Theresa May is the new Prime Minister, and only Britain’s second-ever woman premier. She has wasted no time in appointing her Cabinet and offering less than fond farewells to Brexiteers such as Michael Gove.
But another Brexit campaigner is in the new government. Boris Johnson, the former Mayor of London, becomes foreign secretary. In essence, this is the Minister for Brexit. Is he the right choice? Well some say he’s unlikely to carry his metropolitan record of success far into Europe. But others make the point that it was probably a peace offering in return for agreeing to not put his name forward as a challenger to the ousted David Cameron.
But if Gove faced May’s wrath, it was peculiar that another Brexiteer, Andrea Leadsom, has been given a ministerial role after making a rather crass and inexperienced comment about motherhood directed at May personally.
So a leadership contest has been quickly by-passed and the government is in place rather faster than a planned September 9. So what comes next?
Markets, from the stock exchange to the foreign exchange, are already showing relief rallies in the wake of more certainty about the nation’s political destiny. Many people will be pleased that a protracted and damaging battle for leader has been averted and the time of the Westminster summer recess can now be more usefully trained on the far bigger battle – the future of Britain in Europe.
Peace in Europe
Wolfgang Schauble, the German finance minister, and US Treasury Secretary Jack Lew, on Thursday held a joint press conference in Berlin, in which they said it was in the interests of the United States, Europe and the United Kingdom that good ties are restored following last month’s bruising EU referendum where British voters shocked the pundits and voted to quit the European Union.
The FTSE100 in London may have fallen on Thursday, after the Bank of England opted to keep its powder dry over the timing of a rate cut (now most likely seen in August), but the S&P 500 on Wall Street saw beyond that and investors felt that global monetary loosening which is likely to occur from Tokyo to London while the Federal Reserve holds rates rather than hikes them, is reason enough for the best run of record-breaking highs seen since 2014.
Certainly Lew is concerned that destabilising trade wars don’t break out while Schauble knows only too well the 20th century economic history of his own country. In 1919 world powers met at Versailles Palace near Paris to sign a peace treaty officially ending World War I hostilities – but also ushered in punitive reparations Germany was forced to meet.
By 1923 the German economy was not only suffering the sheer weight of those reparations, but also spiralled into hyper inflation, and a decade later was run by one of the 20th century’s most menacing of dictators, Adolf Hitler.
It was a salutary lesson that it never pays to bring another nation to its knees. Far better for the EU to find a solid and fair trade deal with the UK, rather than a pernicious or capricious resolution that destabilises the entire region for years to come.
Only this week, the president of the European Council, Donald Tusk, said it would be “lethal” to let the UK walk away scot-free as he attempts to avoid a domino effect across the continent in the wake of Brexit. He said he does not want to push away Britain but neither allow it to profit from getting a deal on its own terms.
EU is a trading bloc or block to trade?
So will it be Tusk and Juncker whose voices out-decibel those of Lew and Schauble? World free trade is at stake. As someone who is a staunch Liberal Democrat, and therefore a pro-European, recently told me, the EU is one huge blockade to trade, not just a trading bloc.
That is not quite so absurd as it may seem. Yes, the EU promotes a single market for the trade of goods and services. But it also places other restrictions on the process. Those are the free movement of labour from within the EU, and increasingly also the sharing of the burden of immigrants who come to the EU fleeing regimes and civil wars elsewhere.
So, to tell EU member states, or others outside the bloc like Norway or Switzerland, that in order to have access to the single market they must also accept free movement of labour, is in effect a restriction of trade.
On Thursday, the Bank of England warned that property prices would see sizeable reductions after the so-called Brexit vote to leave the EU.
Economists who supported the Leave campaign, such as Professor Patrick Minford, may well argue that the economic dire straits predicted by the HM Treasury and central bank have yet to be proven. They want all tariffs scrapped as a means of getting a good deal with Europe and elsewhere.
Why all the haste?
But the reality is, that we don’t have to accelerate actions that mean taking risks with trade, nor actions which could bring to reality the UK central bank’s worst fears.
What is breathtaking is why the new government wants to get on with the Brexit negotiations and therefore trigger Article 50 of the Lisbon Treaty which would then give Britain 2 years to quit the EU.
What is the haste? And what is the sense of fatalism about the process?
Even Theresa May, conspicuous by her quiet stance on the Bremain benches during the referendum, has been heard saying “Brexit means out.”
But let’s take a step back and examine a few things here without rhetoric.
First of all, the referendum called by her predecessor David Cameron was viewed by many voters as a protest vote, and ultimate opinion poll, to tell Westminster and Brussels alike that humble voters have had enough of the bureaucracy and corruption of the unaccountable EU machine, and enough of the firebrand Napoleonic tendencies of the European Commission President Jean-Claude Juncker.
Juncker, speaking in Beijing on Friday, said: “Although we feel that in the short term, Brexit will impact on the British economy and thus will impact the global economy to some extent, we think that in a few years from now there will be no remaining consequences on the global economy.”
That doesn’t mean the effects of Brexit will only be felt short-term in Britain. Just that the globe will have forgotten about the island off Europe and move on with the agenda.
When a referendum isn’t a mandate
What I would hope is that we all accept that a referendum is just that. A gauge of people’s opinions as they stood on June 23 – with 7% of Brexiteers now regretting they voted Leave – then ultimately the decision to quit the EU is one for Westminster.
We have a parliamentary democracy and referenda have no constitutional mandate in this country. They don’t have to be called and they don’t have to be observed.
With 52% of voters having voted Leave it would of course be foolhardy to ignore that sentiment, whatever people think a few weeks later.
But isn’t politics about getting the best for your nation and its citizens?
In that case, the new Prime Minister ought to have the courage to say to MPs and voters that “we gave the British people a democratic chance to be heard. And we have heard you. We will act in accordance with those wishes but at a time that is most suitable for the country. Not when it suits the EU or those who peddle dogma on these shores. Parliament feels it is not in the national interest to quit the EU at this time and will keep the timing under review.”
I’m no political speechwriter, but Downing Street’s own scribes would be hard pushed to do much better! The sentiment of the message would be that it is the Prime Minister’s role with her advisers to decide when and how to proceed on the (possible) road to Brexit.
Rather than a second referendum or a snap general election as some have proposed, it is wiser that the government takes its time to weigh up all the consequences as well as give British and other European businesses a chance to plan for any transition. We need stability of a fresh government, not new flux from trade negotiations.
To move too quickly would be dangerous. Risk businesses failing, assets declining, and disharmony about what the future will bring. To act in haste could amount to treason.
If the Brexiteers have not formed their position yet – and that was the impression on June 24 – then it is anyway unwise to negotiate from such a position of weakness.
A conspiracy theory
But there is also a growing view that the exit from the EU was all stage managed. First of all, the 2014 European elections had shown how powerful UKIP could be at “protest vote” victories and some Tories had or planned to defect to UKIP unless the government held an In-Out referendum on the EU. So Cameron appears to have turned adversity into a virtue as it would be a vote winner to give Britons, long-suffering from the negative publicity that Brussels has attracted over decades, a chance to vote on our future with the EU. So it went into the 2015 Conservative Party election manifesto and was carried out even sooner than the Prime Minister Cameron promised. Hasty or what?
Then the campaign to Bremain was half-baked. For all the might of the Eurostat machine, all the data that the UK government could have mustered to convince people to stay with the EU, it wasn’t exactly present.
Instead, what we got was a slew of half-baked and unverified statistics from the Treasury just weeks ahead of the referendum. Hence, no chance to question those figures. People grew suspicious.
Then the Brexit camp traded on emotions rather than hard facts, and the view was “we will never know unless we try it”. The view was that Brexit was a once in a lifetime chance to change the country’s fortunes. Even if they weren’t bad fortunes already.
Then the EU weighed in, almost as though doing the Brexit camp’s bidding. Juncker himself made astonishing remarks about being anti-referenda and generally was condescending towards Britain. I have met some voters who said they voted Leave as they were “pushed” by the actions of Juncker.
Adding to the astonishment, in an interview with Germany’s Spiegel magazine, Juncker described how he had placed a wager with Britain’s top eurocrat Jonathan Hill, who has since resigned as the EU’s Commissioner for Financial Stability.
Juncker said: “I put my money on Brexit. The EU Financial Stability Commissioner, Jonathan Hill from Britain, still owes me a pound.”
Then we had the poll and the aftershock as markets woke up to the reality that the underdog position had won the vote. Even Nigel Farage of UKIP had failed to predict the victory that came. He had commented on election night that he felt they had lost soon after polls closed.
It is simplistic, and possibly naïve, to assume that the UK government of David Cameron felt that Britons are not for revolution and would simply cave in the same way Scots had done over independence in 2014. Or that Britain would repeat the EEC (forerunner name of the EU) referendum of 1975 and stay.
What if, all along, it had been a secret agenda among an inner circle of influential Tories to get Britain out of the EU?
Hence, was it stage managed? Cameron may have gambled. Or he may have been in on the whole political twist.
He seemed chirpy enough humming tunes and preparing to leave Downing Street. Didn’t he in 2013 remark that he didn’t plan to be premier after 2020? So haven’t his wishes simply come a little sooner?
A referendum, let alone a Brexit move, would have been unthinkable had the Conservative-Liberal Democrat coalition still been in place. That ended in 2015 and the Conservatives secured a majority, albeit thin, outright power base. This was the first time the Conservatives had been able to govern alone since 1997.
So the Conservatives may have figured this was their only real chance to exit the EU.
Although on the face of it the Brexiteers appear to have no specific policy of what next, it is just possible that top Conservatives, including Cameron, Osborne, Johnson, and May might have discussed the future agenda. Cameron would have to be perceived as the fall guy.
One sure way to falsify such claims is for the government to now delay the start of any renegotiations of trade relations with the EU. But will they?
It is only an excuse to say that other EU members demand we leave soon and are punished in the process as a means to act as a deterrent for other nations thinking of referenda.
Ultimately that decision to invoke Article 50 is for the UK and the UK alone. The government must choose that. The UK is in a stronger position to bargain than it lets on. Therefore it is worrying that we do this in haste when we really do not need to.