Article 50 may be getting close, but this does not mean hard Brexit is a foregone certainty, suggests a leading economist.
It just boils down to tactics. The government can kick-off Article 50 whenever it wants, but it will probably want to wait until after the dust has settled on the Dutch election, which will, in turn, take us very close to the anniversary of the Treaty Of Rome on March 25th, which in turn will take us very close to the French election, and since there is not much Francoise Hollande can do in the last few weeks of his Presidency, there is a good chance Article 50 will not see the light of day until the latter half of May.
But, given a reluctance by the UK government to accept being part of the free movement of labour within the EU and its close trading partners, there is a general assumption that some form of hard Brexit is inevitable.
Don’t you believe it. Or at least Samuel Tombs at Pantheon Macroeconomics has said words to that affect.
The crux of Mr Tombs' argument is that the economy matters. The so-called misery index – a charming phrase used to put a value on the combination of unemployment and inflation – is correlated with public opinion. Right now, the misery index is low, but alas, misery upon misery, it is likely to rise. And the main reason for this likely rise is Brexit.
Right now, opinion polls show the Tory party is in a very strong position – recent opinion polls indicate that 44 per cent of the UK electorate would vote Conservative if the election was held tomorrow, compared to 34 per cent at the time of the referendum.
But Mr Tombs said: “Public opinion, however, likely will shift again as the economic costs of Brexit become clearer.”
He added: “Although concern about the economy has not increased yet, just 26 per cent of people now say immigration is the most important issue for the Government to deal with, down from 45 per cent in June 2016. On past form, the rise in the misery index that we anticipate is consistent with public concern about the economy exceeding immigration when the Brexit deal takes shape in the autumn of 2018.”
Mr Tombs reckons that as the economy shifts, and the costs of Brexit become clearer, then public opinion will shift. He said: “electoral arithmetic suggests that the Conservatives have more to gain from pivoting to the centre and trying to secure the backing of Labour voters than trying to lure UKIP voters."
He said that a five per cent swing to the Tories from Labour would increase the number of its MPs by 60, but a similar swing to UKIP would lead to just 36 more Tory MPs.