Matthew Lynn

Meet the new leaders of Project Soft Brexit: Mark Carney and Philip Hammond

Meet the new leaders of Project Soft Brexit: Mark Carney and Philip Hammond
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As double acts go, it is probably not up there with Eric and Ernie, John and Paul, or even Liam and Noel. Even so, Mark and Phil, the Governor of the Bank of England Mark Carney and the Chancellor of the Exchequer Philip Hammond, certainly looked today as if they were working in tandem to try and steer the country towards a gentler version of Brexit than some of the harder men of that movement would prefer.

Anyone listening to their speeches in the City this morning, postponed from last week in the wake of the Grenfell Tower tragedy, will have seen immediately what they were up to.

Carney was at pains to point out that while the economy had been resilient in the immediate aftermath of the referendum vote last summer, there would still be tough times ahead. Interest rates would remain low for a long, long time, sterling would remain weak, and there was not much chance of any rise in living standards while the economy adjusted. He took a well-aimed swipe at Boris Johnson, arguing that Brexit was unlikely to be a land of ‘cake and consumption’.

Meanwhile Philip Hammond stressed the need for a pragmatic, orderly departure. He accepted that we would be leaving the Customs Union alongside the EU. But he made the point that jobs and living standards should be the priority, and if that meant being flexible, not to mention a little humble, as the haggling with Brussels unfolds, then so be it. In effect, the two men are becoming the leaders of Project Soft Brexit.

In fairness, both seem to have learned the lessons of Project Fear, their last and not terribly successful outing. The heavy jackboots have gone. Lurid, over-hyped warnings of imminent collapse no longer feature nearly so prominently. Nor are there going to be so many precisely calculated forecasts of factories closed and jobs lost.

But if they are to be successful, both men need to carry the country with them. What will that involve? They should make it clear they see some upsides to leaving the EU, acknowledging that while some companies will move jobs, offices and factories, others will want to come here. They should use a bit more humour, and have the grace to acknowledge that some of their past forecasts were, to put it mildly, a little wide of the mark. And they should spell out that ‘transitional’ arrangements’ are precisely that – a staging post to somewhere else, and not a backdoor attempt to smuggle the UK back into the EU in the middle of the night when no one is paying any attention.

In truth, most of the country would be perfectly happy with a Soft Brexit right now. All Carney and Hammond really need to do is convince the remaining members of the EU not to be too over-the-top in their financial demands, and then convince British voters that they view extricating ourselves from the EU more as a process than a single event. It is perfectly possible – but there is a long way to go yet.