Some commentators have drawn parallels between Theresa May’s Brexit fiasco and John Major’s embarrassing exit from the Exchange Rate Mechanism in 1992. In the latter case, the loss of financial and economic credibility was a major factor in the Tories’ subsequent defeat in the 1997 general election. As for the former, some believe that Brexit has the potential to split the Tory party and once again destroy its reputation for economic credibility, which has been carefully cultivated since 2010.
But Brexit is a different beast entirely. As much as Labour would like to paint Brexit as a Tory project, the reality is that Brexit is an issue that crosses party lines like no other. Let’s not forget that many working-class Labour voters were the most enthusiastic supporters of Brexit – and Jeremy Corbyn himself was once a very vocal Euro-sceptic (before he became party leader and was subsequently forced to change tack in order to placate his metropolitan supporters).
But let’s face it, as much as journalists love to salivate over the latest piece of Brexit gossip, the vast majority of people just want to see the back of Brexit. They want it done-and-dusted. And although Theresa May has had one hell of a tough time of late – not least having gone down to the worst Commons defeat in history – the fact that she is still in No. 10 is testament to the notion that this mess isn’t really her fault.
In fact, I sense a growing sense of respect in the country for plucky Mrs May. She’s a fighter who’s been dealt a tough hand – and we know us Brits love an underdog. And while it won’t be Mrs May who leads the Conservative Party into the next election, it appears that she has made it her personal mission to honour “the will of the people” and deliver Brexit. If and when she is successful, that will be her parting gift to the Conservative Party.
And on that front, it appears that some progress is finally being made. Parliament, which until recently had only told us what it doesn’t want, is now beginning to reveal what changes are needed in order to make the Withdrawal Agreement palatable to the nation’s legislators. The EU is holding firm, but this is par for the course – don’t expect any movement until the eleventh hour here! Nevertheless, if the UK eventually exits the EU on something akin to Mrs May’s deal, the Conservative Party will have fulfilled its election pledge.
But what next? Last week I set out why I believe the UK has a great future outside the EU, but repositioning ourselves as an independent trading nation will take time. In the meantime, however, there is scope for a more immediate uplift in our economic fortunes as the uncertainty surrounding the UK’s future relationship with the EU dissipates.
We’ve all seen the innumerable headlines of how such-and-such company has delayed its investment decisions due to Brexit uncertainty. But when businesses have a clearer image of the future modus operandi, they will be more inclined to make investment decisions. The same goes for the army of would-be first-time buyers, many of whom have held off taking that all-important first step onto the housing ladder because of Brexit jitters. The flood gates will open.
And this will come at a time when wage growth is already strong and is moving ahead of inflation – meaning that wages are now rising faster than prices – putting more money in the pockets of UK consumers. The number of UK citizens in work keeps hitting record highs, which means the labour market is tightening, pointing to further solid increases ahead for wages as employers compete for talent. As the Brexit clouds lift, the pound will rise on international currency markets, making our imports cheaper and helping to keep inflation at bay. Meanwhile, the UK’s public sector finances should continue to improve on the back of this – dare I say it? – “Brexit dividend”, leaving plenty of room for a further easing of austerity.
If there’s anything that the Brexit drama has taught us, it’s to expect the unexpected. With this in mind, I believe the UK economy will prove the doomsayers wrong and continue to grow in the wake of Brexit. And a government that raises people’s living standards is rarely voted out of office. The Cult of Corbyn is already on the wane – not least because of his ambivalence over Brexit – and a path is clearing for a Conservative leader who can seize the opportunities presented by Brexit.
Who will that person be, I wonder?