| But the practice of prorogation goes back hundreds of years. It happens most years and usually in the autumn. It’s part of the process to trigger a Queen’s speech — where a new government lays out its legislative agenda. Britain just got a new government and it’s finishing one of the longest Parliamentary sessions on record. A Queen’s speech is overdue, which means a prorogation is too. The issue is the timing. The five-week break leaves precious little time to debate (i.e. stop) Brexit. But that’s nonsense too. By some estimates, only four days of debate have been robbed by the prorogation. And I don’t think those even count, either. First of all, most of the break which has everyone foaming at the mouth is caused by political party conferences, not prorogation. Parliament can’t run while the major parties meet for social events in seaside towns across Britain. And they all happen to be doing so in the next two months… This is what makes the cumulative amount of time without Parliament so long, not just prorogation. Remarkably, the remaining campaigning Liberal Democrats are holding their conference shortly before Brexit! If they were actually worried about Parliament not having enough time to debate Brexit, they wouldn’t be inviting Members of Parliament for ‘fringe events and a range of social events’ in ‘sunny Bournemouth’. Not to mention Parliament having had the last three years to debate Brexit… Not to mention having already voted on Brexit a heck of a lot of times… Not to mention Parliament having three times rejected the only deal the EU has offered so far. What exactly do they want to debate so urgently now? Which is where we get to the strangest thing of all. MPs claim that the proroguing of Parliament leaves them with not enough time to scrutinise the government’s proposed Brexit. The thing is, the government doesn’t have a proposed Brexit yet. The Prime Minister is heading to the EU Council meeting in October to hash out the deal to be debated by Parliament. That’s after Parliament returns from prorogation and party conferences. It’s tough to argue that you haven’t been given enough time to debate something that doesn’t even exist yet. And that will only come into existence after your time for debate restarts. Oh, and don’t forget, Boris is suspending Parliament, not passing laws or dictats while Parliament is away. The law which actually takes Britain out of the EU was passed by Parliament, with a strong majority, years ago. The law is merely being allowed to go into effect. The time for debating it was before it was passed, not after… Now, I still have my doubts about Brexit ever happening. Boris Johnson is more likely to be agitating for an election than Brexit. He’s exposing his opponents to be bonkers about anything Brexit so that he gets more votes. But if Brexit actually happens, what happens next? Probably not much. Which would be radical in and of itself. The question is what you should do next, as an investor. And when it comes to that, I’m going on the record today. Sort of. On the 1st of November, we’ll know whether Britain is a buy. Or a sell. Whether Brexit is presenting Aussie investors with the investment opportunity of the century. Or whether you’d be better off elsewhere with your money. A Britain freed from the EU would should could boom. Let’s run through some reasons why. Trade deals become easier after Brexit. Sure, being part of the EU gives you more negotiating power. But that’s not what trade deals are about. Both sides can walk away, or exclude industries from the deal, so power is secondary. Trade deals are about lobbyists, interest groups and protected industries. The bigger your economy, the more variety in interest groups vying for protection, the less likely and less broad the trade deal. Some part of the EU competes with the US in almost every major industry, so some part of the EU will object to almost every aspect of a free trade deal. But Britain and America have far more comparative advantage opportunities. Industries where Britain has an advantage, or the US has an advantage, without a corresponding powerful interest group to object to trade with the other country. This is true simply because Britain is smaller and more specialised than the EU as a whole. British trade negotiators don’t need to keep the German car industry and French farmers happy anymore, outside the EU. They can do deals they couldn’t before. More of them, with more countries and more comprehensive. That’s just trade, which could boom in coming years. Britain’s comparatively free market-leaning future governments would should could energise the economy too. A Singapore-style success on its doorstep is the EU’s worst nightmare. Ireland’s low corporate tax rate and Switzerland’s banking secrecy are a major thorn in the side of EU ‘harmonisation’ as it is. Imagine Britain becoming preferable to the EU on a long list of metrics. It would suck innovation, productive people and investment out of the European continent. Irish shoppers already cross the border to take advantage of lower consumption taxes… The only thing that keeps governments reasonable is competition between them. Singapore and Hong Kong boomed because they didn’t want to be like Malaysia and China. Malaysia’s subsequent boom was driven by being humiliated by Singapore. No comment on China and Hong Kong. The EU does the opposite to all this. It allows governments to implement bad policy by making that policy compulsory across the trade bloc, with even bigger barriers to anyone outside the bloc, to prevent competition of both types. There is less competition between governments inside the EU and so bad policy is viable within it. Which is why the EU believes in being so big. Otherwise, its people and its companies leave for better regulated places. Like Brexit Britain. Reengaging with Commonwealth nations and others could provide an enormous boost to the UK too. I’ve encountered more Australian nurses in London than in Australia. But they are rarely allowed to stay, unlike the British nurses in Oz. If Britain could reform its immigration system to treat all nations equally, and control overall numbers, it could be selective. This has the added benefit of not being racist by favouring Caucasian Europeans over the rest, as the EU’s immigration system does. I’ve painted a bright future for Britain, so far. The question is how this would affect financial markets. So far, British assets look undervalued and out of favour. Cheap, in other words. But it’s not as simple as stocks going up. The FTSE 100 has a huge amount of international companies and exporters. If the pound goes up as the economy does well, these stocks will struggle. If you invest in the UK, pick stocks that focus on the domestic economy. Stocks that boom as Britain itself booms. Remember, this is if a no-deal Brexit approaches us in October. Which is unlikely, but a major opportunity in the making. | Until next time, |  | | Nick Hubble,
For The Daily Reckoning Australia |
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