An arms-length assessment of the Brexit drama, as of August 2019

Well, writing back in January 2019, in my review of 2018 and whilst looking ahead into 2019, I said:

“As Brexit is going to be all consuming, probably until the end of March (2019); it’s difficult to see what else the UK will achieve in 2019; maybe nothing!  If the divorce gets postponed beyond March, I will seriously consider moving to an isolated island in NW Scotland".

(https://jeremydaines2018summary.blogspot.com/)

No, I haven’t moved to Scotland, but during 2019, politics in the UK has been all consuming since Mrs May, the Prime Minister (until July), failed to take the UK out of the EU.

An interesting graphic recently did the rounds on Facebook purportedly showing the regional spread of Leave and Remain voters, which led to the Brexit process.

But the graphic then showed the actual Leave/Remain voting split in the House of Commons, which has a significant Remain majority.  So, no rocket science is required to understand why Parliament has failed to take the UK out of the EU.

Before continuing, let’s be clear; with Leavers winning the referendum, there will, by default, be costs to the Government, to businesses and to individuals.  Sorry, if you didn’t realise this.  There’s been quite a lot of time to adapt to these costs, which all those likely to be affected, should have used to minimise the impact.  Is this fair?  Probably not, but when a democratic decision is made a democratic Government is charged with implementing said decision in the best possible way.  All members of a democratic Government are meant to support the referendum decision to achieve its objective.  This clearly has not happened.  The losers (sorry Remainers) have and continue to act, un-democratically in the hope of preventing Brexit.  Just look at the new, young, inexperienced Leader of the Liberal Democrats, whose first pronouncement was her intention to prevent Brexit; to much applause.  Maybe democracy has had its day and decadence is taking over?

Economics – The Dismal Science

Then, you have a range of economists, policy makers and the Head of the Bank of England telling everybody that the economy will plummet if a No Deal divorce were to take place.  These are the same people that said the economy would plummet immediately after the Referendum and were shown to be wrong.

The wonderful Economist magazine, in their 27^th July 2019 issue, had an article entitled “How Bad Exactly? – The Economics of No Deal Brexit”.  The Economist is an ardent Remainer on the basis there will be “economic damage”, there will be lower economic growth; and almost certainly a recession.  All of which is sheer madness to an economist.  Wonderful.  The journalists at The Economist should understand there is more to a country than just the Dismal Science, for example, unsustainable population growth; but, as these issues are not dead centre, they get sidelined (rather like economists have conveniently overlooked the cost of pollution since the birth of the Dismal Science).

In the article, The Economist showed five predictions of the UK’s change in GDP as a result of different forms of exit from the EU.  The predictions range from -17% to +3% with four of the predictions having solely negative changes in GDP.  If The Economist wanted to be neutral it should have included ranges of predicted vs actual GDP change over the last 19 years to illustrate how global events, outside our control, have impacted GDP, hence showing how inaccurate forecasts are.

As with all predictions there’s uncertainty and with all economic predictions, even larger uncertainty.  So, all economic predictions should be taken with a large pinch of salt, whether they are positive, or negative.  As I work in a technical capacity I won’t accept any modelling results without thoroughly reviewing the inputs, plus the model itself.  No independent body appears to be performing checks on these predictions.  In reality, economics is actually a Dismal Political Science, advising governments on what is politically achievable rather than the pure science, that is actually required.  An example of this, is the politically expedient carbon tax.

Project Fear

In the Economist's article the perfect storm of everything going horribly wrong is trotted out, as usual.

This is Project Fear, which has been shouted at the general population by the media; by everyone who voted to remain and, of course, businesses that are trading with the EU.  Plus, by nice people who think we should stay close to our European friends; or for example British expats in Spain who will likely have to start paying for their medical care, assuming Brexit does actually happen (without any reciprocal agreements).

Let’s be clear, once the vote to leave occurred, it was inevitable there would be costs, but there are benefits as well, but you’d be hard-pressed to find what these are because it appears the media has decided they are minimal, or non-existent.

The most significant benefit is having the ability to control our own destiny, for example in terms of population growth and to determine our own trade policy with the rest of the World.  Our Government, who we elect, will be totally responsible for our future; not those in Brussels or Strasbourg.  This is well above the economics argument that is trotted out as being the sole determinant of our country’s success.

When you hear the common statement: “It’s the economy, stupid” this tends to come from (you’ve guessed?) economists (plus politicians who have been briefed by economists & business folk) & particularly businesses that will bear costs as a result of Brexit.  Costs they consider to be un-necessary and unfair because they (not you), are the most important aspect in our country.

They are mistaken.

The Politics

It’s so easy for the losers (sorry Remain-) supporting MPs, to say they cannot support a No Deal Brexit, as a means of trying to prevent Brexit. 

Then, there’s the winners (sorry Leavers), such as the Conservative ERG, who cannot support any divorce deal that leaves any form of tie to the EU.  Between them, these MPs have succeeded in stopping the UK from leaving the EU and potentially could prevent this from happening at all.  Wonderful.

It’s difficult to be neutral about Mrs May.  Her election campaign was a disastrous failure, which contributed directly to the failure to leave the EU on the 29^th March, 2019.  She failed to build a coalition of MPs to support her negotiating strategy with the EU and, not surprisingly, failed to get support for her “Deal” in Parliament and then made two further attempts at putting lipstick on the pig; all failing.  Yes, she tried hard, but it was doomed from early on.  Mrs May was a relatively competent Minister, but clearly not a competent Prime Minister or leader.

August to the 31^st October, 2019

So, having been replaced by Boris Johnson, an ardent Leave supporter with little experience in Government and questionable competence, (but a wonderful turn of phrase); the scene is set for three potential scenarios:

1.  A general election after Remain-supporting MPs win a no confidence vote, basically in order to further delay and/or ultimately prevent Brexit, or:
2. The UK falls out of the EU on October 31^st after weeks of negotiations with no agreement, or:
3. A new deal is agreed and (against the current odds?) passed by Parliament.

As of August 2019, what probabilities would you assign to each of the three scenarios?

Here’s my crystal ball gazing:

1. 50%
2. 30%
3. 20%

Mr Johnson has brought in Dominic Cummings as his strategy advisor.  It was Mr Cummings’ strategy behind the winning Leave campaign.  He outsmarted the Remain campaign’s Project Fear strategy, subsequently confirming how false this was.

My current prediction is that Mr Johnson & Mr Cummings will continue to promote the benefits of Brexit, trying to counterbalance Project Fear; something Mrs May failed to achieve.

Negotiations will start and, if the EU decide not to budge, then Mr Johnson & Mr Cummings will simply keep the negotiations going, regularly intimating the EU is being intransigent as time drains away and the end October deadline creeps up.

In the meantime, Michael Gove (Minister for No Deal) will put in-place a strategy to minimise damage from a No Deal Brexit.  He's probably the best politician for this job although, because he will likely have to work with Remain MPs, they will make his life hell and potentially reduce his effectiveness.

Remainers managed to stifle Mrs May; however, this is less likely with Mr Johnson who appears determined to keep the primary negotiating stick, of No Deal, alive & kicking.  And that is how it should be.

No one in their right mind, before entering into a huge negotiation, throws away their strongest weapon.  But that is what the Remainers, the undecided’s and less well-informed people had succeeded in achieving; until Mr Johnson arrived as Prime Minister.

Over Parliament’s summer recess, the Remainers will likely re-group and try to derail Mr Johnson.  However, Mr Cummings has probably mapped out all their options and has a counter-strategy.  The two of them have had long enough to plan their approach to taking the UK out of the EU.

My prediction is they plan to prolong negotiations into early to mid-October whilst showing the EU all the UK’s plans for No Deal are in-place.  If negotiations fail then Mr Johnson has to maintain the ability for the UK to “drop-out” with No Deal on the 31^st October, blaming the EU in the process.  Or, negotiations succeed, say in mid-October and Parliament votes them through.  This last scenario currently appears less likely because Parliament has no love for Mr Johnson and could even reject a late deal; but if faced with dropping out with No Deal; may grudgingly support a deal to avoid “dropping-out”, by default.

The path of least resistance for Mr Johnson is not to have to take a deal to Parliament at all; hence present the negotiations as positive but drag them out to the 31^st October and then fall out without having to go to Parliament.  If he can prevent Parliament from hand-cuffing his ability to do this.  This is something I’m sure Mr Cummings will have considered and have a plan for; whether it’ll work or not, we’ll know in a few months.

If there’s an election before the 31^st October 2019, the chances are there will be a further delay to the divorce deadline requested by which-ever government is formed.

Can Mr Johnson & Mr Cummings orchestrate all of this successfully, with a coalition majority of one!

I currently put the odds of a Mr Johnson crash & burn as being pretty high.

But, if he succeeds in taking the UK out of the EU, with a Parliament-approved deal; he could be up there with Churchill & Thatcher (where he thinks he should be).

He’ll be vilified for a No Deal Brexit, but he’ll try to blame this on Mr Gove; then maybe disappear for a while, before returning for his next attempt at greatness.

As before, listening to the media pundits spouting on about Brexit, is very painful.  The media think they are doing a balanced, neutral job; they’re not.  The noise is coming overwhelmingly from Remainers, with Leavers failing to counteract this.

But the positive change in tone, brought in by Mr Johnson, is refreshing; it’s something that’s been missing since before the Referendum.

The UK voted to leave the EU. It is every Member of Parliaments’ democratic duty to ensure this happens.

Voters did not endorse a No Deal or a Deal; just to leave the EU.

It is crass to assume voters actually prefer to stay in the EU, rather than leave without a deal.

If the UK & EU cannot agree on a deal by the 31^st October, then the UK should leave as per the Referendum mandate.

As I wrote in January 2019, I’d had enough of the Brexit hysteria during Mrs May’s tenure and would head off to Scotland to avoid hearing more unsubstantiated opinions.

If there’s no workable draft agreement by the beginning of October 2019 and Parliament continues to try to block the Government’s ability to leave; it will be fascinating to see what Mr Johnson’s & Mr Cumming’s strategy turns out to be.

Will it be: Crash & burn or Churchillian greatness?