back to article Why Theresa May’s hard Brexit might be softer than you think

The reality of red tape might mean the UK’s exit from the EU will take longer, and be softer, than the Prime Minister outlined today. Theresa May ruled out “partial” membership of the EU in a bullish speech today. The UK would conclude a free trade agreement (FTA) within the two years permitted by the Article 50 process, she …

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Re: 2 years?

But I must also be fair and accept that many Leave voters felt they had little to lose

Like the song says, "You don't know what you've got till it's gone".

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Re: 2 years?

"look to Tory austerity, the foolish deregulation of banking"

Would that be "foolish deregulation of banking" have anything to do with Brown's having the BoE set interest rates based on a metric which ignored house-price inflation and a huge appetite for personal debt in response to the consequent low interest rates. After that bubble burst there was little alternative to austerity - we're still paying for that excess.

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Re: 2 years?

"Scotland is not England and was only part of Great Britain from maybe 1707"

Shame to spoil your post with an inaccuracy. It was always part of the island of Great Britain (unless you go a good way back into geological time). It wasn't part of the United Kingdom until the accession of James VI of Scotland as James I of England. In fact the UK was his idea. That's right, the UK was a Scottish invention.

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Anonymous Coward

Re: 2 years?

Ah, of course also the money UK gets back from EU will stop to flow...

We're net contributors.

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Re: the UK decided democratically that we were out

Of the EU. By under 2%. Nothing else was asked.

This is purely being done for political benefit.

There is no democratic mandate other than to leave only the EU.

Of course the aim could be to punish the protest voters who allegedly swung the vote.

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Anonymous Coward

Re: 2 years?

Save arguably in financial services and defence, Britain needs the EU much, much more—almost tearfully more—than the EU needs Britain.

The EU is in the process of financially collapsing. The Italian banks have started their downward decline with the 4th largest (and also the oldest) needed to be bailed out. More will follow. France is a basket case and the Germans need to start worrying about Deutsche Bank and it's rather large derivative exposure - currently multiples of World GDP. Before anyone cares to mention it's net exposure being somewhat lower, cast your minds back to the Lehmans collapse and how net exposure has a bad habit of becoming gross exposure in a crisis.

I doubt that they'll be any better off than us once this is over.

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Happy

Re: 2 years?

>UK doesn't hold all the cards at all.

Upvoted, but, this is NOT a card game.

The UK has no say, it must accept deal or go away with nothing. Leaving the single market will mean close to 10 years of trade negotiations. By that time, the banks in the city will have down-sized considerably, remember "passporting rights" ? The car manufacturers who "export" to the EU will also all leave ... I foresee a 30 to 40% decline in GDP this time in 2019.

Tax haven black mail will not work ... why ? Look at Ireland ... 0wned.

I thank Mrs May for her honesty, the Brits have become xenophobes!

https://www.youtube.com/watch?v=fNHMF-tW9vA

"Au revoir!" means "Good bye!", now excuse my French!

I don't care what you do, I did not vote and I do not live in the UK. I do not think the rest of the EU cares that much, either ... we have always seen the UK as the spoiled brat anyway .... I still have a British passport.

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Re: EU financial collapse?

The EU isn't financially collapsing: the Euro might be. The EU (taking the start point as the EEC, not the ECSC) existed long before the Euro and can survive quite happily, if a little less efficiently, with each country having its own currency. It did for decades (01 January 1958 [Treaty of Rome coming into force] - 31 December 2001 [Last day before the Euro]).

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Re: 2 years?

- But perhaps it's the reference to 52m "idiots"?

It was.

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Re: 2 years?

>I'm still not convinced that Brexit should take 2 years. We hold all the cards.<

The only way that we hold all the cards is if it's a game where the object is to get rid of them

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Re: 2 years?

>some relatively small further fraction comes back in the form of EU spending in the UK. But we have >almost no control over how this will increase in future or what the EU chooses to spend it on.

Apart from disputing the use of the phrase "small fraction", I am not so sure that the fact that the EU decides what it is spent on is such a bad idea. A Tory government is going to favour spending it in the Tory heartlands, that's where the votes are, similairly, a Labour government would favour the Labour heartlands. At least the EU decides on economic and social grounds rather than political ones.

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Re: 2 years?

Well large parts of Scotland are of course not part of the island of Great Britain. That aside you are just flat out wrong. The United Kingdom did not come into existence till 1801 with the Act of Union with Ireland. Obligatory Wikipedia article on the subject

https://en.wikipedia.org/wiki/Acts_of_Union_1800

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Re: 2 years?

I don't understand why your comment has been down voted. You clearly show more economic knowledge than most on this forum - that is the majority of Leave voters who are blindly ignoring the catastrophic financial situation the EU is in. Its like watching a slow motion car crash.

I would have loved to remain a part of a strong EU, but was terrified of being dragged under when the EU starts to really struggle when Italy defaults and the fresh bail outs begin.

This is very likely to occur this year according to most financial analysis I have been reading.

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Re: 2 years?

Excellent post

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Re: 2 years?

"the UK decided democratically that we were out" 37% of the electorate voted Out. Hardly a resounding democratic mandate.

Most mature referendum-holding countries apply a double majority for decisions of major consequence. We were naive.

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Re: 2 years?

Most mature referendum-holding countries apply a double majority for decisions of major consequence.

You mean the way that not a single one applied such a condition for joining the EU in the first place? Funny how people want to change the rules when the game isn't going their way.

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Anonymous Coward

Re: 2 years?

"Uh-huh. This '20-25%' - can you explain how you're deriving this, please?"

Probably the same way as all the Brexit campaign statistics. Which, I'm guessing, was to present a focus group with sets of increasingly large numbers, until even the most ill-informed of them start to say, "Hang on, that sounds a bit implausible, are you sure about that?" Back off by 10% from there, slap the figure on a GIF and post to social media. Job done.

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Re: 2 years?

People are entitled to their own opinions, but not their own facts. The UK is a major contributor to the EU; but, not the largest. Leaving is going to be complicated and probably more painful for the economy and take longer than politicians want to let on. No shock there regardless of the country or politician involved.

The UK was the third biggest payer to the EU in 2015 behind Germany and France and contributed 12.57% of the total EU budget.

https://www.statista.com/statistics/316691/european-union-eu-budget-share-of-contributions/

"As a share of gross national income, the UK pays the least of all Member States into the EU budget, principally because of the UK rebate, implemented since 1985."

http://ukandeu.ac.uk/wp-content/uploads/2016/01/Who-pays-for-the-EU-and-how-much-does-it-cost-the-UK-Disentangling-fact-from-fiction-in-the-EU-Budget-Professor-Iain-Begg.pdf

Germany is the only country with a higher Net contribution to the EU than the UK, although Belgium, Luxemburg, Netherlands, and Sweden pay more per capita than Britain. And the net contribution to the EU in 2015 was 283 million euros per week.

http://www.money-go-round.eu/Country.aspx?id=SE

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Pint

Re: 2 years?

> Germany and France will have elections, don't believe they love Britons, ...

Here's a German that loves the Britons, plus I am not aware of a singly individual I know having negative feelings towards you guys.

And now I broke my rule to never comment for a Brexit article...

Pint, mkay?

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Re: 2 years?

Of course, if the NHS *did* get the 100 Million a week that we would save if we completely leave and pay zero to (say) a customs union, it would make an improvement to the service.

The annual budget for the NHS in England and Wales is about 116.4 billion quid. Adding an extra 5.2 billion is a drop in the ocean.

"leave the EU and we can spend an extra 4% on the NHS" is a pretty crappy slogan.

And if leaving the EU does cause a 4% fall in GDP it looks like that 5.2 billion "saved" will be just enough to cover the necessary cuts in NHS spending...

Not that that money will go to the NHS. It's already been promised to the farmers, Nissan, the regions...

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Anonymous Coward

Re: 2 years?

@ Doctor Syntax; "Even after the vote I got the impression that they wanted - and expected - Cameron to pick up the pieces & do the hard work for them."

Farage had *much* more important things to do, like ingratiating himself with an orange-hued s***tstain of a would-be leader of another country.

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Re: 2 years?

You do realise the £350M/week figure from Brutus Gove, Boffo the Clown and Ian Deadeyes-Smith was a complete and utter lie don't you? That it has as much resemblance to reality as a Disney cartoon.

Unfair to Disney cartoons -- even the worst of them has a better story than the Brexit campaign.

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Anonymous Coward

Re: 2 years?

"Mark Carney (no Brexiteer, he) doesn't seem to agree with you regarding the City. Given that more people work in financial services in London than live in the whole of Frankfurt, exactly where do you think they're all going?"

Well he would wouldn't he?, Carney is being paid to do a job and he wants stability, we'll see if that matches reality when the time comes.

Given that many of the banks involved in trading are not British anyway I wouldn't count on them not moving away from London, also having worked for a number of the banks in this field (as opposed to the high street variety), a lot of these staff come from European (and indeed non European) countries because banks want the brightest and the best, and the UK can only supply so many suitable graduates.

Therefore moving to a European office would not be the great upheaval you seem to think, I have actually been involved in such moves and they are pretty straightforward once the legal niceties and acquiring sites and facilities have been sorted out.

All the gossip I hear from former colleagues in this area, and some local gossip from friends in real estate (I work in Amsterdam) suggests there are lots of ongoing plans for moves and scouting for office space in European locations from banks in London in case May goes full hard Brexit, companies involved in financial trading are not in the least bit patriotic and their overriding concern is the minimization of risk, I'm not saying the City will be deserted but they will see significant moves elsewhere if the UK government delivers a deal that puts them at regulatory risk from being outside the EU, this is a no brainer for any business.

On the subject of Lloyds of London you are only telling half the story, their CEO is in favor of remaining and describes Brexit as a "key risk" and indeed confirms they are investigating relocating staff elsewhere, in terms of Lloyds of London which trades globally and earns eye watering amounts of money in the billions "only 5%" adds up to a significant sum of money, here's her actual interview where she discusses this : http://video.cnbc.com/gallery/?video=3000577287

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Re: 2 years?

Interested in the downvotes. Presumably people upset that you're unwilling to forget the lies told by the leave campaign.

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LDS
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Re: 2 years?

Remember me, weren't a not so small number of UK and US banks bailed out it the past years? What about the "Libor" fixing? Montepaschi issue are due to a criminal management. Italian private savings are among the largest in the world. Public debt is enormous, but private debt is very small - unlike UK.

Yes, Deutsche Bank tried to play the anglosaxon financial game, and found itself in sea of s**t full of derivatives. Less "financial creativity" from London could only help.

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Anonymous Coward

Re: 2 years?

At least the EU decides on economic and social grounds rather than political ones.

I remember seeing a tv piece where Eu funded a big street art installation/sculpture in a town in wales, now it's dropping to bits the town have to pay for maintenance or to have it removed. How the bloody hell does this help anyone?

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Headmaster

Re: 2 years?

I think you will find the cards will turn out to be the two jokers, the warranty card and the instructions.

You quote the fantasy payments dreamt up and quickly disowned by the Pied Piper of racists, quote a ludicrous percentage plucked, no doubt from a sea-urchin's navel and then talk about others behaving like grown ups by threatening to walk out and not pay for things the UK is accountable for whether you like it or not.

None of that sounds like any someone who voted to stay remotely agrees with, so your disclaimer reads quite hollow.

As others have already noted, I think the EU has better cards than Mrs May or David Davies.

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Re: 2 years?

"I remember seeing a tv piece where Eu funded a big street art installation/sculpture in a town in wales, now it's dropping to bits the town have to pay for maintenance or to have it removed. How the bloody hell does this help anyone?"

They had to apply for the funding. If they can't maintain it, or didn't know they'd have to maintain it, then more fool them. It's not as if the EU just decided to plonk some big expensive art installation on them as a Xmas gift.

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Re: 2 years?

Even after the vote I got the impression that they wanted - and expected - Cameron to pick up the pieces & do the hard work for them.

Cameron made a huge strategic and human mistake by taking the "Remain" side. He should have just said something like "Here is your referendum, exactly as promised. Here is the information in the issues. Now you go and decide (while I fuck off to this nice island while you are doing it)"

Strategic - because having totally backed the wrong horse, he is Out and can do Nothing.

Human - because him and that vile thing Blair going for "Remain" meant that a lot of people hating their guts would vote "Leave". Screw "the issues" and whatever.

It was obvious to anyone living outside the echo chamber.

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Re: 2 years? @Doctor Syntax

The United Kingdom of Great Britain and Ireland came into being on Jan 1 1800, not early in the 17th century, when two separate kingoms, the Kingdom of Great Britain and the Kingdom of Ireland were united (although the King of England had also been the King of Scotland since 1542 (according to Irish law) or 1555 (according to Papal decree).

Scotland and England were two separate kingdoms until they were joined together as the Kingom of Great Britain on 1 May 1707; that's the earliest date you can talk about Scotland being a member of a United Kingdom, although since 1605 when James 1 of Scotland because King of England whoever was King of Scotland was also King of England.

So Scotland did become part of Great Britain (the Kingdom of Great Britain, not the Island) in 1707 and was not part of any United Kingdom before 1707. You got it wrong on both counts.

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Re: 2 years?

@ Milton : "Financial services will lose their passporting rights and so London will cease to be the principal European trading hub. Frankfurt and Dublin will benefit, much relocation will occur, Britain will be tens of billions worse off."

You do realise that this whole concept of the city moving to Frankfurt is completely absurd!

Population of the entire city of Frankfurt: 800,000 approx

Financial sector workers based in the city of London : 2,000,000 approx.

So, is Frankfurt going to triple in size overnight? They had better get building a few more skyscrapers, and houses, and infrastructure...

Also - being a city employee myself with my ear to the ground, i know of absolutely NOBODY who has expressed an interest in moving to Frankfurt.

Its just not going to happen.

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Anonymous Coward

Flexcit?

On no not another crappy portmanteau. And where does the extra 'c' come from?

I presume it is flexible exit - no 'c' in that at all.

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Coat

Re: Flexcit?

Unless you consider Theresa May as the "C"

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Re: Flexcit?

Should be Flexçit I think.

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Re: Flexcit?

@ AC crappy portmanteau:

You really need to go and read it, and all of Dr North's stuff. Because you will get no useful information from the Beeb, Sky, the press or politicians.

But then we don't information or bothersome facts if we don't mind a plane crash style Brexit...

(Kudos to Andrew for flagging up North's work)

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Anonymous Coward

Occam's razor

The jury is still out is she trying to achieve BrExit as a goal or BrExit is the means to achieve the repeal of the Human RIghts Convention, the repeal of the Eu directive derived legislation, etc which she needs in order to achieve the regime for which she needs to stop shaving her mustache.

Based on her legislative track record I tend to think it is the latter.

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Anonymous Coward

Re: Occam's razor

I really don't think the UK has the rail infrastructure to accomodate Ms May's solution

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Anonymous Coward

I thought the Article 50 negotiations were dedicated to the process of leaving the EU, and that negotiating future trade arrangements had to wait until the leaving deal had been agreed (i.e. the same as for official trade negotiations with non-EU countries) ?

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Wait!

What if May has a plan so cunning, so incredibly clever that it will take care of all these problems? A plan that will allow us to have our cake and eat it too. But in order to not bork the upcoming negotiations she is FORCED to keep it secret from everyone and we will be mightily pleased when the winning moves finally comes into play. And there will be much rejoicing. What if that is the case? Hmm?

No. I guess it's going to be an almighty clusterfuck, the slow-motion train crash is starting to happen as we speak.

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Anonymous Coward

Re: Wait!

"What if May has a plan so cunning, [...]"

Blackadder could do a BREXIT series - and Theresa May could supply the scripts for Baldrick. A pity Rik Mayall isn't able to come back to play Donald B'Stard.

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Anonymous Coward

Re: Wait!

the slow-motion train crash is starting to happen as we speak.

No, that started in 1992 when Major signed us up to Maastricht without a vote, and it became less slow when the single currency was introduced. Now we've got the window open and we're psyched up to jump. The only question is whether we can jump fast and far enough to escape with only minor injuries rather than dying in the blazing wreck.

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Re: Wait!

A plan so cunning...

Perhaps we will strike up a trade deal with North Korea, start trading Golden Unicorns in exchange for Wensleydale cheese. And I am sure there's some arms deals to be had which make us a tidy profit.

That doesn't seem any more ambitious nor ludicrous than anything else she has imagined-up in recent months.

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Re: Wait!

Would this Plan be as cunning as a fox who's just been appointed Professor of Cunning at Oxford University?

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Joke

"Would this Plan be as cunning as a fox".. "appointed Professor of Cunning at Oxford University?"

Even more so than that.

Shh. It's a secret.

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Re: Wait!

"No, that started in 1992 when Major signed us up to Maastricht without a vote, and it became less slow when the single currency was introduced."

I agree that there should have been referenda EU-wide to ratify the treaties - with supermajorities required, unlike this advisory referendum that we suddenly seem to have found wasn't advisory after all.

You may not have noticed but we were never part of the single currency.

But deciding, on the flimsiest of political whims, to take this particular unilateral action is stupidity from the consequences of which I doubt the country will recover in my life-time - and I've no intention of going just yet.

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Re: Wait!

Columbo brexit

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So now any foreign corporations who have set up their EU base in the UK known to start their relocation planning.

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PTW
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Like the Maccy D's and Softbank, oh, no wait...

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Anonymous Coward

My personal hope is that, thanks to the Brexit vote, we in the 27 remaining countries have a new, perfectly usable bogeyman that can handily replace the EU to blame anything on.

Humans being what they are, EU politicians could easily use that to foster a new sense of European unity in the short term against a perceived foe at the gate. Ie, they could do what the British politicians have just done, successfully.

In that view, thinking that the UK could get the same advantages of Lichtenstein is so laughable, it makes me wonder how deluded people can be. Has Andrew even read article 112?

It states:

"Such safeguard measures shall be restricted with regard to their scope and duration to what is strictly necessary in order to remedy the situation. Priority shall be given to such measures as will least disturb the functioning of this Agreement."

Does Andrew really think that the EU politicians will accept an unlimited use of it for a country *two thousand times* more populous than Liechtenstein? What does he expect EU voters would make of their politicians dropping their pants and bending over?

Apples are not oranges, and the UK is not Liechtenstein. This is not the solution to your problems. Continue looking.

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@ AC - Article 112

Read again and more carefully:

Article 112 is part of the EEA agreement, it does not require EU permission for EFTA states. The EU only gets a say in the case of EU member states. EFTA states can (and have) applied safeguard measures (aka "emergency brakes") unilaterally.

Yes, UK is not Liechtenstein, but apples and oranges are both fruit, and Article 112 *is* Article 112 (and does what it says in the text). Also see Article 113.

The EEA agreement is here:

http://www.efta.int/media/documents/legal-texts/eea/the-eea-agreement/Main%2520Text%2520of%2520the%2520Agreement/EEAagreement.pdf

North's take on it is here: http://eureferendum.com/documents/BrexitMonograph010.pdf

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