Will The Brexit Ship Ever Leave The Port?

Will The Brexit Ship Ever Leave Port

There hasn't been much Brexit news or polling over the last couple of days and it remains something that nobody I meet in real life brings up as a subject of conversation.  But I think the obstacles in the way of a smooth transition out of the EU have risen somewhat.  The official process still hasn't started and isn't due to start for another 5 months.  We are in a sort of phoney war.  But the dispositions are being taken up, and the Nissan story is the most illuminating.


Nissan had some investment in the UK planned.  This had to be hastily reconsidered in the light of the surprise Brexit result.  Nissan were obviously concerned about the risk of facing tariffs on the 80% of their cars that are exported to the EU.  So they talked to the government, received assurances and went ahead with the investment.

The obvious question is what sort of assurances they got.  In particular, how many zeros in any numbers.  Both the government and the company are keeping quiet about it.  But it looks like any company with big exports now has a handy stick to beat the government with if it is after anything.  The UK is not a poor country and it has a big jar of sweets to hand out if necessary - but it doesn't have unlimited resources.

I don't blame the government for wanting to keep this kind of thing as discrete as possible. But inevitably the EU side of any negotiation will be well aware of the situation and can use it to their advantage. Apart from Germany and possibly the Scandinavian countries, every country in Europe wants a car plant or some other juicy bit of foreign investment.  Nissan is probably no longer in play but the EU can make the cost of keeping Nissan in the UK pretty high, which in turn would mean fewer resources to sweeten other deals.

Balancing the desires of the voters with the demands of the EU was always going to be difficult.  Paying off footloose businesses - many of which will have operations in the seats of MPs - makes an already difficult project way more complicated.

I thought on day one of Brexit that we would have been better off triggering Article 50 straight away.  I know we didn't have a coherent position and were totally unprepared for it - but so were our current partners and future competitors.  And we had the advantage of not having to keep 27 different countries on board.  Surprise was on our side if nothing else was.  As it is, if the talks develop into a long war of attrition then every advantage is on the side with the most resources.

The other factor that is working against us, and this one has I think surprised everyone, is the fall in the value of the pound.  That it would fall as a result of Brexit was widely predicted and was rather obvious.  The speed and depth of the fall doesn't seem to have been predicted by anyone.   This is already working through into price rises in the UK.  Apple computers and Marmite are hitting the headlines but it will soon be pretty general.  This is something that everyone is going to notice.  A falling pound creates winners and losers.  The losers are the ones who make the noise.  The biggest losers from inflation are always people on fixed incomes, which is a category a lot of older vote-happy Brexiters fall into.  Leaving the poetic justice aside, this is inevitably going to dampen enthusiasm for Brexit from its strongest supporters.

So although not much has happened on the surface, all the currents below are pulling to keep the Brexit ship in port.  I am beginning to wonder if it will ever be possible for it to sail.