Lawrie Williams: SA-loving Brit on Brexit, Boris and switching to “Leave”
I became professionally involved with London-based Lawrie Williams around a decade and a half ago when persuading him to pick up our then desperately flagging global website Mineweb.com. Then, and now, this former engineer turned journalist was widely recognised as the world's most accomplished mining editor – and under his direction, Mineweb was duly turned around and became so dominant in its niche globally that Barrick's chairman and controlling shareholder, the late Peter Munk, and then a consortium of Russian oligarchs wanted to buy it off us. Things have moved on a long way since then, and shortly after I departed my old company Moneyweb in 2012, Lawrie did the same. Although he has eased back on his output and focused it more narrowly on gold, Williams remains a highly respected commentator with his Lawrieongold website a must-read for every serious investor in the yellow metal. As a Brit, he has also been musing on Brexit, Boris and the other issues occupying his nation's collective mind. In this superbly argued piece below, he explains why. – Alec Hogg
By Lawrie Williams*
When the Brexit referendum took place I have to admit I voted for the UK to remain part of the European Union, such as it is. In my viewpoint then it offered less risk than seemingly cutting our extremely close ties with Europe, despite their preventing us doing our own trade deals outside the EU and making the UK subservient to European policies and courts.
But since then, perhaps contrary to the general mood of the country, I have changed my views. Maybe it is partly because of it being thrust upon the UK public as 'fact' that a no-deal Brexit would be absolutely disastrous for the country in economic terms – as suggested by the hugely concerted 'Project Fear' campaign being mounted by Remainers, coupled with a totally intransigent approach to the so-called 'negotiations' by the EU. Should it come to a second referendum I will vote firmly to come out of the EU – deal or no-deal.
While a no-deal Brexit could perhaps mean a couple of years of economic grief for the UK as adjustments with EU trade and global trade are slowly put in place, I firmly believe that longer term coming out of the EU will be the more beneficial route for the UK. Economically the EU at best appears to be stagnating economically, and divisions resulting from the single currency which benefits the efficient (like Germany) at the expense of the less efficient (like Greece) could well lead to any vestiges of EU unity imploding within the next few years anyway. While EU growth seems to be stagnating at best, that of the Rest of the World, on which a post-Brexit UK might depend, is far stronger. And it's not that trade with key EU nations would disappear overnight anyway. It might initially be subjected to increased red tape and costs, but it is everyone's interests that it remains in place in some form or another.
One of the main arguments for promoting the possibility of a no-deal Brexit is as a key negotiating point with an EU which currently benefits hugely from trade with the UK – both inward and outward. That is why it is so important for our negotiators to keep the prospect of no-deal on the table and attempts within the UK to put a total block on this position are so potentially damaging to the negotiators aims. It is this possible ruling out of a no-deal scenario by the UK's parliamentarians which is keeping EU negotiators so determined on some of the key sticking points on a deal. For the UK to be able to undertake its own trade deals with non-EU nations is anathema to the EU hierarchy as it is scared that other EU countries might try and follow suit if the UK does break away.
Much of the anti-Brexit rhetoric, presented in the UK by the Remainers as 'fact', is actually worst-case scenario thinking and once the whole thing settles down, assuming the UK does come out of the EU – even in a no-deal situation – is unlikely to happen, or be prolonged if it does. There is too
much at stake here on both sides. One suspects that after a couple of years, if not sooner, UK and European citizens will find that little of material import will actually have changed apart from the UK sovereignty issue. Now maybe I am over-optimistic here and should not underestimate a degree of top EU intransigence over some aspects, but we suspect concerted individual country domestic issues will sway them back onto the path of reasonableness – eventually.
I am no great supporter of Boris Johnson as UK Prime Minister from the personality point of view, nor of Donald Trump as US President. Both have a strong tendency to be 'economical with the truth' and neither appear to have great moral principles. Indeed both have huge personality flaws in my opinion. But that does not necessarily mean that they won't do what is necessary to improve the economic and military standings of their respective countries, nor not gain re-election. Trump and his team in particular seem particularly adept in raising issues on which traditional Republican values will dominate – whether real or imaginary – and presenting the Democrats as being socialist zealots and in political disarray. Whether the latter can find anyone to beat Trump in the rapidly-approaching 2020 Presidential elections could be a hard task.
Likewise, in the UK, Johnson has a considerable number of detractors, but he appears to be taking a rapid dynamic approach to party leadership. He has already seen a big surge in Conservative support in new opinion polls, and if he can sidetrack Jeremy Corbyn's Labour Party as successfully as the Trump camp has been demonising the Democrat opposition, then the face of UK politics could revert to the 2 or 3 party norm which many had been writing off in recent weeks and resurrect Conservative party fortunes and retain their current political dominance despite the apparent disarray within the party.
The initial UK opinion polls following Johnson being elected leader of the Conservative party seem to have given them around a 6-10 point lead over Labour, up from a deficit, with the latter's popularity being eaten into by the Liberal Democrats. Prospective Conservative gains seem to have largelybeen at the expense of Nigel Farage's Brexit party following the much more hard line Johnson approach to Brexit. If Johnson can maintain this initial positive momentum he may well prove successful in uniting his own party, and perhaps the whole country, behind him!
The prospect of the UK leaving the EU has certainly divided the nation with the pendulum having seemed perhaps to have swung towards the Remain position – but only just (there's maybe only a one or two percent difference between the two camps in the latest polls). The apparent Boris Johnson enthusiasm for an EU split could well help things swing the other way. With perhaps around 40% of the UK population each rigorous in their opposition to, or support of, Brexit then the outcome of any new referendum, in the unlikely event there is one, would certainly be no foregone conclusion. The opinion polls were wrong in the original 2016 vote in underestimating the underlying strength of the opposition to EU membership and that could well be the case now as well.
At the moment the UK does appear to be potentially headed for Brexit – possibly, or even probably without a deal – unless the EU changes its negotiating position, which it is adamant it will not do. But if Brexit does indeed happen, as Boris Johnson insists. and once the initial post-Brexit horse-trading is completed between the UK and the EU, not to mention possible deals with the US, China, Australia, India and other former Commonwealth nations who the UK is currently prevented from dealing with by EU rules, we suspect that many things may actually get less costly for the UK population rather than more expensive as the Remainers would have people believe. Also, on the travel front – another scare tactic from the Remainers – one suspects that those EU nations that are so dependent on UK tourism, will be loath to impose any access restrictions and one also suspects deals will still be done to allow at least some EU nationals to continue to come and work in the UK without restrictions, and vice versa.
So all in all we would doubt that once the initial impact blows over those of us who live in the UK will see little difference in prices or EU access conditions with or without a deal. One suspects pragmatism will ultimately rule, although one should never underestimate the politicians' propensity for letting supposed principle stand in the way of reality! The UK is certainly not out of the wood yet, but maybe getting closer on a decision one way or the other, and not before time.
- Lawrie Williams is a mining engineer who worked around the world, including in South Africa, and the former editor of Mineweb and The Mining Journal.