Wednesday, 12 December 2018

Is PM's EU agreement good for Britain? Yes, says Professor Rajneesh Narula OBE, Henley Business School

Is PM's EU agreement good for Britain? Yes, says Professor Rajneesh Narula OBE, Henley Business School

FINALLY, after two years of chattering, and literally millions of contrasting opinions on the possible shapes Brexit might take, we have an actual plan.

More importantly, it is a plan that is viable, not just to the EU at large, but also to Ireland (very crucially).

Perhaps most significantly, this is a plan that does not tear the UK’s economy asunder. It is a pragmatic plan that is built on the very reasonable premise that it will take years (perhaps decades) to reorient the UK’s economic dependence away from its closest neighbours.

Crashing out without a deal is irrational and requires a deep misunderstanding of how the economy actually functions in a globalised world. Mrs May’s Brexit deal is by no means perfect, but it offers what businesses have been craving for two years — certainty, or at least, less uncertainty.

Certainty that there will be an orderly and civilised transition rather than a disorderly and shambolic crashing out of the EU in four months’ time. Certainty that care will be taken to redefine complex relationships only after due diligence. Certainty that policies will not be driven by passion and promises, but by facts.

The objections to Mrs May’s plan strike me as being politically opportune rather than being driven by economic logic. To reject this plan in the absence of any viable alternative is not in the national interest. By “national interest”, I mean the United Kingdom’s economy and its reputation for calm and considered action.

The objections of the various factions seem tired and, crucially, all impractical.

Is there another deal out there that does not require compromises? Nobody outside the UK seems to think so and this is reflected in the value of the pound against most currencies.

How and why it has taken almost two years to get to this deal is a wonder and markets and firms have not applauded this snail-like hesitation, punctuated by petty rivalries between political factions and tribes.

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