Nick Hubble – Capital and Conflict (Great Britain) –
Is tomorrow independence day? Theresa May’s declaration of Article 50 is widely expected. Here’s the relevant clause in all its glory:
It could be quite a day in the history of Britain, the EU and your future.
Southbank Investment Research is preparing a new publication to guide you through the turbulence of the next two years. There are ways to profit from how politics will move markets.
The best thing about Brexit
The best news about triggering Brexit is that the government will be too busy to do much else. Up to 15 bills are needed to make Brexit happen. That clogs up parliament. The burden on the civil service is supposedly immense too.
This is great news. The government won’t be able to pile on the usual load of regulations and laws. It might even be too busy for overseas military interventions or environmental deals.
Employers won’t have to change their operations or products from last year; employees won’t have to put up with bizarre new health and safety procedures; tax laws won’t mystify people who only just figured out last year’s; and the government won’t have a chance to do anything stupid.
In a way, it’s the opposite of uncertainty. You get the same phenomenon during electoral standoffs, for example. Like when it took Belgium forever to form a government. Politicians claimed it was a disaster. Everyone else was relieved to get a break from political meddling.
But Brexit itself does involve a lot of meddling too. And so maybe politicians will get a chance to foul things up anyway.
David Davis makes a mess of immigration
David Davis has made his first big blunder. He wants the British government to decide how many EU immigrants can come into the country. What a disappointment.
There will be no fixed cap on the total number of EU immigrants under Davis’s plan. “From time to time we’ll need more, from time to time we’ll need fewer migrants.” It’s all to be decided based on the national interest.
The national interest?
Who decides what’s the national interest? Based on what? For whom?
Sure, you have your opinion on what is in the national interest: let in lots of people who aren’t in your profession and nobody who is in the same profession. And no French!
Giving the power over immigration to the government is a terrible idea. Every time the party you disagree with is elected, immigration will be terrible. Every time your party wins, they’ll disappoint you by bringing in something different to what they promised.
The correct way to manage immigration is simple. People who are hired to come here, can come here. People who can get a landlord to accept them as a tenant, can come here. People who can get a bank to approve a mortgage and a homeowner to sell up, can come here.
It’s the same as moving within a country. Sticking a border in between just makes things look different. But they aren’t. People should be able to move when they have the agreement of others – of individuals. Giving governments that power just introduces political motivations into the decision.
So here’s my pitch for managing immigration. Let individuals sort it out between themselves. Let anyone with a job, home or altruistic support into the country. That way every immigrant is meeting a British person’s agreement to let them enter. And that should be the sole requisite of immigration. You have the right to hire, invite and take care of a foreigner.
The Brexit contract
Pro-EU campaigners are in the doldrums. Their efforts now consist of publishing what the Leave camp promised during the campaign. They’re calling it the “Brexit Contract”. And they’re hoping the EU will force the government to breach it.
Which the EU is trying to achieve. The EU’s lead negotiator Michel Barnier continues to lay out his position. Any deal with the EU will require Britain to implement similar policies to the EU’s. We can’t become a low regulation tax haven, for example. After all, it’s unfair to be better than the EU.
Ignoring how on earth such a compulsion is supposed to work in practice, the EU’s position presents the UK with an enormous opportunity. We should go it alone.
Imagine the cash bonanza if the NHS became Europe’s centre for innovative treatments that the EU has banned or not yet approved. Imagine the tax bonanza if the EU’s most profitable companies left Ireland for the UK. Imagine the jobs boom if tech companies all moved to London to take advantage of jobs-friendly regulation. It’d be like the City, but in the worlds of technology, healthcare, biotech, and holding companies.
If the EU doesn’t want to trade, steal their best companies, industries and innovators. It won’t be hard. The Europeans think industries and innovation are a political creation.
Christian Noyer, the former governor of the French central bank, lamented in the Financial Times that the EU doesn’t have its own financial centre. “No other sovereign or monetary zone would allow itself to rely on an offshore centre.”
Allow? It’s not a political decision – it’s a market one. The EU’s best effort to create a European financial centre would be hilarious. It can’t even manage its existing ones. Another European banking crisis is on the horizon.
Until next time,