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Nov142016

A week in politics is a very long time these days

Andrew Mackenzie, Cobalt Recruitment Last week we heard that the High Court had scuppered the government’s plans to use Royal Prerogative to trigger Article 50 of the Lisbon Treaty to start the clock ticking for the UK to leave the European Union.

The court’s decision sparked a furore from all sides, as well as irresistible and predictable press hysteria. ‘Enemies of the People’, one headline read. ‘Judges vs the People’ screeched another. Such hysteria reminds us that we are more divided in our country today than at any time since 1979.

How dare these judges, some Brexiteers exclaimed, defy the will of the people, after the June Referendum? But Remainers were on hand to bark back, that surely the decision of an independent UK court is the purest essence of that grating catchphrase, ‘taking back control’. Or should the independence of the judiciary only be sacrosanct in decisions that one agrees with and approves of?

An Independent Judiciary
Surely, Parliamentary democracy, liberty under law, Habeas Corpus, Magna Carta, the separation of powers and an independent judiciary are the very finest things that our country has had to offer, not only to us but also to the world - the very best of British exports along the veil of time. If these exceptional and fundamentally important key principles are not for you then, frankly, bon chance, because the road to hell can be a very short trip indeed, as history constantly informs us.

The decision of the High Court hinged on the word ‘advisory’ in the Referendum legislation that describes the result of the vote in law. That is to say that, the result was ‘advisory’ to Parliament. The trouble is, how could the largest expression of democracy in living memory in a democracy be only advisory?

However, given the circumstances that the court was presented with, the court ruled that the triggering of Article 50 would have to be debated in Parliament and Royal Prerogative could not take precedence over this. To be clear though, this is what we ask of our judiciary, to interpret the law, not to write it or to decide what is best for us – that is essentially our job in the privacy of the voting booth.

The government plans to appeal the ruling in the Supreme Court, an appeal that will be heard by all eleven of the Supreme Court’s judges, in a special hearing and where time will be of the essence, so as to avoid a legal and constitutional quagmire. Though, frankly, it seems difficult to see how a different result might be forthcoming because the ‘problem’ is not the decision of the High Court or of the Supreme Court but rather, the problem, is one of sloppy legislation enacted by Parliament.

However, whether you believe in the Institutions that are the bedrock of these isles and in your liberty, as well as in mine, or not, the case does highlight the kinds of difficulties that can beset the government over the question of Brexit. There are, unquestionably, deep constitutional queries such as, how would a Remain MP from a Remain constituency vote on the question of Brexit or elements of it, if given the opportunity? Against their conscience and the will of their constituents or should they vote with their conscience but against the will of the people? And what of the House of Lords? Could and should the Lords, most of whom are Remainers of course, again, thwart the will of the people? In what is a very controversial second chamber, in any event, if your answer is yes, then would the people ever forgive them for it? I am debating with you here of course and I am thoroughly of the view that the Lords would stand down and stand aside en masse but we would, of course, have to see.

Brexit Negotiations
The other matter is one of the negotiation. Traditionally, at least, treaties were for governments to negotiate, whilst the primary function of Parliament was to pass and to repeal laws. The idea that the government must have its negotiating hand signed off by Parliament prior to triggering Article 50, would have, potentially, dire consequences for the negotiation, for the economy and for the cohesiveness of the country itself, at a time when we are anything but cohesive. Brexit must not become a long drawn out affair, like CETA, which has, so far, taken seven years and is still not ratified after Wallonia’s (a small region of Belgium) intervention. A long drawn out negotiation could be the death by a thousand cuts for the economy.

UK Infrastructure And Chinese Investment
The great news at the moment is the health of the economy. Thus far, it has been extremely pleasing to pay witness to how robust the UK economy has proved to be since the referendum result in June. The economy has dumbfounded the experts by doing far better than almost every prediction. Yes, Sterling has fluctuated and will continue to do so but that is what a currency should do and far better this than being lampooned by a currency that is totally unsuitable for one’s economy. You just have to ask the Greeks about that.

More broadly, the government has now given the go ahead for the significant investment in a new nuclear power plant project at Hinckley Point, a project where a key investor are the Chinese. Hinckley is one of two power plants that the Chinese are keen to provide funding for in our country.

The government has finally given the go ahead to a third runway at Heathrow. Whether this goes ahead remains to be seen but it is a step in the right direction, since the UK needs to increase airport capacity to grow the economy and doing nothing is simply no longer sustainable. Crossrail II remains under review but it is highly likely that this project too will get the go ahead. There is, of course, a time to borrow and to spend and with uncertainty looming, now is precisely the right time, for this type of government promoted stimulus.

Nissan has just confirmed its commitment to the UK and to its Sunderland plant with its 7,000 UK jobs, GlaxoSmithKline recently committed to invest £275,000,000 in its UK operation and the economy grew by 0.5% in the last quarter, up on the 0.3% widely predicted. By every prediction, the UK economy has done better than expected and has proved to be far more robust than pretty much anyone imagined.

Ambition In Asia
In October, the UK agreed a deal with China to increase flights to and from China and the UK from 80 to 200 a day and critically, to lift restrictions on where UK operators can fly to in China, so UK airlines should be able to fly to any destination in China, the aim of which is to ultimately lift the restrictions on UK businesses to the Chinese market. The UK is China’s destination of choice for investment in Europe. One can say, what pitiful stuff, this is but small beer but it is still early days as we leave the European Union and it is indicative of the future direction of travel. It is not necessary to labour the point that China is the second largest economy in the G7. Given our shared history and our long geopolitical experience, engagement with China – a traditionally insular and inward looking nation – is a fine pursuit for our nation, especially as the Chinese are now flexing their ‘hard power’ on the world stage. China does value UK history, UK heritage, our long experience in the world and they are far more malleable, if approached in the right way, than they at first appear.

Macroeconomics And The House View
Cobalt is a global business and as such the macro world is important to us. At Cobalt, whether it be our Research or our General Practice recruiters, we regularly meet our clients’ in-house economists, property researchers and their Business Developers. Our meetings are very much two-way streets. Cobalt needs to understand the ‘house view’ of our Real Estate clients as well as the broader economic data our clients are monitoring and commenting on and our clients like to hear about what we are seeing, on the hiring side, given the very real economic barometer that Cobalt is as a business. If Cobalt is feeling positive about the outlook, than that is a good sign that the real estate market is in rude health. They want to understand hiring trends and what is happening on the capital raising side, in particular, and what this looks like from our side: essentially, where is the equity coming from and where and in what sorts of assets is it being deployed. Since the referendum, we have welcomed the robust and confident hiring plans of our clients, here in the UK and across the European Union and this has been pleasing to see.

From what we have seen, the economy has been far more robust than all of the predictions. There may well be some choppy waters ahead but it is very plain to see that the UK is considered, globally, to be a great place to do business and to invest in.

Article written by Andrew Mackenzie, Real Estate Recruiter at Cobalt Recruitment

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This entry was posted on Monday, November 14th 2016 and is filed under Property & Real Estate. You can subscribe to our RSS 2.0 news feed here.

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