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In the Brexit Home Stretch there are Only Three Possibilities

by John Brian Shannon

In the Brexit home stretch it looks like nobody is happy, which is a situation that negotiators and their backers often encounter and no one should extrapolate any great conclusions from the recent commentary or resignations of leading actors in the Brexit play, for the simple reason that when emotions run high common-sense usually runs out the window.

Even MP’s in cabinet can get jittery nerves, while others can suddenly lack the necessary conviction to see it through to its inevitable conclusion — or they decide they can’t trust their leader which seems to be the flavour of the week, this week.

But it’s important to remember that Article 50 was lawfully triggered and Brexit will occur and by process of deductive reasoning we find there are only three remaining Brexit scenarios:

  1. A ‘Good Deal’ Brexit proposal is one that the UK cabinet can read, understand, and have access to the legal paperwork. But it will still need to pass through the House of Commons before it can become law.
  2. A ‘Bad Deal’ Brexit proposal is one that the UK cabinet can read, understand, and view the legal paperwork on, but it’s one that might trigger an exodus of cabinet ministers while providing an opportunity for Theresa May to get the cabinet she needs to get Brexit done and dusted. Along with plenty more negotiations to gain either a ‘Good Deal’ Brexit — or if time runs out — default to a ‘No Deal’ Brexit.
  3. A ‘No Deal’ Brexit proposal (through no fault of Theresa May because it takes two to tango and Theresa May has surely done her part in the long-running negotiations) is one that would need to be explained to the British public and would need a high level of oversight to prepare for and implement over the next 4-months.

In the case of the Good Deal Brexit proposal, all sides in the Brexit negotiations would celebrate and find themselves starring in hundreds of fawning interviews that would work to build their political credentials allowing them to go on to ever-brighter futures. Why this isn’t the #1 default option for everyone involved in the Brexit process is beyond the ability of civilized human beings to fathom.

In the case of a Bad Deal Brexit proposal that Theresa May would share with her cabinet colleagues, it would be a case of carefully considering each chapter and verse on its merits and then offering counter-proposals to the Prime Minister that she could subsequently present to EU negotiators. A Bad Deal Brexit proposal in essence, becomes a cabinet brainstorming session to counter EU concerns and objections. Simply put, a Bad Deal proposal means negotiations aren’t over yet.

And in the case of a No Deal Brexit proposal it means that negotiations have ended and Theresa May’s government — with great sense of purpose and speed — must take all necessary actions to help UK citizens, businesses, and all levels of government prepare for a No Deal Brexit scenario.


Legitimate Items of Concern

  • As the Prime Minister begins to finalize the eventual ‘Good Deal’ Brexit proposal — you know, the one that is 95% ready and approved by both sides and just needs a solution to the Northern Ireland border question — it’s completely legitimate that Theresa May’s cabinet wants more details and wants to see the legal briefings on the ramifications of such a deal. That interest should be welcomed by the Prime Minister once she presents that proposal to cabinet. However, her cabinet Secretaries and Ministers mustn’t take that as license to interfere in Brexit negotiations. Rather, it means they should be warmly invited by the PM to read, discuss, question, and even challenge points within any Brexit proposal presented by her to the cabinet in the spirit of creating a better Brexit document.
  • Theresa May has valiantly travelled Europe for the past 2-years selling her version of Brexit to EU leaders and negotiators. Sometimes that can have the effect of the leader becoming too attached to the work-in-progress and over time, the leader can lose their objectivity. This isn’t a knock against Theresa May it’s a knock against all human beings, for it is a uniquely human failing to fall in love with the policy you’re promoting — even if the other side has made alterations to it or has chosen to interpret it differently than its primary authour. While Theresa May should receive plenty of latitude from her cabinet (and even moreso from her non-cabinet caucus) for as long as negotiations continue, when it comes time to evaluate the Brexit deal she presents to her cabinet let’s hope she doesn’t try to bully the document past her cabinet, but instead chooses to allay their concerns using logic and reason.
  • If the EU’s tactic is to delay and delay — the more Theresa May and her government are seen to be preparing for a ‘No Deal’ Brexit — the sooner the CEO’s of Mercedes Benz, BMW and Volkswagen, etc., will prevail upon EU negotiators to gain a proper Brexit agreement. As long as the Prime Minister ‘gets that’ the UK can’t lose. Let’s hope Theresa May is bright enough to see it for what it is and has the internal fortitude to drive EU negotiators right to the deal she wants. I can’t help but feel that Theresa May sees this tactic as her weakest hand when in reality it is her strongest hand.

As long as Prime Minister Theresa May stays strong the UK will enjoy a ‘Good Brexit’ but if she weakens — either by her own party tearing her apart or by the EU draining her confidence — the UK (and the EU corporate world and EU consumers) will suffer for many years on account of a substandard Brexit deal.

Therefore my Brexit friends; Strengthen your team captain to ensure her success and her success will be your success. Or, her failure will be your failure and you will surely wear it at the next election.

Will a ‘No Deal’ Brexit Harm UK Manufacturing?

by John Brian Shannon

Certain pro-EU commentators paint a picture of either a catastrophic Brexit crash-out (Hard Brexit) or a ‘non-Brexit’ where the UK would retain few of the rights gained by a full Brexit but would still be chained to the responsibilities of EU membership (Soft Brexit) whether via the so-called ‘Norway’ model or the ‘Norway-plus’ model, or via any other model such as the ‘Canada’ model.

Those same commentators excitedly cite potential UK manufacturing job losses in the post-Brexit timeframe even though the UK is primarily a service based economy (80.2% in 2014 and rising) and they forget to factor-in the astonishing changes occurring every day in Britain’s manufacturing sector.


UK Manufacturing = Less Than 10% of GDP

Manufacturing in the UK accounts for less than 10% of GDP (2016) and provides jobs for 3.2 million workers (2016) but a recent PwC report says that by 2030 half of all UK manufacturing jobs could be automated. That’s less than 12-years from now. And it could happen much faster and on a much larger scale than that.

Repeat; Up to half of all UK manufacturing jobs will be lost within 12-years. It’s uncertain whether British workers are aware of these looming changes.

Economic impact of artificial intelligence on the UK economy

The economic impact of artificial intelligence on the UK economy. Image courtesy of PwC. Click on the image to view or download the PDF report.


What’s Great for UK Businesses Won’t be Great for Foreign Workers

In 2018, of the 3.1 million UK manufacturing workers (a stat that falls with each passing year as automation increases) we find that over half of manufacturing workers in the UK are citizens of other countries — primarily from eastern Europe, but also western Europe.

So, expect UK-based eastern European workers to be replaced by automation.

Increasing automation and Artificial Intelligence (AI) will cause UK companies to choose between UK-born workers and eastern European workers, and it’s likely that hundreds of thousands (perhaps millions) of eastern Europeans will be returning home with plenty of UK coin in their pocket. (And why not, they earned it)

I hope you didn’t expect the UK to lay-off its own British-born workers in order to protect the jobs of eastern European-born workers as automation proceeds, did you? Would EU companies show that level of courtesy to UK workers in the European Union, were the situation reversed?

Profits for UK manufacturing companies are projected to rise significantly as automation and AI become one with the system, while UK-born manufacturing workers should find themselves at 100% employment.

What’s not to like?


UK Manufacturing Job Losses Due to Automation – Not Brexit

If you’re one of the EU elites who fear that hundreds of thousands of eastern European workers in Britain will lose their UK manufacturing jobs due to Brexit you couldn’t be more wrong.

Let’s be perfectly clear; Half of all UK manufacturing jobs will be lost to automation by 2030 — and it won’t be on account of Brexit!


Summary

The narrative that says the UK economy will be severely damaged on account of manufacturing job losses due to a Hard Brexit is a complete and utter fantasy.

Every day from now until 2030, automation and AI will replace eastern European workers, Brexit or no Brexit. Meanwhile, British-born manufacturing workers will find themselves at full employment.

It’s all good!


Related Articles:

  • How will artificial intelligence affect the UK economy? (PwC)
  • The economic impact of artificial intelligence on the UK economy (PwC)
  • What would be the cost to the UK of regulation by a foreign power and major competitor? (BrexitCentral.com)