According to the Guardian, Jeremy Hunt thinks we’re, er… entering the arena of the unwell?
Hunt also told reporters after the meeting:
“At the moment we are heading for no deal by accident.”
@Aceris, I was thinking more about things that have surprised me during this process. One thing I am genuinely surprised about is the robustness of the UK economy. I would have expected a much more severe slowdown than we’ve currently seen, given the situation that’s unfolding. I didn’t expect a full-blown recession unless we actually crashed out with no arrangements at all, but I thought we’d see a lot more job losses and companies enacting contingency plans. We haven’t seen much of that.
I don’t know if that’s because the economic consequences simply aren’t as severe as I believe, or because businesses still don’t really take serious all this rhetoric about ‘no deal’.
I was a little surprised at first, though it was always obvious that the real recession would come post exit, rather than post-vote. I was surprised that the only sector that had a major initial slump — commercial real estate, particularly offices, recovered relatively quickly as the overseas investors who have dominated the market in recent years mostly returned. But it’s now suffering pretty badly again, at least in terms of lender appetite and prices achieved versus asking prices. The rental market is being propped up by the flexible workspace providers, which is its own bubble.
A large part of it is, I think, that most people aren’t seriously preparing for a no-deal, beyond what they’re legally required to do in some industries (and even there the Bank of England is panicking about insurers being unable to do so in time). We’re so used to Eurofudge, and the consequences of a no-deal exit are so obviously horrible (especially with no real planning until quite recently), that it’s been basically unthinkable. So we’ve seen a reasonable amount of strategic adjustment, but no real attempt to grapple with a situation where we crash out, because that would involve completely reconfiguring your supply chain at enormous expense, or in some cases simply not being able to operate from the UK at all (not a huge deal for some firms, but a massive issue for, say, airlines based out of UK hubs).
Even so, we’re clearly starting to see the effects. The UK economy has been one of the weakest performers in Europe and the G7, the stock market is underperforming, corporate bonds are more expensive than in Europe, retailers are going bust (as much Amazon related as Brexit, granted), and house prices have stalled and are falling in London. It’s not exactly a benign environment.
Right. Like, nobody really believes it will happen. I hear Jeremy Hunt say the above and I just think “yeah, yeah” because something always gets fudged, surely, before the shit really hits the fan.
I read the flurry of reporting yesterday about ‘blind’ Brexit, which seems to mean the UK being allowed to leave the EU without the terms of departure being agreed, and then continuing to negotiate what those terms are after departure. It’s quite hard to understand what this can really mean from a practical standpoint. What can it mean to say the UK is no longer legally a member of the EU but that e.g. people and goods will still flow freely between the two? Or that cases involving the UK will continue to proceed in EU courts? Will there still be fiscal transfers?
I suppose the way to think about is that the EU is basically extending the 2 yr article 50 process indefinitely, so the UK hasn’t Brexited at all. Can that be the solution?
The reporting’s been rather odd, and overblown, but that’s not what it means. It’s not about the withdrawal agreement, but the framework for the future relationship within which the withdrawal agreement is being negotiated. Basically the broad template of a possible free trade agreement. It would be an agreed statement separate from the legally binding withdrawal agreement, which would necessarily have been signed. If there’s no withdrawal agreement, there’s no “blind brexit”.
Like I say, the reporting has been rather silly, as the EU always said it would only begin negotiating an FTA in earnest after the Brexit date, so any framework agreed was always going to be high level and aspirational. It was, at least ostensibly, a concession to the UK to even begin discussing the future arrangement before the withdrawal agreement was finalised.
The best description of the current developments I’ve read is that Europe has been pushing for a statement that was “clear but not detailed”, while Britain wanted something “detailed but not clear”. The EU (or Germany anyway) might now be willing to go into more detail if it helps May get the withdrawal agreement through, provided the red lines aren’t crossed.
Ah, thanks. I confess a great deal of confusion about the scope of the withdrawal agreement vs the future relationship. It was my impression that there was as much of disagreement about the withdrawal agreement as there is about the future relationship. Is that not the case? If so, how can a vague future relationship solve that problem?
Well, it’s complicated, but basically the withdrawal agreement covers everything that absolutely has to be agreed one way or the other when the UK leaves, in particular the financial settlement of liabilities the UK incurred as a member, what happens re: enforcement of judgments in the respective juridictions, rights for EU/UK residents in each jurisdiction, and things like Northern Ireland. The future relationship is everything that can be layered on top of that between what will effectively be third parties at that point.
Now, the UK has been trying all along to tie the two together, so that it will only agree to a given withdrawal agreement if it gets what it wants out of the future relationship. And the EU is pushing in the opposite direction, partly for negotiating reasons and partly for treaty reasons. But the UK has very little leverage, especially now, and even if it is willing to suffer the economic and legal chaos of walking away without an agreement, it faces a legal claim from the EU over the liabilities, which would be heard in, you guessed it, the ECJ.
He just misspoke. It’s certainly embarassing but I wouldn’t read too much into it.
I broadly agree that Hunt is out of his depth in one of the great offices of state. He’s never really been super successful either as a public advocate or an administrator.
Yeah least of our problems a one off gaff that pulled more news minutes than it should have considered what else is going on.
The huge issue at the moment is rich Trump donors and backers are funding the UKs ethno-nationalist and white supremacist politicians, media and groups and sending over Steve Bannon to advise them and the Brexiter Tories like Johnson. Follow the Stephen Yaxley-Lennon aka “Tommy Robinson” news and trends to see all the stuff coming out of the woodwork
I can only imagine his internal monologue being like “Ok, they’re Chinese, so don’t say Japanese, don’t say Japanese, don’t say Japanese…Japanese…Japanese…say Japanese.”
Oh yes if only we had put Boris in charge he would have showed those Continentals what for! His unique negotiating style would have convinced Barnier that the EU had no choice but to give him whatever he wanted. sigh
This from a man who only decided to support Brexit when writing his editorial because he decided it would improve his leadership chances.
