Wednesday, 15 November 2017

Brexiters are retreating deeper into fantasy land

As the realities of Brexit become ever more apparent, Brexiters are retreating ever further into a fantasy world of their own. To take just a couple of the many examples this week we had, first, Christopher Chope MP who amongst other things railed against the EU for making membership of the single market and customs union a “pre-requisite to having a frictionless border between Ireland and Northern Ireland”. This, which is becoming a recurrent complaint from the Brexit Ultras, shows a quite extraordinary degree of ignorance. It seems not to have occurred to Chope that it is the UK which is choosing to leave the single market and customs union and that means, by definition, creating a border. Once you leave a common customs and regulatory regime there have to be border checks – you can’t go an acting as if, somehow, you haven’t left those regimes. To pretend that this consequence arises from EU intransigence rather than UK choice is either to lack knowledge of the most basic of facts or to be deliberately misleading voters.

Then we had an informative report on Radio 4’s The World Tonight about the impact of Brexit on the Dutch economy and especially the port of Rotterdam. It featured various Dutch business people explaining how Brexit would hamper trade and, in particular, what it would mean for building new customs facilities at Rotterdam. One of the interviewees bemoaned the ‘lack of realism’ of the British government in its approach to Brexit. The BBC’s misguided interpretation of ‘balance’ means that any factual story about Brexit, which almost invariably shows it to have damaging effects, has to be accompanied by a Brexiter speculating about how wonderful things will be. So, on cue, Crispin Blunt MP appeared (and was subsequently reported here). His response to the report was that it showed that the EU needed us more than we need them, and that the Dutch business people featured should be lobbying the European Commission to give us a good trade deal.

So here, months and months since the Referendum campaign started, we had yet another version of the idea that German car makers (sometimes French cheese makers, Italian wine makers, even Wallonian vegetable growers but, this time, Dutch dockers) are going to swing a deal for the UK. It seems not to have sunk in that this is not going to happen because both European businesses and European politicians regard preserving the integrity of the single market as far more important than any loss of trade with the UK. In any case, and linked to Chope’s border absurdity, however good a trade deal the UK struck with the EU it is still only going to be a trade deal. Because the UK is choosing to leave the single market and customs union that deal is never going to be the same as membership and so is never, for example, going to obviate the need for new customs procedures at Rotterdam. Failure to understand this runs throughout the Brexiter fantasy land, with John Redwood MP urging the CBI to lobby the EU not to impose any new barriers to trade when we leave – but it is leaving which creates the new barriers to trade. We are imposing them on ourselves, because people like Redwood think that this is a good idea. We can’t leave and yet, somehow, not leave.

All of these examples, and many more that could be given, grow directly out of the false claims made to the British electorate before the Referendum. They re-state in various ways the idea that the UK is ‘bound to get a good deal’ in which we can ‘have our cake and eat it’ (other times it is the endless re-cycling of the ‘we can trade on WTO terms’ myth and, associated, of the discredited Economists for Brexit forecast). For all that has happened since the vote, Brexiter thinking really has not advanced beyond that. In effect, they are still fighting the Referendum and still acting as if they have not won it and are now responsible for the consequences. The only difference is that as these absurd propositions are shown to be false the Brexiters – using their own peculiar anti-logic – take that to be evidence that the EU is ‘punishing’ us and that this ‘proves’ Brexit is the right thing to do.

Meanwhile, this small group of Brexit ultras continues to drive another fantasy world which, unfortunately, turns out to be our sovereign parliament. In search of their approval, the government now hopes to fix Brexit day in statute. Doing so is meaningless both because it is already fixed not by statute but by Article 50, and because the statute could always be overturned by new legislation anyway. It has no conceivable benefit in terms of the negotiations – quite the reverse, since even if it did have meaning its meaning would be to voluntarily reduce the UK’s freedom of action. It serves only as a symbol to garner the cheers of the more bovine of the Brexiters. On the other hand, a symbolic sop was offered to the Tory ‘pragmatists’ in the form of a vote on the final deal. But even as a sop that was stillborn as it emerged that were the deal to be voted down there would be a no deal Brexit. Despite the mantra ‘no deal is better than a bad deal’, everyone knows that the truth is that ‘any deal is better than no deal’, so the promised vote is meaningless. As it had to be, since a meaningful vote would offend the Ultras who must at all costs be pandered to, at least unless the ‘pragmatists’ in parliament are willing to face them down.

The tragedy in all this lies in the repeated terms – fantasy, absurdity, meaningless – that characterise what is currently going on. None of it is in any serious way contributing anything whatsoever to Brexit. It is completely detached from the damaging economic realities that are already happening as a result of Brexit, and equally detached from the (virtually stalled) talks in Brussels. Those who hope to remain in the EU or, at least, get to a single market soft Brexit might take a tiny crumb of comfort from this. The longer the nonsense goes on, and the closer we get to the end of the Article 50 period, the greater the possibility of the Brexit Ultras being comprehensively discredited. The people who should be thoroughly alarmed are those who want, or are reconciled to, hard Brexit but want it in an ‘orderly’ form. For them, every day conducted in these fantasy terms brings us closer either to that possible retreat from hard Brexit or, much more likely, to the chaotic catastrophe of no deal Brexit.

Thursday, 9 November 2017

Government paralysis risks a Brexit disaster

With each day bringing ever more peculiar political stories it is easy to take for granted the over-arching peculiarity shaping British government, as if it were a normal situation. That is to say, we have a minority government whose central and defining policy is to change fundamentally Britain’s economy and foreign policy in ways which will damage, and are already damaging, both; and this on the basis of the most extreme interpretation of a very narrow referendum result, itself conceivably influenced by a foreign power, an interpretation which is not supported by the majority of MPs, nor by half the cabinet, nor by the majority of the electorate and which the Prime Minister herself probably does not think is in the best interests of the country. I cannot think of a precedent in the history of Britain, or any other country, for such a situation. No matter how familiar these facts are we should never take them to be normal.

It is from this perverse situation that everything else flows, with cabinet ministers quite airily articulating their own version of what form Brexit will take so that (even leaving aside Priti Patel’s freelance adventures in diplomacy) Britain no longer has a functioning foreign policy, as Ian Dunt argued in an excoriating article this week. Meanwhile, having insisted that its 58 sectoral impact assessments, full of “excruciating detail”, must on no account be published since they would reveal the UK’s ‘negotiating hand’, the government now announces that, in fact, they do not exist. Which suggests either that on one of these points they were lying, or that the damage of publishing them would consist of revealing to the EU how little proper planning had been undertaken.

If the latter, it is, alas, likely that the EU are all too well aware of this. Indeed, there are widespread reports of growing frustration and bewilderment within the EU. Despite Britain’s frequent calls for quicker progress, this week’s talks are to be brief and, according the government, no more than a ‘stock taking’ exercise rather than substantive negotiations. A closely argued article by Jonathan Lis this week, based on high level contacts in Brussels, suggested that the EU is now coming to the view that a ‘no deal’ outcome, with all the chaos that entails, in March 2019 is more likely than not. And it is reported that a deadline of three weeks will be set for Britain to agree the terms of a financial settlement if there are to be talks about a transition agreement (itself a highly complex matter, as a new analysis by Professor Kenneth Armstrong discusses).

It hardly needs to be spelt out, but the reason why things are stalled is that the government can do nothing because as soon as it does it will fall apart (there have been rumours of a serious offer on the financial settlement, but nothing has happened yet). For that matter, The Times is today reporting (£) that Brussels are preparing for the British government to fall by the end of the year. I argued in my previous post that this must be a real possibility, underscored by the fact that the cabinet meeting was cancelled this week, apparently because of the depth of the political crisis and divisions engulfing it. If this doesn’t happen, then the paralysis will continue. But paralysis does not mean stasis, because each day that goes by brings March 2019 closer, and brings no deal closer. This, of course, is precisely what the Brexit ultras want and is the reason they continue to support May. The issue thus becomes whether and when the more pragmatic parts of the Tory party (and pragmatic in this context does not mean remainers or even soft Brexiters, it just means not belonging to the kamikaze tendency) are prepared to stand up and say that this ludicrous situation cannot continue, bringing the government down if needs be.

If that does not happen soon the damage will be huge. And yet if it does happen soon the Ultras will inevitably say that all would have been well had the government survived and continued on its kamikaze course. In those circumstances, a new government of whatever stripe might well continue on just such a course. So it may be that it is not until the damage – economic and political – really ramps up that there is any chance of the Ultras being discredited, if not in their own eyes then those of the public. Thus we are on a very perilous tightrope with no certainty, and perhaps only a slender chance, of getting to the other side more or less intact. If the government implodes too soon, the Ultras may still drag us to disaster; if it struggles on as it is for too long the disaster will arrive of its own accord and it will be too late to do anything about it.

Friday, 3 November 2017

Now politics is moving fast - but in what direction?

In my previous post, I argued that economics is moving faster than the politics of Brexit. Further confirmation of that came this week when the car industry urged the government to provide clarity “within months” because investment decisions cannot be postponed much longer. Meanwhile, financial services have been saying the same thing but making the sharper point that from early 2018 the value of agreeing any transition period will “start to erode” as the relocation decisions will have already begun to be made. Although people talk of the danger of a ‘cliff edge’ in March 2019, in a sense there is a mini-cliff edge much earlier than that, perhaps in March 2018.

But we are no longer just in the terrain of making predictions about the effects of Brexit. An NIESR report this week shows that households are already an average £600 a year worse off and that this is “directly attributable” to the Brexit vote. We also now have food rotting unpicked in fields largely because of the difficulties of recruiting EU workers and, similarly, growing problems in nurse recruitment and in other sectors. Also this week the Bank of England identified Brexit as having a damaging effect on the economy leading, in part, to the raising of interest rates.

However no one could deny that politics is now also moving very fast. The trouble is that whereas the economics is going in one direction only it’s not clear where politics is going at all. On the specifics of Brexit there are occasional signs that, belatedly and at snail’s pace, the government are admitting some of the complexities of Brexit, for example with Liam Fox’s recognition that his previous assertion that the UK could just cut and paste EU trade deals after Brexit was incorrect. But for every such small step forward there are contradictory statements on such basic issues as whether no deal means no deal or a “bare bones” no deal (i.e. no trade deal but deals on discrete matters such as air travel); on whether or not there could be a trade deal with the EU completed (£) by March 2019 with an implementation period to follow; on whether and how talks might be speeded up, and on a raft of other things.

Overall, there is very little sign, publicly anyway, of the government taking heed of the detailed technical realities such as those spelt out again this week by Sir Ivan Rogers in his evidence to the Treasury Select Committee. Rogers, it will be recalled, was formerly the UK Ambassador to the EU until he was hounded out of office by the Brexit Ultras back in January. It’s possible that we may get some further clarity on Brexit if (and depending on to what extent) the government’s sectoral impact assessments get released. Forcing this has been perhaps the only effective thing as regards Brexit that Labour have done since the Referendum. It’s conceivable that if they are detailed and alarming then this will change the terms of debate considerably. It is notable that the extremely pro-Brexit Daily Express has this week begun to publish stories reporting, rather than ridiculing as ‘Project Fear’, the likely adverse consequences of Brexit. As the bad news piles up there’s just a sense that things are shifting, but not fast enough to make a difference yet.

Of course the big political story of the week concerns sexual harassment and the unfolding events around this seem likely to further destabilise an already highly precarious minority government. It is more than conceivable that we are not very far away from the government falling, both as a result of scandal but also because, in any case, it just isn’t going to be possible to keep fudging all of the detailed issues around Brexit. Once the fudge ceases, the Tory party will almost certainly implode and/or the support of the DUP that enables the Tories to govern will collapse.

If that happens, it will open up highly unpredictable possibilities which could give an opportunity for a government to do what should have been done by Theresa May right from the start. Namely, to provide some proper political leadership not just of Westminster but of the country as a whole. Such leadership would acknowledge and respect the divisions within the country, acknowledge the full complexities of Brexit, acknowledge the unavoidable trade-offs and constraints, and acknowledge in particular the yawning gap between what leave voters were promised and what is actually deliverable. Parroting about ‘the will of the people’ is no longer, if indeed it ever was, good enough. In short, there needs to be a comprehensive rejection of the politics of “easy answers” which was superbly dissected by David Allen Green in the FT this week.

It is almost certainly too late for May to provide this kind of leadership now. Even for a new government with a new Prime Minister it would need political skill of an extraordinary kind. Nor could it just be a matter of the Prime Minister: what is needed is leadership from across the political class but also a kind of multi-lateral rhetorical disarmament from all of those, on both sides and at all levels, who are passionately engaged in all this. That includes, on the one side, dropping all of the relentless nastiness about saboteurs, traitors and enemies of the people; and, on the other side, dropping the endless derogatory insults about thick, racist Brexshitters. In particular, it means almost all of us accepting that we won’t get everything we want, whatever the government does (including following its present course).

In such a climate we might then be able to seek some form of extension to the Article 50 period and to pursue what is probably the only politically and economically viable solution to the current mess which is single market membership via EEA/EFTA, and membership of the various other agencies such as Euratom which are precluded by the ECJ redline. The entire UK approach deriving from the Lancaster House speech would therefore have to be abandoned – not because it is going to fail but because it already has failed. We already know for certain that what was set out then and in the White Paper cannot be achieved within the time available, and almost certainly that it cannot be achieved within any time frame.

So another approach is needed. This would not, to say the least, be easy, either domestically or diplomatically. But nor is the present approach. Indeed, there is no easy course of action available. But if we don’t get to a situation something like I’ve just described within a very few months then it will be too late to avoid catastrophe. A side-effect of the current scandals afflicting the government might – just – be to take politics quickly enough to the point where it is possible.

Update (5/11/17): Consistent with the argument in this post, the President of the CBI is today reported as suggesting that a transition deal needs to be agreed by March 2018, and that the government should drop its existing ‘red lines’ over the form that a deal should take.