealing with the needs of business in
an amateur way and highlighted that the only realist is Chancellor Philip
Hammond, who “is a grown-up in a
political playpen that is stuffed with children. The chief claimant to the
throne, Boris Johnson, is the most childish of all. Bumptious and bungling, he
wants to grab the shiniest prize for himself for no other reason than that it
is shiny. Other claimants also have problems with maturity. David Davis, the
Brexit secretary, is a vainglorious contrarian who … habitually underestimates
the damage a bad Brexit might cause ... On the other side, Mr Corbyn is an
extreme case of arrested development. He is a man-child leading an army of
disgruntled youths, a professional protester who has reached his late 60s
without ever having to make adult decisions about allocating limited resources,
let alone creating them in the first place.”
As it happens, I am pretty sure that the government will be
forced to cave in on its Brexit negotiating position. Despite the position
espoused by Davis earlier this week, The
Observer reports that the government is warming to the idea of a transition
deal. Perhaps they are waiting for the EU27 to offer some form of olive branch
which will allow them to change course. Perhaps the EU27 is prepared to face
down the UK in order for it to change of its own free will. But in an economy
where real incomes are falling thanks to the rise in inflation triggered by a
fall in the pound, and where consumer sentiment has fallen sharply back to
immediate post-referendum lows, I suspect the electorate is in no mood to pay
the economic price for the government’s shenanigans. Politicians need to get real –
and fast – because in effect they have a year to finalise the arrangements
before the EU’s deadline of autumn 2018.
The sound you hear is the clock ticking …
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