(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 gone nowhere in three years as Prime Minister Theresa May’s government discovered what those Remoaners suspected – divorces are bitter to the end. After three years, Brexit remains at Square One.
So we have a running update of Brexit developments:
• After three years of nothing much happening, everyone not named Boris, Nigel or Jeremy has has pretty much figured out the 2016 Withdrawal Referendum was goof of historic proportions. Then, everyone not named Boris, Nigel or Jeremy realized a no-deal Brexit will be a catastrophe. Now, everyone not named Boris, Nigel or Jeremy is figuring out making Boris Johnson prime minister would be a goof of historic proportions. Johnson is getting lampooned for his transparent lie about kippers, of all things, even by the Telegraph, were he’s still a contributor, paid something on the order of 275,000 pounds sterling per year. And then there was that whole ugly row with his young girlfriend.
The trouble is, the United Kingdom looks completely idiotic if it backs off Brexit, and the Conservative Party looks completely idiotic if it bails on Johnson. Which means there’s probably nothing that can stop the UK from making the biggest mistakes in its illustrious history.
• Who’ll suffer the folly of Brexit for decades to come? Young Brits, of course. The Wall Street Journal, which is a conservative Murdoch outlet, has a post about the widening gap between generations, with young Brits generally opposing Brexit because it limits their career options.
Their parents’ attitude is basically, “You’ll be fine. We’ll get you a nice job at the Sainsbury in Swindon.”
Sam Mejias, a research fellow at the London School of Economics, conducted a 2017 study for lawmakers. Mejias found younger people resented what they saw as “a decision made by an entitled older generation (who) grew up when college was free and housing was affordable,” according to the WSJ post.
“The thing I was most likely to hear in almost every single focus group was something along the lines of, ‘No offense to the older generation, but they are going to be dead soon.’ ”
• The Conservative Party is preparing to choose between Boris Johnson and Jeremy Hunt to replace Theresa May as prime minister and both have implied they’ll restart Brexit talks with Brussels. But EU officials are having none of it. So nothing has changed three years after the original Brexit referendum.
BBC Panorama has conducted exhaustive interviews with many of the top officials on both sides and the depiction of chaos they’ve assembled is amazing. For one, May’s government never actually had a plan. Nothing.
The EU, by comparison, entered the Brexit negotiations with one goal – to punish the UK and make sure EU countries with populist governments didn’t try to follow Britain out of the union.
In a long summary, BBC Panorama documents all the missteps including May’s unwillingness to be honest with herself about her ability to win over parliament; the unsolvable issue of walling off Northern Ireland from the Irish Republic and violating the Good Friday Agreement and the inability of the May government to appreciate how EU officials idealize the European Union as the mechanism to prevent another European war.
• The original pitch for Brexit way back in 2016 was that it would be an instant return to greatness. Freed from the tyrannical shackles of the European Union, the United Kingdom’s economy would soar like an eagle into new markets, prosperity would rise and taxes would fall. That was then.
Now, one of the two candidates for Tory leadership, Jeremy Hunt, admits that a no-deal Brexit would basically crush Britain’s small businesses with tariffs, but it will be well worth their sacrifices.
On 30 June, the BBC’s Andrew Marr asked Hunt – who constantly reminds everyone he is an entrepreneur – if he is really prepared to look business owners and employees in the eye and say, ” ‘ you’ve got to lose your job because I’m going for no-deal?’ ”
“I would do so, but I would do it with a heavy heart,” Hunt replied.
An incredulous Marr responds, “Really?! How would you feel if your company was in that position, you’d built up your company and a politician came along and said, ‘Sorry, I’m going to destroy your company for ideological reasons …?’ ”
Marr gives a verbal shrug, basically saying the people have spoken, sorry about your luck. One of them most amazing – and depressing – revelations of the past three years of this never-ending disaster.
• Britain, like the United States, clings to magical thinking. In the case of the United Kingdom, the two Tories running for the top executive job both claim they – and only they – can negotiate a better deal with European Union officials. Who’ve said repeatedly there’s nothing to negotiate … the deal they offered Theresa May – and that got voted down twice by huge margins – is the only deal on the table, or that will ever be on the table.
But to show voters they’re nobody’s fools, both Boris Johnson and Jeremy Hunt vow to take the UK out of the EU deal or no deal. The tough bargaining of shrewd politicians. Which would be laughable if there were a counterweight to their madness in, say, the Labor Party.
Alas, there is not as Trotskyite Labor leader Jeremy Corbyn also wants to leave that running-dog capitalist trade union.
• Seeking to be “great again,” one of the world’s most advanced democracies elects to the highest executive office a man with abysmal history of erratic behavior including narcissism, serial philandering, mistreating women and chronic lying pretty much about everything. Though those who know him best warn he is unfit to be elected dog catcher, everyone is entranced by The Show … the loopy rhetoric, the flashy lifestyle and above all, the hair.
The parallels between Donald Trump and Boris Johnson are uncanny. And as with Trump, whose own ghost writer of his best-seller “The Art of the Deal” exposed him as a fraud, people are coming out of the woodwork to warn Tory voters about Boris.
Max Hastings, Johnson’s former editor at The Telegraph (where Johnson is still paid 275,000 pounds per year, or about 2,291 pounds per hour, for his words of wisdom) has written a long post about Johnson’s many failings.
Though they are too numerous for this forum, they include lack of capacity for abstract thought, much less character; bullying and, well, unrelenting lying.
Hastings quotes one Bishop Berkeley as to why Prime Minister Boris Johnson would never rise above his worst instincts: “It is impossible that a man who is false to his friends and neighbours should be true to the public.”
He concludes by writing, “For many of us, his elevation will signal Britain’s abandonment of any claim to be a serious country.”
• The Tory leadership battle to replace Theresa May is down to the final two – Boris Johnson and Jeremy Hunt. it’s a safe bet Johnson will be the next prime minister of the United Kingdom. Which is a sobering thought.
The New Yorker has a less-than-flattering profile of Johnson, who made his bones as mayor of London. “The Empty Promise of Boris Johnson” revisits all his most clownish and boorish moments from his time as a fake-news generator for The Telegraph, taking revenge on Brussels – which he hated from his youth – to his self-described “royal goatfuck” of an announcement endorsing Brexit in 2016.
The comedic episodes do not lessen the impact of Johnson joining Trump and Putin to form an Anti-Europe Triumvirate, dedicated to destroying the EU.
• If your friends think you’re delusional, imagine how happy Brexit must make Putin?
Dutch Prime Minister Mark Rutte, who describes himself as an anglophile, told his English friends that Brexit in any form, but especially a no-deal Brexit, will leave the United Kingdom “diminished.”
It is unavoidable. Because you are not any longer part of the European Union and you are not big enough to have an important position, important enough on the world stage, on your own.
Ouch. Tell us what you really think, prime minister.
Putin’s foreign policy is focused on undermining institutions from the United States to Ukraine in hopes of weakening liberal democracies. He must be thanking his lucky stars every day for Boris Johnson and Nigel Farage.
• File this under, “See you; wouldn’t want to be you.”
That’s the message British Tories are sending to their “allies” in Northern Ireland and Scotland. A majority of Tory leaders said they’d be fine with jettisoning Scotland and Northern Ireland if it meant they could realize their dream of leaving the European Union.
• The process to stop a no-deal Brexit likely died on 12 June after a Labour-led motion to set up a future vote went down by 11 votes. As that was going on, frontrunner Boris Johnson stated the United Kingdom must leave the European Union no later than 31 October while at the same time saying he doesn’t necessarily want to see a no-deal Brexit.
When it comes to Brexit, the next PM will have limited options simply because EU officials have said (time and time again) negotiations are done.
• If Brexit is about anything, it’s about nostalgia for that great Great Britain and United Kingdom that ruled the world. And we’re nostalgic, too.
Remember those halcyon days when London was the world capital of capital? Boy, it seems like only yesterday, doesn’t it?
Wait, it was only yesterday. Today, the financial world has moved on.
New York City has replaced London as the world’s financial center, according to a survey by New York-based consultancy/security firm Duff & Phelps. More than half those queried named New York as the global financial capital, and only 36 named London.
“Last year, Brexit cast a shadow of uncertainty over the United Kingdom’s economy. It has now escalated to a full-blown crisis,” the report states.
• Brexit was sold as a simple withdrawal from the European Union. In reality, Brexit has proven to be a riddle wrapped inside a mystery inside an enigma. We weren’t the only people who went crosseyed reading the complexity of the agreement, then trying to understand the sequence of parliamentary maneuvers, motions and votes in the House of Commons. And you know what? The situation isn’t getting any clearer.
Now that Tory candidates are lining up to replace the departing Theresa May, the party is divided between pro-no deal factions and a faction that vows to never allow a hard Brexit.
No-deal candidates for prime minister include Boris Johnson and Dominic Raab, the man who negotiated the terms of leaving, then declared it a bad deal.
Those opposing leaving the EU without a deal include Phillip Hammond, Chancellor of the Exchequer and Michael Gove.
But what if there’s a general election before 31 October? Could Brexit Party (and UKIP) founder Nigel Farage end up as PM?
• Next ….
Theresa May didn’t support Brexit but took up the crusade after the June 2016 vote to take the United Kingdom out of the European Union to further her political career. Now, she has no political career as she steps down as Tory leader on 7 June.
May will go into the history books with Neville Chamberlain and John Major as among the most ineffectual British prime ministers. In May’s case, she proved unsuited to the task of bridging the gap between no-deal aristocrats and rural and elderly Brexiteers, and the young and ethnic pro-European Union urban Remainers.
So, who is?
• Speaking of who’s up next to be PM, we don’t think it’s too early to start hating on Boris Johnson even if he never makes it to the top job. We remember Boris as the eccentric mop-top mayor of London who rode around on his bicycle between his public appearances, which always included a little something for the haters.
Like that time he said the Queen loves visiting Commonwealth countries because they supply her with “regular crowds of flag-waving picaninnies.”
Or that time he flattened the little Japanese boy in a “friendly” game of rugby.
Or that time he said “F*ck business” when confronted with the reality that global business leaders are abandoning the UK before Brexit so they can keep doing business with the European Union.
• 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.
• 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.
• 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?”
• 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?
• 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.
• 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. Don’t be silly.
• 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.
• 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.
• 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 Northern 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?
• 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.
•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.
• 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 moved 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.