Brexit weekly: 5 things

April 13, 2018 2:14 pm

May and Foster on the back foot in border battle

Tuesday marked 20 years since the Good Friday Agreement was signed in Belfast. Celebrations to mark the anniversary of the historic agreement – dubbed a “surpassing work of genius” by former Unites States President Bill Clinton – have of course been overshadowed by concern over the lasting impasse between DUP and Sinn Fein preventing a return to power sharing. And then there’s the lingering, unresolved issue of a border after Brexit.

EU and UK officials decided to kick the can down the road during negotiations in March, parking the border issue ahead of the next round of talks in June. The call to delay a decision came on the back of the EU publishing a plan in late February to keep Northern Ireland in the customs union alongside the Republic, to act as a fall-back if the issue is not resolved in negotiations. The EU’s move angered both Theresa May and Northern Ireland’s First Minister Arlene Foster, and they won’t have been pleased by interventions from the Clintons and Tony Blair this week calling on all parties to avoid an “enormous setback” by reinstating the hard border.

While the DUP is also eager to avoid a hard border, the Party lacks a clear proposal to do so, or indeed is yet to see such a proposal produced by Theresa May’s Cabinet. Unionists and Conservatives might also legitimately fear that the EU is not ‘on their side’ at this stage, with Council and Commission leaders Donald Tusk and Jean-Claude Juncker respectively prioritising the future of Ireland and its position within the EU in their public statements on the border issue.

In February, Arlene Foster said the EU’s plan is “constitutionally unacceptable” and would be “economically catastrophic for Northern Ireland.” This week’s comments from prominent international figures on the GFA – including Hilary Clinton, who said, “we cannot allow Brexit to undermine the peace that people voted, fought and even died for” – places additional pressure on the DUP and Theresa May’s Cabinet to get a move on and find an alternative solution over the next two months. If they can’t, the two are likely to come up against EU negotiators even more determined to prioritise the wishes of the Irish Government in Dublin over claims of constitutional crisis from obstructionist leaders in Foster and May.

Post-Brexit registration could hurt the most vulnerable

Fresh fears have been sparked this week over the Government’s approach to registering EU citizens living in the UK after Brexit. A report from the Oxford University based Migration Observatory warned that a “potentially significant” number of people may not know they have to apply for settled status in the UK from 2021 and may not be reached by efforts from the Home Office to contact particularly vulnerable groups.

The Migration Observatory said that domestic abuse victims, children and the elderly are among those at risk of losing their right to remain in Britain despite meeting the required criteria to stay. The academics have especially noted children in care who have moved between foster homes, and other people in dependent, potentially exploitative, relationships, as those most likely to lose out.

The Home Office is clearly putting considerable resources into this issue, creating an app to avoid vast amounts of paperwork in the application process; launching a national awareness campaign; and holding monthly meetings with EU citizens’ representatives to understand how further support can be offered. Migration Observatory director Madeline Sumption queried what will happen to those who are eligible but don’t apply in time. However the Home Office goes about raising awareness, it appears that bad news stories surrounding the removal of eligible EU citizens will become an inevitable feature of the next decade.

Housing market takes a hit

It may have taken longer than expected, but the impact of the Brexit vote on the housing market is now clear for all to see. The Royal Institution of Chartered Surveyors (RICS) has released its latest report on confidence in the housing demand and pricing which the Guardian has labelled “the most downbeat assessment of the housing market for five years.” While prices are flat nationally – and the downshift more dramatic in London than anywhere else – demand from buyers fell for the twelfth month in a row.

This all sounds a bit grim. RICS says that “stamp duty and Brexit have killed the fluidity of the London market,” and tried to nudge the Bank of England into delaying the rise in interest rates, arguing that “only when the extent of the resulting economic damage is properly understood will things be able to change for the better.”

If I remember anything from my Business 104 class at the University of Otago all those years ago (rare chance for a shout out), it’s that falling house prices will dampen consumer confidence and hurt the wider economy. Indeed, consumer confidence has been falling for some time in the UK and has historically correlated closely with house prices in Britain. But the situation is not that simple, with international evidence suggesting a much murkier picture than the rising house prices=strong economy equation.

The lasting issue is that Britain’s housing ownership rates are close to an all-time low and down significantly on most of the rest of Europe, with “ownership for young people in freefall.” RICS is right to raise alarm about the impact of potential interest rate hikes as this will likely do little to improve consumer confidence and grow the economy for all. While the Chancellor has been bullish about employment levels for some time, persistently low wage growth will not provide for a turnaround in home ownership – or any other indicator of economic security – for the people of Britain any time soon.

But wait, there’s good news too!

It would be wrong to portray this week’s Brexit news as purely negative. Indeed, one economic development suggests a rise in confidence of a rosy post-EU picture for the UK.  City AM reports that “confidence in the economy among Britain’s business leaders has improved to its strongest since the triggering of Article 50”, citing a poll by the Institute of Directors (IoD).

The IoD’s comprehensive survey of almost 700 business leaders found uncertainty over the future trade relationship dropping out of the top three concerns for respondents for the first time since March 2017, with the announcement of a transition deal around a month ago bringing firms “some much needed reassurance,” according to senior economist Tej Parikh.

It is certainly true that news organisations accentuate negatives, but if you look hard enough there are always positives to be found. For instance, the economist reports that productivity is rising (ignore the rest of the headline), Goldman Sachs is doing better than expected, and Ireland’s EU Commissioner Phil Hogan thinks the future for a 27-state European Union looks strong. And, of course, I’m burying the lead story…

Take back control! Of that bus…

There’s going to be a Brexit museum. Several news outlets reported this week that a group of prominent Eurosceptics are gathering documentation and memorabilia from the past 40 years to tell the story of Britain’s historic decision to leave the European Union. One of the key figures involved is UKIP’s former head of communications, Gawain Towler, who – in an interview with The Sun – said too many amusing things to include in this piece.

The organisers have set up a website to receive donations and eventually create a physical commemoration to Brexit, which will seek to preserve “the collective memory of the country’s fight for sovereignty.” Towler confirmed the sentiment behind this project was “academically scrupulous,” while suggesting that items on display could include the original UKIP fruitcake and an empty pint glass used by Nigel Farage (cleaned?). He added that while the process – which may take several years – is expected to be “a roller-coaster,” he does not expect the museum to include rollercoasters: rather, the big-ticket item on display could well be that divisive red battle bus.

While myself and many others might not agree with the view of Brexit portrayed by this museum, or necessarily understand the purpose behind a picture of a random windmill on the website’s homepage, I feel this might one day prove a popular place. After all, we do love our museums in Britain.

April 13, 2018 2:14 pm

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