Brexit – Another Week in Review…

Well here we are again and you may be forgiven for thinking nothing has changed since I last expressed my opinion.  If that is your first thought let me see if I can change it for you as I think we have built our knowledge and understanding substantially over the last week;

  • The first thing that is blatantly apparent is that Brussels isn’t a very welcoming place and perhaps not the best location for a summer holiday.  All those foreign politicians do appear to be an incredibly unfriendly lot – the way they have treated Theresa The Bruce’s suggestion of a re-negotiation is unforgivable.
  • I have learnt that a negotiation isn’t quite what I thought it was.  It appears rather that once one side has said; “that is the deal, take it or leave it” there doesn’t appear to be any room left for negotiation.
  • I have learnt that even the staunchest ‘Remainer’ can be stoked into a fit of frenzy by the arrogance of European politicians.
  • I have learnt (yet again) that our MP’s appear to live in a world of make believe.  As far as I can see they still think that the EU might actually change their mind on the backstop!

I have learnt that Comrade One is actually susceptible to a bit of tea and cake ‘bribery’ at No.10 after all.  I hope he had a good look around inside as I am fairly confident that it is the only chance he will get!

  • I have learnt that Barclays Bank has an awful lot of money.  Maybe the Russians will send in a plane to take away the rest of it when the rioting starts?
  • I have learnt that onions take only 24hrs to get from fields in The Netherlands (a place in Europe that will soon be known as Holland again) to the end user in the UK.  I think it is quicker from Lincolnshire though?
  • I have learnt that we will soon all be drinking Chilean wine – a nice Malbec will do me just fine!
  • I have learnt that if the food trucks stop we will be without all those 246 different kinds of cheese that Charles de Gaulle was so proud of, however I know we’ll be alright because we can all eat Magnums and Ben and Jerry’s ice cream – lovely!
  • Finally, I have learnt that there is still an inexorable move towards a No Deal on 29th March 2019.  Certainly, any amendments to The Bruce’s bill that suggested otherwise were well and truly rejected by parliament on Tuesday.

That is what I call knowledge, how can we possibly think we are still in the dark!

Realistically though what I feel we learned is that The Bruce continues to show the admirable qualities of her namesake by trying yet again to continue pushing a bill that pretty much everyone believes to be deader than the proverbial parrot.  Either she has an incredible aptitude for blind optimism, is more stubborn than a herd of mules, is just downright stupid or as I alluded to last week, she has a backup plan that she is playing out which involves running down the timescale nearer and nearer to 29th March 2019.  If the latter is true, she is sat pretty, laughing at them all and waiting for her legacy to manifest itself.

‘What could that be?’ I hear all you distraught Brexit Managers cry in a desperate hope to try and define a modicum of certainty in a dessert of shifting sands?  I may be completely wrong, but I am confident that I have seen a definite shift in activity towards preparations for a ‘No Deal’ over the last two weeks, which was only further fuelled by the vote on Tuesday.

A few observations;

  1. More papers are being released by the government and also the EU for what will happen in a no deal scenario,
  2. Our own Brexit team are starting to receive a substantial increase in requests regarding customs clearances,
  3. Our colleagues in Europe finally appear to have accepted that their logic is not necessarily top of our English minds and that our hearts will take us out of Europe,

Business appears to have realised that there are no definitive answers and that is unlikely to change any time soon, as such they must prepare for a ‘No Deal’ scenario,

Even Nigel Farage appeared to demonstrate an uncharacteristic insight, claiming that the apathetical response by El Presidente Tusk, Chief EU Negotiator ‘I say no’ Barnier and MEP Guy Verhofstadt, head of the European Liberals and Democrats, to his claim that “a ‘No Deal’ was the only constructive way forward” suggested that they were complacent to the idea of a ‘No Deal’.  Of course it could just have been that they were just bored of hearing Nigel ‘St George’ Farage speak.

I therefore feel that a pragmatic approach is the ‘Managed No Deal’ scenario.  It would mean that we are out of the EU so the Brexiteers would be generally placated.  Even the Remainers would be muffled as they could no longer demand that we stay in.  Rather they would have to get support for a vote to re-join. That would include all the normal processes of a country joining, so would effectively disappear from being a realistic option, certainly in the short term. Furthermore, I learnt this week, that under WTO rules, a country can maintain their existing trade rules if they are in the process of negotiating more.  An obstacle to this though is the Cross Border Trade Act change to Acquisition VAT, which may make it difficult to move forward from 29th March on existing rules.  If this is the case, there could be an informal agreement to maintain the existing trade deals without custom clearance requirements with the EU until a deal was resolved.  This would allow for an extension for the date of change to customs clearance requirements in order to provide companies more time to prepare but without having to extend or postpone Article 50.  As it is generally accepted that probably 90% of the details of a post-Brexit world have already been agreed by both sides, these could be gradually implemented thus leaving only the thornier issues such as the Northern Ireland border to be dealt with over the coming months years, decades or centuries!  There you go – I have solved it.  Now, who is living in a world of madness?  But in a world where no one can see anything, maybe a glimpse is enough – the phrase goes “In the realm of the blind, the one-eyed man is king”.

Justin

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