Theresa May is leading us into the unknown

EDITOR'S BLOG: Whatever she might have said in private, the PM seems determined to pursue a hard Brexit. Businesses should be worried.

by Matthew Gwyther
Last Updated: 26 Oct 2016

The Guardian has gone very big on its revelation that the Prime Minister delivered a private talk to the investment bank Goldman Sachs before the Brexit referendum in which she bigged-up the positives of a Remain vote. The leaked tape of her hour long chat on 26 May appears to suggest she was far more of a Remain enthusiast than was believed then. (And certainly infinitely more so than she is now.)

‘I think the economic arguments are clear,’ she stated. ‘Being part of a 500-million trading bloc is significant for us. I think, as I was saying to you a little earlier, that one of the issues is that a lot of people will invest here in the UK because it is the UK in Europe. If we were not in Europe, I think there would be firms and companies who would be looking to say, do they need to develop a mainland Europe presence rather than a UK presence? So I think there are definite benefits for us in economic terms.’

The Guardian says this is significant because it contrasts markedly with her more nuanced and subdued public speeches, which dismayed remain campaigners before the vote in June. In his recently published book Craig Oliver, Mr Cameron’s former chief of communications, recently accused Mrs May of being an "enemy agent" for the Leave campaign.

I’m not sure this is much of a revelation. Perhaps the biggest surprise is that her speech was gratis when Hilary Clinton charged Goldmans half a million pounds when she shared her wisdom with them in New York. Incidentally, one wonders who at Goldmans leaked the tape. Possibly someone deeply disgruntled about the possibility of a transfer to Frankfurt.

As far as I’ve heard Mrs May has never been accused of being a conviction politician. Cautious and thorough, yes. Maybe even stubborn. But certainly not big on Europe in an ideological sense. Her attitude was entirely pragmatic and intensely political. ‘There are definite benefits to us in economic terms,’ hardly makes her Jacques Delors in kitten heels. She is a past master at keeping her powder dry.

Quite what she does believe in remains pretty unclear beyond a vague sense of fellow feeling for the little Englander/ 'forward to the 1950's' faction in her own party. She probably believes in the need for a third runway at Heathrow but must wonder - as does Boris Johnson - if it can ever surmount all the huge legal, financial and political hurdles in front of it.

The problem with this Guardian attack is that, however lukewarm or medium hot May’s enthusiasm for Europe was, she has to accept the referendum result. She is a shrewd enough politician to know that the vote hung on a knife edge and that if it went the wrong way for Cameron then she was in with a shout for the leadership of her party and therefore an immediate step up to Number Ten.

Nobody knew what form Brexit would or might take because nobody had ever tried it before. Indeed, the lack of a thorough investigation into precisely what we might be letting ourselves in for is why "What is the EU?" is said to have become such a wildly popular Google search immediately after the result. Brexit is a disturbing undiscovered country and little thought was given to the nitty gritty of how we might get out and where that might leave us.

It is now becomingly horribly clear that Brexit is going to be very tough for business indeed. Large numbers of UK companies who supported Remain said exactly that and were ignored. This, in itself, demonstrates the worrying low levels of trust that the public has in the opinions and behaviours of business at the moment.

Now, of course, we appear to be headed inexorably for the Hard option - which former EU Commissioner Lord Hill has re-named the ‘Stupid Brexit’ - with Philip Hammond fighting a rearguard action to maintain freedom of movement for those in high paid, high-skilled jobs. The question is precisely what mandate has the referendum vote given her? Fifty two per cent and a mere 17.4 million people entitles her to go just where and how far? Her interpretation currently goes way beyond what many think is reasonable without an election to confirm.

Having said all that, May told the Commons today that, ‘What we want to see is the best possible arrangement for trade with and operation within the single European market for businesses in goods and services here in the United Kingdom.’ It’s all extraordinarily unclear, and uncertainty is the biggest enemy of business confidence.

The news comes as the Resolution Foundation think tank warns us that the worsening economic outlook could leave the chancellor looking down an £84bn black hole when he lays out the government’s spending plans next month. The report warns Phillip Hammond that lower tax receipts and higher spending following the Brexit vote would leave the Treasury with a shortfall every year until 2020-21. Certainly a week spent on half term in Europe last week with the current disastrous exchange rate left me feeling like a pauper. Maybe it’s a feeling we are all going to have to become accustomed to.

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