Thursday 19 January 2017 by Opinion

Brexit – Deal or No Deal

The UK Prime Minister Theresa May made her much awaited speech on Brexit.  While it was well delivered and balanced, there were still many questions left unanswered

British Deal or no Deal

On Tuesday 17 January 2017, UK Prime Minister Theresa May laid out her plans for a global Britain by outlining a 12 point plan on the future relationship it will have with the European Union (EU).  It was certainly by design and not coincidence that May gave the speech at Lancaster House, the same location that in 1988 Baroness Margaret Thatcher spoke about Britain’s plan to enter the European single market. As Darth Vader said, “The circle is now complete”.

The speech had already been widely leaked, and as expected May stuck to her hard lined “Brexit means Brexit” rhetoric.  May commented:

“That is why we seek a new and equal partnership […] not partial membership of the European Union, associate membership of the European Union, or anything that leaves us half in, half out. We do not seek to adopt a model already enjoyed by other countries. We do not seek to hold on to bits of membership as we leave.”

For those left in any doubt, May – channelling Thatcher – added, “No, the United Kingdom is leaving the European Union.  And my job is to get the right deal for Britain as we do.”  It was a convincing speech and few in the room would have doubted her resolve; the lady is not for turning.

However, there was a softer undertone in May’s iron fist approach, to which she commented: “We are leaving the European Union, but we are not leaving Europe.”

Further, May discussed a couple of points that will give her government some wiggle room if it is needed.  Pre-empting the outcome of the Supreme Court ruling, May said, “I can confirm today that the Government will put the final deal that is agreed between the UK and the EU to a vote in both Houses of Parliament, before it comes into force.”  In addition, May added, “I am equally clear that no deal for Britain is better than a bad deal for Britain.”

So where does that leave Britain (no pun intended)?

To be perfectly honest, it is not any clearer. May continues to talk tough while details remain thin on the ground.  May wants “a new, positive and constructive partnership between Britain and the European Union” but acknowledges “there are some voices calling for a punitive deal that punishes Britain and discourages other countries from taking the same path.”

We are all hopeful that the negotiations are conducted in good faith, with give and take and “imagination on both sides.” Although “there will have to be compromises”, everyone is wishing for a positive outcome.  In reality, the two sides remain poles apart and, in my opinion, it will be difficult to find common ground.

In the Q&A session that followed, May dexterously dodged the question – not once but twice – about what would happen if parliament voted down the final deal. We have a long and winding road to follow before we get there.  Indeed conspicuous by its absence was any comment or clarity as to when Article 50 will even be triggered.

In summary, it appears that there will be more uncertainty and more volatility for financial markets.  Furthermore, I still hold my non consensus view that Britain, in the end, does not leave the EU.