First Sunday After Tory Conference

 

Government Policy on Leaving the EU

The policy of Teresa May’s government on many issues – including the consequences of the Leave Vote – has become rather clearer as a result of the Conference.  It is worth looking back at what the Leave Campaign said would happen.

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Daniel Hannan MEP

The Conservative MEP, Daniel Hannan, (a prominent Leave campaigner), posted this piece on the Conservative Home blog last April: “Daniel Hannan: “Here’s what happens when Britain votes to Leave” in which he asserted:  “A vote to leave won’t start any countdowns. Ministers would simply be under instruction to find departure terms that suit Britain – and, indeed, that suit the rest of the EU. They would presumably begin by holding informal talks with the Brussels institutions and the other member states. Then, when the broad parameters were agreed, they would begin formal negotiations. These might be held under Article 50, the clause introduced by the Lisbon Treaty which obliges the EU to reach a trade deal with a departing state within two years; or they might be held under a different intergovernmental structure. It might be possible to reach a mutually beneficial deal very quickly…The point is that nothing would be agreed until both sides were content.”

It is surprising that a royally remunerated  Conservative member of the European Parliament could have been quite so ignorant of the likely approach of the EU institutions.  So what does the optimistic Mr Hannan say now?

He writes in the Financial Times:  “A compromise on immigration will profit Brexit Britain – Even for Leavers, the problem was never incoming European doctors or students, writes Daniel Hannan”.

 

Brexit Bus
The Vote Leave Campaign 

Readers will recall that the  leadership of the Leave Campaign adopted the UKIP immigration stance as reported in the Daily Mirror: “Boris Johnson and Michael Gove back Ukip’s policy on immigration”.  And the Remain Campaign’s position was set out in the same article:

Remain campaigners say the points-system proposal would “wreck” the economy and bar Britain from the Single Market. The official In-campaign, Britain Stronger In Europe, said think-tank Migration Watch had savaged the system in Australia as being “totally unsuitable for the UK”.

Executive Director of Britain Stronger In Europe, Will Straw, said: “This system will not work. Vote Leave’s proposal could put up immigration and it would wreck our economy, as it involves leaving Europe’s Single Market.  Australia, who have a points based immigration system, have twice as many migrants per head as the UK.  Economic experts are agreed that leaving the Single Market would lead to recession – costing jobs and raising prices.”

And we remember how UKIP campaigned-

BreakFar

The Hannan pipe dream of nice friendly intergovernmental chats with the leaders of other member states and the Brussels Institutions has not come to fruition, but the economic consequences of the referendum result are upon us.

Financial Woes 

The Financial Times has this: “Brexit bliss suffers rude awakening with flash crash – Markets offer their verdict after policy commitments issued at Tory conference strip away ambiguity”:-

This was the week in which the British government committed to launching the two-year EU exit process by the end of March and gave strong indications that the UK would leave both Europe’s single market and its customs union. In response, foreign exchange markets have hammered the pound. In the words of David Bloom, an HSBC analyst, sterling is now “the de facto official opposition to the government’s policies

It is, in fact, much more than that. A negative reaction across the despatch box in Westminster does not make Britons poorer. A negative reaction in the foreign exchange market does, by reducing the amount of foreign-produced goods and services Britons receive in return for the work they put into making goods and services to be enjoyed by foreigners.

How much poorer? The economist Tyler Cowen has suggested that since Britain spends about 30 per cent of its income on imports, a 10 per cent fall in the currency can be seen as reducing its effective wealth by 3 per cent, or about 19 per cent of one year’s worth of national income.

The currency market is also an early-warning system for worse to come. When forex traders hold sterling in lower esteem — Mr Bloom refers to them as “FX vigilantes” — other investors may soon follow.

The Telegraph has this about Mrs May’s approach: “What Theresa May did and very carefully did not say about Brexit“.

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The Prime Minister at her Party Conference

Most interesting of all, however, were the clues she gave to her thinking on the crucial issue of our trade with the EU. Without openly giving away her negotiating stance, she was more careful than ever to insist that our Brexit agreement must continue “to involve free trade in goods and services” with the EU….But if she really means that Britain must continue to enjoy “free trade in goods and services” with the EU, this can only mean that, on leaving, we must in some way remain part of the wider European Economic Area (EEA), subject to the single market’s rules.  Anything else would be far too complicated to negotiate in the time available. And anything short of that – such as naively hoping to rely just on “WTO rules” – would result in precisely the disruption and chaos of which so many business interests, from the City of London to the owners of our largely foreign-owned motor industry, have been so firmly warning.”

But the Telegraph also has this: “Cabinet split over handling of Brexit”  – essentially reporting on a split between the Chancellor and the trio of Brexit Ministers.

Mr Hammond, who helped lead the Remain campaign as foreign secretary before moving to the Treasury, is seen as one of the most pro-EU voices around the cabinet table….Recent comments suggest he sees keeping access of the single market as just as important as ending the free movement of people. Yet the so-called Three Brexiteers – Boris Johnson, David Davis and Liam Fox – and other cabinet ministers who voted to leave the EU have put greater emphasis on immigration controls.  This week it was claimed that differences between Mr Hammond and Mr Fox, the International Trade Secretary, over whether to stay in the customs unions were insurmountable.

Not good news

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