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THE BOTTOM LINE

The shifting sands of Brexit

IT is two years since the British public voted (52 per cent to 48 per cent) in a referendum to leave the European Union and 15 months since negotiations on how to leave were triggered. The referendum gave the government a mandate not only to leave the EU but to:

  • withdraw from the customs union;
  • halt the free movement of EU citizens;
  • cease working with EU supranational courts;
  • establish full independence over borders, global trading of goods and services, employment policy, and agriculture and fishing within territorial boundaries

There are other things of course, but these were key issues for voters. The UK feels aggrieved that it was sucked in to policies that were never agreed by the electorate. It joined the European Economic Community (EEC; subsequently renamed European Community) for economic reasons and, due to weakness from its own politicians, is aligned with a group of nations that has the ambition of creating one nation, with common economic, financial, judicial and social laws, governed by unelected representatives. The decision to leave was based on democracy.

The method and consequences of Brexit have been debated ad nauseam and the outcome is that the UK has given and not received, leading to pent-up anger against the Conservative government and Brussels. The government is riven with argument. Theresa May has attempted to quell divisions by forcing her Cabinet to accept collective responsibility for a new set of proposals to be discussed with the EU in October.

Collective responsibility is a pillar of constitutional law, but was suspended for Brexit by David Cameron at the time of the referendum. It has now been re-enforced and has led to a number of resignations, notably those of the Brexit negotiator (David Davis) and Boris Johnson (foreign secretary).

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A FORM OF CUSTOMS UNION

The proposals represent a watered down version of Brexit as voted for. In essence, they retain a form of customs union, acknowledge free movement of labour with the EU (though not free movement of people) and recognise the need to follow many EU laws.

It hamstrings the UK in terms of agreeing to trade deals with countries outside the EU. It has been ridiculed by members of both major parties - Conservative and Labour - and is unlikely to be adopted as a national position, should it ever be voted upon in Parliament. It is unlikely to be accepted by EU negotiators, who turned down similar proposals by David Cameron before the referendum was called. The EU plays hardball when it comes to any disagreement with its aims - witness the way in which it required the Netherlands and Ireland to change their minds when their citizens disagreed with aspects of Maastricht.

So, where does this leave Brexit?

Back in the 1980s, I attended a presentation at Raffles City by the first of the chartist companies to come to Singapore. Chartism is a method of predicting values for investments based on historical trends, particularly stock exchanges. I had some interest, but started to doze off as chart after chart appeared on the overhead screen. The presentation wound up with a chart showing the history of the FTSE to the present day. The presenter told us that the current position was very interesting because "from here, the index could very well go up; or it could come down; or, indeed it could remain the same". I apologise to those around me for the guffaw.

Brexit now stands in a similar position. Mrs May's compromise position has already prompted the guffaws, here, and in the EU. The alternatives are stark. Change the government and renegotiate terms (index up) or just walk away entirely and let the chips fall where they may (index down). Changing the government now would be either through electing a new leader, who can command their party or through holding a general election. Both are extremely risky and time is very short.

HARD BREXIT

Regrettably, it seems that a "hard" Brexit is inevitable. The UK has conceded too much already and the EU is too inflexible. What we would have given for a proper leader - the only one with guts around seems to be Donald Trump. But he doesn't know cricket, so could never open the batting for us.

Further vacillation is self defeating. The prospect of a Labour government under Jeremy Corbyn is a nightmare for the economy as a whole, though his chances are currently slim, according to polls. I guess we will muddle along for a few weeks, pretending to be serious about a negotiated deal then finally bite the bullet and say "au revoir". At least that will save us £39 billion.

  • The writer is a UK-based communications consultant