European Affairs

Letter from London—Post-Brexit “Wary Lull”     Print

MichaelWhite2016A month after Britons surprised themselves and the world by narrowly voting - 52% to 48% - to abandon their safe harbor inside the European Union, the initially pyrotechnic response in all quarters has given way to a wary lull, as the protagonists in London and Brussels, Paris and Berlin, wait for someone else to make a significant first move to achieve Brexit - the promised UK departure after 43 years.

For that there are good explanations and bad. On the plus side, the ruling Conservative party, whose 40-year civil war over Europe and “sovereignty” led now former prime minister, David Cameron, into his fateful offer of the June 23 referendum, managed to choose a new leader unexpectedly quickly after all, not in a three-month knockdown contest, but in a rapid collapse of the field.

After her rivals self-destructed spectacularly, most notably when frontrunner, Boris Johnson, was knifed by his supposed campaign manager, Michael Gove (whose own bid for the job folded within days), the party had no choice but Theresa May, 59, a six-year veteran of the UK’s demanding home affairs department. If party activists had hoped for ideological zeal (as activists often do), mainstream voters were grateful for caution and competence at a time when both are needed. May’s choice of foreign secretary would prove less reassuring.

In the City, the FTSE indexes recovered early losses and business leaders persuaded themselves, yet again, that the pound’s 10% fall against both the US$ and the euro would stimulate exports more than it would push up costs. Unemployment - at 5%, half that of France - fell slightly and both UK and foreign firms which had warned voters of the dire economic consequences of Brexit made cheerier noises about future investment. At 0.6%, second quarter growth was better than feared, though some long term indicators were troubling and talk of an emergency austerity budget evaporated.

Most dramatically of all, the Japanese tech company SoftBank, successfully bid £24.3 billion (around $32 billion dollars) for Britain’s most successful tech “unicorn,” the Cambridge-based microchip pioneer, ARM Holdings. Amid familiar assurances that the buyer will expand the company and its research base inside Britain (Kraft’s betrayal of promises to the venerable chocolate maker, Cadbury’s, still rankles), Philip Hammond, Britain’s new finance minister - chancellor of the exchequer in local patois - declared that it showed confidence among “inward investors” would not be dimmed by the Brexit vote.

Whether the loss of one of Europe’s best efforts so far to beat Palo Alto at its own game in the emerging “internet of things” is a triumph, or short-sighted deal at a bargain price when sterling is low, quickly became a matter of expert dispute. Mrs. May, a former Bank of England official, married to an investment banker, had already promised a less laissez faire approach to industrial strategy - as well as a clamp down on dirty boardroom habits. While some rejoiced, others mourned a rare lost opportunity to create a worldwide tech giant.

The dirty habits of some British businesses, habits for which the EU scapegoats in Brussels could in no way be blamed, were highlighted when Sir Philip Green - knighted by Tony Blair for entrepreneurial flair and embraced by Cameron - was exposed for selling his ailing BHS chain of stores to a dubious, ex-bankrupt consortium with no retail experience for £1, thereby offloading £500 mn worth of pension liabilities for 11,000 ex-staff.

The ensuing scandal, which Green sat out on his £100 mn Mediterranean yacht, was one of the month’s non-Brexit distractions on the negative side. Even worse was the headline grabbing series of summer atrocities, for once more awful in France and usually-tranquil Germany than in the US. Unprompted attacks on civilians occurred with guns, bombs, knives and - on the handsome sea front at Nice - a truck systematically driven through a Bastille Day holiday crowd, killing 84.

The gruesome climax was the videoed, throat-cutting murder of an 86-year-old priest at his own altar in Normandy. Though mental disturbance and other non-Islamist motives featured in the horror, France’s already low morale (it had just lost the final of Euro 2016 football championship to Portugal in Paris and the Tour de France to a Brit) sagged further and the state of emergency extended. As usual, Britain’s Brexit tabloids whipped up an insular storm: “2,000 Terror Suspects in UK But Only ONE Is Under A Curfew.”

In this context, Theresa May’s calm and her experience handling terrorism and other crime as Cameron’s home secretary were ideal. When Boris Johnson and Gove, his betrayer, fell out, her only standing rival was Andrea Leadsom, a mid-ranking minister of little experience and a volatile temperament, whose chief claim to power was being a late switcher to the Brexit referendum camp. Incautious remarks about the importance of having children (the Mays have none) led to sharp media criticism and Leadsom fled a field she might have won. It must be rated a narrow escape.

More of a mixed blessing was the post-result resignation of loud-mouthed Nigel Farage as populist leader of the UK Independence Party (UKIP), Britain’s Tea Party. After triumphantly visiting Strasbourg to insult fellow Members of the European Parliament - “none of you have ever had a proper job,” he told the professorial, scientific and business MEPs - he made a victory tour on the “Take Back Control” fringes of the Republican convention in Cleveland. Since he has repeatedly subverted potential challengers and successors, Farage, a formidable mouthpiece for country club prejudices, may be plotting a comeback.

But in reshuffling Cameron’s divided cabinet, ignominiously dismissing his chancellor and ally, George Osborne, Mrs. May applied Colin Powell’s Pottery Barn rule. An arms-length supporter of the Remain camp on June 23, she decided that vocal Brexit campaigners who broke the EU link should be required to negotiate the UK withdrawal and a new relationship with its near neighbors across just 22 miles of water.

So David Davis, a maverick, libertarian Tory MP, was appointed minister for Brexit and Liam Fox (a strongly pro-US, former defense secretary) became minister for international trade, with high hopes of bilateral deals all round as “Britain goes global” - the mantra of the free trade wing of the Brexit campaign, though not of its blue collar foot soldiers.

Most spectacularly, May appointed Brexit’s campaign star, Boris Johnson, as her foreign secretary, a near perfect example of releasing a blond bull into the diplomatic china shop. Many such appointees are unknown to other national leaders, but in a 25-year career in witty, boulevard journalism, Johnson has insulted most of them. As recently as May the former mayor of London won the Spectator magazine’s £1,000 President Erdogan Offensive Poetry competition. His limerick about the hyper-sensitive Turkish president involved sex with a goat. At his first press conference with US Secretary of State, John Kerry, Johnson vaguely apologized in the abstract and evasive language, which are his highly-educated trade mark. But he will not be visiting Ankara any time soon.

By way of contrast, May is using the summer lull in government business (accentuated this year by post-Brexit paralysis) to travel everywhere, visiting Francoise Hollande in Paris, Angela Merkel (like May, a Protestant clergyman’s daughter, two years her senior) in Berlin, and many other EU officials whose good will she will need in the coming years of painful disentanglement. Even ardent Brexit champions now admit it may take a long time.

“Brexit means Brexit,” May declared as part of her debut message as the new prime minister, conspicuous for its outreach to the political middle ground, to the poor, to women (she has always been a strong feminist) and to ethnic minorities, which usually vote Labour. By that she meant there would be no attempt to stage another referendum and stay in.

May ignored calls immediately to trigger the EU treaty’s Article 50 and set a two-year timetable for Brexit, though Liam Fox expects that next year. The EU Commission (the Brussels bureaucracy) has appointed Michel Barnier, a veteran French official to handle its share of the talks, a signal that it may seek to get tough and punish Britain, as some are urging to discourage copycat referendums. But the dominant role will be taken by the EU’s council of ministers, the elected politicians, which mostly means Merkel.

Her pragmatic instinct has been conciliatory (“Don’t leave us alone with the French”, German politicians said in vain), but she faces her own re-election next year. So does the embattled Hollande. EU solidarity has strengthened across the other 27 states since the Brexit shock, pollsters report. But, as in the US during a campaign year, the public mood is volatile and fearful. Anything could happen.

May moved quickly to extend a constructive hand to regional politicians in Britain’s lesser parliaments in Belfast and Edinburgh (not yet Labour Wales) where nationalists see Brexit as a fresh chance to break up Britain, but cannot rely on Germany or a rise in North Sea oil prices to pick up the bill for their subsidies from London. So far, so good. And May’s room for maneuver has been enlarged by the continuing chaos within the ranks of the official opposition Labour party. 170 of leftwing leader, Jeremy Corbyn’s (think Bernie Sanders without the drive or experience) MPs have urged him to stand down. He is backed by only 40, and faces a leadership challenger in Owen Smith, a Welsh MP whom few have heard of outside Wales. Corbyn will probably survive, popular for his “idealism” - it is of the Latin American liberationist style - among activists, but temperamentally incapable of reaching far beyond his base. Labour will remain on sabbatical.

That leaves May the challenge of asserting herself over her own fractious party, a task for which the “new Margaret Thatcher” (less abrasive, we all hope) may prove far better equipped than Corbyn, whom she eviscerated at their first exchange in Commons question time at Westminster. But that will keep her awake less than the road map to Brexit.

Conspiracy theorists are always warning of a sell-out, whereby May will be so keen to retain tariff-free access to the EU’s single market for half the UK’s exports that she compromises on “free movement” of people, the 3 million EU citizens now living in Britain and the many more who may flood into its open labour market before the rules change, as 850,000 Poles alone have done since 2004.

For Brexit’s blue collar workers, as for Donald Trump’s Mexican Wall builders, it was excess immigration, the threat to jobs, school places and welfare, that was more important than abstract talk of restoring national “sovereignty”. Brussels is floating ideas of a seven year “brake” on unfettered travel to Britain. In the present mood, where fear and anger over economic migrants is mixed up with asylum seekers, terrorism and austerity cuts to the health budget, that may not be enough. Once their victory was won, more cosmopolitan Brexiteers like the Classics scholar, Boris Johnson, pulled back from more xenophobic strands of the campaign. But the reported rise in hate crimes suggest some supporters actually meant it.

Michael White writes for The Guardian in London