If Theresa May’s deal scrapes through it’ll be because of the money
PUBLISHED: 16:38 22 November 2018 | UPDATED: 07:07 23 November 2018
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The answer to most difficult questions is the same: money.
And suddenly it appears the markets have woken up to Brexit.
Yes the pound tanked after the referendum and has not recovered to pre-vote levels. But many economists believe the pound’s revaluing was actually a truer representation of its worth.
However, with the chance of a no-deal Brexit growing there are jitters in the City.
The vast majority of businesses in the UK wanted the country to remain in the EU. Arguments about laws, immigration and sovereignty did not concern boardrooms as much as the potential for Brexit to dent their bottomline.
They worried about how to attract the most talented staff. There was huge concern about trade and whether new tariffs would be applied. But perhaps the biggest fear of all was the uncertainty the whole process might throw up.
As it stands, with the talks going down to the wire, none of their fears have yet been answered. And that is why many bosses now, even though they would prefer to stay in the EU, are backing Theresa May’s deal.
They want clarity. They desperately need it. How can any long-term plans be made by business when the prime minister isn’t even sure what the terms of a deal will be come 11pm on March 29 next year. Or even – terrifyingly for CEOs up and down the land – if there will be a deal at all.
The Treasury – as mentioned by Philip Hammond during his optimistic Budget last month – believe there will be a Brexit bounce once a deal is signed. It might be wishful thinking but the chancellor thinks once businesses have coherence they will release the purse strings, start hiring and pump billions into the economy. On paper that does appear to make some sense.
Only a week ago Mrs May’s deal was dead on arrival. But in the intervening days it appears there is a faint pulse.
The prime minister will be cheered by the support of some Eurosceptics like Tory grandee Ken Clarke. And the media offensive by Mrs May and those loyal to her appears to be having some cut through. The message is simple: back the agreement or risk no-deal or even no Brexit.
There is a growing belief that even if the deal doesn’t survive the Commons the first time around the market reaction might force a second vote which is successful. This prediction has been dubbed TARP after the Troubled Asset Relief Program in the US. That plan was for the US government to purchase toxic assets in a bid to prop up the financial sector amid the subprime mortgage crisis.
But initially the House of Representatives voted against the plan. And the Dow Jones tanked. Just days later a slightly tweaked version returned and hey presto TARP was passed. Don’t be shocked if the same or similar happens to Mrs May’s Brexit deal.
It is impossible to know what the electorate here in the East think of Brexit now. In the referendum there was overwhelming support to leave the EU. But does that equate to supporting a hard Brexit?
It seems unlikely that a majority would have voted for that uncertainty and upheaval.
There have been polls recently that have suggested minds have been changed across the country on whether we should stay in the EU. Personally I am dubious there has been a significant shift towards Remain in the region.
The underlying belief of the majority of Leavers I meet is the process has been badly handled at times but they stand by their decision that the UK should quit Europe.
My prediction – based on little more than gut feeling and consequential evidence – is that given the option the East would, perhaps begrudgingly, back Mrs May’s plan.
And it seems around Westminster that a similar reluctant obedience might be emerging among potentially rebellious MPs. Labour will whip against the deal and the vast majority will vote accordingly. And clearly the prime minister has not done enough to persuade the steadfast Democratic Unionist Party to fall in to line.
But she might just fall over the line. And if she does the reason won’t be that the majority of MPs “want our country back” or seriously believe the NHS will be hugely better off outside the EU. It will be because of money. No party wants a Brexit financial meltdown thrown in their faces for generations to come.
So in years to come when people ask “how did Mrs May get her plan through?” The answer will be “money”.