Keep your tin hats on if your business has any exposure to the Brexit negotiations. We all have skin in this grand political game, be it our own knees and elbows or the backsides of our corporate domains, but none of us wants to come out of it with cuts and grazes.
It is not that I am a pessimist or a member of that shrinking group of hard remainers YouGov discovered is now only 22 per cent of the public; I firmly believe we can benefit immensely from Brexit, even if it means leaving without a deal. Nevertheless, we should prepare for the worst while hoping for the best – which means being ready to deal with worst-case scenarios, whatever they might be, in our line of endeavours.
It is a mistake to swallow the lazy accusations that Theresa May and David Davis are unprepared and making no progress. They have achieved what was required to be done and on time.
First, they had to steady the nerves of the British public and the financial institutions, and that has generally been achieved. After that initial gulp moment following the result, it is pretty much business as usual. Indeed, more sanguine observers have long recognised there are more threatening risks to our economy than Brexit. In that regard, the election of Donald Trump helped bring some perspective to the scale of shocks that can arise at any time.
Second, the new Prime Minister had to establish a settled position inside a heavily divided government and party about what constituted Brexit – and then design a routemap and timeline for achieving it. To her credit, she reasoned that, without regaining full control of taxes, legislation and the judiciary, Brexit would be meaningless, and that to do this meant leaving the grasp of the European Court of Justice, the Single Market and practically all aspects of the Customs Union.
This was also the best position to maximise the global trading opportunities that should more than replace any downside from the risk of not having tariff-free access to the Single Market.
Third, May said she would map out her position and invoke Article 50 of the Lisbon Treaty by the end of March – and this she did, despite legal challenges and parliamentary sniping, so the new timeline of two years before leaving began. It was at that point the EU could begin serious consideration of how to achieve a harmonious separation, and it has done so, publishing its negotiating guidelines and holding a number of bilateral meetings.
That the guidelines contained some outrageous positions (such as mentioning the status of Gibraltar), and that aggressive and insulting details of that Downing Street dinner were leaked, point to how the EU elite is still in grieving mode. Subsequent comments about not allowing the UK to benefit from leaving continues their desire for retribution, no matter how self-harming it will be. Likewise, the confusing and contradictory comments of the new French President, Emmanuel Macron, have added to the sense that everything is going badly.
We are, however, only in the phoney war period. Until Germany decides who its chancellor should be on 24 September, nothing serious shall happen – and even then there could be protracted negotiations to form a coalition government, delaying progress further. The EU needs to know whatever it agrees with the UK will be signed-off by the largest funder of its budget.
Furthermore, it is only the heft of Germany that will ensure other, more cantankerous, nations will pipe down and accept a subsidised agreement. After all, every EU nation has its price, and Germany will be expected to pay it.
The European Project remains dear to many of the continental elites who have little sense of financial or political reality. Even if a deal is struck, there is always the possibility that the European Parliament will make clear it will reject it – or some small region of Belgium might decide it is not in its interests and cast a veto. If that is the case, there is no advantage in hanging around to find out.
The position for the UK is relatively simple and we should not demure from it. The UK is the EU’s largest export market, and if Canada – only the EU’s twelfth largest market – can be given a trade deal without an access fee or requiring free movement of labour, then so can the UK.
If such a deal is not on offer – and we should know by Christmas – then we need to be prepared for an early bath, get suited up and go out to do business in the real world.