David Davis: Secretary of State for Brexit!
Theresa May has moved rapidly to appoint her Cabinet, with big jobs for Brexiteers. David Davis as Secretary of State at the new Brexit department. Boris as Foreign Secretary. Liam Fox at International Trade.
These are positive moves, hailed by Nigel Farage as “inspired choices”. I have to say that with this news, Brexit seems even more real and tangible than it did in the euphoric aftermath of the Referendum on June 23rd/24th. I can almost taste it. Liberation calls.
It’s wonderful to see David Davis back in harness – and in a key role. He’s big enough and tough enough to front up to the EU institutions and to get the deal Britain needs.
Of course not all the papers welcomed the appointments. The Mirror headlines “Boris Johnson – Sorry World!”, showing the famous zipwire photo and fearing that Britain could be made a laughing stock. Tim Farron (“Who’s he?” I hear you ask. He’s described as Leader of the Lib Dems) has Tweeted “Johnson will spend his time apologising to nations he’s offended”.
Angela Eagle’s response to the news of Boris Johnson’s appointment is well worth 30 seconds with the video clip.
Owen Smith (again “Who’s he?” – and this time I’m not sure), who is said to be challenging for the Labour Leadership has said that his policy platform will include a call for a second referendum, arguing that many citizens who voted Leave are concerned at recent negative economic reports, and would like to change their minds. He has a point: the legacy of Project Fear has certainly spooked the markets, and any leave voter who expected sunlit uplands on June 24th was over-optimistic.
We always said there would be volatility around the referendum. It’s vital now to steady the ship, and I believe that Johnson and Davis are the men to do it. And despite my reservations about Theresa May, she deserves credit for those appointments. Allister Heath has a thoughtful piece in the Telegraph welcoming the new Prime Minister’s commitment to Brexit – and the challenges she will face.
And how did Obama react? “Not at all”, seems to be the answer. Theresa May has received calls from a number of world leaders congratulating her on her appointment, but the Express reports she has been “snubbed” by Obama, who has failed to call her. Oh well. Maybe he had other things on his mind. Like the US Presidential election.
Signs of a slowdown?
The Telegraph Business News leads with “Signs of a slowdown hit UK economy in the wake of the Brexit vote” – although much of the report is based on forecasts rather than data (another reflection of Project Fear). Unusually, the Times is rather less negative, speaking of a new interest rate stimulus.
But it also reports criticism of the Bank of England and Mark Carney from the economists at the Institute of Economic Affairs, who say that Carney should not have suggested a rate cut in the immediate aftermath of the Brexit vote, because doing so merely reinforced concerns created by Project Fear, and played into a narrative of negative economic consequences. They argue that he should have waited several months to see the real effects of Brexit before reacting.
Meantime the FT reports that the banking industry has criticised J.P. Morgan and its boss Jamie Dimon for the bank’s “deeply unhelpful comments” in the wake of Brexit. It has suggested it might move thousands of jobs out of London.
In any case, we can expect Theresa May’s bold appointments to calm the markets – as her own early coronation also did.
EU Council President Donald Tusk ‘Britain must be punished’
Bend over. It’s six of the best from the President of the EU Council, Donald Tusk. He’s returned to fighting talk about “punishing” the UK for Brexit – to make sure no other EU member-states have the temerity to follow suit.
At least he’s being honest. The idea that the UK could leave, prosper and set an example to others has always haunted the Brussels apparatchiks. But his attitude reflects the view of a career politician with little understanding of business and industry. Given the trade imbalance between the UK and EU, Brussels can only punish the UK by accepting even greater damage itself, which it can little afford in the parlous state of the eurozone economy.
As I have said before, the last thing Angela Merkel wants to see is thousands of unemployed German auto workers in Munich and Stuttgart – especially with an election looming. And while Brussels apparatchiks like Tusk seek to salve their bruised egos, wiser heads like Angela Merkel and the head of the German CBI Markus Kerber are being more realistic and speaking of “mutual benefits”.
Strangely ITV is reporting much more constructive comments from Tusk , saying that the UK and EU will remain “the closest of allies” following their “divorce”. Maybe Tusk has a touch of schizophrenia. Or maybe you can’t believe all you read in the papers.
Merkel and the EU Army
Again and again we’re told that the threat of an EU Army was one of the “lies” of the Leave Campaign. Yet here it is again, and Merkel is pressing on with it. Maybe it’s for use against member-states that have the temerity to apply for Article 50.
French fishermen fear for Brexit
The Telegraph reports that French fishermen are concerned at the possible damage to their industry if their access to British waters is restricted after Brexit. They are right to be concerned. It will be little consolation for them, but they may want to reflect on the benefit they have enjoyed as they have been allowed to plunder a British resource for 43 years.
But the report illustrates the pusillanimous attitude of many in our UK media (and people in authority who should know better) when we read that “British fishermen have been warned of the difficulty of negotiating new arrangements”, while The National Federation of Fishermen’s Organisations has said: “We can certainly seek to renegotiate quota shares, as well as access arrangements, but it is realistic to expect that there will be a price”. Whose quotas, for heaven’s sake? They think we have to buy the rights to our own fish?
Hang on a minute, guys. For a newly-liberated UK, these are our waters under international law. They are our fishery resources. As an independent country, we won’t need to negotiate anything. Our starting point is that the fish are ours, and we decide how they will be exploited (and sustained). We may of course choose to offer access to other nations, either long-term or perhaps on a tapered basis. Then indeed there would be a price – paid by French & Spanish fishermen to the UK.
‘Please don’t be nasty to Spain and Portugal’
In 2015 both Spain and Portugal exceeded the EU’s 3% deficit limit, and could be liable for fines as high as 0.2% of GDP. But France’s Finance Minister Michel Sapin has appealed to Brussels not to “punish for the sake of punishing”, arguing that the fines would further damage the countries concerned, and do no one any favours.
This situation shows the absurdity of the EU’s construct for monetary union. First of all we have euro-zone rules which the countries find they can’t achieve. And why can’t they achieve them? Why because of the eurozone itself! Then we have a system of penalties which is counterproductive.
If they can’t find revenues to cover 97% of their expenditure commitments, how will they pay the fine? Then we note that the fines are discretionary. It is not a rule-based system founded in the rule of law. It is a system of arbitrary patronage, like some Mediæval Satrapy, where sucking up to the Sultan is the only hope of leniency.
And finally there is the ultimate ignominy of once great nations going cap-in-hand to plead for mercy in Brussels, and of democratically elected governments not allowed to manage their economies. Thank heaven we voted for Brexit.
Airbus joins Siemens: backing Britain after Brexit
In yesterday’s Debrief I noted that having spoken out against Brexit before the Referendum, Siemens has done a quick U-Turn and confirmed that it will remain, and invest, in the UK. Just too late for yesterday’s Debrief came the news that Airbus has made a similar announcement. Fabrice Regier the CEO says “We don’t expect it will affect our operations here where we have 15,000 employees”.
Farage confirms membership surge
Nigel Farage has confirmed that “significant numbers” of disaffected Tory supporters have left their party to join UKIP in the wake of the Conservative Leadership elections. I suppose the Boris/David appointments weren’t merely a sop to eurosceptic Tories?
Perish the thought.