Welcome to London, 2020. You’re in the former Battersea Power Station where the British International Motor Show is being held this week!
Apple Inc’s new UK & Commonwealth HQ is full of Alan Turing-esqe brilliant people glad to be hosting the show in their auric new building — and for the first time anywhere, iDrive (Apple’s shiny new hydrogen powered car) is on public display.
Aside from its obviously stunning design, the best thing about this car is that it can’t be stolen because unless the owner of the car is within a few feet of the car with his/her iPhone on and logged-in to the iDrive app, it is just a piece of aluminum, glass and plastic that can’t go anywhere. There’s no computer or operating system to allow the car do anything at all, save for the iDrive app in your iPhone or iPad.
No iPhone or iPad? Then you’re not the owner of the car. Because a matching serial number iPhone & iPad is provided with each Apple Car, with thumbprint security and as many passwords or login captchas as you want. It’s up to you.
Even if someone steals your iPhone and manages to locate your car, you can always “Log out of all devices and apps” remotely from any computer or smart phone on the planet — including the app that drives your beautiful new Apple Car. (Stolen car coasts to side of road, wholly inactive)
Now, that’s what I call a user-friendly car ownership experience.
And Brexit, You Ask? Pshaw!
Brexit came and went a long time ago. Neither Project Fear or the extreme Brexiteers were right; The UK coasted through 2019, Brexiting on March 29 as scheduled and other than a temporary blip in the markets things continued as normal. Yes, even the Sun rose in the sky the next day. Astonishing!
But not really. For all the hype, compared to other events taking place in the world Brexit turned out to be a sideshow. Only hyperventilating European politicians on both sides of the English Channel noticed Brexit.
After dipping to 1.2% GDP growth in 2019, the UK recovered and is now looking at 2% growth for 2021 — not due to Brexit — but due to the fact that Remainers are no longer sabotaging the UK economy hoping for it to fail so they could get their way.
Since the summer of 2019, the UK joined the USMCA (the new NAFTA agreement) and the CPTPP, and the new Commonwealth of Nations Free Trade Accord (CNFTA). In 2020, the UK has signed trade agreements with countries that have a combined population of 5 billion+ people.
A free trade deal with the EU (based on the excellent CETA agreement the EU has with Canada) is expected to be signed by the end of 2020 and go into effect on January 1, 2021.
Food shortages, rioting, family strife, civil war? Not a bit of it.
Every politician who tried to make a career out of Brexit is gone. Whether extreme Brexiteer, extreme Remainer, whether continental European or Briton; Every politician who held an extreme Brexit position was invited by their respective parties (and voters, hehehe) to leave politics.
Enjoy the day Britons, legal migrants to the UK, and visitors! You’ve earned it.
Oh, and the UK and the EU signed a modified Withdrawal Agreement on the 11th-hour of March 28th, 2019. But you knew that.
Everything that could’ve happened, did happen — except for a 2nd EU referendum which (speaking hypothetically) if the Leave side won, might’ve put a stop to the complaining of Remainers who still can’t reconcile the fact that they lost the referendum 2 1/2 years ago. It’s time to move on, folks!
But what if Remain had won a 2nd referendum on EU membership, you ask? It would’ve turned it into a best-out-of-three affair that would’ve required another costly and divisive referendum to settle.
If the UK had unlimited funding and unlimited time — a best-out-of-three referendum scenario would’ve worked out nicely, wouldn’t it?
Just for the record, Brexit would’ve won it two-in-a-row, thereby preventing the need for any third EU referendum and Remainers (I’m sure!) would’ve thanked Brexiteers for saving taxpayers even more millions for a third EU referendum. Because for Brexiteers it’s all about saving UK taxpayer money. You’re welcome! Just another Brexit dividend.
Fortunately, as time is short, there’s no time for another referendum to ensure ‘The People’ voted the ‘right way’ and only the usual malcontents are holding placards and yelling at cars, because, well, they didn’t get their way!
That old democracy thing really sorts them out, doesn’t it? (“Why can’t I just get my way every time?” “Because, democracy.”)
However, the EU is well-known for its last-minute 11th-hour deals, and nobody should expect the draft Withdrawal Agreement to be modified enough to pass in the UK House of Commons and be approved by each EU27 country until at least March 15th. That’s just the way they do things there. Hey, they’re allowed to use whatever negotiating ploys they want, as is the UK. All’s fair in love and divorce, they say.
In the meantime, Theresa May has but one option: Prepare for a ‘No Deal’ Brexit with as much enthusiasm as she can muster, getting all of her departments moving in the right direction, and she must continue with the non-Brexit business of running the country — until the 11th-hour people want to talk again.
And they already know what they must do in order to gain a deal that will pass on both sides of the English Channel: It’s as simple as removing the Irish backstop, or putting a firm end-date on UK Customs Union membership. Either of those choices are fine.
And once that happens the UK House of Commons will pass the amended draft Withdrawal Bill with plenty of bipartisan support as party politics must step aside for the good of the country at such historical moments, and it’s likely the EU27 parliaments will pass it as well.
For EU countries, there’s not only continuing access to UK markets to think about, there’s that £39 billion one-time payment to gain or lose. And if they miss it they’ll have only themselves to blame because all it takes to obtain that £39 billion payment is a signed Withdrawal Agreement — and that means signed by both sides — the UK and each of the EU27 countries.
Steady-On, Theresa, Until the EU Get Serious About an Implementation Period + Withdrawal Agreement
According to the terms of Article 50, Brexit will occur on March 29, 2019 and it’s the default option — no matter what else happens or doesn’t happen in the meantime. If the Withdrawal Agreement never gets signed, Brexit will still occur. Let’s make no mistake.
However, Theresa May has no power to force the EU negotiators to the table in order to arrive at a mutually beneficial Brexit agreement. If they want a deal, they’ll show up prior to March 29, 2019.
But if they don’t, the UK gets to keep the £39 billion and spend it on the NHS and other important parts of the UK economy and the UK will be completely (and mercifully) out of the European Union governance architecture. Which might involve a little ‘short term pain for long-term gain’ for both sides.
Yet it’s coming out a little more each day that a ‘No Deal’ Brexit scenario isn’t as scary as Project Fear has made it out to be. Let’s try to forget how wrong they were over the past 2 1/2 years. Nobody is listening to their ‘sky is falling’ toxic talk any more.
Almost every economic indicator in the UK is on the uptick since the EU referendum and a lower pound sterling works to make UK exports affordable overseas. Which is a very good thing for British manufacturing — a sector that has fallen to less than 10% of UK GDP since the 1970’s when it contributed 25% to UK GDP.
One of the best things about Brexit is that the UK will again forge its own trade relationships with the rest of the world instead of being tied to the EU economy which has fallen from 25% of global GDP in 1993 to 11% of global GDP in 2016, and is projected to fall further to 9% of global GDP by 2020.
While we should wish the EU27 well, it’ll be a breath of fresh air for British exporters to finally leave the bloc. Yet, let’s hope the UK can leave the EU on good terms, with a decent Withdrawal Agreement that’s acceptable to all 28 nations, and with a CETA-style trade agreement.
So many people are caught up in the present Brexit moment they forget there will be life after the official Brexit date of March 29, 2019.
With that in mind, policymakers must begin to focus on the problems that will still be with us in the immediate post-Brexit timeframe.
Q: Why can’t they do that now?
A: Because their hands may be tied by present EU regulations, or everyone is waiting to see what kind of Brexit deal the UK gets, or they’re busy advising business groups and the government how to maximize their Brexit advantage.
So let’s begin the post-Brexit era by solving problems we know will still remain after Brexit day — and use solutions that aren’t presently viable due to EU regulations or norms.
Ask Any Londoner and They’ll Tell You their Worst Daily Problem is City Traffic
Actually, the worst problem Londoners face is the weather. But the City’s notorious traffic congestion starts early, the roads become increasingly packed with vehicles, air pollution levels skyrocket, life occasionally becomes dangerous for pedestrians, and it wastes millions of hours of time every year.
Not only London, but Manchester, Birmingham, Belfast, Edinburgh and other UK cities force drivers to spend countless hours stuck in traffic and millions of gallons of petrol are wasted annually as cars and lorries inch along the country’s congested roadways.
Of course nothing can be done about it — because if something could be done it would’ve already been done! Right?
Except there is a way to decrease traffic congestion: Theresa May’s first legislation following Brexit should be to ban all lorries from operating within cities of 1 million inhabitants or more — from 6:00am until 6:00pm every weekday.
Lorries could still cross from the continent on ferries or via the Chunnel, operate in the countryside, passing through towns and smaller cities and arrive at (for example) London’s Ring Road anytime after 6:00pm each weekday. Yes, they’d need to obtain ‘the key to the shop’ to unload the shipment at ‘Mom & Dad’s Deli’ or perhaps drop an appropriately sized (and electronically locked) crate full of goods on the loading dock.
It’s a scheduling issue for freight companies; As long as their large vehicles are parked or otherwise off the UK’s major city roads by 6:00am each weekday they won’t incur automatic/electronic fines and they’ll be able to go on with the rest of their day as normal.
Trash haulers, freight delivery, fuel trucks and other transporters will simply adjust their schedules to comply with the weekday hours ban.
List the of Benefits of Such a Plan!
Think of Britain’s major cities free of lorries within their city limits from 6:00am until 6:00pm every weekday:
Less traffic, less traffic noise, less congestion and less gridlock.
Increased parking availability.
Better visibility for cars, cyclists and pedestrians equals fewer accidents and lower NHS spending.
Lower air pollution levels on weekdays resulting in fewer respiratory emergencies, thereby saving the NHS budget millions annually and helping the UK to meet its international clean air commitments.
Although lorry drivers would work different hours, they’d have far less traffic to deal with between the hours of 6:00pm and 6:00am, their big rigs would have acres of room to maneuver around in and they’d easily find parking to offload or load their goods.
An automatic/electronic fine for lorries that enter the city during banned hours of the day could go towards building major lorry parking/queuing areas on the outskirts of major cities. Perhaps a great place to set up coffee shops and motels dedicated to truckers so they can grab a few hours sleep before their afternoon shift/night shift begins? And (while they sleep during the day) have their big rig repaired at a shop within the secure ‘Trucker Zone’ area. If so, I want to invest in those dedicated Trucker Zones — talk about having a captive audience! — the lorries can’t leave until 6:00pm and if they do they would automatically incur a £100 fine as soon as they pass the “City Limits” sign a few feet down the road!
Trucking companies could arrange to have a fully loaded lorry parked and ready to roll at such ‘Trucker Zones’ for each night shift driver to pick up at the beginning of his/her shift and provide a safe place to drop it off in the morning.
Lorry drivers should gain free and hassle-free parking anywhere in the city between 6:00pm and 6:00am and receive special consideration from police in case a lorry driver happens to park in front of a ‘No Parking Zone’ for the few minutes it takes to deliver the load. As hardly anyone is around in the middle of the night and there’s no traffic, why make an issue of minor parking rules?
Lorries leaving major UK cities at 6:00am could pull into the ‘Trucker Zone’ nearest them at the end of their shift, leaving the lorry there for the daytime driver to carry on with the day shift’s rural deliveries/pick ups.
National productivity could be enhanced by requiring lorries to remain outside city limits (or parked within the City) during the daytime hours, giving them free run in cities until 6:00am.
Cities might notice more lorry traffic at the weekend. However, the vast majority of cars aren’t on city roads during the weekend so lorry traffic won’t be too onerous.
Certainly, traffic and congestion in the UK aren’t the fault of the EU, but in the post-Brexit timeframe UK regulators will have a freer hand to solve many issues. Traffic congestion is a problem that affects everyone whether you drive a car, ride a bus, pedal a bike, own a business, or are a tourist who wants to get from tourist site “A” to tourist site “B” and not spend the whole day at it.
Cities depend upon free movement of goods and people. Moving to a two-track plan to obtain better use from city roads could radically change how we use cities. And the day after Brexit is as good a time as any to begin making the best use of those valuable assets.
“KPMG predicts economic growth of 1.4 per cent next year, but cuts this to 0.6 per cent if Britain leaves the EU without a deal.” — The Times
While some firms predict slower than normal growth for the UK economy in the post-Brexit timeframe, it’s always good to reflect on the assumptions that forecasters employ in creating their reports and why such forecasts can cause more harm than good.
If you tell your employees that, ‘the chips are down, the economy is sinking, and corporate belt-tightening isn’t far off’ they are likely to respond in a negative way. Some may look for other employment, some will opt for early retirement, while others spend more time in the staff room talking with their coworkers about their employment concerns than getting their work done. Which means such reports can actually cause the negative outcome they’re warning about. It’s human nature to perform to a predicted level instead of trying to exceed expectations. There are few exceptions to this behavior and they are called names like; Olympic athlete, Pulitzer Prize Winner, President, or Astronaut who have the innate ability to ‘power through’ the negative times without losing momentum.
Such reports deal with known inputs only. For example, a zero-tariff trade deal with the Americans may seem far off today, but by 2020 it may already be signed. And not only the U.S., other political and trade blocs are likely to sign trade deals with the UK following Brexit. The AU(Africa), MERCOSUR (the South American trade bloc), the Pacific Alliance (several Pacific nations), the CPTPP(the Comprehensive and Progressive Agreement for Trans-Pacific Partnership) nations, ASEAN(the Association of Southeast Asian Nations),The Commonwealth(Commonwealth of Nations), and China, are likely to expand their trade links with the UK after it departs the European Union. America and those seven trading areas will have a combined total of 7.0 billion people by 2020. That’s a lot of potential consumers, and the massive opportunities presented by signing zero-tariff trade deals post-Brexit are absent in most economic projections by design. Even if the UK were to sign only one free trade deal (with the U.S., for example) it could improve UK growth by a full 2 per cent or more. Presto! A shiny new UK economy!
“Now we’ve got them!” While economic forecasting provides vital information for policymakers, Brexit negotiators aren’t helped by the news that growth will slow even in the face of a ‘good Brexit deal’ and will slow moreso in a ‘no Brexit deal’ scenario. It’s the kind of report that makes Michel Barnier’s day! KPMG is certainly one of the most respected firms around, but if you’re a Brexiteer and a report like this has been released to the public instead of it remaining in the hands of policymakers it plays with your mind; “Are they working for the UK’s best interests or are they working for the EU’s best interests?” (and) “Who commissioned (who paid for) this report and what parameters were used?”
So, while the good people of KPMG do their best to provide policymakers with the best near-term assessment of the UK economy, making such reports public can actually cause the negative things to occur about which the report warns.
That’s why policymakers everywhere must be ahead of the curve and treat all such documents as ‘the worst-case scenario’ without exception.
Now that UK Prime Minister Theresa May has been reliably informed that the worst the UK can do is 0.6 per cent growth between now and 2020, it should be an easy matter to arrange a number of free trade deals and blow the doors off that projection by 3 or 4 per cent by 2020.
Looking at this in the proper context means accepting that exiting the European Union is merely a necessary stepping stone to get the UK to 4 per cent growth by 2020 — which should result in Theresa May keeping the PM’s chair for at least one more term and with all past ‘political sins’ forgiven.
For all the talk about negotiating a reasonable Brexit deal with the EU, not much negotiating has happened almost 2 1/2 years on from the EU referendum in which a majority of UK voters informed the government to make preparations to leave the European Union.
And when we look at the results of Theresa’s well-intentioned attempts to obtain a Brexit deal, we see the results have been disappointing.
Although as we near the official Brexit date of March 29, 2019 it’s likely to change for the better. Assuming responsible leaders on both sides of the English Channel, each month from September 2018 onward should see increasingly frantic negotiations culminating in a reasonable Brexit deal for both sides.
Even if some sectors of the economy are left off the table until later in the year, responsible negotiators will guarantee that EU cars can continue to be sold in Britain and that UK services can continue to be sold on the continent without punishing tariffs or other trade barriers on either side of the Channel.
If May, Merkel, Macron, etc., can’t meet that low definition of success, the lot of them should be thrown from power at the next election and never be returned to political office as that failure would represent the worst-yet political failure of the 21st century.
Only in ‘low ambition Europe’ could such a thing occur. Nowhere else in the world could politicians set such a low bar… and then fail to meet even that (low) challenge.
How to get the EU to the Negotiating Table
Again calling on the wisdom of Winston Churchill who said, “However beautiful the strategy, you should occasionally look at the results,” we see the results of Theresa May’s negotiating strategy — which has consisted of Theresa negotiating with her party, the government opposition benches, and various lobby groups (some of dubious credentials) and highly placed individuals who work directly or indirectly for HM government.
While it can appear that the Prime Minister has done everything ‘right’ it can sometimes occur that you can do everything ‘right’ and still fail.
It’s time to try a new strategy to get the Europeans to the negotiating table — but that doesn’t mean dropping the truly excellent speeches, the traipsing around Europe to discuss Brexit with EU leaders, nor does it mean ending the quiet but competent diplomacy that’s been a hallmark of Theresa May’s premiership. What it means is adding a new strategy to the existing strategy, henceforth a ‘two-track’ plan designed to cause EU leaders to run (not walk) to the table to begin earnest ‘Win-Win’ discussions on the matter of Brexit.
And it’s so easy to cause that to happen. It means employing the one factor that Theresa May hasn’t employed thus far — political courage. (OK, the Chequers ultimatum was pretty cool. I think we saw a smattering of Theresa May’s potential there)
Some might counter that ‘courage’ has no place in delicate discussions, that diplomacy is always a ‘risk little/gain little’ proposition. But it’s only that if you make it that. Full stop.
In reality, SDI was nothing more than a policy wonk’s vision. Thankfully, SDI never saw the light of day.
The one thing that we must note is that President Reagan’s team didn’t end the polite diplomatic rapport with the Soviets during that tense period — on the contrary, they ramped-up their diplomatic efforts as never before and employed political courage (courtesy of the SDI gambit) to achieve the results they wanted all along.
In short, it worked.
“If you keep on doing what you’ve been doing, you’re going to keep on getting what you’ve been getting.” — Jackie B. Cooper
What Theresa May needs to do now is to employ a gambit, a play to make EU leaders actually see value in a reasonable Brexit deal, a device designed from its inception to guarantee a ‘Win-Win’ result for both sides. If it isn’t seen as a ‘Win-Win’ from both sides, there’s no point in employing it for it will surely fail.
Therefore, whatever frustration May must be feeling with EU leaders, now is the time to drop it and move forward with a two-track plan; One; get the EU to the table, Two; continue with the excellent diplomacy she’s employed until now.
Make ‘a Brexit Deal’ a Better Option for the EU than ‘a Hard Brexit’
Using the same sort of gambit that President Reagan employed so well to help end the Cold War, Theresa May should likewise (and very diplomatically) create a gambit that results in the EU seeing the value of signing a Brexit accord well in advance of March 29, 2019.
At present, the UK sources 30.35% of its total food demand from the EU (ONS statistics) but other jurisdictions want to purchase EU produce and meats too, so let them! That 30.35% stat has been falling in recent years anyway.
Begin replacing EU food imports to the UK by growing those foods in the UK or changing to non-EU suppliers at a fractional rate. (North America’s agriculture belt is so massive it could easily supply 100% of the UK’s food let alone the 30.35% that the EU presently supplies)
Starting September 2018, Theresa May’s government could legislate that the UK must buy 1/5th less food from the EU per month. That sounds like a lot of effort might be required, but during WWII (over a period of a few months) a much larger scale of change was forced on Great Britain, and the United States and The Commonwealth of Nations stepped in to supply Britain with everything it formerly purchased from the continent (not only food, but everything!) and it worked.
Let’s assume that after 6-months of zero progress in Brexit negotiations the UK would no longer be buying any produce from the EU, therefore why would anyone spend one moment worrying about EU *food tariffs* or *non-tariff trade barriers* when food is no longer being imported from the EU?
Yes, British farmers would lose the ability to export their produce to the EU. But as EU exports to the UK drop, UK farmers will simply sell more produce to UK customers. Nothing will change for British farmers except the destination of their goods.
But at any time within the 6-month period the EU could agree a Brexit deal and stop the decrease in EU food exports to the UK.
Some crops may need to be sourced elsewhere. Again, the United States agricultural belt is so massive it could supply the UK with 100% of its food needs without a problem. Canada too, has enough arable land to supply 100% of UK food needs — although the country doesn’t have the same labour capacity as the United States to produce large quantities of food and have enough labour to actually harvest it — Canada would need to import UK labourers each harvest season if Canada was supplying 100% of UK food needs.
However, it’s only 30.35% of the UK’s total food demand that might need replacing, not 100% of Britain’s total food demand, making it a small problem to substitute EU produce with North American produce. And UK farmers and ranchers are likely to pick up more than half of the 30.35% within one season, leaving less than 15% of the UK’s total food demand for North America to supply to the UK. Such a tiny amount wouldn’t even register as a blip on the financial charts of North American food exporters.
A commitment by HM government to political courage may result in a large upside for both the UK and the EU — a true ‘Win-Win’ Brexit deal.
This week we talked about EU food exports to the UK and how employing some political courage could help drive the EU to the Brexit negotiating table — without ending Theresa May’s excellent diplomatic efforts (which have so far returned absolutely zero, but it’s still theoretically possible such diplomacy could still yield a positive result) and thereby gain a ‘Win-Win’ Brexit deal.
Lowering EU food imports to the UK by 1/5th per month might be just the incentive needed to get the EU to the table. We’ll know within 6-months.
Next week, we’ll talk about lowering EU auto imports by 1/5th per month in an attempt to get European Union negotiators to the table to work out a reasonable Brexit deal.