Brexit: playtime over

08/06/2017

There is a sense that the reality has been suspended while the politicians and media have played their dire little games but, once the voting is over, it'll be back to work with a vengeance. Nothing fundamental will have changed.

Waiting for us on the "other side of the hill" is uncertainty, flagged up by the World Bank and JP Morgan on Tuesday and by the OECD yesterday.

The tidings borne by the OECD do not make happy reading. The economy, it says, is projected to slow in 2017 and 2018, owing to uncertainty about the outcome of the Brexit negotiations.

Interestingly, this projection "assumes that the United Kingdom's external trade will operate on a most favoured nation basis from April 2019", a short-hand way of saying that Mrs May bugs out and walks away with only the WTO option to sustain us.

Under those circumstances, to have the economy merely "slow" is a relatively benign outcome – although the term is vague enough to cover a wide range of eventualities. To "slow" could mean just a little bit, or grinding almost to a halt.

But the OECD does elaborate on its generality, stating that the United Kingdom "faces a long-standing decline in its export market share", warning that its less affluent regions "are exposed to the risk of global protectionism, which could lower incomes and raise inequality".

The thing about uncertainty, though, is that it actually means that we don't know what's going to happen. That's why it's uncertain. And that means things could either be better, or worse than (not) predicted. Or they could even end up just the same - that's the beauty of uncertainty.

But, if the OECD is really anticipating that the United Kingdom's external trade will operate on a most favoured nation basis (aka WTO option), then we should be expecting some pretty drastic effects on the economy. With projections of 28 percent loss of EU trade, and a "perturbation multiplier", then we could be looking at recession verging on depression.

Nothing of this, however, has formed part of the debate through the campaign, so we remain as "uncertain" as ever we were. It is going to be for Mrs May to break the news, assuming the "May Team" is elected with a majority – which most assume to be the case.

What Mrs May perhaps hasn't realised is that, in personalising the campaign the way she has done, if (or when) Brexit goes belly-up, she is going to be at the head of the queue when it comes to handing out the blame.

Should her party get an increased majority - which does seem likely – then she can hardly blame the voters. She called the election to secure "the strong and stable leadership our country needs at this crucial time" so she can hardly blame anyone else if she gets what she's been asking for. To that extent, her bluff – if that is what it was – will have been called.

Given that, on the basis of what we have so far seen, Mrs May's capacity to secure an effective (or any) deal from the "colleagues" has to be lower than a deep sea diver breathing hydrogen fluoride, her options are drastically limited. Unable to secure a deal and unable to dump the responsibility on the voters, the only logical harbourage is Brussels itself.

It was Conan Doyle who had his hero Sherlock Holmes say that, when you have eliminated the impossible, whatever remains, however improbable, must be the truth. If we apply that nostrum here then, when it comes to apportioning the blame for failure, the uncertainty peels way and the "truth" comes shining through. All the rest is detail.

On the other hand, if Mrs May doesn't get her victory, then we're probably doomed anyway – which puts us in the position of being doomed if we do vote for her, and doomed if we don't. That makes this election more a choice of how we want to be doomed.

Since the outcome of our doom is uncertainty, though, it seems we're going to be doomed to uncertainty, which was going to be the outcome even if we were not going to be doomed. Therefore, we look to be uncertain if we're doomed, and uncertain if we're not. On that basis, the only certainty is uncertainty.

Here, there is almost a whiff of the 1975 referendum when, with a major economic crisis waiting in the wings, normal politics was suspended while we decided to stay in the Common Market.

According to some pundits, that bit of history might be about to repeat itself, with the dark clouds of financial Armageddon gathering on the horizon. And, although, Brexit may not be the cause, it could well be the trigger which sets off something that was probably going to happen anyway.

The one ray of sunshine in all this, though, is immigration. As we wrote in Flexcit and elsewhere, more than anything else, numbers are effected by "push" and pull" factors. And, in terms of "pull" factors, there is nothing like a buoyant economy to drag in the migrants. But, on the other hand, there is nothing more calculated to keep the foreigners at bay then to trash your own economy – something which we seem poised to do.

I suppose the ultimate joke here (or irony, if you prefer) is that, according to a report in the Independent yesterday, regardless of Brexit, the free movement of European people is coming to an end. The pressure to keep closer tabs on terrorist suspects is being felt across Europe, the report said, meaning that the concept of a borderless Europe was going to have to change.

For the moment, though, we have the brief entertainment of watching the results come in overnight, and working out which of the polls and the pundits got it completely wrong. I'll stay up to to watch them come in, running a live blog from about 10pm, for as long as I can stand it.