Friday, 29 December 2017

2018: the year that Brexit gets real and the year for getting real about Brexit

It is eighteen months since the EU Referendum and a great deal has happened since then, but most of it has been removed from any sense of reality. For the first six months all we knew was that ‘Brexit means Brexit’, something which lasted until the Lancaster House speech when it was announced that Brexit meant leaving the single market, the customs union and all institutions and agencies that entailed a role for the ECJ; a position then endorsed by the White Paper. It is worth pausing to reflect on this, because that six month delay gives the lie to the claim that the Referendum vote automatically entailed hard Brexit: had it done so, there would have been no such delay in announcing it. We also now know that the Cabinet did not have a formal discussion of the government’s post-Brexit plan until just a couple of weeks ago, and that no detailed impact assessment of it was made. So it would seem that the hard Brexit decision was made by Theresa May and her advisers, rather than by Cabinet, and with little understanding of what its implications would be.

Nevertheless, it was this decision, endorsed by Parliament, which framed the terms of the Article 50 letter and thus fundamentally shaped the way that the phase 1 negotiations occurred. Throughout those negotiations Brexiters continued to spout nonsense – that there would be the ‘row of the summer’ over sequencing; that the EU could ‘go whistle’ for a financial settlement; that ‘no deal’ was a possible or even desirable outcome; that the Irish border issue could be solved by magical, non-existent technologies. All this – along, of course, with the bizarre decision to call an election, and its outcome – was a stupendous waste of time and good will. Thus nine months into the Article 50 period the UK has agreed to pretty much everything the EU set out at the beginning, as was always inevitable unless the government was willing to accept the ‘no deal’ calamity that a breakdown of the talks would mean. Yet even at that point some Brexiters tried to say that the phase 1 agreement wasn’t really binding – only to be immediately disabused of that by the EU.

That, in brief, has been the story so far (for far more detail, see the last 110 posts on this blog!) and it is a woeful one of incompetence, unforced errors and a profound refusal by the government and especially the Brexit Ultras to engage in a serious and realistic way with the policy that they, themselves, wish to pursue. But 2018 is the year that Brexit will get real, and politicians will have to get real about Brexit – real with themselves, real with the public, and real about the EU-27. The crunch date will come, of course, in October 2018 when the final terms of the Article 50 process will need to be agreed for ratification to occur by March 2019 (see Paul Waugh of HuffPost for a great summary of the process).

That is an astonishingly short period of time – really, only nine months - and there is simply no way that it can be achieved if the government continue in the way that they have conducted themselves over the last nine months. But there is another, less obvious, crunch date coming and that is March 2018. That date will mark a year before Brexit actually happens and if by then it is not clear that there will be standstill (i.e. status quo) transition period then really serious disinvestments and relocations will begin to happen because a year is about the minimum timeframe for businesses to make those kind of decisions.

So this is the first and most urgent thing the government need to get real about and they have to do so in the next few weeks. There is going to have to be a standstill transition and if the Ultras don’t like the idea of being a “vassal state” then tough. That’s the consequence of the policy they sold to the British people. The only alternative would be to seek to extend the Article 50 period. It’s highly unlikely, but not impossible, that the EU-27 would agree, of course, but in any case Ultras won’t accept that because they see it as postponing, perhaps forever, Brexit. But the time has come for Mrs May to stop pandering to the foot-stamping Ultras who have so consistently and so conspicuously failed to understand or accept the basic consequences of their own actions. Nothing will satisfy the Ultras because they don’t want to be satisfied and let’s be clear: they represent only a tiny fraction of leave voters, and certainly don’t express ‘the will of the people’.

It is also down to Mrs May, and the government in general, to stop peddling factually nonsensical claims to the British people about what is going to happen now, or what can happen now. Thus, first, what was agreed in phase 1 is not contingent on the outcome of phase 2. It defines the agreed exit terms. Second, phase 2 is not going to yield a future trade deal, it can only (both because of the terms of the Article 50 process, and the timescale) yield a political framework within which that trade deal can be negotiated once Britain has become a third country. There will be no trade deal in March 2019, nor will there be one for a long time after that, and very probably this will mean a significantly longer transition period than is currently envisaged by either the UK or the EU.

Third, whatever the final terms of trade are going to be, May, the government, and Brexiters in general, have got to get real, and quickly, about the incompatible nature of the policies and red lines they currently espouse. That is, there isn’t going to be anything remotely close to the current trade arrangements unless the UK stays in the single market via EFTA/EEA and signs a customs treaty very similar to customs union membership. If the terms are going to be something like CETA then that is going to be a long way from the current situation, especially as regards services, and, in turn is going to be incompatible with having an open border in Ireland. Moreover, as regards non-trade issues then, just as has been accepted for citizens’ rights, participation in all sorts of agencies in areas including aviation, nuclear materials, security and policing will mean accepting some role for the ECJ. There are multiple circles that can't be squared here, and May should give a Prime Ministerial speech or broadcast to explain this to the British people. They deserve, and can for the most part undoubtedly take, some honesty and realism.

There are also some more specific things to get real about. The governmental structure created to handle Brexit doesn’t make sense, split as it is between the Cabinet Office and DExEU, the latter of which has been a mess from the start and which has suffered multiple resignations and staffing problems at both political and administrative levels. This was most sharply revealed by OIly Robbins' move from DExEU to the Cabinet Office. DExEU appears to be dysfunctional and it is not clear that David Davis is on top of his job or, even, what his job is. Whilst rethinking his role and that of his department, it would be a good time for Liam Fox to be told that there is no prospect of him making any substantive progress on trade deals with other countries: it’s not just that no deals can be signed until after the transition period, it’s that no country will discuss the details of such deals until the final terms of Brexit are known. And, finally, all politicians need to get real about the fact that EU leaders and officials do actually have access to the British media: statements made for home consumption can and do adversely affect the negotiations.

So much for the government, but in 2018 the Labour opposition are also going to have to get real and clarify their position. In particular, if they have got any sense, they will clearly and concertedly back staying in the single market as the only way of both ‘honouring the Referendum result’ and avoiding the complexity and damage of Brexit. There are signs that they are inching towards that policy but inching is no longer good enough. Talking about a ‘jobs first Brexit’ or being opposed to a ‘Tory Brexit’ is simply meaningless. The only way to make those slogans meaningful is to support a soft Brexit or no Brexit at all. And that, too, needs to be the position of the Tory backbench ‘rebels’. They will need to do far, far more than they did in backing amendment seven, the one time in 2017 they showed even a fraction of the ruthlessness of their Ultra colleagues.

And, finally, 2018 is also the year when ‘hard remainers’ are going to have to get real. Although it’s conceivable that Brexit might be abandoned completely, this looks less and less likely for the reasons I set out in detail in another post. I don’t like that, and I’d be happy to be proved wrong, but barring a major, sustained change in the opinion polls in the next few months that is how it seems to me. If this is so, it means that the best hope of minimizing the damage now is to seek the kind of soft Brexit which, were it not for the baleful influence of the Brexit Ultras, we might have had and could – just possibly – still get.

In the very first post on the blog, I wrote that it started from the position that the Referendum vote was a national catastrophe, and that is still my view. But even given that – or even for those reading this who do not share this view – what has been striking about all that has happened since the vote is that the botched and incompetent way that the government have approached Brexit has made the worst of a bad job (see this great summary from Jonathan Lis). They have only a few months – really, only a few weeks - left to retrieve the situation and they can only do that by firmly squashing the Ultras. If they do not then any pleasure that we remainers may feel at seeing Brexit crash and burn will be more than offset by seeing the consequences. Because a crash and burn won’t take us back to 22 June 2016 but will propel us into a national evisceration in 2019.

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