Everything’s going to be OK
We start this week with good news – sort of. UK GDP grew 0.5% in the three months from July through to September: the three months, you’ll note, after the vote to leave the European Union. That was a touch slower than the previous quarter but above what some experts were predicting, and well above the doom and gloom forecasts of hellfire raining from the sky as predicted by the Remain campaign prior to the Referendum.
But Philip Hammond did not trumpet these figures, using them instead as an opportunity to remind voters that there may be trouble ahead. Quite right; as many on both sides of the debate are keen to point out, Brexit is still just a phrase for now. The short-term impacts of Brexit may be felt, but they will be felt when the UK actually starts to leave. Until Article 50 is invoked and the process begins, we remain in an odd state of talking about discussions about negotiations. Let’s watch the GDP figures when a deal becomes clearer.
A deal for you, a deal for you, no deal for you
It was the good voters of Sunderland who sent the pound crashing on the evening of 23 June, as their overwhelming vote to leave suddenly alerted markets to the fact that, well, the UK might actually leave.
It could well have been a vote entirely against the economic self-interest of many Sunderland electors. Nissan, a huge employer in the region thanks to the presence of the UK’s biggest car plant there, has spent the past few weeks threatening to divert work elsewhere in the EU. Disturbed by uncertainty and the distant but real prospect of tariffs on the cars they produced, the Japanese firm sought an urgent meeting with the Prime Minister.
Something must have gone right at this Number Ten summit between Theresa May and Nissan’s chief, Carlos Ghosen (something of a rare honour for an individual CEO) – Nissan has announced that it will build new models in the UK after all, securing thousands of jobs.
But at what cost? Others in the automotive sector will be asking what deal Nissan got in terms of Government guarantees – and when can they get the same? And other companies in other sectors will be pointing out that they employ British workers too, so what will you do for us Mrs May? It’s an industrial strategy of sorts, but perhaps not the one the Government was after.
Goldman Attacks
Apparently, Theresa May was a Remainer. Who knew. The current Prime Minister trod a careful line before the Referendum, publicly backing the Remain side but doing it with all the enthusiasm of an MP opening the local school fete in a snowstorm.
A leaked speech obtained by The Guardian this week gave a bit more insight into the then Home Secretary’s thinking. In a speech to conspiracy theorists’ favourite bank, Goldman Sachs, given just a month before the referendum, Mrs May said that “the economic arguments are clear” for remaining in – “I think being part of a 500-million trading bloc is significant for us.”
It’s not exactly shocking, nor are her arguments new. It is also completely legitimate for Mrs May to be swallowing her own views and leading Brexit discussions based on the will of the people. But the reminder that Mrs May was a convinced (if not convincing) Remainer will box her in, forcing her to take maximalist positions to shore up the support she has for now amongst Tory leavers. Things will get more difficult when negotiations start too, particularly if the deal Britain looks like getting isn’t to the liking of these Leavers. Maybe one of them could and should have got a better deal?
Brexit Committee
This week also saw the results of elections to the Brexit super Select Committee, which will be holding David Davis and his new Department to account.
The Committee is turning into quite the attraction: the Chair, former Labour front-bencher Hilary Benn, will be joined be joined by a little-known former Conservative front-bencher Michael Gove. The former Education Secretary and Justice Secretary is one of eight pro-Leave Conservatives elected (of the ten Tory positions up for grabs), along with, amongst others, John Whittingdale, Peter Lilley and Dominic Raab: former Ministers all. Added to that is Alistair Burt, one of the two pro-Remain Conservatives elected and a former Minister, and Pat McFadden, one of the Labour MPs elected and a former Mi – OK you get the idea.
Once this Committee of twenty-one MPs has found a room big enough to hold them all, then we may well be seeing one of the most experienced groups of Parliamentarians ever assembled to examine a topic. Good luck David Davis, you’ll need it.
Walloons Give In
Finally, after intense pressure from pretty much everywhere else in Europe, those plucky Walloons in Belgium have dropped their objections to the EU free-trade deal with Canada.
CETA, as the treaty is known, can now go ahead – assuming there aren’t any other roadblocks, an assumption that it would be deeply unwise to make about any political process in the EU. But the process of agreeing this treaty has not been an edifying or easy one, and the implications for the EU and future deals are alarming. If striking a deal with Canada, the world’s most inoffensive nation, is so tough, what are the chances of the proposed Transatlantic Trade and Investment Partnership with the much more reviled US?
And what, they may be asking in Whitehall and Westminster, are the chances of a sensible Brexit deal which works for both the UK and the EU?
