13 February 2017

Theresa May’s Britain is starting to look like a safe haven


In his CapX weekly briefing two weeks ago, Robert Colvile commented on the “remarkable stability of Brexit Britain”. He highlighted the Prime Minister Theresa May’s big poll lead over Labour leader Jeremy Corbyn and concluded that “the May supremacy looks like a welcome source of relief”, given the uncertainties elsewhere in the world.

Since then, Mrs May’s authority has if anything grown. She won the Article 50 vote by a convincing majority of 372 in the Commons and is apparently now strong enough to shake off missteps, such as dropping a promise made to Lord Dubs by David Cameron that Britain would take 3,000 under-age refugees from Syria. Even the gathering crisis in the NHS does not seem to really throw her off course.

This domestic confidence is echoed by surprisingly positive economic news. The view of financial markets towards the UK as being a victim of a potentially insane political instability is being re-evaluated. An entire thesis about Brexit is starting to be turned on its head.

To remind you, this thesis conflated Brexit with the election of Donald Trump and the emergence of populist parties in Europe. These phenomena have many things in common, of course – but those who espouse this theory have also been guilty of making a big mistake, by missing important nuances both about Brexit and about the character of Theresa May and her Government.

The significance both of this error, and the fact that it is now being recognised, should not be missed.

Investors, who only a short time ago saw Brexit as the beginning of a chaotic continuum which will result in populist uprisings across the West, are now reconsidering their view.

Take the last week, for example. Sterling, which was so volatile for most of 2016, has partially recovered and been pretty steady at $1.25 since the end of January. The FTSE 100 continues to hover at near-record levels.

Markets are reflecting what is happening on the ground. Judging by data from the Office for National Statistics, there are signs that the long-awaited rebalancing of the economy is underway. Manufacturing production rose by 4 per cent on an annual basis in December, a near six-year high.

Exports are growing much faster than imports, and the quarterly trade deficit in goods dropped from £14.4 billion at the end of 2015 to £8.6 billion. The BRC’s retail sales monitor showed retail sales growing at a modest 0.1 per cent in January. By contrast, new car registrations hit a 12-year high.

It was always a mistake to conflate Brexit with President Trump. Of course, there are similarities, including a desire to give the Establishment a bop on the nose and concerns about immigration (an emotive subject on which Leavers have varying, not uniform, opinions). But the list of differences is much larger.

The most critical such difference is that Brexit was fought on an explicitly free-trade platform and the signing of new free trade agreements around the world, including with the EU. Insofar as there was a Protectionist Brexit faction, it has lost the subsequent, post-referendum argument.

Contrast that to Donald Trump. He is decisively protectionist in inclination, as the phrase “America First” and his withdrawal from the Trans Pacific Partnership indicate.

There is another important distinction. Donald Trump has resulted in, um, Donald Trump. But Brexit has resulted in Theresa May. It is hard to imagine two more different people.

Opinions on Trump are not hard to come by, but most people hardly know Mrs May. But we certainly know enough to say that the photo of her holding hands with the US President is utterly misleading.

In fact, Mrs May is a person of deep moral seriousness, to the point of being almost dull. There has not been such a morally serious occupant of Downing Street since Margaret Thatcher. Indeed, this is her most salient characteristic.

This is reflected in the tone, policy and posture of her Government. Revolutionary in the French, Russian or German sense, it is not. It is evolutionary.

My own personal view is she got off to a somewhat awkward, unconfident start, but she has found her poise in 2017. What we see now is a Prime Minister who takes her time, eschews radicalism, and is thorough in her approach. She has a credible plan for implementing Brexit, which she outlined in her Lancaster House speech.

That doesn’t mean Mrs May is perfect. If anything, she lacks sufficient radicalism or vision. For instance, the recent Housing White Paper was rather plodding. She is still too in thrall to the unimaginative elements in the Civil Service, especially in the Treasury. The Downing Street machine is constantly criticised in the press. It would be a pleasant surprise if she could be a little jollier and open, especially to our European partners.

Nor should we downplay the challenges of the upcoming negotiation with the EU, or the possible side effects, such as the hysteria of the Scottish Nationalists in Edinburgh.

In the grand scheme of things, however, these are second-order issues. The really big point is that far from being a tumultuous, cacophonic, unstable, firecracker of a polity, Brexit Britain is starting to feel like a relative island of calm, more at ease with itself than it has been for many years, led by a sort of 1950s Prime Minister, who is nearly 20 points ahead in the polls.

The spotlight of worry has swivelled round elsewhere, to Greece, France and to the United States. If Brexit is a revolution, it is so far turning out to be a very British and incremental one, lacking in violence or upset. More tea, vicar?

George Trefgarne is founder of Boscobel & Partners, a communications firm