The ongoing Brexit drama took yet another bizarre twist this week, as a vote of no confidence was called on Prime Minister Theresa May.
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00:00Hello and welcome to Dirhams and Dollars, the Gulf News business podcast, where we talk
00:07about news affecting the business community in the region and in the world. On Wednesdays
00:11we have in-depth conversations on a topic defining the week. You can find us at gulfnews.com
00:17and you can always download the latest episodes from iTunes. I'm Ed Clouse and I'm joined
00:21today by Jonathan Richards and I'm Scott Shuey.
00:24All right, as we were sitting down this week to talk about what to talk about on this show,
00:29we had sort of a problem. Which one of the global economic crises is the focus on? I
00:34mean, there's four of them going on right now. You've got the streets burning in Paris
00:38because of tariffs on gas. You have the Indian government trying to raid the central bank
00:42to boost the economy ahead of the elections. You have the ongoing circus that is U.S. politics.
00:49But if you're really looking for something great, you really got to look at a country
00:52which is actively going out of its way to make its situation worse. And that's sort
00:57of what we have right now going on with Brexit. So for those of you who don't know where we
01:03are in the news cycle, we are looking at a no-confidence vote in Theresa May in, I think,
01:08about eight hours. Now, if you haven't been following the Brexit, it's...
01:12If you don't know... Do you think there's anyone out there who doesn't know what Brexit
01:15is? There might be.
01:16I'm going to assume for the second that there just might be.
01:17There might be.
01:18There might be.
01:19There might be somebody out there who's had their head in the sand for the last two years.
01:22But it's been getting worse and worse. It looks like there's going to be no deal, a
01:25hard Brexit, and EU is basically, I think at this point, told the UK, no more negotiation,
01:32take it or leave it. Of course, they took it back, argued about it, and now the entire
01:37UK government looks like it's about to fall apart.
01:39So Sarah Dee is out on assignment today, so we thought we'd bring in Richard, too. So
01:44we have two Brits here to explain what is going on and exactly how could it be any worse.
01:52I mean, I'm as confused as everyone else. I think that's part of the problem. I mean,
01:57from my point of view, obviously, I've been living in Dubai for three years, and I've
02:00been watching it from afar, and I'm just horrified. I mean, I leave the country for five minutes
02:04and it all goes to hell.
02:05It's the best to watch it from afar, I think.
02:08But I am slowly watching my London property price plummet. And I think that is the greatest
02:15concern that most people have nowadays. What is the economic future looking like? And it's
02:19looking bleak.
02:21Well, your salary, I mean, just on the economic futures of us expats living abroad, your salary
02:27is looking better.
02:28That's fine.
02:29That's fine.
02:30We're only making petro-US dollars back to the Durham here, so we're okay.
02:34You're going to sell your house for a loaf of bread in about five years.
02:37Yeah, that's right.
02:38But the salary will be enormous.
02:39You won't be able to get a loaf of bread in about five years.
02:41We'll be scrapping over, we'll be fighting the rats that you're only about seven feet
02:45away from in London for the last potato in the supermarket.
02:49And some medicine.
02:50But yes, I mean, not to make our British compatriots jealous, obviously, but yes, we do quite well
02:58out of dropping the pound. And that's great for us temporarily. But what are we going
03:04to go home to? I have no idea.
03:05All right, well, let's back up a little bit. Exactly what's the situation now? What are
03:10we looking at in the short term? Like I said earlier, we know that the EU has come out
03:15and said, here is the terms of the divorce. They've gone back to the UK. There was a big
03:22fight in Parliament, or has been going on for the last three days, with basically Theresa
03:27May trying to schedule a vote to get it passed. If they got it passed, they got a deal. It
03:32ain't going to be pretty, but it'll get them out of the situation without a hard Brexit.
03:36And a hard Brexit meaning they have no deal come March, which means they're in a lot of
03:41trouble. Everything from not being able to land airplanes because of lack of international
03:45agreements to a falling pound. And instead of passing it, they said, no, no, no, we don't
03:50like it. It's too much of what the old deal was like. They didn't like the Irish backstop,
03:56a number of things. So what is going to happen now? They're going to have a no confidence
04:01vote. What does this mean for Brexit?
04:03Well, I mean, if you knew that, you could probably make a fortune. It's really unclear
04:08what it means right now, because we don't know the result of the no confidence vote
04:12taking place. But for those who are perhaps uninitiated in British politics, what this
04:18is effectively means, it's an internal party challenge against Theresa May, who's the prime
04:22minister. By about midnight tonight, Dubai time, or 8pm GMT, we'll have a better idea
04:29as to whether she is still prime minister. If her party decides that she is done for,
04:35then she will exit stage left and her replacement will come in and will be voted in in the coming
04:41days and weeks.
04:42All right, let's assume for a second that she gets voted out. What happens next?
04:46Well, the best way to put it is the singer changes, but the song remains the same.
04:51Okay, so we're going from Van Halen to Van Hagar. That's not a good enough...
04:55We're going from one sort of dodgy deal put in place by Theresa May to another same dodgy
05:04deal put in place by her replacement. Really, effectively, the options remain the same.
05:09And what we're looking at now is a flowchart.
05:10Well, if the options remain the same, then why are they going through this?
05:13Well, because they've lost faith in Theresa May's ability. So, I mean, within the Conservative
05:18Party, you have different factions. You have those who believe that a hard Brexit without
05:22a deal is the best way forward. You have those who believe that Theresa May's deal, flawed,
05:28but the best we're going to get is the way forward. And you have those who believe that
05:32we should remain in the EU and therefore there should be a second referendum where the British
05:36people are allowed to choose.
05:37So basically, the British, sorry, the Tory Party, the Conservative Party, has decided
05:42to rearrange deck chairs on the Titanic after they've hit the iceberg. And there's going
05:48to be no real change in the direction other than the ships going down.
05:52No, I mean, even if you have a centrist, sort of quasi-Remainer come into power following
05:59Theresa May's exit, they are still going to be tasked with delivering the mandate of
06:04the British people, which was voted in 2015, pardon me, 2016.
06:08But the EU said no. The EU said you don't get the mandate of the British people, you're
06:13part of a bigger organisation, take the divorce or get out.
06:15No, the mandate of the British people being to leave the EU. So by hook or by crook, the
06:20next Tory leader will have to, will feel obliged to deliver the will of those 17 million people.
06:27And so that leaves them with very few options. That leaves them with either a hard Brexit
06:30or Theresa May's deal. As you've already pointed out, Scott, there's no new deal coming. The
06:34EU have made that abundantly clear. There's going to be no fundamental change to the deal
06:39that May has already negotiated.
06:40So if May's out tonight, hard Brexit?
06:42No, no, no, no. It could still be May's deal or hard Brexit or a second referendum.
06:49And therein lies the problem. Because again, if she's voted out tonight, that's it. She
06:53can't go forward for re-election again. That's it. She's out. That's six weeks of being a
07:00caretaker Prime Minister at a time when Parliament is about to break up for Christmas. And that's
07:05quite a long Christmas, by the way. They have a good, those MPs get quite a good holiday.
07:10And then it's the state opening of Parliament next year. So then we will have a new leader,
07:17probably, maybe, maybe. Again, that's still not actually, that could still drag on for
07:22quite a while. And who's that going to be? I mean, hopefully not Boris Johnson or Jacob
07:27Rees-Mogg, which would be even worse. Who's that going to be? I can't even see any good
07:32contenders, really. I mean, there's no obvious contender that I can actually really think
07:36of that the British people would swallow at this point. So now, and then before you know
07:43it, it's February. March is fast approaching when the deadline is coming.
07:48So if she's out tonight and we get someone new in by February, they got a month to pull
07:53it together or hard Brexit. Pretty much, I reckon. All right. So what happens if she
07:57survives tonight's vote? What's the scenario then? She's safe for a year. She's safe. What
08:01about Brexit? Well, Brexit again remains exactly the same. She's safe personally for a year.
08:06I would say it's a proxy vote on her deal, particularly within the Conservative Party.
08:12I mean, the Conservatives are not going to vote to keep her in power, only to then vote
08:16against her deal. Although those warring factions that are plotting her coup within
08:21the party, the Jacob Rees-Mogg's of the world, are not going to suddenly, just because there's
08:26a vote of confidence in her, decide her deal is great. They are still categorically going
08:31to vote against her deal when it reaches the House of Commons, as are many, many other
08:35people in the opposition, the Labour Party and the Greens and DUP and all of the other
08:41parties within the House of Parliament. They are going to still vote against her deal.
08:45So she could well weather this storm and still see her deal fail when it reaches the
08:49House of Commons, as we edge ever closer to that March 29th D-Day. Is it March 20th?
08:57I think it's something like that, yeah.
08:58Yeah, as we edge ever closer to that precipice from which we fall into a completely uncharted
09:04economic and suicidal war.
09:08The problem now is you've got fairly sensible, I mean, if there is such a oxymoron that you
09:16can put together, some fairly sensible Tory MPs now who actually fully supported Theresa
09:21May. And if you actually read their letters of no confidence to the 1922 committee, they
09:28are now very damning about how Theresa May has treated them, the people who actually
09:33really fully supported her. And she has treated them very, very badly. So, for example, won
09:39the snap election for a start, but also been trying to force things through, like with
09:43the Chequers deal, for example, and then slowing things down suddenly and then forcing things
09:47through suddenly and then suddenly cancelling the vote. And they feel very badly treated
09:53and consulted.
09:54And the vote of contempt of Parliament. I mean, it's getting ugly there.
09:56Yeah, very ugly.
09:57So, OK, if she gets through tonight, she's still basically, you're telling me, has no
10:02chance of salvaging this deal before March 20th, whatever that date is.
10:08There's a chance, but it's a slim chance. And the reason it's a slim chance is because,
10:14you know, the deal that she has, and this is why the whole thing is rather farcical
10:18and this is why the whole thing is completely disingenuous from a political standpoint.
10:23Jeremy Corbyn, the leader of the opposition, the Labour Party leader, has been saying,
10:27I could get a better deal. Many others within the Conservative Party have said, I could
10:30get a better deal.
10:31The cheese submarine argument.
10:32The cheese submarine argument.
10:33For those of you who read Twitter.
10:34Yes, exactly. The brilliant thread by Hugo Rifkind. The reality is that the EU know what
10:40they're willing to give up and they know where the red lines are and more or less give or
10:46take the deal that May has is the best one that they are willing to offer. So realistically,
10:51she's not going to get that any fundamental changes to that deal to take back to Parliament
10:55and say, hey, guys, look, we got a confirmation or some assurances on the Irish backstop,
11:01which is the contentious issue. And please now vote for my deal. She's not going to get
11:05that. She's not going to get any fundamental changes. She's just going to get lip service
11:09to her deal and to the assurance that the EU will not seek to control that Irish backstop
11:13forever.
11:14And in the meantime, obviously, it's coming up to Christmas, a time when we all look for
11:18some sort of economic hope for the new year, especially to do with sales and the new year.
11:24And we can all have a have a drink and a bit of turkey and get stuffed. And hopefully that
11:28the following year will be prosperous.
11:29You're going to get a turkey and you're going to get stuffed.
11:30We are definitely going to get stuffed in some way or the other. But again, from an
11:36economic point of view, it's the uncertainty and also all these conflicting messages. So
11:41for example, I think either today or yesterday, there was an economic report that employment
11:47is the highest it has ever been in the UK. And we're on the cusp of Brexit. So what's
11:55going on there? So are we facing economic doom or actually has Brexit actually made
11:59no difference?
12:00Then the pound drops and then it rises again against the dollar. And it's very, very mixed
12:05from that kind of standpoint.
12:07I think it's fair to say, having kind of observed the last two years and we've seen and heard
12:15all of the economic forecasts and both pro-Brexit, anti-Brexit, there is no conceivable way at
12:23this point that exiting the EU could be in any way, shape or form better for us economically
12:31than the status quo of remaining in the EU. Now, set aside all the political considerations,
12:37the cultural considerations, immigration and all that kind of thing, regaining our sovereignty
12:42and so on. Economically, it's simply unthinkable that exiting the EU, either on May's deal
12:51or in a no deal scenario, could be better for us than staying in that. It's a flawed
12:56institution, the EU. It's imperfect. But staying in the largest single trading block in the
13:02world is better for us than next.
13:05The problem is we wanted our cake and we wanted to eat it. That was the problem. The problem
13:10is that we wanted a relationship with the EU in terms of actually some of their legislation,
13:14whilst over bureaucratic, is actually quite good in terms of food standards and food safety,
13:21et cetera. I'm thinking of other things about agricultural kind of projects that they've
13:24invested even in Britain and Ireland, for example. I mean, I know Ireland isn't part
13:29of Britain, but it's the EU investment in Ireland saved it in terms of the roads that
13:34were built and the connections built, and that's helped Northern Ireland in many ways
13:38as well.
13:39And Scotland tremendously.
13:40Oh, absolutely, tremendously. So there are lots of good things about the EU that were
13:42good. Now, I hate the idea of EU in terms of being over bureaucratic. I hate all the
13:48junkets and the gravy train that all their commissioners are usually on. That's not great,
13:53obviously. But we wanted to get rid of that and we wanted to keep the good stuff. You
13:59can't do that. And that's what the EU clubbed together and basically said, well, if you're
14:03out of the club, you're out of the club. And now that's the consequence we are now having
14:06to live with.
14:07Yeah, and they've said previously they're going to, when you leave the club, we're going
14:10to make it as bad for you as you can. You don't want everyone else leaving the club
14:13too.
14:14Yeah.
14:15Basically, what I'm hearing you two is no matter what happens now, regardless of the
14:19vote, regardless of who's actually prime minister come February, you guys are out.
14:26Yeah, we're out.
14:27There's no going back. And probably, unless all of a sudden everyone wises up in parliament,
14:32you're out with no deal.
14:33Unless the only way-
14:34You're looking at a pound that's parodied to the dollar.
14:38Yeah. I mean, the only way now, and I think we were talking about this a bit earlier,
14:42the only way now is that from a no confidence vote and a new leader, a new leader just says,
14:48you know what, I'm just going to take the risk. You've put all your faith and trust
14:52in me. I'm cancelling this. We are now going to have a second vote. Now, I think that's
14:56good and bad. I think bad in that we're going to have to wait even longer for certainty
15:02and that could cause even more chaos, but good in that it at least puts it back in the
15:07hands of the British people who can now actually hopefully make some sort of sensible decision
15:12based on actual facts rather than the lies we were spun and told before. On both sides,
15:17remain and leave.
15:19I think the Prime Minister, regardless of who is actually in that post comes February,
15:24if there's no deal in place at that time, it would just be smart to say, you know what,
15:29we're cancelling Brexit. Not because they really want to cancel Brexit in the long term,
15:33but you get out of that, you take the get out of free jail card, which the EU has toshed
15:37you, and then you say again, okay, we're invoking Article 50 and then start the process all
15:42over again. That may have wasted a lot of time and effort, but it gives you another
15:45two years to make sure you're not exiting with nothing but, you know, nothing.
15:50Yeah, I mean, I grew up in Britain in the 70s. So I remember the single common market
15:57and all the fuss that was around that. And I'm of the generation that grew up with that.
16:02And I don't think I've suffered that much for it, to be honest, actually. But we have
16:05to remember, this decision now, this year, 2019, will affect an entire generation, if
16:13not two generations. And that is a big deal. You know, my children will grow up in that
16:20environment.
16:21No, they probably won't. They probably won't be able to afford to go back and live there.
16:24Some of the data we've seen, and granted, you know, some of it's scary data, and it
16:29may or may not be true. But they're talking about things like, you know, three quarters
16:34of a million jobs could be lost in the UK because of Brexit. You're looking at a pound
16:39that is on parity with the dollar. Now, people probably don't realize what that means in
16:43terms of daily lives. But basically, your food stuff, your house, your clothes, everything
16:48you import just jumped in price tremendously, not by a small bit, I mean, up to 30%, you
16:54know, depending on which prediction you look at. You're looking at a country which is going
16:58to have a hard time surviving. I mean, going back to, you know, the 70s and 80s, the British
17:03economy was not particularly in good shape.
17:05I remember the power cuts. I remember the rubbish piling up in Leicester Square. It
17:10was terrible.
17:11Yeah. And a lot of that had to do with the fact that British pound was relatively weak.
17:16They're an island economy. You have to import a lot of things. And if you don't have a strong
17:20currency, it makes it very difficult. And I think people have forgotten what that actually
17:23means to have an island economy and not have a strong pound. And they're going to find
17:27out, or they're going to have it brought back up for them in the worst possible way.
17:32But that's part of the problem, isn't it? Part of the problem now is that from a feasibility
17:37point of view, had politicians been honest, and had there been a proper feasibility study,
17:42I don't mean a boring feasibility study, I mean a bullet pointed, this is how it actually
17:47will directly affect you, or very probably will affect you. We'd had a much clearer idea
17:53about that. But now we've got complete uncertainty. And we're stuck between these stalls of, well,
17:59so for example, some of the MPs who have given this no confidence vote, some of the
18:02more sensible ones are actually now saying, we as Britain, as Ed is now saying, deserve
18:09to be confident. We should be confident. And actually, we should have gone into the deal
18:12with all confidence. And actually, if it ends up in no Brexit, that should have been it.
18:18And actually, our negotiation position should have been much stronger. Why didn't we go
18:22to our strengths? And actually, Theresa May went in there with very weak arguments, didn't
18:26really push it very hard and actually bent over, basically.
18:30And by the way, way to start off the conversation, if the politicians hadn't lied to us.
18:36It's almost like an organisation that's facing difficult financial troubles. It is far better
18:41to cut back and reinvent whilst you still can, rather than wait, and whilst rather than
18:49try and deal with the structure and financial situation that you have, and somehow cobble
18:54along and make it work. That doesn't work. Either we were going to reinvent ourselves
18:57like some magical pop star and re-evolve Britain, or we should have just not bothered at all.
19:04And actually, had we gone in, as you say, with all guns blazing and actually tried to
19:08find an inventive solution from the very beginning, maybe we wouldn't just be negotiating with
19:12people who didn't want us when we said we didn't want them.
19:15Really missing David Bowie right about now.
19:18Yeah, I mean, I think at the end of the day, we undermine ourselves as well, domestically.
19:28The press reports and the constant EU bashing, thinking that they're not reading that in
19:31Brussels and going, look at these guys, they're so arrogant and living up to that British
19:36stereotype. That's the reality. And I think that as Brits, we have a lot to say that's
19:41good about the country and economically, culturally and otherwise. But I mean, the
19:45political omni-shambles of the last few years is humiliating. And yet again, in this no
19:54confidence vote that we'll watch tonight, it is, whenever you listen to this, Wednesday
20:01night, it is ultimately a reflection yet again of the infighting in the Tories that has really
20:07led to a lot of these things. I mean, even David Cameron calling the referendum in the
20:11first place, many say is an echo from his days at Eton, the famous boarding school with
20:16Boris Johnson and that rivalry that they had. I mean, these ridiculous, stupid rivalries
20:23date back decades and lead to real world implications and consequences today that mean that the
20:29EU funding of abused women's shelters and orphanages and things like that in Wales,
20:35the EU funds are going to be withdrawn and people are going to suffer. Marginalised people
20:41who really, really are struggling in today's society are going to suffer even more. And
20:47we should have addressed the issues of Brexit first, before it ever got to that point where
20:52people protested and lashed out against the elite and against the society that they were
20:56living in, that it wasn't working for them. And now May, two years later, is saying we
21:01need to build a society that works for everyone. But it's two years too late.
21:04And again, like all drastic change in life, whether it's organisations or your own life,
21:09you have to ask yourself some fairly fundamental reality checks. How is this really actually,
21:14you need to imagine how this is actually really going to affect you. And we never really did
21:18that. We had all these little myths and these kind of little soundbites that we clung to.
21:26And that wasn't really the reality. You know, when I moved back to Britain eventually, and
21:32I want to go to pop to France, I can't pop to France anymore, I'm going to have to have
21:38a visa. Yeah, that's really hard now. I mean, okay, it's not a massive hardship that some
21:44of the poor people are going to have their funding removed. But just those little things
21:48all add up to making life difficult and a pain.
21:54And imagine if you I mean, I'm 27. So the vote took place when I was 25. And I felt
22:00a tangible sense of like, a big part of my future and my, you know, status as a European
22:07citizen had been extinguished. And, you know, there are a lot of 16 year olds out there
22:12or who were 16 at the time of the vote in 2016, who are now 18 and eligible to vote,
22:18and who have seen the damage that leaving the EU will do over the last two years have
22:24seen what an utter catastrophe has been politically. And who would in a second referendum say,
22:30we need to stop this madness right now. And we need to put it behind us as a national
22:34shame and an embarrassment. But we need to stop this right now. And I think there's a
22:38lot of old people who probably did vote for Brexit, like my grandmother, she didn't vote
22:43for Brexit, but she probably would have done if she was alive, who are dead now. And who
22:47wouldn't who wouldn't be able to vote in a second referendum? Do you know what I'm saying?
22:51And ultimately, it is those 16, 18 year olds, 21 year olds who are going to live who will
22:55be impacted, not the angry 75 year olds who won't be and are just doing it to sort of
23:00reclaim some part of their history that no longer exists.
23:03But see, also, and again, it's quite good that we've got two Brits here with an American
23:08in the middle of us, because what hasn't also helped are our American cousins, special relationship.
23:18Trump hasn't really weighed in, like, I think Obama would with some sensibilities, and
23:25perhaps calmed everything down a bit.
23:27Calmed everything down? He went crazy talking about it last week. We talk about the indictments
23:33and
23:34he was encouraged. Well, that's the galling thing. He was encouraging it. And then he's
23:36now he's pulling back from saying you're a mess and you're alone.
23:39He was saying, you know, look, the deal that May has negotiated sees Britain fall to the
23:43back of the list, you know, the list for trade deals with the US. But initially, as
23:48you say, when he was asked about Brexit, he was all for it. He was all for regaining sovereignty
23:53and all that, even though he doesn't even understand US politics. I mean, how he could
23:57understand British politics to make a qualified statement like that.
24:01Did he not realise that we were in Ireland? I think it was something like that, wasn't
24:05it? I can't remember.
24:06Yeah, probably. He just knows he's got a golf course in Scotland.
24:08Yeah, that's probably what he really cares about. Yeah, but I don't think looking at
24:12Donald Trump's going to bring you any new level of sanity. Look at the situation the
24:15US is in right now. So probably should never expected that. All right. I think on that
24:20particular note, we're going to wrap it up for today.
24:24OK, if you're looking to find this podcast course, you can always find us on iTunes and
24:28you will be able to find us on Snap. Also, if you just look for Business Wrap, you'll
24:34be able to find us there. I'm Scott Shuey. You can find me on Twitter at Scott Shuey.
24:39I'm Ed Klaus. You can find me on Twitter at Ed Klaus.
24:42I'm Jonathan Richards. And even though I'm the digital director, I don't really believe
24:45in social media that much. But we are on Snap, as Scott said. We're also on Amazon. And I
24:52think the skill that you need is dollars and dirhams and you can open it by just saying
24:56Open Business Podcast. So yeah, I think that'll be really good. And yeah, catch us there.
25:02All right. Thank you for listening.