EDITOR'S LETTERMerryn Somerset Webb
You may have been wondering what Brexit means. Now you know. It really does mean Brexit – leaving the European Union (EU) properly. That means leaving the single market, leaving the customs union (probably), controlling immigration from the EU on our own terms, ending our huge payments into the EU budget and, crucially, preferring to take our chances with the world over taking a bad deal from the EU in 2019. We want a bespoke deal. But if we can’t have a good one we won’t have one at all.
This effectively threatens what most people would think of as a hard Brexit (or a good part of what economists Liam Halligan and Gerard Lyons call a “clean Brexit” in their new paper on the matter for the Policy Exchange).
We suspect this is the right form of Brexit. It leaves us with the hope of a good free-trade deal with the EU from 2019 – we have plenty of leverage given our value as a regional partner in defence and security, our trade deficit with Europe, our ability simply to walk away at the end of 2019 if needs be and, of course, our money (£9bn a year to the EU).
It also gives us two years to prepare for life outside the single market (I don’t suppose we need that much time but work, as we all know, expands to fit the time available); it means we won’t get too bogged down in pointless negotiations; and it is probably the only real way to regain sovereignty in a way that meets the expectations of Leave voters.
So things are gradually getting clearer in the UK, something that has cheered the pound up no end – it rose more as May spoke than it has in a single day since 2008.
There’s starting to be a little more clarity in the US as well. In our cover story, Rupert Foster looks at the policies that are likely to be enacted first – and what they might mean for your investments. The good news, says Rupert, is that Trump is definitely going to be a “pro-business, pro-growth and pro-stockmarket president”. What do you buy to take advantage of that trend?
You might also want to think about what to do with any profits you manage to make – perhaps take a deep breath and start thinking about how you are going to pay for your very old age. We often write about pensions here. What we haven’t often done is pointed out that you don’t just need to think about financing the fun bit of retirement (when you are still mobile and healthy), you also need to think about the not so fun bit (when you need care) – and that the latter can cost a lot more than the former.
Hard Brexit, soft Brexit, or clean Brexit, it is hard to see getting good long-term care becoming cheaper or easier to access in the next few decades. It’s boring and depressing to think about preparing for that. But, as with most things, it’s best to make a plan and then just get on with it, Theresa May-style.