Monday, 19 March 2018

Draft transition agreement: initial thoughts

The agreement of much of the text for the terms of Britain’s withdrawal from the EU and the ‘transition period’ thereafter marks the first substantive development since the conclusion of the Phase 1 negotiations in December. There is much in the detailed provisions to be picked over, and the fine print may throw up some significant problems, including the possibility that the body to oversee citizens’ rights might come to an end eight years after the end of the transition period. And the most intractable issue, that of the Northern Ireland border, has been deferred. Overall, though, it is now far less likely (although still not impossible) that there will be a ‘cliff edge’ in March 2019 and to that extent has been welcomed by business groups since it makes for a greater degree of certainty.

However, it can also be seen as no more than an extension of the period of uncertainty. It is not, at this point, a transition to anything nor is it an implementation of anything. Future trade terms will not be agreed until after the end of the Article 50 period, although there will likely be an outline political agreement on what is aimed for. It seems unlikely that the detailed legal terms will be fully agreed in time for the end of the transition period, so a cliff edge is still a possibility. And if the outcome is, as the British government insists it must be, that Britain leaves the single market and has no Customs Treaty equivalent to the Customs Union then there is not enough time for either the government or many businesses to make the necessary adjustments without a further transition period. For some of the major projects involved, especially customs facilities, December 2020 is really not very far off.

But the agreement makes no provision for any such extension of the transition period. Thus if all goes ahead as agreed Britain will be a third country with respect to the EU at the end of March 2019 and out of the single market and customs union at the end of December 2020. What form its relationship with the EU will then take is unknown. For large, long-term business investments that is a major problem. There is also one particular uncertainty about the transition period itself that the text of the agreement is very coy about: Britain’s access to EU trade agreements with other third countries, via which about 16% of UK trade is conducted. A footnote in the text says that the EU will inform those countries that Britain is to be treated as a member state for the purpose of those agreements. But it is not clear that they are under any obligation to do so.

Will this agreement, assuming its terms get finalised, go ahead? On the EU side, the answer seems almost certainly to be yes. After all, in almost all key respects, including the length of the transition period, the agreement follows the terms originally set by the EU. In particular, the UK will continue to be subject to but have no control over all EU rules and laws. This will be the ‘vassal state status’ that Brexit Ultras have said would be unacceptable (a tacit admission that their erstwhile claims that Britain had no say in the EU was inaccurate), and pretty much the opposite of ‘taking back control’.

Even so, and despite what will no doubt be a lot of huffing and puffing, it seems very likely that Brexiters will accept the agreement. It makes it all but certain that they will get over the line in March 2019 and Brexit will be a legal reality, even if at first with little tangible effect on everyday life. Some of them will make much of the fact that the transition terms allow Britain to both negotiate and ratify (but not implement) trade deals with other countries. That is actually a hollow concession by the EU since it’s unlikely that other countries will want to sign up to trade deals with Britain before knowing the nature of Britain’s post-transition trade terms with the EU. And in any case Britain’s limited capacity for trade negotiations will be fully used up in talks with the EU. Apart from that crumb, there is nothing in the agreement that will commend itself to Brexiters. But they – or at least those of them in parliament - have little option but to go along with it since if they do not the political crisis it would provoke could end up de-railing Brexit altogether.

Conversely, that means that for remainers the prospects of avoiding Brexit look more remote. If there is no political crisis and a further deferment of most of the really serious economic damage of leaving the single market, it becomes much harder to mobilise public opposition to Brexit in the time available. For many people, who are perhaps not very interested in the details, it will seem as if things are drifting along with nothing much to worry about for now, if at all. Such drift, of course, is fatal to remainers because just as Brexiters will swallow anything to get over the March 2019 line so too is it the case that once that line is crossed there is no going back (except in the very long-run). On the other hand, it’s still possible that Britain could change policy on single market membership and seek to remain in that after the transition period ends. But that it is a possibility is likely to erode the willingness of Tory remain-inclined MPs to see any urgency in rebelling now. Why go through the pain if, after all, the eleventh hour on single market membership has been postponed?

That the possibility of single market membership being retained exists is principally because of the unresolved issue of the Ireland/ Northern Ireland border. The government believe that this will be solved either by Option A (a very close trade agreement) or Option B (special arrangements, especially technological solutions). Since the trade terms will still be under negotiation during the transition period, this means that the Irish border issue will continue to be deferred until after Brexit day. However, no known trade agreement can avoid the need for a border and no known technologies will enable it to be a completely invisible border of a sort compatible with the Good Friday Agreement. Which would then bring into play Option C, meaning regulatory alignment across the border. If that were to mean a border between Northern Ireland and Great Britain then, according to Theresa May, no British PM could agree to it. Which would then have to mean regulatory alignment with the whole of the UK: de facto single market membership and customs union. Whether by then – some four and a half years after the Referendum – Brexit in this or any other form could be called the Will of the People is another matter entirely.

Friday, 16 March 2018

A preview of the geo-political costs of Brexit

Much has been written about the economic damage that Brexit is already beginning to do to the British economy and the longer-term damage that can be expected. In the last week, we have also begun to glimpse the geo-political price that it will exact.

EU nations were quick to show solidarity with a fellow member state over the nerve agent attack in Salisbury, but the unspoken words were that this was an attack on a country who is a member state – for now. And whilst the Prime Minister and other politicians talked of seeking support from the EU and its members the inevitable reality is that British influence on, for example, the already divisive issue within the EU of sanctions against Russia is far more limited now and post-Brexit will disappear. That disappearance will also have implications for other foreign policy disputes, such as those over Gibraltar or the Falklands. The EU position on these and other issues will in future not be influenced by Britain and will not necessarily be supportive of Britain.

By contrast, the US reaction to the attack was slow, initially confused and, from Trump, equivocal. The sacking of Rex Tillerson may not have been, as some suggested, a reaction to his robust statement in support of the UK just hours before; but at the very least it showed that Trump cared nothing whatsoever for the damage done to Britain by this timing. And although the US position has becoming considerably harder in the last few days the reality is that Trump doesn’t offer reliable support partly, in relation to the present crisis, because of ongoing questions about his relationship with Russia; but in any case, because of his capricious and unpredictable nature. The idea that he was going to be a great friend to Brexit Britain because of his brief chumminess with Nigel Farage was always a fantasy.

At the same time, both in relation to Trump’s new policy on steel and aluminium tariffs and, for that matter, the Iranian nuclear deal, the divisions between the EU and the US are becoming greater and in the process exposing the incoherence of Brexit. On both of those (and other) issues it is clear that British interests align with the EU, and require EU heft to be pursued. Britain is stuck between the two, with waning influence on each of them. Crucially, even if and when a more conventional administration emerges in the US it will not help matters. Prior to Trump and presumably afterwards the standard US view is that UK membership of the EU is vital, and it gave the UK a particular transatlantic bridging role which will be lost forever after Brexit. This was clearly spelled out by numerous senior American politicians prior to the Referendum.

Brexiters’ standard response to these kinds of issues is to say that security is nothing to do with EU membership and everything to do with NATO. That response is deeply flawed, even leaving aside the current issues of Trump’s ambivalent attitude to NATO. Firstly, the EU and NATO are now inter-related in ever more deep and complex ways. Britain, as a NATO member, will continue to be part of that relationship but will no longer be pivotal to it. Secondly, security is about far more than military issues, but rather a spectrum of diplomatic and economic capacities. Again, the Iranian nuclear deal and the sanctions against Russia are examples of the EU’s role in such security. And beyond this, of course, are issues about security in the sense of policing and intelligence co-operation. The reality is that it is not possible to separate out as discrete elements military, diplomatic, economic, intelligence, policing etc. They are all connected together as aspects of geo-political relationships.

In so far as Britain has a strategy to address any of this it goes under the slogan ‘Global Britain’. But that was effectively dismissed as meaningless in a Foreign Affairs Select Committee report this week except to the extent that British foreign policy has always had a global focus, and the report pointed out that the failure to secure a British seat on the International Court of Justice for the first time since 1946 was hardly a ringing endorsement of the strategy. For that matter, the relentless hostility to immigration shown by the government scarcely speaks of a global vision. And Brexit itself has already led to reductions in Britain’s diplomatic presence outside the EU in order to bolster the staffing in EU countries (this, in turn, reflecting the misguided idea that Brexit can be negotiated bi-laterally with member states rather than with the EU-27 en bloc).

Meanwhile this week saw what should, but probably won’t, put an end to Brexiters’ fantasy about the Commonwealth as the basis for future trade. This was always, indeed, a fantasy (the Commonwealth explicitly has never been a trade project; many of its members already have deals with the EU or are developing them; many of them are members of their own regional trade groupings; and none of them has an appetite for the neo-colonial implications of the Brexiters’ dreams) but was made so unequivocally explicit this week that even the rabidly pro-Brexit Express had to report it although the readers’ comments beneath suggest that the message still has not sunk in with Brexiters. The still occasionally heard CANZUK fantasy is even more absurd.

That Britain doesn’t have a workable strategy for foreign policy post-Brexit is in any case not surprising considering who holds the post of Foreign Secretary. No one seriously thinks that Boris Johnson is the best person for the job. He has it solely and simply as an artefact of the domestic politics of Brexit, another small price we are already paying. There can surely never have been a less statesmanlike holder of this office and he is held in contempt in many foreign capitals, especially in European countries given his long record of mendacity about the EU going back to his time as a journalist. That can hardly be an asset when, as at present, the message he is carrying is a request to trust him in saying that there is strong evidence that Russia was responsible for the nerve agent attack.

I’m not suggesting (as some of the angry responses to my recent tweets on this subject imagine me to be) that the Salisbury attack happened as a result of Brexit. That’s not my point, although some, including the Lithuanian Foreign Minister, have made it. I’m arguing that responding to the attack gives an early, partial taste of what post-Brexit geo-politics are going to be like. Brexit won’t make such politics impossible, nor will it make Britain completely friendless: support has indeed been garnered for the British response. It will just make everything more difficult by jettisoning the carefully crafted role that Britain had carved out for itself in recent decades as a node between the major global institutions and a key shaper of its own continent. Yesterday the Prime Minister spoke of having sought support for Britain by taking its grievance to the UN, NATO and the EU, piling layer after layer of pressure. After Brexit, the third of these layers won’t be available.

The effect won’t be immediate or dramatic, just a gradual leaching away status and influence in the world. Against that loss, there is precisely zero geo-political benefit of Brexit: it is all downside. Nor, unlike the economic consequences, is this something that can be mitigated by soft rather than hard Brexit. Both are equally damaging. On the other hand, a no deal Brexit in which Britain walked out of its international obligations, perhaps even reneging on the phase 1 agreement, as some Ultras repeatedly urge would make the geo-political damage catastrophically worse by completely shredding Britain’s reputation as a reliable international partner.

Yet it is a huge irony that Brexit does give Britain one very strong card in dealing with Russian aggression. If we really wanted to do something in response to Salisbury that would pain Russia rather more than the slightly peculiar call to “go away and shut up” we could abandon Brexit altogether, since in isolating Britain and weakening the EU it is, as Rafael Behr argued last year, Putin’s dream policy.

Friday, 9 March 2018

Brexit gets silly

At the end of a recent blog post, following Theresa May’s Mansion House speech, I remarked that even though Britain refuses to get real about Brexit that does not mean the EU can or will do the same. We saw that plainly with Donald Tusk’s speech this week. Although you would not think it from most of the coverage in the British media it was highly conciliatory in tone, welcoming cooperation on security and UK involvement in various agencies, and emphasising the urgent need to prevent any disruption to air travel. But it also made clear that the only trade option consistent with the UK’s own red lines is an extensive free trade agreement (FTA) which would necessarily create barriers to trade which do not currently exist. In that sense, it would be a worse deal than single market membership.

This is only a statement of definitional fact which has been stated many times by EU officials and which should be well-known to everyone in the UK who follows Brexit, and certainly to anyone in the government. In fact, Tusk gestured towards an FTA somewhat more extensive than that modelled by the UK government in its reluctantly publicly disclosed impact analysis (for example, by suggesting completely tariff free trade in goods, and even that “like other FTAs it should address services”). But – yet again – he reiterated that there could be no ‘pick and mix’ approach which undermined the function of the single market, because “it’s simply not in our [meaning the EU-27’s] interests”.

I’ll come back to that, but it’s important to clarify that “addressing services” does not mean or imply anything approaching the existing arrangement for services as a single market member. No FTA does this, or could do this (for example, CETA, the EU-Canada deal, mentions financial services but its provisions have almost no depth, barely going beyond what little would exist under WTO terms) and there is a reason for it, which is nothing to do with EU ‘intransigence’. The barriers to services trade are entirely non-tariff barriers (NTBs) relating to standards and regulation. To remove them requires a common regulatory and legal space (and, no, not just ‘mutual recognition’), which the EU single market creates, principally via the ECJ. That is why the single market is the only example in the world of extensive cross-border services trade liberalization. But since membership of the single market is excluded by the UK there is no prospect of an EU-UK FTA covering services in any extensive way. In this sense, the outcome of Brexit, if pursued as the UK government wishes, must be economically worse than remaining in the EU or at least the EEA. Indeed this is clear in the government’s impact analysis which stresses the significance of NTBs for post-Brexit trade.

So far, so obvious. The problem lies in the reaction of Brexiters, for example Liam Fox’scrass response to Tusk: “The idea of punishing Britain is not the language of a club, it’s the language of a gang. We need to begin this argument by putting politics aside and doing what is in the economic interests of the people we represent”. Of course, Tusk had not used the word ‘punishment’ or even ‘argument’: this is a standard misrepresentation by Brexiters, albeit especially reprehensible in a senior cabinet minister. Moreover, a Canada-style FTA was presented during the Referendum by some Brexiters, including Boris Johnson, as delivering exactly the market ‘access’ Britain needed, so there was no need for voters to worry about ‘Project Fear’. Perhaps they were lying, or perhaps they just did not understand how inferior such access would be to single market membership. Otherwise, how could such a deal be positioned as ‘punishment’?

But even leaving all that aside, the quote revealed several persistent and bizarre misunderstandings. Since we are leaving ‘the club’ why would Fox expect its remaining members to treat Britain in a ‘clubbable’ manner? It’s a line which is often heard from Brexiters, as if there is some sentimental reason why Britain should be treated preferentially as a kind of alumni member of the EU. Yet it is Britain that has chosen to leave and thus to forego such chumminess. More than that, it shows an extraordinary naivety about how international relations operates: niceness and nastiness are not the register in which such relations are played. They are, indeed, about interests.

Here we come to the other part of Fox’s statement. He appears to think that by insisting on ‘no pick and mix’ the EU is putting politics above economic interests (May said something similar in her Munich speech; the irony of saying this whilst enacting Brexit is, to say the least, striking). But, as Tusk said in terms, that is not so. Although an FTA Brexit will be damaging to the EU economy in the short-term, the long-term effects of allowing a third country to have equivalent trading terms to member states would be far more economically damaging. The EU-27 have judged, correctly, that their interests do not lie in allowing that. It is naïve of Brexiters to imagine it could be otherwise, and to think that the EU-27 have either a moral responsibility for or a strategic interest in ‘making Brexit work’.

In fact, this is just another version of the longstanding naivety of Brexiters about how ‘they need us more than we need them’ and all the associated nonsense about how the German car industry (or variants thereof) will secure what Fox once said should be ‘the easiest deal in history’. Imagining that others will conceive of their interests in the way that you think they should, especially if it is in the way that you need and want them to, is perhaps the most naïve assumption that can be made in international relations. At all events, it is by now abundantly clear that the EU-27 (and the industries within those countries) do not and will not see it as being in their interests to act as the Brexiters think they should.

Which in turn gives rise to a further naivety, which is to imagine that, whatever stance the EU-27 may take collectively, Britain can lobby individual member states in order to fragment that collective position. Right from the start, the British government have tried to do this, and their efforts are intensifying now. Sometimes the idea is that it’s just a matter of ‘getting Germany on board’; other times it's trying to woo the smaller countries. But it is a grave miscalculation. Although it is true that Brexit has very different impacts on the different member states, trying to chip away at individual countries would only make sense if the Article 50 deal required unanimity, which it doesn’t; and the idea that Germany has an interest in undermining the single market to accommodate Britain has been shown to be completely wrong, even if Germany ran the EU in the way that Brexiters wrongly believe it to do.

Beyond all of this, though, is a perhaps even more dangerous naivety, and it can be seen not just amongst hardline Brexiters but also amongst more pragmatic politicians – such as Philip Hammond – and in some journalistic commentary. This is the idea that the EU-27’s stance is ‘just a negotiating position’ and that, as in all negotiations, each side has to compromise. What underlies this is the assumption that Britain’s Brexit negotiations are rather like those she has conducted as an EU member, with last-minute deals, compromises on all sides, and a recognition of the particular domestic pressures of British politics from the Eurosceptic press and politicians. But the situation with Brexit is fundamentally different, partly because Britain is, indeed, leaving, so there is no particular desire to accommodate us; partly because the time clock of Article 50 and the catastrophic effect on Britain of ‘no deal’ completely changes the balance of power. To put it another way, whereas in those previous deals when we were a continuing member the EU was trying to achieve something and needed Britain to do that, now Britain is trying to achieve something and needs the EU to do it.

So there is a fundamental realpolitik in all this which Brexiters and – since they have colonised it – the British government have to face up to. Many adjectives have been applied to Brexit and to Brexiters. Looking at the way they are conducting themselves now the adjective which seems most applicable is one which may seem rather anaemic but which captures this serial naivety and lack of realism. Brexiters and the Brexit government have become … silly.

Post-script: Indirectly related to the theme of this post, consider the tweet this week from former UKIP MEP Roger Helmer, bemoaning the possibility that a post-Brexit US-UK trade deal might mean that Scotch whisky and Cornish pasties were not protected descriptions anymore (currently, they have EU protected name status). Admittedly Helmer is, against fairly stiff competition, at the lower end of the Brexiter intellectual spectrum. Still, it’s revealing of so many things: a failure to understand the benefits of EU membership, a naivety about how the US would treat the UK in trade negotiations, and the incoherence of a nationalist rejection of the EU whilst favouring a globalist trade policy.      

Sunday, 4 March 2018

The perverse politics of Brexit

Most of us will have had the experience of living under a government pursuing a policy with which we profoundly disagreed. It might have been the privatizations of the 1980s, or the Iraq War, or the ban on hunting. It might, indeed, have been joining what became the EU and then progressively closening and deepening that membership through the signing of treaties up to and including Lisbon.

The situation with the government’s Brexit policy, though, is fundamentally different. All of the policies listed above, and all others that I can think of, were deliverable in principle and the people who championed them knew how to deliver them in practice. The profound political dislocation of Brexit is that neither of these things are true in this case.

The problem in principle has been widely described, not least on this blog. The government’s Brexit policy cannot be delivered because it contains incompatible demands, fundamentally because it seeks to keep something close to the economic arrangements of EU membership, and especially single market membership, without accepting the political and institutional arrangements that go with that. This incompatibility is most starkly obvious in relation to the Irish border, which the government wants to have completely open whilst also not belonging to the single market or having a comprehensive customs agreement. But the same basic impossibility runs through every part of the policy for the same reason.

That is not to say that any form of Brexit policy would be impossible in principle to deliver. It would be possible to deliver a soft Brexit of single market membership via EFTA/EEA along with a comprehensive customs agreement. Or it would be possible to deliver a ‘clean Brexit’ of complete detachment from the EU, the single market and the customs union. Both of these policies would be politically controversial for various reasons and both would be economically damaging, in the latter case catastrophically so. But they would not contain the inherent contradictions of the actual Brexit policy and in that sense would, for better or for worse, be deliverable.

Of course any form of Brexit would, whatever one’s view of its desirability, be a complex matter. That is just because of the scale of the operation and the timescales involved and, as such, it requires very considerable expertise across a wide range of domains – trade, security, international relations, and law being just a few of them. One of the biggest ironies of the present situation is that, by and large, the advocates of hard Brexit simply do not possess that expertise and in this sense are reliant upon those who do. But those who do are, again by and large, opposed to Brexit in general and, even if they were not, cannot by definition be expected to enact a form of Brexit which is impossible in principle.

This appears to be the unprecedented bind that the Civil Service finds itself in. It is generally thought (and the class and education profile of the Referendum vote makes it statistically probable) that civil servants are, again generally, not in favour of Brexit. Indeed, Brexiters frequently bemoan this. But delivering policies with which they disagree is meat and drink to career civil servants and hardwired into the ethos of the British Civil Service. It’s an ethos which is nicely captured in the classic political sitcom Yes Minister, when Sir Humphrey explains:

“I have served eleven governments in the past thirty years. If I had believed in all their policies, I would have been passionately committed to keeping out of the Common Market, and passionately committed to going into it. I would have been utterly convinced of the rightness of nationalising steel. And of denationalising it and renationalising it. On capital punishment, I'd have been a fervent retentionist and an ardent abolitionist. I would've been a Keynesian and a Friedmanite, a grammar school preserver and destroyer, a nationalisation freak and a privatisation maniac; but above all, I would have been a stark, staring, raving schizophrenic.”
What makes the government’s Brexit policy different is the impossibility of delivering it. It is difficult to know what is going on behind the scenes because serving civil servants do not give public briefings, but we have seen many indications of what I am claiming. Most obviously, the high profile resignation of Sir Ivan Rogers, formerly Britain’s Ambassador to the EU, who was effectively hounded from office by the Brexit Ultras, showed how the government refuses to listen to expert advice which challenges an impossible policy. The statements of many other former senior civil servants paints the same picture, and it is difficult to believe that they are not saying in public what their current-day successors think and say in private.

The most recent example is the comment by Sir Martin Donnelly, until last year Permanent Secretary at the Department for International Trade, criticising the government’s ‘Fairy Godmother’ approach to Brexit, a term that underscores, indeed, its fantastical nature. This prompted a scathing response from Brexiters including his former political boss at DfIT, Liam Fox. It is difficult to imagine that when, just months back, they were working together they did not hold similar positions to those they hold now. More generally, it is reasonable to suspect that the senior civil service is endlessly trying to explain to Ministers what is and is not possible and being ignored if it does not fit the hard Brexit playbook. Indeed, the trashing of the leaked forecasts of the consequences of Brexit seems to confirm this.

The politics of Brexit are unprecedented for another reason. Just as civil servants often have to enact policies they disagree with so too, very likely, do Ministers and even perhaps, on occasion, Prime Ministers. But Brexit is unique in that it is not just a single policy but a complete reset of Britain’s fundamental economic and geo-political strategy and yet the Prime Minister herself appears to think that it is essentially mistaken. I remarked in my previous post that the sub-text of her speech on Friday, as with the Florence speech, was that Britain would be better off staying in the EU. A very acute editorial in today’s Observer makes the same argument at length, pointing out that the speech constantly implied the benefits of what was being rejected. It is an interpretation bolstered by her evasive response when asked after the speech whether Brexit was worth it, and by the fact that she has twice refused to say whether she would vote for Brexit if the Referendum was being held now.

This is really quite an extraordinary situation. Of course, it is well known that May was, if only reluctantly and not very vocally, a remainer during the campaign. It’s easy to understand why she would have felt it necessary to endorse Brexit in order to secure the leadership of her party, and it’s not wholly ignoble for a leader to seek to keep her party from splitting (though that’s not to say that placing that above the national interest is justified). Nor is it ignoble to believe, as she apparently does, that not to have enacted Brexit would have created a potential crisis of democratic legitimacy and trust. But none of that justifies, or requires, the pursuit of Brexit in an impossible form. There was an answer that would have satisfied those concerns and also have been deliverable (i.e. soft Brexit, in the meaning described above). We may even, conceivably, end up with something not a million miles away from that, but only via a route which will leave the Ultras (whose hopes she has raised) and remainers (whose views she has treated with contempt) equally unhappy.

Whatever her motivations, what has been revealed is a profound lack of leadership. She appears to have mistaken stubbornness for strength, determined that come what may, and regardless even of her own true beliefs, she must continue down the path she has embarked upon. Ironically, I have heard it said (but cannot find the source) that when she was at the Home Office she was described as having the qualities of a good civil servant in terms of delivering her brief. She seems to have taken the Referendum to have set out the brief and her job as PM to be to deliver it. But the Referendum did not set out how the result should be delivered and, anyway, a good civil servant knows that there are ways and means of delivering. Or, as Yes Minister’s Sir Humphrey once put it (and I suspect that his current real life counterparts are now often, in effect, saying):

“If you are going to do this damn silly thing, don’t do it in this damn silly way.”

So the politics of Brexit are truly remarkable not just because Brexit polarises opinion more deeply than perhaps any issue in modern British history but because it does so in a particular way. Brexit policy has taken a form that demands the impossible and requires those who know it is impossible to implement it. It is overseen by someone who presumably thinks that it is possible in this form, but doesn’t appear to believe that it is desirable. Meanwhile it is proclaimed as the sacred Will of the People who magically knew what they voted for two years ago, even though it was only last week that the government precariously agreed what that was. And what we end up with will certainly be different to what the government wants, because that’s impossible to deliver, but whatever it turns out to be it would be an affront to democracy to ask the people to vote on whether or not they agree to it.

Friday, 2 March 2018

Four speeches and a wake-up call

Speeches have been as plentiful as snow this week and like our snow-blocked roads they lead us precisely nowhere. That was made brutally clear by the publication of the EU’s draft text of the Withdrawal Agreement and the predictably absurd reactions it engendered.

Liam Fox’s is easily dealt with. It was a vapid restatement of claims about the value of an independent trade policy which the government’s own analysis show to be minimal and which his own former Permanent Secretary had earlier the same day analytically trashed.

Jeremy Corbyn’s had a greater political significance in that by opening up a different policy on a comprehensive customs treaty he also created a route for parliamentary defeats of the government and, with that, unpredictable but potentially major implications. How that plays out now will depend on the extent to which Tory remainers are willing to take the opportunity. But, that said, a customs union alone will not solve the Irish border issue nor will it mitigate very much of the economic damage of Brexit. For that, Labour need to shift on the single market, too – and that seems to be their most likely, though still very far from assured, direction of travel.

John Major’s speech was a reminder of the virtue of common sense, which seems to have all but deserted the British polity, and made logical, detailed, and well-informed arguments (although he, too, appears to think that a customs union will solve the Irish border). Beneath the tone of statesmanlike sagacity I thought I detected an almost pleading note to the country and to his party to get real before it is too late. Predictably, it was immediately denounced by the Ultra Brexiters as treachery. There may well still be voters who listen to and are swayed by Major, but alas for him and for us all, a large swathe of the backbenchers in his party have moved beyond common sense, logic and detailed well-informed argument.

And finally the Prime Minister’s capstone of the ‘road to Brexit’ series. At the core of it lay a statement of the ‘three baskets’ or ‘ambitious managed divergence’ approach agreed at Chequers last week. For the reasons I discussed in some detail in my previous post, this is a non-starter. After all these months, she still refuses to understand that although there are different ways of being in or being out of the single market, there is no way of being both in and out. The most depressing aspect of it, as with the Florence speech, was the sub-text that it would be better for Britain not to leave the EU at all or, at least, to do so whilst staying within the EEA. It is a terrible, tragic failure of political leadership that a British PM is enacting a policy which is not only harmful to Britain but which she clearly realises is harmful to Britain. And it’s an insult to the people of Britain to demand that we ‘come together’ to support a Brexit that almost half who voted did not want, and in a form that more than half of them certainly don’t want.

Overall, it seems clear that there is going to be no change of course by the government, unless it is forced on them by parliament, and thus they will have to accept the consequences of having chosen that course. Which bring us to the wake-up call of the EU draft Withdrawal Agreement. There was nothing in it that should really have been a surprise to anyone since it is the legal reflection of what was agreed in the phase 1 talks in December. Those talks agreed that, barring a trade arrangement (option A) or a technological arrangement (option B) that obviated the need for a hard border, then option C would be continuing complete harmonization (in effect, continued single market and customs union operations) across the border. Whether or not that extends to the whole of the UK or just Northern Ireland would be a matter for the British government. There is no ‘annexation’ going on here.

The howls of outrage from the Brexiters were entirely bogus. They arise solely because as the Article 50 period continues it is exposing all of the lies, fantasies and misunderstandings in which they have indulged and which they have conned many voters into believing. As reality bites back, this ceases to be a matter of theoretical argument or political rhetoric but begins to take on a tangible, legal and institutional form. This is what they wanted, but they act as if it is being forced upon them.

In particular, as regards the Irish border, what is being rammed home is that both a customs union and a single market entail, for a different reasons, a border. That cannot be negotiated away because it doesn’t lie within either the EU’s or the UK’s power to do so. A customs union is a particular kind of construct within those WTO rules that Brexiters often say they like so much, but even if that were not so as soon as there are different tariff levels within different territories there has to be a border, or else there is no way of enforcing the tariff. Similarly, with market standards and regulation. Brexiters say they want freedom for regulatory divergence, even, we are told, to set higher standards than the EU. Suppose this happens, perhaps on animal welfare standards: how then will the Brexiters prevent lower-standard EU produce entering the UK without a border? The same goes for every regulatory divergence or tariff divergence, whether upwards or downwards, between the EU and the UK – indeed, ironically, were it not so those independent free trade deals that Brexiters are obsessed with would be impossible. The technical details are fiendishly complicated; the basic principles could be understood by a child.

So if you leave the single market and any customs union you have to have a border. The only question is where. It can’t be on the Irish land mass if the GFA is to survive. It can’t be in the Irish Sea if the United Kingdom is to survive. So the government have to decide which of these mutually incompatible choices they wish to ditch. Howling that it isn’t fair will change nothing.

Of course the government’s position is, still, that these choices can be avoided, either by a free trade agreement so comprehensive that the need for a border is obviated (option A) or by means of a technological solution which makes the border virtual (option B). So far as the first of these is concerned it rests on the pervasive failure of Brexiters to understand the difference between a single market and a free trade agreement (FTA). No FTA, no matter how ‘deep and special’ or ‘bespoke’, can be the same as single market membership. I suppose it is just about conceivable that an agreement could be devised which amounted in all but name to membership but if so the obvious question would be: so why leave? In any case, such an outcome would be completely at odds with the government’s current ‘managed divergence’ plan, and with its existing red lines, as May’s speech made clear.

The idea of a technological fix for the Irish border has gained new impetus in the last few weeks in Brexiter circles because they have latched on to a research paper produced for the European Parliament on this topic. As is their habitual modus operandi, they leap on to things that they half-understand (‘WTO rules’ and ‘Most Favoured Nation’ being other examples) in order to proclaim that there is, after all, an answer to the incompatible demands they make. In the present case, like the devil quoting scripture, the fact that it is a report to (not, as many of them claim, by) an EU body adds to their glee.

However, that glee is quite misplaced. The document in question outlines a series of new and still-emergent technologies which could be used in a combination that has never been tried before and to that extent is highly speculative. But, crucially, even if it could be put into practice (and in any kind of feasible timescale) it would not remove the need for any physical infrastructure at the border and does not claim to do so. Moreover, it would not avoid the need for human interventions at the border, for example to check vehicles which intelligence operations had identified as suspicious.

This latter point was made by Dr Katy Hayward of Queen’s University Belfast, who has conducted detailed research on Brexit and the Irish border issue, in an interview on Radio 4’s The World Tonight last Tuesday. Yet the very next edition of the same programme had former Tory leader Michael Howard re-stating that the ‘EU’ paper proved that the border issue could be solved by technology. He was being interviewed by the same person as had interviewed Hayward the day before, yet her points were not put to him. This, in microcosm, is one reason why so little progress is made in debate with Brexiters: they set off false hares that leave everyone chasing around in circles until the next one starts. It was, don’t forget, only a few weeks ago that they were proclaiming with equal confidence and equal inaccuracy that the Sweden-Norway and USA-Canada borders were frictionless.

In the absence of a viable form for options A and B, the EU draft text only provided details of option C, whilst being clear that this would be rendered irrelevant if the UK did, indeed, come up with a practical alternative. Apart from the ridiculous reaction of the Brexiters (including Mrs May’s peculiar response that no British PM could agree to option C when she did exactly that, at least as a potential, in December) some sensible and well-informed commentators suggested that the EU had been undiplomatic and provocative in drafting the document this way.

I strongly disagree with that. The whole sorry mess that Britain has got itself into arises from the inability or refusal to stand up to the Brexit Ultras in politics and the press. For years now, like domestic tyrants whose families try to avoid enraging them, they have been tiptoed around. Cameron did so, May does so and actually, more broadly, pro-EU politicians did so. One of the reasons the Referendum went the way it did was that for decades very few pro-Europeans were willing to make a full-on case for membership – rather than a grudging, transactional case - so that by the time of the campaign it was too late. Instead, the Brexiter narrative was allowed to take hold as established fact rather than being firmly dismissed from the outset as nonsense. As usual with the politics of appeasement, it failed.

There’s no reason at all why the EU should now show any respect for the sensibilities of the Brexit Ultras. During the years of Britain’s membership, endless accommodations were made to those sensibilities (hence the numerous opt outs, including from the Euro and Schengen) but, of course, they could not satisfy the Ultras because, as we now clearly see, they cannot be satisfied. Now that we are leaving, the EU-27 are understandably unwilling to continue trying to work around them. But even if that were not so, the circumstances of Brexit make it impossible for them to do so. What the Brexiters want is fantasy because it contains so many mutually exclusive things and there’s just no way that the EU can pander to this by pretending it is not so or by ignoring it. Britain is still refusing to get real about Brexit, as the speeches by May, Fox and Corbyn, and the reaction to that by Major, showed: that does not mean that the EU will or can do the same. Britain, and the Brexit government in particular, needs to wake up to that.