“BREXIT BRIEF” – ISSUE 1, 9th Feb 2018

Welcome to Brexit Brief

It will not have escaped your notice that the United Kingdom is due to cease its membership of the European Union next year.  

This carries potentially huge consequences not just for everyone who lives and works in the UK, but also for citizens in each of the other 27 EU member states.

However, in many ways, the on-going confusion and uncertainty is the biggest concern of all.

As a company that is proud to work across the open borders of the EU and employ the very best staff from many states therein, Eville & Jones is acutely aware of the need to keep you as well-informed as we possibly can about Brexit. 

To that end, I thought it would be useful to provide you with a written weekly update summarising the key Brexit developments over the previous seven days, together with some analysis about where we believe the decision-making process in Brussels and London may be taking us.

Crucially and in keeping with the Eville & Jones ethos, I will seek to keep it upbeat and positive – and hopefully inject some fun along the way.

I hope that Brexit Brief will become essential reading for you as a critical phase of modern European history plays out before our eyes.        

The Brexit week in summary

The primary focus this week was meant to be on two meetings of the UK Government’s 11-strong Cabinet Brexit Sub-Committee. Its task was to agree the country’s formal negotiating position on a range of crucial Brexit-related issues. However, in the end, the British bulldog chose not to bark and instead settled down to a bowl of fudge. 

But it doesn’t end there. The Prime Minister has now summoned Committee members to - of all things – an away day at Chequers, her official country retreat, where final decisions will supposedly be made. There is as yet no confirmation on whether casual clothes or bonding activities will be compulsory.  

The Committee membership is very finely balanced between senior ministers who voted Remain in the EU referendum and favour a so-called “soft” Brexit, and those who voted Leave and wish to deliver a cleaner break with Brussels or “hard” Brexit. Pivotal to the current discussions is whether the UK seeks to remain in the customs union after it leaves the EU. 

This week a spokesperson for Prime Minister Theresa May sought to pacify Conservative Brexiteers by insisting that the UK will "categorically" be leaving the customs union after Brexit.

However, Conservative Remainers – together with many in other political parties in the British Parliament – believe that this battle is far from lost. Instead, they are relaxed about how the arrangement is described if it allows the UK to trade in the EU without border checks and tariffs. For its part, the EU has warned that life outside the customs union and single market – which Britain wants to access for free after Brexit - would mean “unavoidable” barriers for the UK to trade in goods and services.  

The UK is due to leave the European Union on 29 March 2019. However, preparations are clearly far short of readiness – hence Britain’s desire for a two-year “transition period” which would feel almost identical to the UK staying inside the EU. Brussels is open to this but wants the most pressing details to be finalised by the end of next month.

This brings me back to the two Cabinet Sub-Committee meetings which, by all accounts, achieved very little for the simple reason that UK ministers cannot agree.

There is an ever-growing insistence from Leavers, Remainers, the European Commission and the other 27 EU member states for Theresa May to “come off the fence” and make clear what outcome she wants across the key subjects for decision, enabling the crunch negotiations with Brussels to get fully underway and reach a conclusion by the end of next month.

The problem for Mrs May is that if she signals a desire for a “soft” Brexit, she risks the wrath of Tory Brexiteers and could lose her job. Conversely, if she seeks a “hard” Brexit, the Tory Remainers will most likely move against her. Remember, the Conservative Government does not enjoy a majority in the House of Commons and any major fracture in the party could lead to a General Election. 

But it is important to be aware that the Prime Minister hold two favourable cards. The first is that most of the serious contenders to replace her know she faces an almost impossible task and so don’t want that responsibility themselves quite yet.   Secondly, there is every chance that the Conservatives could lose an imminent General Election – costing many Tory MPs their seats in the House of Commons and handing Labour Leader Jeremy Corbyn the keys to 10 Downing Street.        

So, what to do? Nothing seems to be the option of choice – for now. But the big decisions cannot be put off for very much longer.  

Meanwhile in America…

Whilst you may think – with sound reason - that current political events in Europe are bizarre to say the least, they are as nothing when compared with life in the United States under President Donald J. Trump. 

To provide a little light relief, each week in Brexit Brief I thought it might be useful to highlight one or two of the Leader of the Free World’s most recent brushes with notoriety just in case you missed them. It is not for me to judge, but you are very welcome to.

Aside from the moment when his famous haircut appeared to come unstuck in the wind as he clambered up the steps to board Air Force One, this week’s Presidential low point came when 24-hour news channels around the world interrupted normal programmes to show live coverage of Mr Trump’s speech to workers in Ohio.

Unusually for an American President, “the Donald” has sought to claim credit for recent gains in the US stock market. It therefore seemed logical for networks to feature the Dow’s dramatic fall of more than 1,500 points in a single afternoon on one half on viewers’ screens, whilst simultaneously broadcasting Mr Trump wandering aimlessly off-script and accusing political opponents of “treason” on the other. Were the two events related? Well, as I say, feel free to make your own mind up. 

Enjoy your weekend.

Jason

Jason Aldiss BEM

Managing Director