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brexit-means-bailouts

It’s been a while since the referendum.  Exactly how long I really can’t be bothered to calculate now.  Seems like centuries, but maybe that’s just an indication of how far back you’d need to go to understand some of the arcane behaviour we’ve witnessed since the people ‘spoke’.

However long it is, we still don’t seem to have any idea what Brexit will mean.  I don’t even know if you should capitalise the word brexit.  I guess that’s something that we’ll have to add to the list of imponderables. Until we decide, and in line with the referendum vote itself, I will alternate capitalisation roughly 50/50 in the rest of this article.

In the intervening decades since Theresa May’s coronation, we’ve seen precious little of her plan to extricate us from the EU.  We’ve mostly had sound bites and one-liners to chew on, as well as the repeated declaration that she won’t give a running commentary on our strategy.  Whilst proclaiming that she will honour the will of the people, she’s effectively treating us like children who should shut up and watch the cartoons whilst their parents fight over the divorce settlement.

May’s objections to holding a parliamentary debate on any aspect of her self appointed role as Brexiter-in-chief already shows a disregard for the democracy we were all supposed to have been so fond of a few months back. But revelations about her former stance on leaving the EU, leaked in a speech to Goldman Sachs, as well as her flip-flopping on the third runway at Heathrow, show a truly breath-taking depth of careerist political vacuity that would make even Donald J’s hair stand on end, if it wasn’t there already.  It certainly makes more sense of her appointment of fellow double-thinker Boris Johnson to the cabinet.  I imagine their private conversations run along the lines of a Chuckle Brothers routine as they bounce contradictory positions between each other. To me, to you, to me, to you.

One could, of course, argue that she’s a good parliamentarian as she eschews her own beliefs and ideals for the greater good.  Or you could take the view that she’ll say and do anything to stay in the job she’s longed for for her whole political career, whatever it costs. 

If it’s the latter, we’re all probably in deep shit.

May’s nickname is apparently ‘The Submarine’, referring to her habit of disappearing during difficult times only to pop up when the storms have passed.  Since becoming PM she seems to have been more like a seaside pedalo – enjoying the ride from above, with the paddles furiously thrashing around below, creating plenty of foam with little traction.  And like one of those notoriously difficult to control craft, her course is equally as capricious.

It’s clear that there’s no overall strategy for negotiating brexit.  How could there be?  She’s been handed an impossible task.  One that no one ever envisaged having to achieve.  Certainly not one that anybody ever planned for.  If the Brexiteers fervour for whatever it is they’re fervent about this week is to be assuaged, she must deliver a deal that’s akin to quantum entanglement, which is about as likely as Joey Essex giving a lecture on the concept.

As the pound continues its vertiginous course, the fantasy that the UK can thrive outside the EU has already evaporated.  Yet May has to keep the dream alive in order to stay in power, or at least keep the balls in the air until the next election.  This seems to require superhuman feats of contradiction and confabulation, even by the standards of modern politics, making speeches and answering questions that essentially clarify nothing.  A psychologist has now even defined her behaviour as a syndrome, although I prefer Private Eye’s dubbing of her as Theresa Maybe.

Amidst all these smoke and mirrors the real business of doing business goes on, and in general, businesses are less likely to be consumers of the snake oil being sold by May and her cabinet.

So last week we saw Greg Clark trying out his hypno-vison on Nissan’s Carlos Ghosn, followed by reassurances on the continued employment of all those worried Mackems currently hobbling around after taking aim at their own feet on June 23rd.

Initially we were given the characteristic pat on the head and told not to worry ourselves about the details.  Clark had achieved a great outcome with Nissan without apparently offering them anything other than a firm handshake and a glint in his eye.  We should simply applaud his great work and get on with watching Gogglebox.  When the content of the ‘letter of comfort’ given to Nissan was eventually leaked, we saw yet more carefully crafted nonsense worthy of a scene from Yes Minister.

Wreathed in ambiguity, the letter promised nothing other than the government’s intention to get the best deal it could, which would hopefully not inconvenience anyone too much.  I wouldn’t be surprised if it was signed by Clark with a couple of kisses and a winky emoji.

On this basis we’re expected to believe that Nissan are perfectly prepared to sink billions into the UK.  That they would do this without even a hint of a nice fat bung from the government or any sort of financial guarantee that would offset their likely losses should their muddled approach to Brexit spectacularly unravel.  In exactly the way that no businessman in Ghosn’s position would ever do, he is betting his company and his career on a politician’s promise.

Pull the other one Greg.  It plays The Ode to Joy.

We don’t need to know the real content of discussions with Nissan to know that whatever solution is being aimed at, be it a customs union, tariff agreements, or the implausibility of staying within the single market, the backstop is that they have been promised compensation, if not inducements, to stay put.  Anything that will head off the stampede of business decamps that would be sparked by Nissan’s departure.  As with most things post-Brexit, we’re back to the good old days of tax breaks and subsidies to keep our industries afloat.

Already that penny (or several trillion of them) has dropped with other companies who are also seeking similar ‘reassurances’ from kind uncle Greg.  The pharmaceutical sector has reportedly asked for a sweetheart deal that will see a £1bn post-Brexit shortfall in investment plugged, something which frankly defies belief considering revelations about their profiteering from the NHS only a few days ago.

Similarly, other car manufacturers are making noises about leaving, particularly General Motors and Ford, both quite reasonably expecting a deal that will keep them competitive with Nissan.

The aerospace industry, much of which is heavily dependent on ties with the EU, not least the Pan-European Airbus, are also now expecting some positive overtures from Mr Clark.

However, the sector that hasn’t been shouting quite so loudly is the financial quarter.  Perhaps after the mess from the last bout of ‘unpleasantness’ that they were involved with was so quickly mopped up by government, they are confident that they don’t need to subject themselves to the indignity of discussions with Westminster.  As a more agile and vapid industry they’re easily able to dodge the bullets when they start flying.

Considering the nature of bankers, they can’t have missed the fact that this is another golden opportunity for them to leverage yet more promiscuity and permissiveness out of government, if not to slip a few more billion into their back pockets.

Indeed there were reports a few years ago about the City seeking reassurances from Brussels that whatever happened in the event of a Leave vote in any referendum, they would be protected from the fallout.  They were told in no uncertain terms that they would receive no such undertakings.

But considering the City is by far our most successful sector, they may be in the best position to take advantage of what appears to be a government running scared of any signs of retrenchment in the face of ambiguity over Brexit.

Financial institutions are recognised by many now as the de facto rulers of our society and they may be about to get even more powerful as a result of the referendum.  The truly troubling thing is the tentacular nature of these organisations, We’ll probably never know what sort of deal is struck with them behind closed doors or the impact it will have on our lives.

We’ve not even started negotiations with Brussels yet, but it seems deals will need to be made that will have nothing to do with taking back control, or making Britain great again.  It will have more in common with the ‘smoke filled rooms’ of yesteryear, although now I guess they’ll be vape-filled rooms.  There’s one advance I suppose.

Before we can agree trade deals with other countries it seems we’ll have to agree them with companies already trading on our own hallowed shores.  And that could cost even more than whatever disputed figure we pay to the EU now.

Whatever Brexit means for the rest of us or for the rest of Europe, as far as the industries and companies that the UK economy relies on, it means one thing above all others – Brexit means bailouts.

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