The Supreme Court has decided to reject the Government’s appeal which means they cannot invoke Article 50 to leave the EU without an Act of Parliament. Will that make much difference? Probably not as the Government is expected to submit a short Bill to give it the required powers to do just that which is likely to be voted through.
The judgement of the Supreme Court, at 43,000 words, was not unanimous with 3 of the 11 judges dissenting. The majority view was that the European Communities Act (ECA) meant that the Government could not simply use its prerogative to proceed without the support of Parliament. But they did reject the “devolution” issues raised by Scotland and Northern Ireland by saying “The devolved legislatures do not have a veto on the UK’s decision to withdraw from the EU” which will make the Government’s subsequent actions easier.
As with most cases that get to the Supreme Court, the issues are both complex and require fine judgement. It does not seem to me that the Court did a bad job of deciding on the issues like many Brexiters have been claiming.
Of course the financial impact of Brexit is still being debated, particularly as it turns out the somewhat cataclysmic forecasts of many economists are to date proving to be quite wrong. It is interesting to read what Tim Martin, founder and Chairman of J.D.Wetherspoon had to say in a recent Trading Statement from the company about economists:
“The underlying reason for their catastrophically poor judgement is a semi-religious belief in a new type of political and economic system, represented by the EU, which lacks both proper democratic institutions and the basic ingredient for a successful currency – a government.
It also lacks any genuine commitment to free trade, other than to countries which are in, or on the borders of, the EU. Unless these lessons are learned and acknowledged by economists, their historic mistakes will be repeated.
As regards the other frequently asked question about the government’s stance on dealing with the EU, the golden rule in any negotiations, ignored by David Cameron, is the willingness to walk away.
Most people now understand that the mutual imposition of World Trade Organisation (WTO) tariffs would create a windfall for the UK, so a sensible basic mantra for the UK is ‘free trade or World Trade Organisation rules – the EU can choose’.”
But there is surely one thing for investors to bear in mind. That is that deciding on investments based on the forecasts of economists or of political commentators is as likely to be wrong as right.
Mr Martin says
“The underlying reason for their catastrophically poor judgement is a semi-religious belief in a new type of political and economic system, represented by the EU, which lacks both proper democratic institutions and the basic ingredient for a successful currency – a government”
This is ridiculous. Economics is a subject of study, not a forecasting tool. Economists from Adam Smith onwards have given us insight in how economies work. This knowledge is improving all the time. Economists as a profession have no record of catastrophically bad judgments. Forecasts of human behaviour are usually wrong to some degree.
The EU certainly does not lack democratic institutions; it is much more democratic than other international organisations. It does, of course, lack a sovereign government – sovereignty remains with the member states.
It is untrue that a currency requires a government. It is not unknown for country not to have a currency of its own but use another’s currency or a standard it cannot control, such as gold or the US dollar.
To conflate the Eurozone with the EU is mischievous. The Euro works perfectly well as a currency for those countries that do not need inflation for economic health.