June 26, 2016
In the doom and gloom scenario of my previous post, Great Britain: 2035 Post Brexit, I really didn’t imagine that most of my worst fears would come true on the same day! Though with hindsight, it all made perfect sense. When I posted a link to my facebook profile on the evening of the 24th, one friend suggested that I alter the title to 20:35.
Between the election on Thursday and now we have learned a number of things:
Scotland wants to be in Europe more than it wants to be in the UK.
Northern Ireland wants to be in Europe more than it wants to be in the UK.
Many of the scary economic predictions that millions seemed to believe could not happen, launched in spectacular style within minutes (sterling devaluing, the Bank of England having to launch a huge amount of capital to prop the currency up, FTSE dropping, Moody’s downgrading the UK’s credit rating to Negative).
Several of the Leave campaign’s core promises were admitted to be impossible or unlikely.
Some parts of England began demanding that their EU funding continues even though they voted to leave.
Many Leave voters admitting (on TV!) that they voted out because they “didn’t think it would happen” suggesting that a subject as complex as this is not one for the general public to decide.
The Worst Job In The World?
Today’s contention is that David Cameron has delivered a checkmate, putting the entire Conservative Party onto the horns of an almighty dilemma and making the UK leaving the EU much less likely.
Firstly, much of the thinking pre-vote was working on the presumption that if the Leave campaign won, Cameron would submit Article 50 to the Union the following day. This meant that the messy job of being the man to break up the United Kingdom would be his.
Secondly, the result of a referendum is not binding on Parliament. The government does not have to follow it’s outcome.
By postponing that decision, during his resignation speech, and leaving the task to his successor, he has bought the UK more time. However, he is also forcing the coming election debate over the party leadership to be whether or not to actually submit Article 50.
Let’s face it, politicians are an egotistical breed. They all dream about being President or Prime Minister one day, even though they recognise the slim odds of that happening.
However, few of them, when growing up were thinking, “One day, I’ll be Prime Minister and I’ll be responsible for breaking up the United Kingdom into parts, pulling out of Europe and spending years in difficult negotiations from which no outcome will be good enough to make the electorate happy, leaving me with a legacy of national hatred and disappointment“.
I have long believed that we humans are not good at looking far into the future and understanding the scale of what might come next. As Prime Minister, Mr Cameron must have a pretty good idea of the huge range of problems that pulling out of the EU will cause. It impacts, basically, everything. He must have thought long ago, “I don’t want to have to do all that!”
Now, the Conservative Party leadership candidates will need to stand for election on a platform of in or out.
The look on Boris’ face when he spoke the next day, told it’s own story. He knew that if he does not run for the leadership (he has said in the past that “I’m no Outer”) his career is finished. If he does run, but without wishing to submit Article 50 he is also finished. If he runs and wins and submits Article 50, then he is almost solely responsible breaking up the Union, financial upheaval, job losses and much more. None of those options will be appealing to him.
Most of the politicians of all three main parties want to remain in the EU. This means that there will be a very small potential group of people willing and able to carry the UK out – and they will need to be elected by their peers, who will not want to elect them. Brexit as a subject could end permanently at this point if the elected candidate does not wish to submit Article 50. If their party does manage to elect them, they will then almost certainly need to convince Parliament, which will not be easy to do.
A Possible Outcome?
By falling on his sword Cameron has skewered the Leave campaign. This puts the responsibility on them to admit publicly that their aims are not really possible and that exiting the Union can only come at a massive cost that very few people are willing to bear. He has said many times that they were campaigning on lies and half-truths. Now when it comes to implementing the vote, Johnson / Farage / Gove will have little choice but to admit the same themselves. Even just fading into the background won’t be possible – not following through is it’s own admission of guilt.
It also puts the UK in / out debate to rest for decades to come. Whenever there is any sort of complaint about being in the EU, everyone will know that the pain of leaving is more than the country can handle. There will be much less philosophical back and forth because the potential for destruction has already been visible.
By postponing the submission – or not – of Article 50 until after a leadership election campaign (it is very possible that both Conservative and Labour will be underway simultaneously), Cameron is building in three months of uncertainty, market volatility and turmoil, fractious debate and pain, enabling the UK to really understand some of the real world ramifications of the decision.
This will all be blamed on Johnson, Gove and Farage. You wanted it, you got it! Now do you still really want it…?Author : financialguy