Brexit weekly: 5 things

And Brexit means…

Where else to start this week but Lancaster House where, after months of speculation Prime Minister Theresa May gave us an indication of the deal she expects to reach for Britain.

Admittedly the speech was very much topline, but gave the clearest indication yet of what a post-Brexit Britain might look like. And that includes no single market access, no agreement to free movement of people, a soft border with Ireland, and a commitment to a parliamentary vote on the deal. Although Brexit Secretary David Davis was quick to point out that vote wouldn’t be on whether the UK leaves, but rather how. Meanwhile, at least in the UK, Mrs May’s speech somewhat overshadowed the election of Antonio Tajani as President of the European Parliament – a critical announcement for the Brexit process, given the Parliament has final approval on any Brexit deal.

While political commentators fell over themselves drawing comparisons between Mrs May and the late Margaret Thatcher, EU negotiating chiefs were likely contrasting with a far more recent political figure in David Cameron. While Mr Cameron was at pains to keep his negotiations collegiate, Mrs May seems to be very clear. Her way or the highway.

Alas poor Boris

The PM was pretty unequivocal on Tuesday. Loose lips and errant headlines will hurt not harm the negotiations. One person who apparently didn’t get the memo was Foreign Secretary Boris Johnson. With European leaders and heads of state still digesting the content of Mrs May’s speech, the Foreign Secretary insisted that French President Francois Holland couldn’t dole out “punishment beatings” as Britain prepares to leave the EU, also drawing comparisons with World War II.

Reaction to Mr Johnson’s speech was a mixture of bemusement and outrage, with his comments doing little to redress any concerns at the more pointed remarks of the Prime Minister. While Mr Johnson’s comments may be taken with a pinch of salt, they may equally harden attitudes in European capitals, paving the way for more demanding negotiations.

What of the Foreign Secretary? Given he advocated leaving the customs union and appears to have won his battle with Philip Hammond for a ‘harder’ Brexit, he’s likely feeling a bit more secure in post. How secure he’ll remain should he continue to speak off the cuff, particularly when negotiations begin, is entirely another question.

Trade trumps

To the US, and with Donald Trump about to become the 45th and arguably unlikeliest President of the United States, The Times scored an impressive scoop over the weekend with an exclusive interview with the man taking over the Oval Office.

Seemingly in an ebullient mood, Mr Trump was happy to express his support for Brexit to his interlocutor – none other than former Justice and Education Secretary Michael Gove. And Mr Trump expressed a willingness for a quick trade deal with Britain, with Mr Gove temporarily swapping his journalist role for trade envoy – an irony unlikely to be lost on a PM who unceremoniously kicked him out of Cabinet barely six months ago.

News of Mr Trump’s desire for a trade deal will have heartened Downing Street and likely sparked greater confidence in their ability to secure agreements to offset loss of single market access. The great intangible, of course, is Mr Trump. Will he remain so positive once ensconced in the White House? Or will this be a pledge he’s unable or less willing to keep?

Auf Wiedersehen HSBC?

A keynote speech, lower unemployment figures and a upwardly revised forecast of the economy by the IMF. So far a pretty good week for Theresa May. But her trip to the World Economic Forum in Davos will have prompted more sobering thoughts as a series of financial and industrial heavyweights suggested they might be moving jobs and business out of Britain.

The list included Toyota, Goldman Sachs and HSBC – with the latter being clear that business falling under European regulation will be done in Europe. While this won’t have taken much if any perceived gloss off Mrs May’s speech for her supporters and Brexiteers, it will be a reminder of the need to protect the UK’s status as a financial services powerhouse, while also providing plenty of incentives to the likes of Toyota to keep their business on these shores.

Equally, European negotiators will doubtless have taken note. After all, if the like of HSBC shifts its investment business from London, the likes of Frankfurt and Paris will eagerly offer them a new home.


Back to Washington, and Donald Trump also found time this week to pour scorn on the North Atlantic Treaty Organisation, or NATO.

Describing the multi-country alliance as “obsolete”, Mr Trump will have raised the hackles (and perhaps the concerns) of leaders across Europe. His comments were not atypical of those during his presidential campaign, but equally contrast starkly with those of his soon to be Defence Secretary, Gen. James ‘Mad Dog’ Mattis, who’s been a firm supporter of NATO.

Defence experts in Europe were quick to jump to NATO’s defence. Select Committee Chairman Dr Julian Lewis described the President-elect’s views as reckless, while also squeezing in the pointed comment that the next head of NATO shouldn’t be David Cameron.

Why does this matter? The chances of US withdrawal from NATO seem slim, evidence of a relationship between President Putin and Donald Trump notwithstanding. But in a time of heightened geopolitical uncertainty, European leaders will be keen to cling to the NATO safety blanket. In their domestic contexts this could prompt increases in defence spending by EU member states. But it also potentially gives Theresa May an ace up her negotiating sleeve. One of her priorities for Brexit negotiations is for the UK to remain heavily involved in European intelligence and counter-terrorism work, an area in which Britain has been very much a leader in recent years. Mr Trump’s comments may prompt EU negotiators to push for continued British involvement – which Mrs May could and may choose to use to her advantage.