Monday, October 10, 2016

May's Labyrinth

Theresa May's conference speech made waves. Especially her citizen of the world comment directed at multinationals and elites.

Combined with speeches by David Davis and Amber Rudd, the Tory government released an image that shocked, both inside Britain and outside.

Not only did a signal that a hard Brexit was the aim but an anti-global one as well.

As ex LibDem MEP Graham Watson pointed out on Facebook the certainty May's speech emitted was that companies were better off outside the UK.

Rudd's proposal that companies would have to publicly declare the ratio of foreign staff in the UK came with the qualification "I am not  racist but".

Davis warned that migrants who do not add value to the UK would not be welcome. Critics were quick to point out that migrants are more prone to work and burden the system less.

Merkel and Hollande were quick to point out that a hard Brexit would not give the UK access to the Single Market. Merkel also pointed out to German industry that pressure from European business associations to keep the UK in the Single Market without free movement should be resisted.

The rationale is clear. If the UK gets a Single Market deal without free movement, everyone will start wanting their own a la carte EU.

A UKIP MEP even pointed out that the government's anti immigration proposals went "too far"!

LibDems pointed out that there is no specific mandate re immigration given by the referendum result. That all it said was EU exit, nothing about migration or EEA membership.

So why is May, allegedly an ex-Remainer, adopting such a hardball stance?

Obviously, her government's position will take voters away from UKIP. But it my lose many to the LibDems.

Is she catering to the ultra anti EU side of her party?

Is it a negotiation tactic?

So far, the EU has been adamant. No free movement no Single Market.

42% of UK exports go to the Single Market, 14% of its exports to the UK.

And what about free movement of capital and of services.

Is it surprising that the proposal for have companies declare their ratio of foreign staff has been taken back?

May is on a dangerous path. She is making companies puzzled in addition to scaring EU nationals in the UK. Is this the pro business party that the Tories used to be?

The UK industry needs the Single Market, at least in its present structure of goods produced. It cannot afford a trade deal of the Serbia-EU type.

Is May going to continue to cater to the anti-immigration, anti-establishment vote?

It's a long way to the March triggering of Article 50 date.

The financial markets' reaction to May's speech is indicative of the situation.

To be fair, May's policy proposals on immigration are not unprecedented in Europe and the world. But when a country with a rather liberal view of the world and open to migrants decides to radically change course, what May got is what she should have expected.

The UK's economic model needs the European HQs and production facilities of companies. So far, May's words are damaging this model. What does her cabinet really have in mind.

Probably, nothing. And that's the problem.

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