Brexit Britain: FDI Soaring and Manufacturing Booming

New figures show that growth in Britain’s manufacturing sector is outpacing every other major European nation as the EU is gripped by a slowdown. Manufacturing growth is at a 26-month low in France, and a 31 month low even in powerhouse Germany. Also Italy languishes at a 47-month low…

IHS Markit has released its index of factory activity in November where a score of 50 is the cut off point between growth and decline. The UK has risen to 53.1, but the Eurozone as a whole has fallen to its lowest since August 2016, at 51.8.

All the while the ONS has revealed that the UK’s inward foreign direct investment (FDI) position increased to £1,336.5 billion last year, a record high. Despite Brexit…

ECJ Advocate General Says UK Can Unilaterally Revoke Article 50

In a major victory for the continuity remain campaign, the European Court of Justice’s Advocate General Manual Campos Sánchez-Bordona has announced that the UK can unilaterally withdraw its Article 50 of the Lisbon Treaty notification, although domestically this would require a Parliamentary vote and a co-operative executive. The ECJ is not bound to accept the opinion of the Advocate General, but it almost always does…

Remoaning MPs, MSPs, and MEPs have been arguing for a unilateral mechanism to remain in the EU and it looks like the ECJ will grant them their wish. Yet another unholy alliance of domestic and foreign interests working to reverse the 2016 result…

Cox: Backstop Would Be An ‘Instrument of Pain’ For UK and EU

Geoffrey Cox responded to Nigel Dodds with about as compelling case as you can make for the backstop. It rests on Northern Ireland firms having unparalleled access to two giant global markets and EU firms taking the Commission to court if they hold up the progress of moving from the backstop to an FTA. Guido is unconvinced, but it is worth listening to respectable Cox’s considered opinion…

Read the Attorney General’s Legal Summary in Full

Read it in full here:

Downing Street Pushing Merits of May’s Deal With Hashtag #BackTheBrexitDeal

This is the line Downing Street will be pushing out in a paid for social media blitz, highlighting the merits of May’s deals versus the alternatives. Like with the £9 million spent before the referendum, the government has no qualms about spending taxpayers’ money pushing their policy position – even though it has little support in the country or parliament. Some might quibble with the accuracy of the presentation’s spin…

For example the “independent trade policy” only becomes available once the final Brexit terms are agreed. As long as Britain is stuck in the implementation period there will be no independent trade policy. May isn’t planning to diverge on regulations either – which would happen with a clean Brexit. The DUP might want to add a red cross next to a line about how Northern Ireland would be treated under “no deal” versus how they will be treated differently from Britain under May’s deal. Some of these line items are merely vague commitments in the political declaration, which may not hold true when the actual hardball negotiations begin. When Guido put these quibbles to Downing Street the response was: “The PM’s Brexit deal is the only one that delivers on the referendum.”

Brexit: “How Did We Get Here?”

Gary Gibbon asks; Brexit: “How Did We Get Here?” It is a good and fair-minded recap.

Incidentally, some say he might be interested in becoming the Sky News Political Editor. A source claims Gary Gibbon was on the shortlist last time, and that John Ryley, Head of Sky News, is a big fan of his. His old school political neutrality does seem out of place at the left-wing Channel 4 News. They could do worse…

Penny Mordaunt Backs May, Slams ‘Unhelpful’ Mogg

It looks like we can take Penny Mordaunt off resignation watch. The Portsmouth North MP has given the scoop to her local Portsmouth paper The News, telling them May would deliver on a Brexit that would ‘work for the nation’.

Of the ERG-led no confidence push, ‘That was not helpful,’ she said.

‘What the public want to see is their members of parliament and their members of government working hard to get the best result for their communities and their country. Everything else that is a distraction to that should cease.’

The paper reported that Mordaunt “would not be drawn on whether the PM was the right person to lead the nation through Brexit.” So not quite a wholehearted endorsement of the PM…

UPDATE: It has been pointed out that if you carefully read the report it does not actually quote her as supporting the current deal on offer.

Science Minister Resigns to Vote Against May’s Deal, Cites EU Attitude Over Gallileo

Sam Gyimah has resigned as Universities and Science Minister to vote against May’s deal, citing the EU’s attitude over the Gallileo Satellite programme as an example of the difficulties ahead with this deal. He was a remainer, very much part of the Cameron liberal-conservative tendency, he has posted on Facebook his reasons for resigning:

I will vote against the Government’s EU Withdrawal Agreement.

After careful consideration and reflection, I cannot support the Government’s deal and as such, I have tended my resignation as Universities and Science Minister.

This line struck Guido as echoing Boris Johnson

What is the alternative, I hear people say? Sometimes it seems our horizons have been narrowed and our expectations lowered to the point where potentially crippling ourselves politically and economically for decades to come is seen as a success we should welcome.

Sam was seen lunching with Jo Johnson and Justine Greening this week, so don’t expect him to join the ERG. He won’t be the last to resign…

Nigel Farage: This is a Good Deal

Nigel Farage, standing just yards from Michel Barnier, yesterday told the European Parliament that May’s Withdrawal Agreement is a good deal…

“It’s a good deal… for the European Union. For the UK I think it’s probably the worst deal in history.

… you probably can’t even believe your luck that you came up against a British Prime Minister who met every single demand of yours.”

Punchy stuff…

Macron Threatens to Veto EU – South American Trade Deal

Macron has threatened to veto a trade deal with the Mercusur bloc of South American countries, if Brazil’s new President-elect Jair Bolsonaro follows through with his pledge to withdraw from the Paris Climate Agreement.

The deal is still not complete, even after 17 years of negotiations. When the EU negotiates trade deals with other countries, any one of the 28 EU member states can veto the signing of it, making the process painfully sclerotic. When the UK leaves the EU’s Customs Union, we will be able to sign a deal with Brazil if we want to – without having to seek Macron’s permission…

Second Referendum Poll: No Deal Beats Remain

New DeltaPoll research has found that if a second referendum were held, the public would back ‘No Deal’ over ‘Remain’ by 52-48%. And that’s achieved in the absence of a leave campaign, with the public being subjected to a constant torrent of un-combatted Remain campaigning over the last two years.

The poll even shows that the public prefer May’s deal to Remain. Be careful what you wish for Remainers…

EU Migration Down, High Skill Rest of World Migration Up

Since the referendum, EU migration has fallen back to levels last seen in 2010, but at the same time non-EU migration has risen to its highest level since 2004. Interestingly, as the UK has a controlled, Australian-style points based system for non-EU migration, most of this increase is likely to bring a higher skill set than the EU/EEA free for all.

Polls consistently show that the British people have a more nuanced view of migration than is traditionally portrayed. In general the public is deeply sceptical of low skilled migration, and much more relaxed about higher numbers of those with high skill levels and language ability. This trend may well not be seen as an unwelcome one…

Economist Who Won Nobel Prize for Trade Theory Sceptical of Carney’s Forecasts

Paul Krugman, who won a Nobel Prize in economics for his work on trade theory, seems the kind of person who might have a credible view on the various scenarios depicted by the very political Mark Carney’s report to the Treasury Committee. Krugman made some points on Twitter last night;

  • The Bank of England just released some very dire scenarios.
  • But their bad-case losses from a no-deal Brexit look extremely high. I mean, 8% of GDP was the kind of estimate we used to make for countries with 150 percent effective rates of protection.
  • I don’t understand how you can get that kind of cost without making some big ad hoc assumptions about productivity or something. And I have worried in all this about motivated reasoning on the part of people who oppose Brexit for the best of reasons.
  • As best I can tell, the big results depend on assumed relations between trade/FDI flows and productivity. It’s really important to understand that this channel does not follow from basic trade theory and comparative advantage; it’s a black-box story.
  • What we have are correlations between trade and investment flows and productivity that don’t really follow from standard models. Are these causal? There is surely room for skepticism. Yet that seems to be the big driver of the whole thing. So I’m worried.
  • Again, I’m anti-Brexit, and have no doubt that it will make Britain poorer. And the BoE could be right about the magnitude. But they’ve really gone pretty far out on a limb here.

Krugman is right, the UK is a globalised world class advanced industrial economy, not a third world small economy easily buffeted by adverse changes. The Treasury and the Bank of England were completely wrong in 2016 – predicting a recession and massive unemployment that never came. They are wrong this time too.

Seumas Evasive Over TV Debates

Downing Street are very bullish on making a May v Corbyn TV debate happen. They have lined up the BBC, Labour say they prefer ITV’s format and earlier timing. The Tories think May’s concrete plan will contrast well with Corbyn’s evasiveness and ambiguity with viewers. They claim Seumas Milne knows that and is making excuses to avoid the head-to-head. We have put our chicken on standby for Seumas if he continues to try to wriggle out of the debate. Guido thinks it will be a laugh to watch May pretend she is enthusiastic about Brexit and Corbyn pretend he would prefer Britain to remain in the EU…

Daily Mail’s Own Poll Found Public Backs ‘No Deal’

This is the most extraordinary front page of the Daily Mail’s new era under Geordie Grieg. It claims voters want Tory MPs to “rally behind Theresa May’s Brexit deal” based on a Survation poll.

What the Daily Mail’s front page has done is ignore the key result that Survation found. When asked to choose between Theresa May’s withdrawal plan and leaving the EU with “No Deal”, voters opt for “No Deal” by 41% to 35%. Extraordinary from Geordie…

UPDATE: The Daily Mail has made strong representations that our previous headline “Daily Mail Twists Own Poll Results, Public Opposes May’s Deal, Frontpage Headline Says Opposite” was unfair and untrue. On further reflection we accept that we were quoting from two different polls commissioned by the Daily Mail two weeks apart. We have now changed the headline and the content of this story. We accept that their front page story reflects accurately and truthfully data from the second poll. We apologise in particular to Simon Walters.

Government Spokesman Makes Case To the Public

Theresa May has embarked upon her national tour, with the entire cabinet enthusiastically making her characteristically compelling, persuasive argument in a not-at-all-robotic way.

Okay, this isn’t really a Government spokesman… but it might as well be…

Rich’s Monday Morning View

Macron’s Blunt Brexit Warning to UK Over Fishing

Voters Want MPs to Reject Withdrawal Agreement

This poll out this morning from Ashcroft’s polling might surprise readers of the Daily Mail and others who are lapping up the superficially appealing line, delivered to camera from Downing Street by May, that the British people just want the government to “get on with it”. They don’t want them to get on with this deal. The British people overwhelmingly want MPs to reject the agreement.

By 46% to 26% they want MPs to reject the Withdrawal Agreement, if you exclude don’t knows that is 64% of the British people want MPs to reject the agreement – an almost 2 to 1 margin. Both Remain and Leave voters overwhelmingly dislike the deal…

Boris: Backstop “Makes A Complete Nonsense of Brexit”

Brexit big beats are hitting out against the Northern Irish backstop. Boris’ intervention comes as the number of Tory MPs committed to voting against the withdrawal agreement reaches 88. That’s more than half of backbench Tory MPs…

Raab Speaks Out Against May’s Deal

In their first public interaction since his resignation, former DExEU Secretary Dominic Raab calmly slices through May’s Withdrawal Agreement.[…] Read the rest

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