UK art market recovered in 2018, but trade partnership with Switzerland declines markedly

Exports to UAE rise, but banking regulations and other factors blamed for fall in Swiss business

Customs figures for 2018 show the first signs of recovery in UK art market activity since 2015 but also highlight a marked decline in business with Switzerland, a key trading partner. However, exports to the UAE rose significantly.

Global exports of art and antiques from the UK were up 5.5% at £5.1bn, while global imports rose by more than 20% to £2.1bn. This compares with the 2.2% decline in exports and 21% fall in imports in 2017. (Figures represent the total value of art moved across the UK border, whether by sale or loan)

Most marked was the increase in exports to the UAE following the opening of the Louvre Abu Dhabi in November 2017. £78.2m worth of pictures were exported from the UK to the UAE last year, up from just £13.3m in 2017. The total value of fine art exported to the UAE from the country in 2018 was £83.4m, compared to £31.1m in 2017.

©Ivan Macquisten 2019

©Ivan Macquisten 2019

The UK’s chief trading partners remain the US, Hong Kong and Switzerland — all leading art market hubs. However, while total exports to and imports from the US rose by more than a quarter, figures for Switzerland fell dramatically. Picture exports there fell by more than 30%, at £532m, and imports by more than 40%, at £282.4m.

One Swiss dealer, who asked not to be named, said that the biggest single reason for this was probably changes in the country’s banking laws. “Switzerland was traditionally a place where dealers from other countries could set up shell companies to store assets as a means of avoiding tax,” he says. “However, Switzerland has dropped its banking secrecy laws and that means an end to anonymity, so companies can no longer conceal their ultimate beneficiaries.”

The dealer added that the bureaucratic burden now placed on those wishing to trade in Switzerland or deposit money was equally a deterrent: “The due diligence has become super efficient and demanding and takes much more time to complete. This could make using freeports in Luxembourg or Singapore much more attractive.”

Problems with freeport’s won’t have helped

Damaging headlines linked to freeports will not have helped either. The European Commission president Jean-Claude Juncker has recently defended the Luxembourg freeport, set up during his premiership of the country, against calls for a fraud investigation from the German MEP Wolf Klinz.

The fall in the value of the pound could also be a factor, the dealer argues, making New York more of an attractive option than London when it comes to exporting works of art for sale.

Other changes in Swiss banking and residency laws have made it less attractive for collectors to move their art holdings there for safekeeping.

Another Swiss dealer, who also did not want to be named, agreed with the first, adding that the Swiss Federal Office of Culture’s increasing interference in trade was having a damaging effect.

The customs figures measure the registered value of goods crossing UK borders rather than sales, although they tend to reflect market trends and spheres of influence.

Intrastat rules govern what is reported in customs figures for the movement of goods between the UK and EU countries — classed as arrivals and dispatches rather than imports and exports, These do not cover anything like the entire value of goods moved within this sphere, which is why totals seem so low comparatively. However, they can provide useful information on trends.

Exchange rate movement appears to have aided recovery

Part of the general recovery is probably attributable to the rise in the average sterling-dollar exchange rate across the year*. Despite a weakening pound since April, relatively high values in the first quarter of 2018 gave rise to a yearly average of $1.33 to the pound, compared with just $1.28 across 2017. A sharp fall in the average rate in May 2018 would also have made London a more attractive place to bid during the height of the summer auction season.

The UK market has some way to go to regain the 2015 peak, where exports nudged £5.8bn and imports £3.6bn, but these trends also tend to follow global market shifts. As the accompanying graphics show, the UK market has some way to go to regain the 2015 peak, where exports nudged £5.8 billion and imports £3.6 billion, but these trends also tend to follow global market shifts.

If the UK does leave the European Union this year, Intrastat will no longer apply, with shipments to and from the EU 27 reverting to export and import status, which is likely to affect the reporting of customs figures at least in the short term.

* Source: X-RATES

A version of this article first appeared in The Art Newspaper in April 2019

Where is the ivory debate heading?

We live in hope but must prepare for reality



Arts and heritage minister Michael Ellis told the Art Business Conference on September 4: “It is important that the measures being taken to regulate the ivory trade are balanced with considered exemptions.”

A week later during the Lords debate at the committee stage of the Bill, rural affairs minister Lord Gardiner of Kimble said the Government would not accept amendments tabled in trade interests and they were withdrawn, albeit with the promise of further debate at the report stage.

Such tabling, rejection and withdrawal of amendments at this stage is normal under parliamentary convention, as it puts the Government on notice of serious future challenges without disrupting the passage of legislation – it is at the report stage that the battle will be lost and won.

Exemptions under the Bill are narrow indeed. Last October, environment secretary Michael Gove introduced the Government consultation, saying: “Ivory should never be seen as a commodity for financial gain or a status symbol – so we want to ban its sale. These plans will put the UK front and centre of global efforts to end the insidious trade in ivory.”

On January 31 the then foreign secretary Boris Johnson praised China for its decision to close down its entire domestic ivory market, describing the UK as “united” in its perspective with China and “more forward looking and ambitious in our ban than the European Union itself”.

Johnson added: “Whilst I’m on the subject of ivory, don’t forget, as we work to save the elephant, the threat then moves across to the hippo, and the narwhal, and other bearers of ivory in their jaws.

“And so I am very glad to say that earlier today also that the Hong Kong Legislative Council voted to end the Territory’s ivory trade by 2021, with no compensation for dealers.”

With public opinion overwhelmingly on the side of a total ban, and the diplomatic and political prize of the International Conference on the Illegal Wildlife Trade next month, a significant shift in policy looks unlikely.

The imminent conference is also a major incentive for the Government to rush the bill through, but, as Lord Judge has pointed out, this hastiness has serious implications if it means the failure to amend a clause that allows the secretary of state to invest search and seizure powers in civil servants, rather than restricting them to the police.

Exemptions and how they might work

Items with more than 10% ivory content qualifying for exemption must be “of outstandingly high artistic, cultural or historical value”, taking into account their rarity, “the extent to which the item is an important example of its type” and “any other matters specified in guidance issued by the secretary of state”.

Few people outside the trade have the knowledge to decide this, and limited time and resources will restrict any reviewing committee. Items failing to qualify under the ‘Outstanding’ exemption can only be sold or gifted to a designated museum. If museum curators sit on the committee, this risks a potential conflict of interest.

An exemption covering pre-1918 portrait miniatures, pre-1947 pieces and pre-1975 musical instruments with less than 10% intrinsic ivory content rules that they must be registered with the secretary of state, who would issue confirmation of the registration, which would then go on record for future transactions. However, the detail required, along with the payment of an as-yet unspecified fee, might well deter applications for cheaper pieces.

Hong Kong’s enforcement starts in 2021. UK Government rules stipulate transitional periods for businesses to adapt for such legislation, especially where no compensation is due. This should delay enforcement until at least 2021 if not later.

But with the prospect of a near-total ban, who is prepared to invest in ivory now?

In future, valuers must identify if an object’s de minimis content is indeed elephant ivory or another banned material. Time and cost will determine whether they bother or simply refuse to consider anything with ivory content.

If so, this would help with enforcement. As Shadow Environment Minister Lord Grantchester noted during the Lords debate, the CITES border force comprises just ten members, while the National Wildlife Crime Unit has just 12, including admin staff and no funding commitment beyond 2020. Meanwhile the OPSS (Office for Product Safety and Standards), which will oversee the process, has no expertise in this area.

If antique ivory loses all value as a commodity, and becomes socially unacceptable, museums will come under pressure not to accept donations and remove it from display. Then, at best, it will go into storage. If so, how long before pressure on space and preservation costs lead to a relaxation of de-accessioning rules? If that happens, then destruction becomes a greater risk.

The exemption for portrait miniatures makes sense; the failure to protect other treasures for similar reasons less logical.

Michael Ellis’s promise of “balanced [and] considered exemptions” is a straw to clutch if nothing else.

Why I think Kinesis looks like the best way ahead for money

Safe, stable, liquid and easy to use for day-to-day spending – meeting the crypto currency challenge

Kinesis image

A few days ago, when bitcoin values slumped overnight, the former CEO of PayPal, Bill Harris, reportedly dismissed the crypto currency as “a useless payment mechanism”.

“The cult of bitcoin [makes] many claims – that it’s instant, free, scalable, efficient, secure, globally accepted and useful – it’s none of those things,” Harris told CNBC’s Fast Money programme.

Well, as the ex-boss of a global payment system challenged by the whole concept of crypto currency, he would say that, you might argue.

However, Harris has a point. The real challenge for an alternative global system of value exchange is not for it to be a wealth creation exercise for the elite, but an effective method of transfer that is stable, cannot be manipulated by institutions or governments, protects the individual, has an intrinsic value and can be used quickly for ordinary, day-to-day transactions.

It should also act as a barrier to crime, particularly money laundering and terrorism financing, and offer a reasonable alternative to expensive wire transfers for the ‘unbanked’.

That is why I have become involved in the programme to promote Kinesis, which has the potential to achieve all of these objectives.

Being hailed by its developers as a “blueprint for the future of money”, Kinesis is a wholly integrated value exchange system linking to a globally accessible crypto currency directly backed 1:1 by hard assets in fully insured gold and silver held in third-party vaults across the world, giving it an intrinsic value. These holdings will be subject to semi-annual third-party holding audits. To put that in perspective, the last full audit of the gold held in Fort Knox took place in 1954. The Kinesis system is ethical because it’s based on LBMA (London Bullion Market Association) bars, and it’s officially recognised via the legacy system, with all associated taxes paid.

In short, Kinesis is an ethical system that enhances money as both a store of value and a medium of exchange.

This is not a gimmick that has suddenly emerged from nowhere, but a system carefully devised over seven years, based on London’s accredited Allocated Bullion Exchange (ABX), the world’s leading electronic institutional exchange for allocated physical precious metals.

It will employ bespoke block chain technology to ensure global security.

Kinesis can never be sold below the current price of gold or silver

“We provide a value and a unit of account and we solve the medium of exchange issue, while the system produces a yield,” says Kinesis CEO Thomas Coughlin.

The only way to bring this currency to the people is to digitize it and allow it to trade in very small amounts.

Kinesis can never be sold below the current price of gold and silver thanks to the direct allocation policy, which gives it stability. Transactions take just 2-3 seconds and are proportionate to what you are buying, so, unlike other crypto currencies, this one can actually be used in day-to-day transactions like buying a cup of coffee.

And when you pay over the currency unit, which can be allocated using your Kinesis debit card, you are also paying over that percentage share of the gold or silver that goes with it, gram for gram. At the same time, transactions costs* are a fraction of alternatives, making the whole system viable for day-to-day use in even small amounts. The Kinesis debit card can also be used to access cash at ATMs.

Another incentive to use the system over others is that all of those involved in it are paid a fractional share of the transaction fees, making it a unique multifaceted yield system. This promotes the growth and use of Kinesis as a medium of exchange while distributing back the wealth to the system’s users, encouraging the rapid movement of money around its network.

What this also means is that for the first time ever precious metals attract yield as physical assets in a way that encourages trade and transactions.

What’s more, Kinesis is Sharia compliant because it makes its yield from transaction fees not interest.

One of the Kinesis currencies’ (1 KAU = 1 gram of gold and 1 KAG = 10 grams of silver) most important features is the security they provide for users.

With unbacked crypto currencies, the title can be held by the exchange and the end user holds a warrant to that title. This is why crypto exchanges get hacked, because they are effectively treasuries.

Likewise, depositing money in a bank in the traditional way effectively means taking on bank risk where you are exposed above the guarantee limit. Kinesis does not expose you in this way because it is backed gram for gram by gold and silver. There is no counter-party risk because the depositor retains title to the gold and silver represented by their deposit. With paper deposits, the bank retains title and issues a warrant of title to the depositor. If the bank fails, the risk is passed on to the paper depositor above the guarantee limit. Remember the Cyprus depositors of 2012-13, who lost access to their funds and took a government-sanctioned ‘haircut’? With Kinesis, that can’t happen.

Other new developments in crypto currency are trying to build in stability by pegging themselves to fiat currencies, but that will leave them exposed to the usual banking risks detailed above.

The fractional cost of transactions also make the Kinesis system far more attractive to the ‘unbanked’, like migrant workers wanting to send funds home to their families in other countries. Currently, they are forced to use services like Western Union, which can charge anywhere between 5% and 25% of the money being transferred in fees, whereas Kinesis fees are limited to 0.45%.*

ABX has already raised the entire call for backing it needs to launch the system (around $250 million) through the issuing of Kinesis Velocity Tokens (KVT). It will continue to sell KVTs up to the limit of 300,000.

How Kinesis Velocity Tokens work

KVT holders are effectively stakeholders in the success of the system and will receive a 20% proportional share of the transaction fees from the Kinesis Monetary System ongoing. The more successful the system, the more money KVT holders stand to make. But what is different this time is that ABX has prevented institutions from muscling in and taking a concentrated position, scooping up huge holdings of KVT, which would risk compromising the system. Instead they have prioritised small investors. Institutions can get involved, but allocations to them have been strictly limited to ensure genuine system independence in the future.

Unlike bitcoin, Kinesis does not use up vast amounts of energy in the ‘mining’ process. The process is a simple one of exchange: you buy it with fiat currency.

Why would countries back you when what you are doing would limit their ability to control currency? Because most governments hate cash as it limits their ability to fight crime like terrorism. Kinesis digitises the system and anyone who wants to participate has to go through a vigorous Know Your Customer (KYC) process, working through Unified Signal, before they can gain access to it. Unified Signal control every cell phone for billing in the US, as well as the medical systems for the US, and provide the digital wallet through which Kinesis operates. This means there is no way of laundering the money through the system. You have to establish credibility before you are allowed to join. It also means that governments who adopt Kinesis will be more empowered to tackle tax evasion and terrorism financing, while generating additional income from transaction fees as a system user. Think how that could transform the fortunes of African countries currently beleaguered by corruption and the wholesale plundering of their assets.

It doesn’t take a genius to see how this could have additional applications in areas such as provenance and international transactions for the art market, another area of great interest to me.

So who has Kinesis convinced so far?

Well, the Indonesian Post Office for one. It has signed up to use Kinesis in the handling of its $12.5 billion of assets. Deutsche Bourse is set to become a liquidity provider to Kinesis too.

With an unblemished track record, which it is vital to retain, there is much at stake for the ABX in the intrinsic reliability and honest robustness of Kinesis.

Credibility and reputation at work

And look at the Kinesis advisory board. Among others, it includes Andrew Maguire, arguably the most important whistle-blower in the history of bullion banking, who in 2010 exposed the manipulation of the precious metals markets to the US Commodity Futures Trading Commission (CFTC). He effectively risked his life to do this when, instead, he could have sat back and exploited his knowledge to makes millions but was sickened by the cost in broken lives that the corruption and manipulation of the silver markets led to.

Other members include Padraig Seif, CEO of Finemetal Asia Ltd, and Axel Diegelmann, MD of Trisuna-Lagerhaus AG and co-founder of the Lichtenstein Precious Metals Group). Watch this space for additional names with game-changing reputations to be added to that list.

As confidence in the traditional banking system wanes further and existing crypto currencies continue to give the impression of Wild West gambling dens, trust, reliability and stability have never been more important.

Kinesis has impressed me more than any other proposed value exchange system and shows the best chance I have seen of solving the problems that dog other forms of banking, investment and exchange. That’s why I’m putting my money where my mouth is.

The Kinesis Monetary system explained (1.55 mins long)

Kinesis yields explained (1.38 mins long)

Art businesses ill-prepared for GDPR, new EU data protection law

Data privacy is getting a long-overdue overhaul with GDPR, but is the art market ready?

ICO 12 steps adviceBarely four months before it becomes law, much of the UK art market has yet to address what is billed as the most important change in data privacy regulation in 20 years.

The General Data Protection Regulation (GDPR) comes into force on 25 May to protect European Union citizens against privacy and data breaches, replacing the previous 1995 law. The new law aims to give individuals more power over how and where their personal data is used by companies “in an increasingly data-driven world that is vastly different from the time in which the 1995 directive was established”, according to the UK Information Commissioner, which will enforce the law in Great Britain.

Organisations that fail to implement the changes risk heavy fines of up to 4% of global turnover or €20m (whichever is greater), and it will apply to the UK regardless of Brexit. However, when contacted for this article, few galleries or other art market concerns had even begun to plan for the changes.

One organisation that has taken action is the Society of London Art Dealers (Slad), which circulated a briefing from the art lawyer Simon Stokes of Blake Morgan to members in September to alert them to the stringent new regime.

Slad’s director general Christopher Battiscombe says: “The new legislation is causing some concern and it is still not entirely clear what dealers need to do to comply with it, for example in respect of mailing lists. We are seeking legal advice and also putting on a seminar on it for members this month [February].”

Queries over emailing clients

Peter Osborne, the director of London-­based gallery Osborne Samuel, says his main concern is how the gallery can use historic data after May: “Can we carry on selectively emailing and mailing our people or do we have to get their formal consent first? Slad think we should be OK; I do hope this is the case.” He fears that if the gallery has to contact everyone on its existing lists to get them to opt in, only a small percentage will respond and “the people we most want to contact (VIPs and top clients) are just the kind of time-poor people who may not reply.”

Portals, aggregators, online auction platforms and the major auction houses appear to have been more active than the trade so far.

Richard Whittle, the marketing director in the UK and Europe for Invaluable, the live online bidding platform, says: “We believe our certification with the Privacy Shield Framework has a direct correlation to our ability to comply with the upcoming GDPR, and we are currently working to ensure complete compliance with it.”

Christie’s has a team working on the project and expects to be fully compliant by the deadline, with a spokeswoman saying: “Confidentiality is at the core of our business.”

Sotheby’s notes that “there are neither specific exemptions under the regulation for the art market, nor specific requirements pertinent to the art market”, but the auction house states that it knows its obligations and has systems, processes and policies in place that are already compliant.

GDPR centres on the individual’s data, not the organisation processing it, in relation to the offering of goods or services (regardless of whether payment is required), and it applies not just to customers, but to staff, suppliers and others.

Firms must make clear requests for consent to process personal data, stating why they want it and providing easily accessible consent forms, while making it as easy to withdraw consent as to give it—so no more interminable, jargon-filled small print. Tick-boxes for opting in will replace those for opting out.

Attention to detail is essential for avoiding the tiered system of fines. Not having records in order, for instance, could cost 2% of annual turnover. The rules extend beyond data controllers to data processors, such as cloud storage facilities, and contracts between the two must be updated to reflect this.

What the expert says

Ian De Freitas, a partner at London-­based law firm Farrer & Co, has been advising on GDPR for three years and says clients are most concerned with making sure their privacy and marketing policies are compliant.

He identifies the three main impacts for art market businesses as increased risk, culture change within organisations, and a change in relationships with clients, contributors, employees and service providers.

“Companies should focus initially on making it appear for outward purposes that they are compliant with GDPR,” De Freitas says. “They need to look at the privacy policies and the terms and conditions they offer their customers to make sure they are GDPR-compliant. That still takes quite a bit of work, because you have to know what you are doing with data and that it is completely lawful, and you must also put it all in simple language.”

The UK Information Commissioner overseeing this process, however, faces a lack of clarity from European regulators. Operating as the Article 29 Working Party, the regulators are supposed to issue common guidance, “but they have not been very good at doing this”, De Freitas says, “and their language is not clear at all. They have also only issued guidelines in some areas and occasionally in my view they have strayed beyond what GDPR ­actually requires.”

Regardless of this, once the law changes, the regulators will apply their own interpretation of the rules and the only place to test this will be in the courts, De Freitas says.

Limited resources will force ­regulators to focus initially on larger organisations in other sectors, such as banking, insurance, technology and retail, he adds. However, they must investigate individual complaints, so reactive investigations could target anyone, including art businesses. “Therefore, if you get any challenges from individuals, be very careful how you respond to these after 25 May, as it could lead to an investigation,” De Freitas cautions.

Firms must review how they share data internally and with other organisations and will have to re-engineer employment contracts as employees’ subordinate status means they cannot freely consent to data permissions.

“GDPR is odd because although it is supposed to be a European-wide measure the member states couldn’t agree on everything, so certain areas will be dealt with country by country,” De Freitas says. “These include areas of employment law, the processing of criminal data and freedom of expression. The UK government is in the process of introducing a new Data Protection Bill, which will fill the gaps, but it is very late in the day and won’t give everyone much time to accommodate UK-specific rules.”

The countdown TO “ZERO DAY” BEGINS

Ian De Freitas of the law firm Farrer & Co identifies the key requirements for GDPR compliance by 25 May 2018

“As ‘Zero Day’ approaches, businesses within the art market need to remember that cleaning up old data takes time and a lot of hard work, so leaving everything to the very last minute is not an option,” De Freitas says. “We have had nearly two years to get ready and it is getting a bit late, so businesses should act immediately. There will be very little sympathy for those that do not.”

  • Establish leadership and assign responsibility. Set up your team and allocate the budget to deal with this process.
  • Map personal data. How do you acquire, use and share it?
  • Analyse processes for compliance.Establish risks and your approach to them.
  • Implement change. For example, obtain renewed consent for holding and using data, amend and reissue privacy policies, and revise service provider contracts.
  • Train staff.
  • Monitor and enforce compliance.

Preparing for the General Data Protection Regulations (GDPR)

12 steps to take now


You should make sure that decision makers and key people in your organisation are aware that the law is changing to the GDPR. They need to appreciate the impact this is likely to have.

Information you hold

You should document what personal data you hold, where it came from and who you share it with. You may need to organise an information audit.

Communicating privacy information

You should review your current privacy notices and put a plan in place for making any necessary changes in time for GDPR implementation.

Individuals’ rights

You should check your procedures to ensure they cover all the rights individuals have, including how you would delete personal data or provide data electronically and in a commonly used format.

Subject access requests

You should update your procedures and plan how you will handle requests within the new timescales and provide any additional information.

Lawful basis for processing personal data

You should identify the lawful basis for your processing activity in the GDPR, document it and update your privacy notice to explain it.


You should review how you seek, record and manage consent and whether you need to make any changes. Refresh existing consents now if they don’t meet the GDPR standard.


You should start thinking now about whether you need to put systems in place to verify individuals’ ages and to obtain parental or guardian consent for any data processing activity.

Data breaches

You should make sure you have the right procedures in place to detect, report and investigate a personal data breach.

Data Protection by Design and Data Protection Impact Assessments

You should familiarise yourself now with the ICO’s code of practice on Privacy Impact Assessments as well as the latest guidance from the Article 29 Working Party, and work out how and when to implement them in your organisation.

Data Protection officers

You should designate someone to take responsibility for data protection compliance and assess where this role will sit within your organisation’s structure and governance arrangements. You should consider whether you are required to formally designate a data protection officer.


If your organisation operates in more than one EU member state (ie you carry out cross-border processing), you should determine your lead data protection supervisory authority. Article 29 Working Party guidelines will help you do this.

  • A series of documents to help organisations prepare for GDPR can be found on the Information Commissioner’s website:

This article first appeared in The Art Newspaper, both online and in print in the 298 February 2018 issue

Brexit: Why the Tories will fear Corbyn less if the deal unravels

The UK-EU Brexit deal announced earlier this week appears to have reassured and annoyed people in equal measure. Certainly it raises questions over the wording of the content, with some pledges apparently contradicting others.

For instance, it is difficult to see how an undertaking to maintain Northern Ireland’s alignment with the EU internal market is consistent with it leaving the internal market along with the rest of the UK after Brexit. In other words, parts of the agreement, when looked at closely, give the impression of being no more than sticking plasters. If so, trouble lies ahead as it will prove impossible not to break one promise while honouring another.

EU negotiators have been keen to protect Theresa May in the run-up to, and announcement of, the Brexit deal for fear of her government collapsing and Jeremy Corbyn taking power. The DUP has (for now) accepted the terms of the deal, but one wonders what Mrs May had to say to Arlene Foster to reassure her that all would be fine in the end. Elements of the commentariat now argue that the terms of the agreement are so ill-defined that the UK will be able to interpret them as it wishes in the long term, the sort of reassurance that might have persuaded Mrs Foster to sign up to them. Others believe that this looseness only plays into the hands of the EU, which will be able to dictate terms during the transitional period when the European Court of Justice continues to hold sway, however narrowly.

None of this sets the scene for a happy Brexit outcome.

Michael Gove’s intervention, reassuring the public that they will be in control of what eventually happens via the ballot box, is significant because it hints at what may well happen next.

If the May Brexit deal begins to unravel – and I would not bet against this – Cabinet frustration is likely to boil over to the extent that it overcomes the fear of Corbyn at the ballot box. If that happens, leadership challenges will arise from both sides of the Brexit divide. Remainers, led by Amber Rudd or perhaps Jeremy Hunt, will pledge that a vote for them will mean staying in the Customs Union and Single Market, as well as keeping the jurisdiction of the ECJ, while a Johnson/Gove/Patel ticket is likely to pledge a hard Brexit – both sides distinguishing themselves from Labour by offering clarity and a real choice to an exasperated electorate.

Another change of Conservative leader over Brexit will have to mean a general election

It is hard to see how, with another change of leadership, the Conservatives can press ahead with a new policy on Brexit without the mandate of a general election. In the event that an election is called, Labour will capitalise on the youth vote, better discipline and the firm grasp of social media that the Tories lack when it comes to issues such as tax, welfare and the NHS, but will suffer if it does not remove its fudge on Brexit, especially if the Conservatives vote in a leader who comes down clearly on one side or the other.

For the Conservatives, a lurch to one side of the Brexit debate or the other risks alienating a significant proportion of their traditional support, splitting the vote for a right of centre government and thereby playing into Labour’s hands.

Labour has everything to gain. Firstly, because after close to eight years of the Tories under two prime ministers – and with no untarnished candidate on the horizon to take over as leader – public patience with the incumbent administration has worn very thin indeed. Secondly, the recent incompetence and negotiating weakness of the May team has also undermined the electorate’s confidence.

However, Labour is far from unified, and a real fear of Momentum’s influence and how the political landscape might change if Corbyn and McDonnell achieve power may well stay the hand of voters in the polling booth. Many sympathise with the left’s NHS, welfare and education spending plans, but the astronomical bill for them could prove a step too far, and the backtracking on student fees in July, with a pledge turning into an ‘ambition’, will have sown doubt in some people’s minds.

So, just as the negotiating stand-off between the UK and EU has largely been about who will blink first (the UK), so the domestic political scene faces the same challenge. The Cabinet has been prepared to back May while she stays roughly on track because of the threat of a Corbyn takeover. However, if her position becomes untenable, as looks increasingly likely, then a leadership challenge promises to be instantaneous, as both sides in the Brexit debate fear being left behind. Under these circumstances, fighting Labour at the polls becomes all but inevitable and so, ironically, the Corbyn threat disappears as a factor in tactical considerations.

If this is where we end up, then the Conservatives are up against some very hard choices. Any leadership candidate faces the currently insuperable challenge of uniting the party and instilling rigid discipline in the face of a hard left takeover by Labour, while promoting clear leadership under the banner of either the hardest or softest of Brexits.