Britain should hit pause on the Brexit negotiations and rethink

Iain Anderson
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There is an emerging need for “consensus” over Brexit (Source: Getty)

Like you, I have absolutely no idea what Brexit means now.

It may as well mean breakfast, as so many politicians have accidently dubbed it in the past year. And it is certainly a political dog’s breakfast now.

Business had been diligently getting on with the job of preparing for Brexit – whatever it meant. The safest thing to do was to prepare for a hard Brexit: no Single Market membership, no Customs Union, no freedom of movement. So it seemed.

Multi-millions has already been spent on planning, risk analysis and regulatory engagement. That’s not even to mention the time that has been taken to calm the nerves of international investors and to show that – while the politicians may not have had a plan – business did.

In fact, before this mess of an election result, I spoke to a number of City audiences making clear that business was far better prepared for a hard outcome than the politicians. And I told politicians of all parties just the same. The most prudent thing to do was to prepare for the worst.

As a result of that, we have seen a large number of institutions start to make public their Brexit plans. Quite right too. They had customers and investors and regulators to satisfy. They still do.

In the UK, City firms had also been preparing for a Great Repeal Bill to digest the EU acquis into UK law. Again, a huge amount of time and effort has been put into this effort to ensure as smooth as Brexit as possible for commerce.

But the election result has ripped up the relative certainty of all that planning. On election night itself, my phone lit up with US and Asian investors demanding to know what happens next. I did not know whether to laugh or cry. It is an impossible question to answer.

Inevitably, what we have already seen is the rating agencies start to take a harder nosed approach on the UK’s investment prospects.

No one currently knows the content of a stripped down Queen’s Speech, and so the Brexit positions outlined in the Conservative manifesto are no longer set in stone. Already Brexit Secretary David Davis has indicated the start of the Brexit negotiations will be delayed.

Hurrah. Spot on. There is really no way the government can or should begin to negotiate. Whether you are a convinced Leaver or an utter Remainiac, the UK government – such as we have one right now – is totally unable to press ahead.

It is my judgement that there is simply no majority for a hard Brexit in the House of Commons anymore, and this really does not need to be tested by any bloody-minded attempt towards ramming it through a Queen’s Speech. I’m convinced it would fail, and I am therefore convinced the government would also then fail, and the prospect of Jeremy Corbyn as Prime Minister would edge closer.

It is, however, likely there will be a majority for an “open Brexit” of the kind promoted by a number of Tories, as well as the noises off from the DUP, who don’t want a hard Irish border and actually would like to stay in the Customs Union with the EU too.

There is a clearly emerging need for “consensus” over Brexit, and that is going to take time – time for everyone to reflect. I am attracted by the idea of a cross-party discussion but it must include business too.

The election result was a disaster for Britain just before we start our most important international negotiation in generations. But we need to take some deep breaths and hit the pause button. Now is the time to take stock and not charge ahead with a Brexit approach that is likely to hit the buffers. That would be the biggest disaster of all.

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.

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