Tag: Brexit chaos

Brexit For Our Time!

Knife to a Gunfight

Johnson has always fancied himself as a modern-day Churchill. The last-minute “deal” on Brexit was more reminiscent of Chamberlain. Another Sir, Sean Connery, once famously said, “never bring a knife to a gunfight”. In some respects, we didn’t even have a knife. Claims that the EU was “mean”, and didn’t deal in “good faith” fails to acknowledge that the EU’s first duty is to secure the best deal possible for the single market. The right thing for our government to have done was to have taken the same attitude towards our negotiating stance. Instead, we lept out of the bed completely naked, screaming divorce.

Another issue is the EU doesn’t trust us. They would have loved to keep us in the Union. They expressed this wish by handing us the best deal out of any members. Was it mean when we went to Brussels year after year complaining and asking for more? Or, was it looking after our interests? The EU saw it as dealing in bad faith. It seems they were excellent students.

What Deal Did We Get?

We don’t really know, is the truth. Much of what is to come has not been settled. We did get a deal for fisherman. In fact, that’s about all Boris could point to in his news conference. That and the laws we wouldn’t have to bow to. Unless we want to trade with the EU. He left that bit out.

Johnson’s promise to have a non-tariff border was a lie, much like the £350 million for the NHS. Those were his two big promises. Neither were true. Does anyone remember that? Other than fishermen, we did secure tariff-based trade for manufacturing. Those businesses are busy trying to conform to the new reality. Yes, I said tariff-based trade. The added paperwork and cost is substantial and may make many uncompetitive. We have already experienced the queues brought about by delays at the channel. Just in time supply chains are a thing of the past for now, and that will also have a negative impact on British manufacturers.

The government brings up fish a lot. Even that wasn’t an overall success. In five years we may well be back to fish wars. Remember those? A return to the good old days, you know, blackouts, the IMF bailout, and strikes. Can’t wait.

We do have a deal most of which is undefined. Little like a mortgage with a payment amount to be determined at some point by the bank.

What About the 80%?

Johnson and his barrow boys have yet to mention what’s going to happen to the majority of our economy, services. We are a service-based economy. They are too busy selling day-old fish. Fish accounts for less than 1%, although you would have thought we all owned boats.

The largest contributor by far to GDP is financial services. They are currently in limbo. The firms based solely in the UK are. Those with offices in Europe are downsizing UK operations and expanding in places like Frankfurt and Paris.

Any chance the EU will cry foul for us? Stop International firms moving people and money to Europe? Yeah right. No, the reverse. In the same way, we took advantage of the single market to make London an international finance hub, the single market countries who have long wanted a piece of London’s action will be hard at work building empires off our back. They have already moved trillions of pounds in assets out of the UK.

He’s Behind You!

It’s probably fitting that a Brexit deal appeared during the Pantomime season. They have all the same elements. A feckless arrogant character who can’t seem to keep up with his nemesis requiring help from the audience. In our case the audience failed to participate.

We are where we are, an idealistic mess punctuated by throwing our toys out of the pram. The EU didn’t hand us a bad deal; we created it ourselves and the government owns the results. That’s why they are spinning hard pointing to fish and ignoring elephants.

Brexit Ends as It Begun – In Chaos

From the day a stunned Boris Johnson took the stage to proclaim Brexit was a reality, to today, we have fought an uphill EU exit battle utilising our ill-advised negotiating position of the victim.  That indefensible stance has led to failure and a last-ditch attempt to find common ground, over a dinner, that collapsed into the French Onion Soup.  Was there a splash?  We may never know.  

The UK has always been on the back foot from the day we voted to leave the EU.  As Sir Sean Connery once famously said, don’t bring a knife to a gun fight.  Unfortunately, we didn’t even have a knife, plan, leverage, or any of the other necessary components needed to complete a successful negotiation.  Claiming the other side is ‘unfair’ plays to those bent over the table, but not to those causing the bending.  So, we entered the most important negotiation of our modern era, completely unprepared, and have never recovered ground.  

What did we expect to happen?  We had slapped the collective European States in the face by saying we didn’t want to play anymore and expected they would nod their heads agreeably and immediately launch an effort, regardless of how painful it would be to the EU, to assist us out the door.  For our part, we would point out all the things we didn’t like about the common market and expect them to not apply to us on exit.  “We don’t want to abide by your regulations any longer”, ignoring that all other non-EU nations selling goods and services into the common market must comply with EU regulations and requirements if they are to gain access.

Most in Europe don’t understand the UK decision and many average citizens have taken it personally.  We callously dismiss these feelings to our detriment.  This body of 250 million customers of UK goods and services may decide buying EU is an appropriate way to answer a UK snub.  Our intolerance of Europe will most likely manifest itself in intolerance of us.  The government loves to tout the world is our oyster scenario where we replace the EU market with others more lucrative.  Trade is best practised with those closest to you within efficient and fluid supply chains.  Bear in mind the EU is the world’s largest single market.

If we were the world’s supplier of cuddly toys and offshored assemblers of high-end phones, that would be a different story, but we are not.  Our manufacturing industries have disappeared, and what we are left with is primarily services.  Services require connectivity and trust.  When we bust out of the EU, we will alienate almost 50% of our international trade, £294 billion.  Are EU competitors going to be hounding their governments to repair this break?  No, they will be too busy filling the gap.  There is a high likelihood much of the £294 billion will never be recaptured.  The election of Joe Biden has also cast significant doubt on a US trade deal with the new administration.  Biden is a strong supporter of the EU and has far stronger relationships with EU members than he does with Britain.  It is questionable that he will tarnish his EU ties by fast tracking a UK deal.  That leaves the World Trade Organisation, formed to allow third world countries access to first world markets.  The sophisticated services offering of the UK are not the items Ghana or other emerging markets routinely put in their shopping basket.  Australia?  Fantastic ties as a Commonwealth member, but significant cost implications due to distance even in this era of Zoom calls.  Filling even half of the £294 billion gap is challenging to say the least.  To secure any meaningful restoration of trade lost requires Europe.        

As the saying goes, we are where we are.  That said we need to start treating EU like the customers they will become at the end of this month, and recognise that replacing the EU market is not going to happen and that we need them more than they need us to be successful.