Q15 Given the premise Britain leaves the EU, what is the best way forward with Brexit?

New Year’s Eve 2019 Forecast (What’s this?)

Full disclosure, I don’t think Brexit is a good idea and I’m not sure that with everything that’s happened and the way the ambiguity has persisted there is such a thing as a ‘clean’ Brexit any longer. The anxieties that Brexit has created in business sectors may be irreversible in the short term and strategic decisions to relocate or minimize operations may already be underway regardless of what I mention below. Still, assuming the premise that Brexit does happen, and there is a way to make it the least-worse option here are my forecasts.

First ideological fire and brimstone needs to be abandoned for pragmatic execution. A senior team is needed that can “disagree and commit”, meaning that they may voice internal disagreements about options but have the ability to pull together and create pragmatic, rather than sound-bite, solutions to the challenges that a Brexit will entail. Assuming that the political decisions are in the past, and not subject to the news cycle debate, that may make things easier.

As an example of these pragmatic compromises I can think of no better than the potential resolution of the border between Ireland and Northern Ireland with the New Protocol. The border problem was a dilemma: the need to control customs goods, services, and labor moving between what would amount to a national boundary between the EU and the UK in Ireland, without creating a “hard border” of checkpoints and control mechanisms that might risk the fragile peace there. The New Protocol solution, which recognizes a “legal” border being between Northern Ireland and Ireland but the “functional border” being in the Irish Sea is a clever solution to resolve this dilemma. Legally, there is a border between the two entities – but that border is ‘controlled’ as goods, people, and services cross from England into Northern Ireland across the Irish Sea.  It’s not perfect, and there will be some tradeoffs, but it’s that kind of creative thinking and resolution on all of the lingering challenges that are needed to make Brexit the least-worst option.

Another factor necessary to improve outcomes, but not in the cards, is to abandon the necessity to accomplish the exit at the same time as the political treaties are concluded. I can understand, even if I don’t agree with, the concerns of the Conservatives and Prime Minister Johnson that perpetual delays represent a chance to back-track or avoid Brexit.  But the reality is that even clever ideas like the New Protocol above probably need a one-to-two-year runway to properly develop, iteratively implement and work out the bugs. 

In some ways a staged roll-out is in the long-term interests of the Conservative party. The worst case from their perspective is a no-Brexit, which means a second worst case must be a Brexit that crashes hard leading to public backlash and reversal. Just as I’ve talked elsewhere about Europeans becoming acclimated to the reality under the EU, if the transition is managed professionally and competently, with minimum ‘shocks’ then over time some Britain’s will come to acclimate to the reality of Brexit. It’s just in our nature as humans to adapt to things which aren’t causing us active sharp pain.