(Editor’s note: Liam Fox infamously said Brexit would be “the easiest negotiation in human history.” Suddenly, 29 March doesn’t mean Brexit. Negotiations and votes could drag on for… well, no one knows. See below for details.)
When the Brexit vote came up on 23 June 2016, we went to bed that night thinking this wasn’t a big deal. Who in their right mind would vote to leave the European Union, the largest, richest and most frictionless single economy in the world?
We awoke to the answer on 24 June 2016: A majority – 51.9 percent – of the voters in the United Kingdom, or more than 17 million people.
In the runup to the election, then-United Kingdom Independent Party leader Nigel Farage (who has a German wife and several French mistresses), Boris Johnson – later (briefly) foreign secretary – and others on the Far Right had convinced the British people the EU was the bête noire, responsible for all the UK’s troubles.
Leaving the EU would mean an extra 350 million pounds each week for the National Health Service; the UK would get a Brexit dividend and would soon be able to cut taxes with the windfall from brilliant new trade treaties around the globe. None of which turned out to be actually true.
What was billed as “the easiest negotiations in human history” has taken almost three years as Prime Minister Theresa May’s government discovered what those Remoaners suspected – divorces are bitter to the end. And basically, Brexit remains at Square One.
So we have a running update of Brexit developments:
• Brexit has turned from political drama to political farce, with Theresa May’s almost masochistic talents for alienating everyone as she does a hopeless imitation of Maggie Thatcher.
The tabloids are full of headlines about “the sofa up against the door,” a reference to May barricading herself in No. 10 so her own party can’t storm the castle.
The leader of the House of Commons, Andrea Leadsome, resigned, abandoning May for the Hard Brexit lobby. Will the Daily Mail and Telegraph prove prescient and May really leave?
Does it matter?
What’s certain is that this is not going to end well for anyone but Nigel Farage.
British Steel collapsed on 22 May after Brexit led to its Europe business disappearing, putting a total of 25,000 jobs at risk at the firm and its suppliers.
The beginning of the end ….
• After a Far Right Austrian leader was caught on video pretty much offering to sell out his country to the Russians, more people (including investigators) suddenly are interested in where the money funding Brexit leaders is coming from.
Apropos to this, Channel 4 News documented how Arron Banks has been bankrolling Brexit Party leader Nigel Farage’s extravagant lifestyle to the tune of 450,000 pounds per year, paying for his 13,000 pound per month Chelsea digs, trips to meet Trump in the U.S. and of course his dry-cleaning bills.
But where does Banks’s money come from? The National Crime Agency is investigating Banks, trying to figure that out. Meanwhile, even the pro-Brexit tabloids are noticing that Brexit Party Chief Richard Tice won’t say whether the new party takes foreign money.
Ever stranger, the Telegraph, which runs regular Farage columns and is rabidly pro-Brexit and anti-EU, has a post about a UK-taught Spanish developer who developed the tech that Russians trolls used to sway the Brexit vote. That post is from The Signals Network, a project to bring together whistleblowers, investigative journalists and major media outlets.
Will the exposure of Vladimir Putin’s tireless efforts to undermine Western democracies turn out to be the catalyst for creating a movement to defeat Russia and the populists it funds?
• File this under, “You had one job ….”
EU officials agreed (reluctantly) to extend Article 50 until 31 October, but only after telling May & Co. that they had to use the extra time to come up with a deal that could make it through Parliament.
After 29 March, things got very quiet as May and Labour leadership including Jeremy Corbyn tried to hammer something out that Torys and Labour could get passed. But in mid-May, both parties conceded they’d failed miserably and talks have collapsed.
Now what? Well, May says she wants a fourth vote on her plan next month, apparently seizing a final opportunity before stepping down to top her own record of having the biggest loss in Parliament in British history.
• While May and Corbyn fiddled, is Rome about to burn? That’s the conclusion of Sky News’s Lewis Goodall. After spending time with Nigel Farage at a Brexit Party rally, Goodall predicts Trumpian politics will fill the vacuum created in the United Kingdom by the incompetency of the establishment parties.
You can see the full “Brexit: The conditions are ripe for the biggest backlash imaginable” post here.
• So, this is what greatness looks like ….
Financial Times is reporting 30 billion pounds in equity fund investments have left the United Kingdom as investors flee to the relative safety (and at least some predictability and continuity) in Europe-based funds.
The funny thing is, the Daily Express has a post stating the opposite … that money is POURING into Britain because of Brexit.
Foreign direct investment in the UK for 2018 was GREATER than in Germany, Portugal and Poland “combined,” the Express is reporting. That PROVES (the Express loves caps) “doom mongers who predicted an economic downturn after the 2016 referendum vote to quit the EU had been proved wrong again.”
You have to go to the Tory’s official news site, the Telegraph, to find out that the Express is wrong … again.
In “Dutch steal UK’s crown as most attractive destination in Europe for foreign investment,” the lead paragraph states, “Foreign direct investment into the UK slumped last year as the Netherlands poached the top spot in Europe for the first time since 2015.”
Obviously, FDI is a different bucket of capital than investment funds. But the trend is for all capital classes to be exiting – not entering – the UK because of Brexit.
• Is it just us, or is Labour’s Jeremy Corbyn that grumpy old man always feuding with neighbors while yelling at kids to stay off his grass? Corbyn appears to be distracted form tormenting Theresa May for the moment, feuding with his own party. Corbyn and deputy Tom Watson are going at it over a second Brexit referendum – Watson wants one; Corbyn says, “nay.”
• Okay, we found that ray of sunshine mentioned below ….
John Thornhill has written a post on the Financial Times opinion page, “Brexit has a chance to kick-start a period of radical change” that outlines how more rational minds will prevail in the United Kingdom.
Thornhill’s take is, “scarcity is clarity” … that entrepreneurs in the tech sector, not Britain’s discredited and inept ruling class, will understand that the UK is running out of time and quickly seize opportunities to upgrade healthcare, education and the environment.
• If you’ve been trying to understand Brexit as a single irrational act, you can’t. In “Britain is once again the sick man of Europe” – possibly the most insightful and concise analysis we’ve read – Martin Wolf at Financial Times argues that Great Britain has six concurrent crises including constitutional, political, economic and sociological. The longer these issues remain unresolved, the worse things will get, Wolf concludes.
If you’re looking for a ray of sunshine in the Brexit debacle, this ain’t it.
• Ask Robinson Crusoe – there’s nothing worse than being stuck on an island. Which is why ferry bookings to cross the English Channel surged 40 percent overnight after the U.K. and EU agreed last week to delay Brexit until October, according to Bloomberg.
• The plan was for the EU to give Theresa May and her Tories more time to come up with a new Brexit deal … any deal … that could make it through parliament. But a week after the Article 50 extension, the only thing happening is that other countries are starting to flex their economic leverage. In the United States, Democrats control the House of Representatives, where trade laws are drafted. Speaker of the House Nancy Pelosi is wading into Brexit with a warning that if the Brexiteers get their way on a hard border with the Republic of Ireland, they can forget a trade deal with the U.S.
• Politico.eu has new polling data that shows Brexit is disuniting the United Kingdom, with lines hardening in a culture war.
Leave voters in the pro-Leave areas of East Midlands and North West value “standing up for common sense and tradition” and “being tough on crime,” according to the post. Remain voters in London value “being part of an international community’ and “protecting the environment for future generations.”
The polling data suggests it will be difficult (impossible?) for Tories or Labour to end the Brexit stalemate.
• First, it was 29 March. Then it was 12 April (or 30 June … who knows.) Now, the Brexit date apparently is 31 October. Let the jokes begin.
What is no joke is this might be enough time for the Conservative Party to dump Theresa May. Then, the question becomes, “Would the next prime minister be legally obliged to honor this latest Article 50 extension?”
• As Theresa May and EU officials negotiate another, likely longer Article 50 extension, the British media are filling the news void by asking British people what they think about Brexit. What they’re hearing from Leavers and Remainers is that everyone has Brexit fatigue as we enter the third year of wrangling.
Sky News has a post by People & Politics reporter Nick Martin, who heard the words “embarrassed,” “frustrated” and “powerless” over and over as he crisscrossed England and Scotland.
• We’re starting to run out of similies and metaphors, but it’s tempting to describe this final chaotic stage of Brexit as a three-ring circus.
In Ring One, Parliament has rushed through a law requiring Theresa May to seek an extension to Article 50, theoretically preventing the UK from crashing out of the EU without a deal. We say “theoretically” because the E.U. can say N.O.
In Ring Two, we have May crisscrossing Europe, trying to get EU leaders to agree to said extension.
In Ring Three, we have EU officials assuring the Republic of Ireland that no matter what the UK does, they’ll support keeping open the border with Northern Ireland. Which sharply reduces May’s leverage with her far-right Brexiteers and sets up a huge showdown with the EU post-Brexit.
Have a GREAT week!
• May asked her EU counterparts to extend Article 50 until 30 June. European Council President Donald Tusk has said he’s willing to postpone the UK’s departure to as late as April 2020.
• The British media has reverted to horse-race coverage, trying to keep up with rapidly unfolding events. So if you seek a deep understanding of why a hard Brexit is likely, you have to go to the long-form American mags.
The New Yorker has a post on how the border between the Republic of Ireland and Northern Ireland is an unsolvable problem.
From the post:
This is the paradox and the tragedy: Brexit fundamentally conflicts with the Good Friday Agreement, but the U.K. government is in a state of denial about that conflict. It insists that it is committed both to Brexit and to the peace accord: Brexiteers claim that they can maintain a “frictionless” open border with the Republic of Ireland after Brexit—in the same place that the newly hardened border with the E.U. will be.
The Washington Post has an opinion post that compares Brexit to a zombie horror movie. Which is funny, right? Except the same post by British political writer Ian Dunt finds that you have to go back to the English Civil War to find a comparable level in parliamentary infighting.
• So, there’s this American absurdist movie called “Groundhog Day.” Bill Murray is a weatherman covering Groundhog Day, a quaint American tradition where rural folks believe a groundhog (basically a giant squirrel) living in a hole in Pennsylvania predicts when spring will arrive. This is apropos to Brexit for two reasons. First, in the movie, Murray keeps waking up on Groundhog Day over and over and nothing changes. Second, what is it in humans that make us cling to myths that clearly aren’t true?
• Meanwhile, reality is starting to set in, with the UK’s business community is amping up its criticism of Brexit and the chaos it has caused in manufacturing, finance and every other sector. EasyJet executives stated the uncertainty about travel after Brexit is pushing down ticket prices. At the same time, executives at German electronics giant Seimans say Brexit is destroying Britain’s reputation for business stability.
• Scotland is already running around on the United Kingdom. On Friday, 29 March – the original Brexit date – Scotland released a love letter to Europe in the form of a video that invites the Europeans to “continue our love affair.” Bold as brass, that!
Of course, 62 percent of Scots voted to remain. And Scotland has been dreaming about independence at least since Robert the Bruce in the 1300s. A Scottish exit from the United Kingdom could be the next big challenge for whoever the unfortunate soul is who takes Theresa May’s place.
• Clearly, the third time is NOT the charm. Parliament has voted down May’s Withdrawal Agreement for the third time. And not just voted it down but crushed it 344 to 286.
So, the Brexit date is now 12 April. That doesn’t mean the Brexit Reality TV series must close out with a very, very sad no-deal episode. A new referendum, a withdrawal of Article 50 or an EU intervention are just two of the many, many possible outcomes.
Hardline Brexiteers, the Democratic Ulster Party and anti-May Labourites united to defeat the Withdrawal Agreement, plunging the UK even deeper into crisis.
• Let’s see … Theresa May thought she had a deal to leave the EU which would have included transitional periods to craft new treaties for borders, customs, transportation and immigration. Parliament – especially hardline Brexiteers in her own party – said “no” twice, and weren’t very nice about it.
Parliament has taken over the process of negotiating the terms of the UK leaving the EU. Which means we’ve moved to the “anything goes” segment of our big Brexit Reality TV show.
Or nothing goes ….
Parliament on Wednesday, 27 March failed to agree on any of a raft of alternative Brexit proposals that included slightly different takes on remaining in the EU’s trade and customs union at least temporarily. Not that it matters because all those proposals went down in flames in eight separate votes.
Somewhere in the middle of all this chaos, Theresa May offered to resign if Parliament would circle back and approve the agreement she hammered out over two years to leave the European Union. Though John Berkow ruled that out two weeks ago, and the Democratic Unionist Party – the Tory’s ally in Northern Ireland – won’t budge on the border issue. Cue the memes and tweets with “SMFH” tags.
• Brexit was a 2-percent vote … only two percent more people voted to leave the EU than voted to stay. Which Brexiteers hold up as a vote sacred to British democracy. But is it possible that many who voted for Brexit only understood the complexity and profound ramifications of leaving the world’s largest trade block after companies fled and no-deal loomed? Could it be that a majority now wish to stay?
Perhaps no two events illuminate that point better than Nigel Farage’s pro-No Deal march from Sunderland to London, which attracted a handful of people (Nigel sat out most of it) while Saturday’s pro-Remain march in London drew an estimated 1 million. Which might not matter because MPs who literally represent Britain’s One-Percent, such as Jacob Rees-Mogg, are likely to succeed Theresa May should the Tories purge her this week for her ineffectual leadership. As right-wing Bolsheviks, the Moggsies and Borises don’t give a fig what the majority wants. As it turns out, democracy becomes terribly inconvenient when history is no longer on your side.
• Prudential, the UK’s largest insurer, has just moved most of its operations to Luxembourg. But it has nothing to do with Brexit. No way … it was just that it “made sense,” said its CEO. In financial filings, the company stated it has moved 36 billion pounds (about $48 billion) of assets to Luxembourg, which will be its Europe HQ. But this has nothing to do with Brexit. No way.
• The date 29 March 2019 has lived in infamy for almost three years. Now, it might end up being just another day. On 20 March – with eight days to go – Theresa May bullied, wheedled and cajoled EU officials into a Brexit extension. Maybe. Tusk & Co. agreed to making 22 May the new date. IF May can persuade Parliament to accept her plan. Which, by the way, they rejected twice in votes that weren’t even close.
If not 22 May the Brexit consolation prize is leaving 12 April unless EU officials are convinced there’s sufficient momentum to start the whole painful process over again or to withdraw Article 50. Oh, and the UK would have to field candidates for EU elections, which May already termed “absurd.”
Our prediction? With so many qualifiers on each side, our Magic 8 Ball reads “No-deal Brexit.”
• Admit it … we’ve all used that tried-and-true “It’s not you, it’s me” line to slip out of relationships gone wrong. Not Theresa May. Eight days from the theoretical Brexit, May went full “It’s you, not me!” as she lambasted members of Parliament for failing to support her Brexit deal(s) with the EU. Pretty much assuring she’ll get little or no support from either side of the aisle for whatever agreement she brings back from Brussels.
• The voluble speaker of the House of Commons has thrown a huge monkey wrench into the creaky Brexit machinery, which – let’s face it – was on the verge of breaking down anyway. John Berkow says there will be no third vote on Theresa May’s deal until she makes some meaningful changes. Which at 11 days out is nigh on impossible. Throwing the UK into a constitutional crisis. Or deeper into a constitutional crisis … whatever.
• Ah, remember the Good Old Days when Prime Minister Theresa May was hunched over her desk at No. 10 Downing, writing on her official stationery with her Conway Stewart Westminster Teal pen?
Dear Messieurs Barnier and Tusk
Remember when we said we’d be out of the EU by 29 March? Well, there’s been a spot of bother. So we’re thinking perhaps we could have a bit more time. Cheers, Theresa.
Was it only a few days ago the House of Commons voted to ask the EU to delay Article 50? Back in those halcyon days, France and Germany stated they want to know exactly what tangible measures the Brits can take toward a new plan that will a). get through Parliament and b.) satisfy EU negotiators. Who have said (over and over) that the UK already has the best deal it’s ever going to get.
Now, who knows what’s going to happen.
• Best line after Wednesday night’s vote: A senior EU negotiator described the vote to reject a no-deal Brexit as “the Titanic voting for the iceberg to get out of the way.”
• Okay, the Parliament doesn’t want May’s deal. They also voted to reject a no-deal Brexit – May’s final bargaining chip to get her deal approved – under any circumstances. But to a large extent, the UK isn’t the master of its own destiny because there’s still no deal to leave. Like at all. The EU still has to approve any new Brexit tactics including a request to extend Article 50. Meanwhile, hardline Brexiteers including Nigel Farage are lobbying nationalists in Italy and Poland to vote against an extension to ensure a no-deal Brexit. It would only take one EU country to vote against to essentially guarantee a no-deal Brexit.
BUT, one of the options being talked about is bringing back Theresa May’s agreement for a third vote. No, really.
• With the defeat of Plan B. Tuesday night, Scottish officials are once again talking about walking. Scottish First Minister Nicola Sturgeon said the thunderous defeat of May’s “pandering to Brexit extremist” leaves the UK with a “Government that has effectively ceased to function and a country that remains poised on a cliff edge,” according to the Scotsman.
Sturgeon advocates a second referendum, and added that the case for Scottish independence “has never been stronger.” Scots voted heavily – in some districts 70-plus percent – to remain.
• Plan B is dead, shot down by another huge margin, 391 to 242. Which leaves two default Brexit votes to go this week … one vote on a no-deal Brexit and one on extending Article 50. But already, Scottish MPs are talking about another referendum.
• Monday’s last-minute negotiations with the EU have yielded a mind-bendingly complex and notional agreement on the Irish border, though it was all in vain. The Irish Backstop – a continuation of the current EU open-border policy until new agreements are complete – was a gambit by EU officials to keep open the border between Nothern Ireland, part of the UK, and the independent Republic of Ireland, an EU member.
That’s sacrilege to hardcore Brexiteer who say a Backdrop would be a violation of British sovereignty. Only trouble is, closing the border would be a violation of the Good Friday Agreement, which bought peace to Nothern Ireland. So, the Backstop is a political hand grenade thrown into the middle of the negotiations … it was just a matter of time before it went off.
• Businesses – especially multinationals – have as sector never supported Brexit, not just because of the potential trade barriers to the EU, but simply because of the uncertainty it’s injected into UK’s business environment. The Washington Post has a detailed and well-written post documenting the havoc even possibility of a no-transition Brexit has caused.
Companies have been forced to spend hundreds of millions of dollars on contingency planning or put off expansions, the post notes. And the biggest just left.
From the post:
“Dublin is our headquarters for our European bank now — full stop,” Anne M. Finucane, Bank of America’s vice chairman, told the Financial Times’s European Financial Forum last month. “There isn’t a return. That bridge has been pulled up. . . . From a trading perspective, likewise, Paris would be the European trading arm.”
By the way, chalk up another big win for Amsterdam as Japanese pharma company Shionogi just announced it would leave London and make the Dutch business center its new Europe HQ. At least 275 companies representing about 1 trillion pounds of capital and 5,000 executive positions are leaving the UK including companies such as Dyson, controlled by Brexit supporter Sir James Dyson.
The question is, are Brits tired of all the winning, yet?
• We knew the Brexit Blues would infect people across Europe. But now, Brexit is even screwing up space.
The BBC has a post about British space entrepreneur Will Marshall, founder of Planet, the world’s largest satellite imaging network with 150 satellites. Marshall warns EU withdrawal will leave the UK “lost in space.” We saw that one coming …..
• What? Donald Trump has turned on another ally? Nooooo way!
This time it’s the UK. The American president and acolytes such as Steve Bannon encouraged Brexiteers to flee horrible EU tyranny, promising “a very, very big deal, very very quickly” if they leave. Turns out that as we move to only three weeks till Brexit, the America First mentality has superseded outreach to May & Co. Instead of a fast, sweet deal, Trump is offering “a preview of what it can expect from take-no-prisoners trade negotiations after Brexit,” states a CNN post. The US is demanding major trade concessions and not offering much in return.
Ending EU rules could open the UK to American agricultural products including genetically modified crops, animal feed with antibiotics and chlorine-washed chicken, all currently banned in the European Union.
• We love cosmic irony as much as the next person, but this rich.
The Daily Mail, the reliably and historically far-right newspaper that supports Brexit, has a post revealing “a leaked document.” That leak shows government officials are putting together a “hardship fund” to hand out cash to workers who lose their jobs to a no-deal Brexit. The Daily Mail post is curiously similar to a post on the Times website, which amazingly has the same leaked document!
What a coincidence.
We’re still waiting for the Times, Daily Mail, Telegraph, Daily Express and other “conservative” outlets that spent decades whipping up the anti-EU sentiment run a good-news story about how swimmingly Brexit is going.
• So a small island nation votes to leave a trade association … how hard could that be, right? Well, apparently gut-wrenching enough that Brexit has torn apart both of the UK’s main political parties and is in the process of totally reshaping British politics.
So far, 11 MPs have left Labour, ostensibly over party leader Jeremy Thorp’s anti-semitism. Then, three moderate MPs from the Conservatives – frustrated by hardline Brexiteers in their own party – joined them to form the informal “Independent Group.” The Atlantic has a deep dive into the fact that Labour and the Tories have lost a significant number of members in aggregate “at a time when—with Brexit only weeks away—they arguably need them the most.” Interestingly, the Independent Group – whose member support a second Brexit referendum – now makes up the fourth-largest group in the British Parliament … larger than the DUP, the far-right Unionist party representing Northern Ireland in May’s government.
• Tic-tock, tick-tock.
At the 44-day mark, Ford officials followed Honda and Nissan execs out the door, announcing plans to move production out of post-Brexit UK. The Times of London is reporting that during a call with business leaders, British-based executives with the Detroit automaker told Theresa May they were “preparing alternative sites abroad.” Ford of Britain has 13,000 employees at multiple facilities including three factories – Bridgend, Dagenham and Halewood. But the big hit for the UK would be losing Ford’s R&D center in Dunton, Essex, which employs more than highly paid 3,000 engineers.
• Dang, what do you really think, Donald Tusk? EU President Tusk got something off his chest at a presser Wednesday with Taoiseach Leo Varadkar. He looks right at the camera and says, “By the way, I’ve been wondering what that special place in Hell looks like for those who promoted Brexit without even a sketch of plan how to carry it out safely.” And if you think he “misspoke,” he immediately tweeted the same thing.
Can you say, “Righteous indignation?”
• It increasingly appears the possibility of returning to a hard border between Northern Ireland and the Republic of Ireland might be the unsolvable issue that guarantees a no-deal Brexit. Theresa May seems to be trying to have it both ways, assuring the Irish there won’t be a customs-and-passport check while assuring her hardline Brexiteers there will be.
A hard border would essentially abrogate the Good Friday (Belfast) Agreement signed in 1998, a peace agreement that opened the border and ended “The Troubles,” decades of sectarian tension between pro-independence Roman Catholics and pro-Union Protestants. But Brexiteers see an open border as an affront to its sovereignty and one more way Britain will still be tied to the EU post-Brexit.
• The Sex Pistols released “Anarchy in the UK” way back in 1976. Little did we all know how prescient they were. The biggest news lately was whether Queen Elizabeth II will be whisked away from London should the UK actually collapse into anarchy. The question of course is, will the queen be flown somewhere safe … like the EU?
• Japanese auto giant Nissan announced in February it will not be building its X-Trail SUV in Sunderland, but will move production to Japan. Which – if this wasn’t part of the larger Brexit story – would be a stand-alone fiasco all its own.
Why? Because until the announcement, the fact that the May Government was giving Nissan substantial incentives to build the vehicle in England post-Brexit a been a state secret (no, really). Business Secretary Greg Clark revealed on Monday that Nissan was awarded 61 million pounds ($80 million) in grants, contingent on building the X-Trail and another SUV in Sunderland. That money is at risk if it reneges on the deal, he said. The only problem was, the May government had assured voters there were no incentives. Despite having the majority of its job at a huge auto plant owned by a foreign multinational, 61-percent of people in Sunderland voted Leave.
• Earlier in January it was Dyson. Then Airbus. CEO Tom Enders released a video saying in the bluntest possible language – pointed language you rarely hear from top executives of multinationals – that no companies should have to deal with this much uncertainty 65 days out from Brexit. This could be the most sobering moment yet is this wildly chaotic process as the normally diplomatic German went right to the point: “We can’t move our operations and workforce overnight, but move them we will in the event of a no-deal Brexit.”
“Please don’t listen to the Brexiteer’s madness which asserts that because we have huge plants here, we will not move and we will always be here,” he says in the video above. “They are wrong.”
The departure of Airbus operations from the UK would be the biggest potential financial blow yet. The aviation industry giant has 14,000 employees in Britain and supports another 110,000 jobs through its supply chain, according to CNN.
Using a median wage of 50,000 pounds in a back-of-the-envelope calculation, that would be a potential 7.25 billion pound loss just in pure wages. Which seems to us to be a high price for making the UK great again
• More companies announced they were leaving the UK for new headquarters cities including Brexit supporter Sir James Dyson, who’s moving his vacuum cleaner/clever device company to Singapore. Dyson, Britain’s 12th richest person, assured everyone his decision at 66 days out has absolutely nothing to do with Brexit.
Brexiteers defended him by explaining Dyson is a global brand. Which is kind of the point … companies are leaving the UK to ensure they still have access to global markets. Also on the list of companies bidding London adieu are P&O, the ferry company, which is relocating to Cyrpus. See the full story here at The Guardian.
To top off the news, Bentley’s new CEO told Reuters that Brexit will put a huge dent in the financials of the definitive British luxury carmaker just as it’s starting to turn a profit under Volkswagen.
Sony had already announced it’s moving its European headquarters from London to Amsterdam.
Most of the largest financial institutions have begun Brexit exits to Germany. Among banks that announced plans to relocate some of their EU operations to Frankfurt are Citigroup, JPMorgan Chase, Morgan Stanley and Standard Chartered.
San Francisco-based Wells Fargo announced it was shifting its European operations to mainland Europe from London late last year. Wells Fargo announced 15 October that it will open a subsidiary in Paris post-Brexit, according to The Financial Times.
Wells Fargo was followed by Warren, N.J.-based insurance giant Chubb Group, which is relocating operations to Paris.
Will the last company to leave please turn out the lights ….
• So, May presented Plan B last month. You know things didn’t go well when Sir Vince Cable, leader of the Liberal Democrats, asks about the plan to call out 3,500 troops, then put them on standby in the event of a “no-deal” Brexit. Cable asked specifically what the “rules of engagement” would be in the event armed British soldiers face angry and violent demonstrators.
May replied that everything is under control. (We’re not making this up. Here’s the link to the exchange as reported by Sky News.)
• On the day May presented the draft agreement to parliament, the guy who oversaw Brexit quit. Brexit Minister Dominic Rennie Raab – the son of a Czech-born Jewish refugee who escaped the Nazis, and who is married to a Brazilian Google executive – said he could no longer support the deal, which Raab said has “two fatal flaws.” Which he negotiated. Monty Python couldn’t have written a more absurd script.
• On 31 October – Halloween, appropriately – the Guardian reported that Manhattan-based rating agency Standard & Poor’s warns that a no-deal Brexit would plunge the U.K. into recession, send unemployment skyrocketing, home prices lower and office leasing rates off the cliff. Oh, and for good measure, Britain’s credit rating would be downgraded.
• The New York Times has a post about a new phenomenon – Brexit Preppers. They’re the Brits who are hoarding food, medicine, toilet paper and other supplies, preparing for the disruption of supplies likely after a no-deal Brexit.
From the post:
“People are talking about World War II and rationing,” said Ms. Mann, a former midwife. “People have also been talking about the blackouts in the 1970s, and how power was rationed. This has the potential of being a combination of the two,” she said.
• On Sunday, 9 September, The Times of London published details of a leaked report from the National Police Co-ordination Centre. The report warns that in the event of a no-deal Brexit, the military might have to be deployed to back up police to quell civil unrest after food and other necessities start disappearing from British shelves. The NPCC report warns that traffic jams at ports could lead to “unprecedented and overwhelming” disruption to the road network.
• On 6 September, several British media outlets including Sky News revealed the existence of Operation Yellowhammer, the May government’s planning for a worst-case, no-deal Brexit scenario. That plan includes messaging to reassure financial markets to keep them from collapsing.
The plan also calls for instituting budget austerity, with taxpayers funding emergency measures such as stockpiling pharmaceuticals and other essentials.
Operation Yellowhammer is the work of the Civil Contingencies Secretariat, designed to plan for emergencies and disasters.
• On 23 August, then-Brexit Secretary Dominic Raab sent out 24 technical notes he called “practical and proportionate advice” in case the UK leaves the EU without a deal. Raab’s release of the documents was meant to demonstrate to the British public that adults are in charge, with plans to ameliorate the worst effects of a no-deal Brexit.
Why, “the vast majority” of consumers won’t even notice any impact, Raab said, apparently referring to Brits who don’t fly, eat food, work for a living or make credit card purchases.
“People and businesses should not be alarmed by no-deal planning and preparation, nor read into it any pessimism. Instead, they should be reassured that we are taking a responsible approach, ensuring the UK’s exit can be as smooth as possible in all scenarios.”
• Unfortunately for Raab, the very same day, May’s Chancellor of the Exchequer Phillip Hammond stated in a letter to Tory MP Nicky Morgan, chairwoman of the Common’s Treasury Committee, that a no-deal Brexit will mean a 7.7 percent decrease in the UK’s GDP over the next 15 years.
To put that in perspective, the real GDP contracted by 4.2 percent between late 2007 and mid-2009 during the U.S.’s worst economic downturn since the Great Depression.
From Hammond’s letter:
Under a no deal/WTO scenario chemicals, food and drink, clothing, manufacturing, cars, and retail were estimated to be the sectors most affected negatively in the long-run, with the largest negative impacts felt in the North East and Northern Ireland.
Bottom line: Government borrowing is projected to increase by 80 billion pounds per year by 2033 to cover the budget shortfall in order to simply maintain the status quo.