Brexit provides a big test for our positive thinking PM

As the Brexit deadline draws ever nearer, the biggest questions still hang unanswered.

Article updated: 1 August 2019 10:00am Author: Ian Forrest

“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness”. The opening line of Charles Dickens’ novel A Tale of Two Cities seems an appropriate description of the state of the political debate in this country at present.

It feels as if we’ve never been more polarised between Leave and Remain than we are right now. Those who favour exiting the EU see only benefits and opportunities, those who wish to stay in the bloc can see only doom and disaster if we don’t. Pulling in different directions has led to stalemate, and democracy is the main loser.

Into the midst of all this comes a new Prime Minister in the form of Boris Johnson. Given the events of the past three years, it’s hard to blame him for wanting to strike a more positive, upbeat tone at the start of his term. However, the two big questions he faces are: if he can’t agree a new deal with the EU by October 31st, would he really try to take us out without a deal? And if he did, would he be able to achieve that in the face of strong opposition from Parliament?

Of course, he can’t answer either at the moment. He doesn’t know what the EU might do if they suspect, for the first time, that a UK PM would actually be prepared to leave with no deal. And if we’re heading for a no-deal situation and Labour forces a vote of confidence, he can’t possibly know, and no-one does, how many of his own MPs might be prepared to vote against him.

So you can’t really blame him for adopting a more positive approach, saying he will agree a deal in time which will also meet with Parliament’s approval. That is being met with much cynicism in the media but there is also a sense of relief that finally there is some leadership and new thinking emerging from the government.

Go to the source

On the subject of the media, my years working as a journalist taught me that if you really want to know what’s going on, switch off the TV news and put down your newspaper. Those will only give you a very black-and-white, unbalanced and highly opinionated view. That’s what sells but it does little to inform us on important matters, and it defies reality. As we know, life is rarely black and white, but journalists are encouraged to have strong opinions and only include facts in their copy which appear to support their views.

When analysing companies, the big City investors don’t rely on the business pages of the Daily Mail, they examine the audited accounts and talk directly to management teams on a regular basis. You won’t be surprised to hear that when they look at the accounts they focus much more on the notes to the accounts towards the back, which can be very revealing, and less on the highly selective information chosen by the management shown in the first few pages.

I would encourage everyone who really wants to know what’s going on to try to follow the journalist’s maxim of “go to the source” – searching out official statements from government departments and ministers. Not just the soundbites for the cameras, but the full statements in all their glory. The same applies to opposition parties. Of course, it takes longer and can be tedious, but you gain a much better, more rounded view of an issue and may well come across all sorts of new information which the media are strangely ignoring.

As for Brexit, a lost vote of confidence would probably result in a general election which would lead, in my opinion, either to a Conservative/Brexit Party coalition or to a Labour/SNP deal. The first would likely deliver a no-deal Brexit and right of centre government, the second a Remain-oriented socialist revolution with another Scottish independence referendum thrown in.

At least, that’s how it looks right now. Next week it’ll probably all be different.

These views are those of the author alone and do not necessarily reflect the view of The Share Centre as a whole.

Ian Forrest portrait photo
Ian Forrest

Investment Research Analyst

Ian’s background in investments, financial journalism and research has seen him advising private investors on equities and helping to manage portfolios. His qualifications include the Certificate in Financial Planning and the Chartered Institute for Securities & Investment’s Investment Advice Diploma.

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