Theresa May: Out of the Frying Pan and Into 2019

Well Brexit fans, that was a year, wasn’t it?

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.”)


Only 90 Days Until Brexit

Although UK Prime Minister Theresa May tried mightily she wasn’t able to get a draft Withdrawal Agreement passed in the House of Commons that would’ve allowed the UK and the EU an easier transition through Brexit and (bonus for the EU!) a £39 billion, one-time payment.

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.

Anything less than that minimum level of success would be a case of leaders on both sides of the English Channel shooting themselves in the foot.

Written by John Brian Shannon


NO MATTER WHICH SIDE OF BREXIT YOU’RE ON: HAPPY NEW YEAR!

Brexit: The Summer of Concession

In the land of Brexit some has been lost while much has been gained in this, the summer of concession.

Thus far, UK Prime Minister Theresa May has passed the EU Withdrawal Bill, held a firm but fair meeting at Chequers where she stopped prevaricating and demanded a ‘For’ or ‘Against’ decision from her Cabinet on her Chequers Brexit plan — which resulted in the day-after resignations of two of her most powerful ministers and four others — and she has since met European officials where she received cool support for her super-diplomatic, uber-polite and overly soft Brexit proposal.


How Very British!

In some ways those recently resigned MP’s (who will now sit as Conservative backbenchers) might as well be sitting on the opposition side because they possess deep knowledge of May’s inner circle and have the inside scoop on how Brexit is to proceed.

Yet, it was a polite affair with Boris Johnson making a gentle resignation speech in the House of Commons while still urging the Prime Minister to pursue the kind of Brexit UK citizens want. Boris Johnson never looked so principled or gentlemanly in his life (struggling to sound almost deferential to May) and good on him for doing so. Of course emotions were high, and no doubt, he was extremely disappointed that (in his mind) the Chequers Brexit plan surrendered some amount of UK sovereignty to the EU politburo. Five stars for Boris.

David Davis, who is more of a moderate Brexiteer than Boris, tried hard to contain his deep disappointment and published a polite and informative resignation letter outlining his position. As Brexit Secretary (but Brexit-lite when compared to Boris Johnson or Jacob Rees-Mogg, for example) it appears he thought he could convince May to move to a slightly more robust Brexit plan only to have his hopes dashed. If she was going to be swayed by anyone it would’ve been him. We understand his disappointment too, but that’s politics. Well done, David Davis!

The problem with forcing Cabinet members to declare support or non-support of her Chequers Brexit plan is that she has lost some of them who now sit as backbenchers and are free to hold the government to account.

Theresa May imagines herself to be an experienced operator but if they choose to make her look bad, they could. Therefore, she should not be looking for a fight with them nor should the Prime Minister default to her previous ‘slapping-down’ behaviors or she will get tossed around in a 30-month-long-storm completely of her own making. (Approx. 9 months to go until the official Brexit date of March 29, 2019 plus the 21-month implementation period, equals 30 months of potential hell for Theresa May if she handles her former Cabinet ministers harshly)

Even with all of that said, it’s better to head into the final Brexit stage with a unified team who are fully committed to her overly soft Brexit plan instead of a team that’s pursuing several different Brexit versions at once.

Now that May has asserted herself she seems to be gathering respect from all sides, resignations notwithstanding. Since Chequers, she’s twice the Prime Minister than when she first took the job. Theresa May marque une victoire!


Notes on Theresa May’s Chequers Brexit Plan

  1. The Prime Minister’s plan suggests a ‘common rule book’ with the EU so that trade in goods and agricultural products won’t be impeded by conflicting sets of rules. ‘Red tape is the eternal productivity killer and the less of it the better’ said every business person ever. Of course, adopting EU standards could make it more difficult to export UK goods to non-EU countries with their different standards, or so the argument goes. Yet, every other country seems to master this, so why not Britain?
  2. The Chequers plan suggests a common rule book on state aid for industry, and harmonized environmental and climate-change standards, social policy parity, and protection for employees and consumers.
  3. Formerly one of the PM’s “red lines” was the jurisdiction of the European Court of Justice (ECJ) which will end after Brexit although UK courts would consider ECJ rulings and/or even consult with the ECJ in certain cases. Which seems a wise idea for any country to consider.
  4. An FCA (a Facilitated Customs Agreement) where the UK and the EU would operate as a combined customs area — which some might call a customs union of sorts — where the UK would collect tariffs on goods shipped from outside the two countries destined for Europe, and presumably the EU would do the same for Britain.
  5. A mobility framework agreement to formally end the free movement of people between the continent and the UK. Unregulated immigration from the EU caused the number of EU nationals in the UK to rise to 3.8 million in only a few years, which was a significant contributor to the Leave victory. The mobility framework would allow freedom of movement for persons — such as students that are actually enrolled in college, for retired persons that can afford to live in the UK, for workers who have a guaranteed job waiting for them in the UK and streamlined entry for tourists from any non-terrorist country. One would hope the EU would reciprocate on all of this.

The problem with the common rule book approach is that MP’s of any party may see it as a ‘BRINO’ (Brexit In Name Only) and consequently lower their level of support for Brexit — at least Theresa May’s version of Brexit. And if BRINO fears take root, Conservative MP’s could decide to vote for a different leader should a leadership contest arise.

Parliamentarians have very long memories… so the caution flag is out for Theresa until the UK crosses the Brexit finish line.


Summary

Although progress on Brexit seems agonizingly slow Theresa May is an accomplished bureaucrat who realizes she can move forward only as fast as the other participants in the race, and if she moves too fast her government may lose support in Parliament, in the public space, and in Brussels (where she has precious little support to begin with and doesn’t want to suddenly find she has even less) and if she moves too slow, even worse may happen to Britain and to her political career.

Therefore, the race she’s really in is an OJ Simpson-style slow vehicle police chase to the official Brexit date with every camera rolling and catching every step and misstep.

Not very exciting to be sure, but if she gets a reasonable Brexit all should be forgiven.

At worst, the next British Prime Minister will have a firm foundation upon which to Build a Better Britain. Let us hope!


  • View or download (PDF) the Chequers cabinet meeting Statement from HM Government here.
  • Iain Mansfield: May’s new plan isn’t perfect, but it’s practicable. However, it can only work if treated as her bottom line. (ConservativeHome.com)

Written by John Brian Shannon | Reposted from LetterToBritain.com

Brexiteers Davis and Johnson Abandon May’s Soft Brexit

Major Resignations in Theresa May’s Government

Over the past 24-hours two senior officials in Theresa May’s government have resigned due to differences in what kind of Brexit each seeks.

And frankly, it’ll be a blessing. Far less paint will be peeled off the walls each week at 10 Downing Street, if you catch my meaning.

Even though both David Davis and Boris Johnson were and are strong proponents of Brexit (which Prime Minister Theresa May also claims to be) governing the country becomes an impossible task when three people fight each other daily to steer the ship of state.

Every Prime Minister must tolerate some division within the party caucus to be sure. Less so, but still important is to allow a variety of views within Cabinet so that it doesn’t become a sterile place where ideas go to die. But there comes a point when too much division becomes the main issue — instead of the people’s business being the main issue.

Which is why it’s important Theresa May stuck to her guns and didn’t make any last-minute deals (of a kind that a lesser PM might have made) to keep the crew together. Not that Davis and Johnson are going anywhere as they’ll remain Conservative Party backbenchers.

Certainly, Margaret Thatcher would’ve told Davis and Johnson to ‘go fish’ some time ago and probably would have physically evicted them from the room. 😉 (You never knew with Maggie!)


Whether You Agree with Davis and Johnson or Not, this Streamlines Whatever Brexit Modality Theresa May Pursues

While some would like the strongest possible Brexit — Britain’s future will be better with a Brexit agreement that doesn’t ruin relations with the EU, one that includes some kind of reasonable free trade deal, one that allows the UK and the EU to cooperate on a wide range of issues such as, but not limited to; A common rulebook where and when feasible, the Galileo project, the ECJ (where UK courts would include, but not be limited or bound by ECJ rulings and opinions) NATO, and agreeable relations or even membership with other important European institutions.

Theresa May’s sole goal (it seems) is to get a deal with the EU. Which is a noble goal in itself.

The flip side of that is when the agreement Theresa May intends to present is so diluted that her Cabinet walks out the door. Yet, the Prime Minister may still be proven right by events yet to unfold.

It’s obvious to all but the most politically tone-deaf that no matter what agreement is presented to the EU mandarins, it is likely to be swiftly rejected. Including Theresa May’s super-diplomatic, uber-polite and overly-soft Brexit proposals.


But if That’s the Case, Why Try at All?

As an experienced bureaucrat slogging it out in the Home Office for a decade Theresa May knows something that hardcore Brexiteers don’t. And that is, those who get ‘stuck with the bill’ wind up paying many times over.

Let’s look at three scenarios, and let’s see who gets stuck with the bill:

  1. Hard Brexit faction presents an uncompromising Brexit deal to the EU: The European Union declines the deal offered and the blame is on Britain ‘for being so unreasonable’ and from that point on… every single thing that ever goes wrong in Europe, the World, and the Solar System… will be the fault of *those* unreasonable Brexiteers. And it’s not that EU people are evil, it’s just human nature to feel that way when jilted.
  2. Soft Brexit faction presents a soft agreement for signing in Brussels which is accepted by the EU: It’s seen as a ‘Win-Win’ for both sides. But the EU ‘wins’ by a slight margin and when you’ve effectively ‘dumped your partner’ sometimes it’s a good thing to let them ‘win’ a little bit. The worst that can happen in such a case is that the next UK Prime Minister will try to improve the deal and may or may not succeed in that endeavor. Likely, as time rolls on, both sides will arrive at a better agreement and both can claim credit with their respective voters for any future agreements. Not a bad scenario at all.
  3. Soft Brexit faction presents a soft agreement for signing in Brussels which *isn’t* accepted by the EU: At that point, the British can walk away from the table knowing in their hearts and with the whole world as a witness that they ‘tried their best’ to accommodate the concerns of the people in Brussels but they just couldn’t strike a deal. (A sort of ‘no fault’ divorce) And Brexit proceeds on a WTO-style basis with a flurry of à la carte agreements signed following March 29, 2019 allowing EU cars to be sold in the UK and UK airlines to operate over continental Europe, for two examples.

In scenario #1: Britain and the Hard Brexiteers get stuck with the bill for about the next century. Maybe longer. ‘Those intransigent Brits! A bloody difficult people they are!’

In scenario #2: Britain gets stuck with the larger part of the bill and in the following years must work incrementally towards the final Brexit arrangements they were originally seeking. ‘Damn, Theresa, couldn’t you do any better? Oh well, we got a Brexit of sorts, you’re forgiven.’

In scenario #3: The EU gets stuck with the bill and the world decrying EU intransigence. And Theresa May *probably* gets re-elected in a landslide.


Summary

The lesson from this story is that when the chips are down and you *must* bring home a win *always* go with the plan that is *guaranteed to work*.

Which in the real world often isn’t the most glorious, most exciting, nor the most popular plan. Unfortunately.

But when a plan works, it’s a win. And beautiful or ugly, if the plan works that’s all that matters.

Written by John Brian Shannon

Theresa May’s New Year of Hope

As far as years go, UK Prime Minister Theresa May must be glad to see the end of 2017 as are many others in Britain and around the world. In matters Brexit, it was a year of low-level chaos and unfulfilled expectations — lots of ‘churn’ but not much actual progress.

Yet the Prime Minister did make some exceptional speeches and unexpectedly reached-out to EU citizens to assure them that while Britain was leaving the European Union, it wasn’t leaving Europe. Well done on both counts, Theresa May.

She also told EU citizens living in the UK that their situation wouldn’t change, aside from having to register their residency with the Home Office and pay a nominal fee to retain their ‘settled status’. And while that didn’t seem to impress small numbers of EU negotiators, it brought great comfort to millions of expats living in Britain.

Of course, it’s all contingent upon reaching a final ‘Withdrawal Agreement’ between the United Kingdom and the European Union, but it’s not too much of a stretch to suggest that the UK would act unilaterally to guarantee the rights of EU citizens working or studying in Britain in the case of no agreement.

Theresa May also offered £40 billion of UK taxpayer money to the European Union; Everyone is unclear what this is for, as nobody from the government has bothered to explain it to citizens.

Many people think that the UK’s share in the EU Parliament buildings and in other EU properties and assets should be sold off to the other EU27 members and the £9.65 billion (estimated) value could be used to pay future UK liabilities to the EU and that there is no need to pay £40 billion. Which seems reasonable.

If there is an actual need for the UK to pay £40 billion to the EU, surely British taxpayers have the right to know what they’re paying for, and to whom.

But if Theresa May has agreed to continue paying the £8.6 billion annual net payment to the European Union until Brexit completes within 2 years (approximately) plus 2 more years to cover the transition period, then that seems pretty reasonable too. If that’s how the £40 billion is being arrived at, there’s not much to complain about there.


With all this reasonableness going ’round it’s no wonder EU negotiators agreed to move to Phase II of Brexit negotiations — trade — a hyper-important part of the post-Brexit relationship on both sides of the English Channel.

Negotiating a mutually beneficial trade agreement between the UK and the EU in 2018 is Job Number One for negotiators on both sides.

Trade between the United Kingdom and the EU27 ranks as one of the most robust trading relationships in the world

  • 44% of UK exports are sold to the EU27, making them Britain’s most important trade partner.
  • 16% of EU exports are sold to the UK, making Britain the EU27’s most important trade partner.

Which makes the whole ‘getting an agreement’ discussion largely academic — as there will be an agreement or hundreds CEO’s on both sides of the English Channel will be breathing fire down the necks of UK and EU negotiators every day until an agreement is reached. “Don’t even think about coming home without an agreement!” (Yes, just like that)


UK/EU Trade: Where do United Kingdom Exports Go?


Where do UK exports go? UK Office for National Statistics 2015.


UK/EU Trade: Where do European Union Exports Go?


The EU's largest single export market is the UK. European Commission Export Helpdesk.


So There We Have It: They Can’t Live With Each Other, But They Can’t Live Without Each Other!

Which is a very good thing.

And because companies on both sides need to keep their biggest export market open and flourishing, there absolutely will be a reasonable trade deal — one that both sides can live with. There is simply no alternative.

Which neatly explains the title of this blog post ‘Theresa May’s New Year of Hope’ because Job Number One for Brexit negotiators on both sides must be working a successful trade deal — and every CEO in Europe will be watching with keen interest, to put it very mildly.

You don’t want to be the trade negotiator coming home without a deal and having to tell the CEO of Volkswagen or BP that you were too incompetent to get a deal. Yikes!

There will be an excellent UK/EU trade deal in 2018, a trade accord that both sides will be rightly proud of — one that works for CEO’s, citizens and governments throughout Europe.


Trade As Saviour

As the focus will be on trade in 2018 (something that both sides must preserve if today’s politicians want to keep their jobs) the new year looks to be one of the better years for relations between the UK and the EU27.

Let’s hope that Phase II of the Brexit negotiations move smartly along and that (if a Phase III is required) the momentum that gets built throughout 2018 works to facilitate friendly and workable solutions to any remaining issues between the two blocs.

Politicians and negotiators on both sides of the Brexit divide have everything to gain by bringing home a fair and workable trading agreement and everything to lose if they don’t.

Therefore, let 2018 be ‘The Year of Hope’ as 512 million European citizens are counting on their politicians and negotiators to open windows of opportunity as big as the sky, and to create even more justice and fairness for all Europeans, no matter where in Europe they may live, work, or play.

No matter which side of Brexit you’re on, the kleef&co team wish you a Happy, Safe, and Prosperous New Year!

Written by John Brian Shannon

Day 548: Pass the Eggnog & Where Are We on Brexit?

by John Brian Shannon | Reposted from Letter to Britain

“It was a dark and stormy night; the rain fell in torrents — except at occasional intervals, when it was checked by a violent gust of wind which swept up the streets (for it is in London that our scene lies), rattling along the housetops, and fiercely agitating the scanty flame of the lamps that struggled against the darkness.”

Oops, that was another lifetime. But in the here and now, London rain still falls in torrents, violent winds sweep up and down the streets, and the flames of freedom still struggle against the forces of darkness.

Our protagonist is of course the redoubtable Theresa May, Prime Minister of the United Kingdom who has given repeated assurances since her July 2016 inauguration that “Brexit means Brexit” and “Brexit will occur on March 29, 2019” and has repeated many similar expressions of intent.

But not much has changed.

For all the talk by Remainers and their skulking ‘Project Fear’ campaign, none of their shrill accusations have materialized; The economy didn’t crash, unemployment didn’t skyrocket, the deficit hasn’t increased, and governments haven’t fallen.

It’s been a rather bit dull, hasn’t it?

For all the talk by Leavers and their loud promises to save £350 million per week (and redirect the money to the NHS) and to save UK taxpayers £8.6 billion (net) per year, and the largely unfulfilled increase in British exports due to renewed interest in UK goods, not much has happened there either.

In fairness to the Leave campaign, as Brexit hasn’t yet occurred they can’t be faulted on promises which can’t be kept until Brexit completes.


So, What Has Happened?

Politicians on both sides of the Brexit line have been talking, and they’ve decided to talk some more.

Apparently, the talks are going so well that one side wants to pay the other side £40 billion in advance of gaining a bespoke trade deal, while the other side say that talks have progressed so well that they’re going on to ‘Phase II’ — more talk — but this time the talk will be about trade.

Oh, and March 29, 2019 appears to be the mutually agreed official Brexit date, but negotiators on both sides have created a policy ‘Mulligan’ allowing them to postpone the official Brexit date in case one side misses the target date by a few days or weeks.

How very European.

And you must know they agreed on the Mulligan as the first order of business, but then delayed announcing it until concluding their ‘Phase I’ negotiations.

Here in North America such concepts as missed deadlines aren’t tolerated. ‘Get it together or you’re fired’ is how deadlines are kept in the U.S.A. (and no Mulligans)


What’s on the Horizon?

Next-up appears to be working towards a trade deal by October 29, 2018 — as a lack of agreement by that date will indicate a WTO-style Brexit.

NOTE: October 29, 2018 is cited by many as the latest possible date to sign a Brexit trade deal and still have time for industry and government to properly implement such agreements.

Newspaper columnists are wondering aloud about a CETA-style deal between the UK and the EU. (CETA is a trade deal between Canada and the European Union that took 7 years to negotiate and even into the 8th year isn’t fully implemented)

Still, CETA is an excellent basis upon which to build a future trade relationship with the European Union. The UK could do worse than using CETA as a template to forge a new trading arrangement with the EU. Such an agreement could be further tailored in later months or years to meet specific needs on both sides of the English Channel.

But as of December 2017 we’ve not seen much urgency for trade discussions. However, as October 2018 draws close, the speed at which things happen will increase exponentially.

Nobody wants to fail at getting a trade agreement — UK and EU industry would crucify politicians who didn’t sign a viable and timely trade agreement — and voters would likely punish their respective politicians at the following election. Yet, if some horsepower isn’t soon applied to the slow-motion Brexit discussions, policymakers on both sides are likely to find themselves speaking from the opposition benches after the next election.


Either Way, We’re On Our Way to a Cordial Brexit

Whether a trade deal is signed in time or not, in typical European fashion a cordial parting looks set to occur.

Three years will have passed from the June 23, 2016 Brexit referendum and the only variable seems to be whether politicians will manage to negotiate a free trade deal that is ready to sign by October 29, 2018 thereby leaving enough time for implementation ahead of the final Brexit date of March 29, 2019.

Only 461 days to go, Prime Minister…

UK Brexit, PM Theresa May.

With Theresa May at the helm for the foreseeable future it may take plenty of time to arrive at certain Brexit waypoints. Yet irrespective of ongoing Brexit frictions — UK relations with the European Union are likely to improve even from their present (high) level. Which in the final analysis, means that quiet diplomacy may be the most profound of Theresa May’s political qualities.

Wishing you all a very Happy Holiday season and a safe and prosperous New Year!