Tuesday, 17 April 2018

How the Windrush scandal connects with Brexit

The Windrush scandal is disgraceful and disgusting in its own right. It is also connected in multiple ways to Brexit. First, in the most generic way, the “hostile environment” created by immigration policy grew out of the same political and cultural soil as the central, anti-immigration, plank of the Leave campaign. Both are expressions of the same hysteria of ‘uncontrolled’ borders, of health tourism, of jobs and public services supposedly taken by immigrants and of crimes supposedly committed by them. It is a hysteria whipped up by the tabloid press and the far right and, at the very least, pandered to by politicians of the two main parties. Without this political culture, neither the Windrush scandal nor – whatever the protestations now of ‘liberal leavers’ - the Brexit vote would have happened.

More specifically, what has happened to the Windrush victims, who – to spell it out - had a perfect legal right to reside permanently in Britain, has a direct relevance to the situation of EU nationals living in Britain will face post-Brexit when they, too, have that right. The, still provisional, guarantee of settled status (itself, by the way, a significant diminution of the rights of free movement, as discussed in a previous post) will require, precisely, that the British immigration authorities do not make the same kind of errors they have made in relation to Windrush.

And it is hardly as if these errors are an isolated event. They form part of a longstanding pattern of failure at the Home Office. Indeed, some EU nationals who have sought to clarify their status since the Brexit vote have already been caught in the vortex of incompetence and encultured, bureaucratised suspicion of the Home Office. For example, last August it emerged that the Home Office accidentally sent at least a hundred letters wrongly threatening EU nationals with deportation.

It’s important to understand that – as with the Windrush victims – when things like this happen it creates a life-wrecking situation. It isn’t just a matter of some onerous bureaucracy: people’s relationships, jobs and indeed their whole lives are in danger of being ripped up. Even if the situation is resolved, it leaves an ongoing trauma for the people affected, and this ripples out to those who might come to be affected.

With Brexit, EU nationals will become vulnerable not just in the immediate aftermath but for years to come. As Windrush shows, the dead hand of Home Office incompetence can reach out over the decades to knock on your door when you are old, or in need of healthcare. The already questionable proposition that EU citizens have nothing to fear from Brexit has taken a further, massive knock as a result of Windrush. Small wonder that the EU want independent oversight of the arrangements for their citizens’ rights. Windrush will cement the case for that, and probably for a longer period of ECJ oversight.

Moreover, at a less personal level, the scandal has pointed up very sharply issues around the fantasy of Global Britain and, especially, of the role that the Commonwealth might play in Britain’s post-Brexit trade relationships. As George Eaton, writing in the New Statesman, points out, the timing of the Windrush scandal breaking as the Commonwealth summit opens in London could hardly be less auspicious.

But in any case, the ‘Empire 2.0’ idea is misguided in every respect. Its first step is to exit the trade agreements that Britain as an EU member has or is currently negotiating with Commonwealth countries. These cover the vast majority of those countries, including those which are the major trading economies. Of particular note in the Windrush context are the agreements with Caribbean countries. So all those will have to be re-negotiated on a bi-lateral basis (the idea floated by some of a pan-Commonwealth trade agreement or even trade area is a fantasy within a fantasy: the Commonwealth is, avowedly, not a trade bloc or trade negotiating entity in its own right).

Beyond that, Empire 2.0 is apparently blind to the very particular political context of the Commonwealth. In brief, few if any of its members aspire to re-enact imperial preference in order to dig Britain out of its Brexit hole, and even if they did they have not stood still since 1973. They are part of their own regional trade agglomerations and neither economically nor culturally do they participate in some misty-eyed reverence for ‘the mother country’. And beyond that, whether Commonwealth countries or not, trade with places far away is never going to compensate for lost trade on the European doorstep.

And beyond even all that is the fact that any such trade deals will usually require preferential immigration treatment, as India has already spelt out. Indeed, it is British opposition to this which to a large extent explains why an EU-India trade deal has not yet been finalised.  Which brings us full circle to the prevailing anti-immigration political culture in Britain which makes such deals difficult (how to reconcile them with an immigration cap in the tens of thousands?) and also rather unattractive to the non-British party (who wants their nationals to be exposed to so hostile an atmosphere?). This is yet another version of the contradiction in Brexit whereby a vote which mobilised nativism is being used to endorse a policy of (a certain sort of) globalism.

The Windrush scandal and Brexit both disclose what happens when, as Ian Dunt describes it “a country completely loses its mind about immigration”. Even if Brexit does not go ahead, there is an urgent need for the country as a whole, and the political class in particular, to regain its senses. A part of that would be to think about the benefits of immigration in more than the narrow, transactional, economic terms which are about the only ones that even pro-immigration arguments get made. If Brexit does go ahead, then that task will arguably be even more urgent.

Thursday, 12 April 2018

Business gets vocal about Brexit

One of the many remarkable consequences of the Brexit vote is the extent which it has fractured the traditional closeness of the Conservative Party and the business community. For the Ultras, in particular, it has become commonplace to treat bodies like the CBI and the IoD, and the City in toto, as being part of the assorted horde of saboteurs and enemies of the people stretching from universities to the judiciary.

This seems to have spread to the government more widely. Following the Referendum, there were repeated complaints that neither the Prime Minister nor DExEU would engage with businesses unless they express positivity about Brexit. Since few businesses see anything positive in Brexit this inevitably eroded business influence on the Brexit process. That is said to have changed somewhat since the General Election, admittedly, and the government’s acquiescence to a standstill transition period on EU terms is widely understood to reflect this.

But even with a transition period agreement in prospect, at least, the concerns of business are only very temporarily met. Hence there is now a growing public clamour to mitigate the worst effects of Brexit. A high profile example this week came from the CEO of Airbus, which directly employs 15,000 people in the UK and indirectly perhaps another 100,000. Moreover, many of these are highly skilled jobs. For Airbus, the main issues are the customs union and EASA membership (which entails a role for the ECJ). In passing, I once heard Jacob Rees-Mogg loftily opining that since (as is true) there are no tariffs on aerospace parts the industry had nothing to fear from Brexit. A small example of the way that a little knowledge is a dangerous thing. At all events, lack of clear and realistic plans on the part of the government, Airbus warned, threatened long-term investment and time is running out fast to develop such plans.

Aerospace was one of multiple sectors covered in a CBI report entitled ‘Smooth Operations’ published this week, setting out the views of its members on regulatory issues post-Brexit. This report deserves high marks for recognizing some things which the Brexit business debate has often missed (although both have been discussed on this blog). First, that very often goods and services cannot be separated out, for example where companies provide repair and customer support services for their products, or where software forms part of the product. Second, that business sectors can’t be neatly and discretely packaged up: they interact, as does their regulation. This did, however, make it puzzling to then identify some sectors where divergence would be desired; a reprise of Theresa May’s ‘three baskets’ approach, with all its attendant problems which I’ve discussed elsewhere.

The overall thrust of the report was that British business should for the most part stay closely or completely aligned with EU regulations (thus, of the three baskets, two are virtually empty). The problem, though, is the clear implication of this is that Britain should remain in the single market. Since the CBI were not willing to argue that (they have done in the past, but presumably now see that political horse as having bolted) it becomes unclear what ‘alignment’ actually means. Presumably it means always adopting EU rules as they arise or change and some body, which can really only be the ECJ (or, perhaps, the EFTA Court), to enforce them. On these matters – which go to the heart of the entire debate about Brexit, soft Brexit and hard Brexit – the report only speaks in vague terms of the need to develop “mechanisms for influence and enforcement that benefit both sides”. It may have been politically astute of the CBI to avoid re-engaging with the debate on single market membership, but it leaves a big hole in their analysis and, more importantly, has the potential for adverse consequences for Britain, and for business, further down the line.

I will come back to what those consequences are, but before doing so it’s worth noting the response to the CBI report from Richard Tice, Vice Chair of Leave means Leave (which may perhaps be taken as representing the views of the Ultras more generally). He bemoaned it “as protecting the vested interests of the global multi-nationals at the expense of the approximately 90% of the British economy that does not export to the EU”. This short sentence embodies a series of misleading implications. Of course it is true that most of the British economy doesn’t export to the EU. Like all countries, most of the economy doesn’t export to anyone. But it makes no sense to have two sets of rules, one for the trading economy and one for the rest, which would be a recipe for red tape and would also permanently freeze the British economy into exactly the shape of its present pattern of trade activity.

However, the bigger implication is the populist one of Brexit as a battle with the “vested interests of global multi-nationals”. That is a nonsense given the kind of trade deals the Brexiters want to sign, anyway. It’s also a nonsense in terms of the way that all advanced economies – Britain’s, for better or worse, especially so – are globally embedded. Unless Britain wants to lose those firms, their jobs and their taxes then that needs to remain so. Brexit was never sold to the British public as a manifesto for economic autarky, and wouldn’t have been bought by them on that basis. And it’s nonsense because the CBI represents, and the issues it raises apply equally to, small and medium-sized businesses not just multi-nationals.

One of the most informative and saddening things I read this week was a blog post by Natalie Milton, the owner of small manufacturing company exporting mainly to the EU. In it, she details how leaving the single market and customs union will destroy the business she and her partner have built up over many years because of additional processes and costs. She explains precisely the nitty-gritty practicalities of Brexit for such a business (something few advocating Brexit seem to understand) and also how she and her family have built it from nothing so that losing it will devastate their whole lives. On her own account, these are ordinary people who don’t come from a privileged background but have created a successful business, earning foreign currency and providing jobs in their local community. It is crazy to think that destroying all this is a blow against “vested interests”. And, coming back to the point at the start of this post, it is striking how this person is almost the embodiment of what the Conservative Party used to claim to be the backbone, even the model, of what Britain was about. No longer, it seems.

How much influence business has on what happens with Brexit now remains to be seen. There are potentially heavy penalties for individual firms speaking out: as long ago as 2014 Brexit Ultra John Redwood threatened punishment for firms which spoke in favour of EU membership, and there are risks of adverse press coverage and lost government contracts. Still, as the government slowly come to appreciate that the fantasies of the Brexit Ultras cannot be put into practice, some degree of sanity may prevail. There is an irony in that, by the way, since what we see happening is the mirror image of that now rarely-heard piece of Brexiter scripture that the ‘German car industry’ would pressure the EU into delivering a cake and eat it Brexit deal.

It may be such business pressure that is leading to rumours that Theresa May will, after all, seek a form of customs union with the EU (something both the CBI and IoD have lobbied for and which recently became Labour Party policy). It may be that something like what the CBI are setting out in ‘Smooth Operations’ comes to pass. And that could, indeed, mitigate a lot of the economic damage of Brexit. However, even if so, there is a real danger ahead if the efforts of the business lobby are successful. The danger is of drifting into a kind of de facto soft Brexit when it has never been clearly articulated or framed as such, and doesn’t sit within a defined framework such as EFTA. I think there are many people in business and beyond who expect something like this drift or fudge to occur, and in a way it would be a rather British, make do and mend, kind of Brexit if it did.

But if that happens it will always be liable to future attack and unstitching by the Brexit Ultras, or for that matter by others. It won’t represent a clear, strategic decision by the UK but will rather be a patchwork of compromises and ad hoc solutions cobbled together in such a way as to slip it past not just the Ultras but everyone else, including the EU and including the British public. That won’t be particularly good for businesses – it means that investment in Britain will always have an additional risk factor – and it certainly won’t be good for Britain as whole. It will mean that far from Britain’s relationship with the EU being settled for a generation, that relationship will continue to be the running sore it has been for the last three decades with the added inflammation, of course, that Brexit has rubbed into that sore.