|THIS MONTH’S WISE OWL|
|Steve Norris is the Chairman of Soho Estates and Driver Group PLC and is a Senior Adviser to BNP Paribas Real Estate UK/Strutt Parker. He chairs the Council of the National Infrastructure Planning Association and advises a number of international clients on major developments. Steve also writes a regular column in Property Week on the Politics of Property.|
None of us, including the Prime Minister and the EU itself, knows what the final Brexit outcome will be but negotiations with Brussels are notoriously tortuous and we can confidently predict that a deal won’t be reached before the early hours of the 30th of March 2019.
That said, there are two sides to this negotiation and any deal has to work for both. The UK media has been full of alarm and despondency, much of it ludicrously inaccurate, but the UK is the world’s sixth largest economy and a hugely significant contributor to the EU’s budget. [pull_quote]Call me a cynic but I confidently predict the final outcome will be a whimper rather than a bang.[/pull_quote] We will take back control of our laws but change almost none. After all, we helped draft them. More controversially we will take back control of our borders but we won’t close them. Our problem is not that we have too many migrants but that we don’t have enough. As unemployment falls below 4% we need migrants from baristas to brain surgeons and pretty much every skill level in between to keep the UK’s economy moving.
We will leave the single market and the customs union, but we will recognise as do the Canadians, that when we sell into Europe we have to abide by their terms of trade. Nothing unreasonable about that. It suits both sides to avoid tariffs or excessive customs controls. The 27 member states sell far more to the UK than we do to them. For many of them, particularly food producers, the UK is a hugely significant market and as we know, 20% of Germany’s auto exports are to the UK. The EU consistently tells Donald Trump that nobody wins a trade war and they are right.
The Irish border exists already in terms of tax, duties, benefits and security. A new hard border hurts the Republic far more than the UK which is why it won’t happen. Our key card in all this is the money. We will pay our strict legal dues to the EU although there is some debate about the quantum. But over and above that we have put almost £40billion on the table to sugar the pill. And with a very clear proviso, much repeated by Dominic Raab the Brexit Secretary, that nothing’s agreed until everything’s agreed. Even if a deal is not reached on the 29th of March, the fact that the UK could keep its hand on its halfpenny will concentrate a few minds in Brussels. Meanwhile life without EU will be remarkably like life with it. [pull_quote]As Michel Barnier himself might say, “plus ça change, plus c’est la même chose” – the more things change, the more they stay the same.[/pull_quote]