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.

Thursday, 26 October 2017

Time's running out: economics is now going faster than politics

It’s a truism that the Article 50 clock is ticking. In March 2019 the UK will be a third country to the EU with all that entails, and any deal will have to be done at least six months before that in order to allow ratification. So there is about a year left.

What is becoming increasingly clear is that this political timescale is being overtaken by the timescale of economics and business. This week, five groups representing British business wrote to the government urging an early agreement to a transitional agreement on, effectively, status quo terms – which would mean many of the things that are red lines for the Brexit ultras, including ECJ jurisdiction. It’s a mark of how strange British politics has become that a Tory government regards these business groups as peripherally relevant or even, for the Brexit Jacobins in the Tory Party, just another group of saboteurs who don’t share the true faith.

But faith doesn’t really cut it when it comes to investment decisions, and whilst the Cabinet have reportedly not discussed what future trade terms the government will seek with the EU (even whilst insisting that the EU must start trade talks immediately) for fear of the splits it will reveal, businesses are obliged to make those decisions. For example, supermarket chains faced with the possibility of lengthy customs checks need to decide very soon on investments in new refrigeration facilities. For airlines, the crunch point of selling post-March 2019 seats is coming in March 2018. And before long, farmers are going to have to make decisions about what crops to plant.

Brexiters don’t understand any of this, partly because very few of them know anything about modern business practice. Very few business people support Brexit – it’s telling that only three have really had a significant profile: James Dyson, JCB boss Lord Bamford and Tim Martin of Wetherspoon. The first two of these have had massive legal disputes with the EU, with JCB suffering a hefty fine for anti-competitive practices, whilst Wetherspoon does not export and is highly reliant on EU migrant labour.

At all events, we’re now getting to the point of no return as regards business decisions. For some, the point is already passed. Internet entrepreneur Jean Meyer is moving his company from London to Paris having “lost track of the number of developers, marketing managers or data scientists who refused to join us following the Brexit vote”. On a bigger scale, the strategically vital pharma industry is getting very alarmed: “will we be able to do everything on time? Probably not” said one senior manager of Merck, a leading player.

Brexiters dismissed the warnings of business as ‘Project Fear’ before the referendum, and since then have dishonestly pretended that since the warnings did not come true the day after (which they did, in fact, as regards sterling) then they will never do so. But the situation now is quite clear: businesses are not investing and are beginning to leave. Jon Worth wrote an excellent blog this week arguing that politically ‘something has got to give’. That’s true, but when it does it is likely only to increase the political uncertainty around Brexit. Which will only accelerate disinvestment. And businesses which leave now won’t come back, whatever subsequently happens with Brexit.

Beyond all the business issues, it’s crucial to remember that uncertainty bites very hard upon individuals, especially EU citizens in the UK and UK citizens in the EU-27 but also people who may be thinking of moving to work, study or retire in other countries. Many of these people are facing decisions without any real way of knowing on what basis to make them: decisions about themselves but also about, say, their children’s schooling. Literally millions of people who, quite reasonably, have built their lives on a presumption of UK membership of the EU are having those lives wrecked and having to make decisions, whilst the meaning of Brexit cannot be defined even by those who most assiduously campaigned for it. Those decisions, like those of businesses, are also being made right now and won’t easily be revoked.

Formally, Brexit happens in March 2019. For many businesses and individuals it is happening right now. Is there anything on the other side of the coin? Are there any businesses or individuals investing in or coming to Britain because of Brexit? No. That is an extraordinary fact so it's worth repeating: there is not one single business investment that has been announced as a result of Brexit.

Update (with apologies for the font/formatting problems which I haven't been able to resolve): The claim at the end of this post, that not one single business investment has been announced as being a result of Brexit, has been criticised on Twitter. Some named well-known cases of companies (such as Amazon, Google and Toyota) which have made investments since the Brexit vote, but these investments are not as result of that vote. Another criticism was that the collapse of sterling following the Brexit vote has made UK firms attractive for purchase by foreign investors. This may be true – although the case most usually cited of this development is the purchase of ARM by SoftBank, whose CEO said “I did not make this investment because of Brexit” - but what I actually had in mind with my claim was firms making new productive investments because Britain has voted to leave the EU rather than the sell-off of British assets to foreign ownership because, as a knock on effect of the vote, the pound has collapsed. It’s also worth saying that the fall in sterling doesn’t necessarily make firms cheaper to acquire because if they make profits in other currencies (notably, dollars) the fall in sterling makes their share price, and therefore acquisition price, higher.
Anyway, I undertook to amend this blog post if examples could be found of companies announcing investments made because the UK had voted to leave the EU. In response, links to several news stories were proposed as examples. However, with one partial exception, which I will come to, they did not show evidence of a company making a new investment because of the vote to leave. They were: a report of an Asian hotel chain that wanted to open a hotel in the UK because of the fall of sterling (but had as yet not done so); a UK holiday camp being re-developed (with an investment that started in 2014, so not as a result of the vote) which is experiencing a boom because the falling pound is leading to more ‘staycations’; a report of booming yacht exports because of the falling pound (no investment announced); an airline saying that it ‘expects’ more business travel as a result of Brexit (no investment announced); a report predicting that more US films ‘could’ be made in the UK because of the falling pound (no investment announcement); a survey showing that 52% of Scottish food and drink firms had increased their investment ‘plans’ because of the Brexit vote (no investment announced); a story about how gin exports have increased because of the falling pound (no investment announced); a report of the CEO of AstraZeneca saying that Brexit will create (unspecified) new opportunities for UK life sciences (no investment announced); and a report of a construction industry leader saying that Brexit ‘could be great news’ for the sector (no investment announced).
So none of these stories show a company announcing a new investment made because the UK voted to leave the EU. But I mentioned that there was one partial exception, a story in the Express, published the same day as my post. This was about a Dutch private equity firm opening a UK office. They see Brexit as an opportunity to “help UK companies to internationalise and to move into the continent” and “provide strategic advice to chief executives that might feel a little lonely at negotiating tables after Brexit”. It is true to say that this is happening because of the vote to leave the EU (although it is not clear what the nature of the investment is) and I am sure that there are many other examples of an industry developing to give advice to companies about how to deal with Brexit. But it’s rather like the chutzpah definition about the man who sought clemency for having murdered his parents by pleading that he deserves sympathy as an orphan to claim that the development of such an industry shows the business potentials of Brexit.
Coming back to the main issue, it may have been a hostage to fortune to say that there have been no announcements of this sort. But I haven’t seen any. Still, it’s impossible to prove a negative only to disprove one, and I wouldn’t be completely surprised if with enough digging it might be possible to come up with some examples. The fact that it is necessary to dig deep is telling in itself and suggests that they will be vanishingly few, and seem likely to be a side effect of the damage that the Brexit vote has done to sterling rather than a direct effect of the decision to leave the EU per se. Thus, at most, they will be indirect consequences. If so, it also bears saying that many Brexiters, most prominently John Redwood, claim that the fall in the pound is nothing to do with Brexit anyway!

Friday, 20 October 2017

Brexit is bringing humiliation to Britain, and there is much more of it to come

It wasn’t meant to be like this. According to Brexiters, leaving the EU would be the easiest deal in history, achievable within minutes and assured by the lobbying power of German car makers and French cheese makers as an inevitable corollary of being ‘the fifth largest economy in the world’. Such claims were made not by a few fringe figures but by almost all prominent leave campaigners including present and former cabinet ministers.

Instead Theresa May is reduced to “pleading” with the EU for a deal “she can defend to British voters”. Pleading was not supposed to be the order of the day as the British lion roared again, but perhaps this word is just The Guardian ‘as usual talking the country down’? Alas, if we look at foreign news reports it seems that pleading is the least of it. Begging is how the Swiss media describe it.

This pitiful spectacle is, in any case, not really about finding a deal which May can defend to ‘British voters’. That would probably not be too hard to do, at least if May were prepared, finally, to be honest with the electorate about what Brexit means and what is and is not feasible, and where the trade-offs and incompatibilities lie. What she actually wants is something with can be defended to the ultras within her own party. And that – which is also what prevents her from being honest with the electorate – is not just difficult. It’s impossible.

There is no deal which can be defended to the ultras for the simple reason that there is no deal that they will accept. Having pushed the envelope from soft to hard Brexit they are now openly campaigning for no deal as a desirable outcome, even though, thanks to the delays of the election and the lack of planning before the Article 50 letter, negotiations have barely started; even though the talks are following the phasing entailed by Article 50 and agreed to by the British government; and even though it is internal rows within the British government which are the primary cause of the lack of progress on the phase one issues.

EU leaders may have a small degree of sympathy for May’s domestic problems – that is implicit in some of the language at the summit and in the announcement that the EU-27 will begin to talk amongst themselves about phase two (trade) issues. But the sympathy will be very limited. That is partly because they, too, know that the ultras are unappeasable. It is also because British domestic politics are no longer of great interest to the EU. In the past, when Britain was a continuing member, a recognition of our domestic political constraints did engender considerable flexibility, allowing all the numerous opt outs and special deals that Britain enjoyed. Now, the terms of engagement have changed and the EU-27 must, inevitably, focus on their own priorities not those of British politicians. If May is unable or unwilling to stand up to the ultras that is her problem.

But of course for those of us in Britain her failure to do so most certainly is our problem. This week’s begging in Brussels is just a small foretaste of a much greater national humiliation to come. By tying the fate of Brexit entirely to the minority of ultra Brexiters May has ensured that. It is important to recall that there was nothing inevitable about this. It may, politically if not legally, have been necessary to proceed with Brexit in some form because of the Referendum. It wasn’t necessary for it to be in the form that May decided it had to at the time when she still had the authority to take a more consensual line, one more respectful not just of remain voters but also of soft Brexiters.

So the stage is set for what we might call soft or hard humiliation. Either some kind of deal will be done, primarily along lines set by the EU, in which some or all of May’s red lines are breached, accompanied perhaps by either a long transition period or an extension of the Article 50 period. Those things would not, in themselves, be humiliating. They might even, in so far as the word can be applied to any form of Brexit, be relatively sensible although will entail considerable economic and geo-political costs, some of which have already been incurred. But compared with what the ultras promised it will be a humiliation and, of course, will be greeted by them as a betrayal.

Alternatively there will be no deal, and economic and social dislocation of a sort never experienced by an advanced, democratic country in peacetime. That dislocation will come partly because, as I and many, many others have repeatedly explained, the ultras’ mantra of ‘trading on WTO terms’ is meaningless. But also because if no deal really means no deal then that applies to all kinds of things which are nothing whatsoever to do with the WTO, for example air travel and medicine licensing. In this regard, ultras have started deploying two new and highly dishonest claims. One is to pretend that, somehow, WTO rules do cover non-trade things like air travel. The other is to talk of ‘no deal’ whilst also saying, as they used to about trade, that the EU is ‘bound’ to agree (i.e. do a deal on!) these non-trade matters.

In either scenario what is about to be administered is a (long) sharp lesson in reality of an order of magnitude bigger than, say, the Suez crisis. It will certainly make what for years was the line that ‘going cap in hand to the IMF’ in 1976 was a national low seem like the mildest of shames. No one should feel happy about this, for two reasons. First, obviously, because the effects of, especially, no deal are going to land very heavily on all of us, whether leavers or remainers. ‘I told you so’ will not put food on remainer tables any more than ‘we’ve taken back control’ will put it on those of leavers.

And, secondly, because history and psychology tell us that the consequences of humiliation are almost always rage and violence. Those things are never far away with Brexiters anyway – they have been quite as angry since winning the Referendum as they were before. So if the Brexit ‘patriots’ urging no deal with the EU - who are currently on every news programme, as if their views represented anything other than a small, extremist minority – get their way we can be absolutely certain that they will not take any responsibility whatsoever for the consequences. It will be, as it always is for them, the fault of others: of the EU and, closer to home, of those of us who warned them repeatedly of the national humiliation to which they are driving us. It won't be pretty.

Wednesday, 18 October 2017

Talk of a 'no deal' Brexit is normalising hard Brexit

One noteworthy feature of the nomination race for the Republican Presidential candidate was that the candidates who might in other circumstances have been thought of as holding rather extreme views became seen as moderate. The reason, of course, was Donald Trump, compared to whom they were indeed relatively moderate. By moving the scale so far to the extreme what had hitherto been seen as extreme became normalised.

Something very similar is underway now with Brexit. The idea of a ‘no deal’ – or what might be better called kamikaze - Brexit was not even entertained during the Referendum campaign when, as noted in my previous post, leading Brexiters assured us that a deal would be quick and easy. But now no deal is being talked about quite blithely as not being too bad or, even, as being actually preferable to having a deal. And this comes not just from fringe figures on social media but from senior MPs like John Redwood and even cabinet ministers like Liam Fox.

Anyone who knows anything at all about it knows that the consequences of no deal would be catastrophic for the UK – not just in terms of trade but a wide range of the taken-for-granted amenities of modern life from air travel to affordable food to cancer treatments. No less significant is that such an outcome would shred Britain’s credibility as a trusted negotiating partner, with consequences for both trade and geo-political deal-making. Pretending otherwise does not hold water even as a ‘negotiating tactic’ since the EU knows all this just as much as anyone else. This is not, as some seem to imagine, a game of poker in which one player can bluff because each player already know what cards the other holds.

So no deal is not, and should not be regarded as, a serious possibility. But the consequence of talking about it as if it were certainly has serious consequences. It serves to normalise what is actually an extreme position, namely hard Brexit. Thus we are getting to a situation where it seems as if just avoiding the catastrophe of no deal would somehow be a sane, pragmatic and desirable outcome.

In fact, as those long months in which all we knew was that ‘Brexit means Brexit’ showed, in the initial period after the Referendum the spectrum of possibilities ran from soft Brexit – meaning single market membership and some form of customs union membership – to hard Brexit, meaning neither as well as exiting numerous bodies such as Euratom. It was not until May’s Lancaster House speech in January 2017 that we were told that Brexit must mean hard Brexit. Yet now, it is common to see no deal described as hard Brexit, and what used to be called hard Brexit depicted as a soft position. Thus Philip Hammond is eviscerated for his lack of faith for championing what was once seen as the extreme form of Brexit.

I’ve written elsewhere about how no matter what concessions are made to Brexiters they always want more. They have now succeeded in dragging the whole country with them. There is simply no way that most, or even many, leave voters could have thought that the no deal scenario was what they were voting for. But now that this scenario is being discussed as a real possibility many voters – whether they were for remain or leave in the Referendum – are highly likely conclude that, by comparison, hard Brexit is ‘not so bad as that’*. In this way, hard Brexit, which was never voted for by the British people, is becoming normalised.


*That claim is in no way undermined by the recent Sky News poll finding that 74% of people would prefer ‘no deal’ to ‘a bad deal’ because a question posed in that form would be bound to achieve such a result. A ‘bad deal’ sounds – of course – like something bad; whereas ‘no deal’ sounds neutral, as if nothing much would change (some respondents might even interpret it to mean remaining in the EU). But if a question were posed in terms of choosing between the realities of ‘no deal’ and those of hard Brexit the result would certainly be a preference for hard Brexit.