Friday 23 February 2018

Britain still refuses to get real about Brexit

In December 2017, after the end of the phase 1 talks, I wrote on this blog that what would now happen would be that “we will continue to travel endlessly around the Mobius Strip of Brexiter madness. That is to say, on the one hand the Ultras will keep finding new ways to imagine that it is possible to have all of features of being in the single market without being in the single market, whilst the EU will keep finding new ways to explain that this cannot be so”. The Chequers Awayday meeting was the last chance the government had before the phase 2 talks start to get off this endless fantasy loop. They blew it, and have arrived back at something that was first mooted as far back as 2016: a form of sector-by-sector Brexit.

The current version goes by various new names – three baskets, managed divergence or, freshly minted today, ‘ambitious managed divergence’. Whatever term is used the idea is almost certainly doomed to failure. In December 2016 I discussed some of the reasons why in a blog on UK in a Changing Europe website. I won’t reprise all that now, but one issue, which may not be immediately obvious, is that business sectors are rarely, if ever, discrete, clearly bounded, entities. For example, the government can talk about ‘the automotive sector’ but that pulls in goods and services from all kinds of other sectors, such as textiles or computer software. Sectors do not stand alone.

That indeed is one of the reasons why (as is already clear) the EU are highly unlikely to agree anything like the Chequers model. That is often expressed in terms of a refusal to allow ‘cherry picking’, but I think that is a misleading expression, implying that the juicy cherries are there to be plucked if only the EU would be more flexible or if the UK were to negotiate bullishly enough.

The real point is that the single market is, conceptually, precisely that: a single market. It is not in principle a single market in X or in Y, and if it were to be, or become, so it would lose what is central to its defining characteristic and its economic rationale. It is true that, to the extent that it is still a work in progress, especially in services, some sectors lie outside it and are only gradually being brought in. But those sectoral exceptions are temporary, usually for reasons of technical difficulty; anomalies to be rectified, not end states to be made permanent. The single market doesn’t just unify national markets, it creates a unified market tout court.

There is another issue – perhaps not worth spending much time on, since the whole model is almost certainly not going to happen, but important for understanding one of the key confusions of Brexiters. That confusion is the now often-stated idea that a UK trade deal with the EU will be easy because of existing convergence, which is the thing that is time-consuming in normal trade deals. The meta-problem with that is that this is not an ordinary trade deal in that it will be concerned – uniquely – with divergence not convergence, as discussed in a previous blog post. But within that, there is a particular issue that arises from the idea of a sector-by sector Brexit.

If we think about a normal trade deal, one of the key sources of delay is that powerful business groups lobby for their sectors to be excluded (i.e. to protect themselves from competition) and/or to shape the forms that regulatory convergence takes. In the Brexit case, the same lobbying will happen but in reverse: almost all sectors will lobby to be amongst those included in the single market and/or to shape the forms that regulatory divergence will take. So whereas it would very probably be fairly quick to agree a soft Brexit of Britain staying entirely in the single market (via EEA/EFTA), it will be no quicker to negotiate a sectoral Brexit than it would be to negotiate any other trade deal – in other words, many years.

But all this is, as I say, largely beside the point. Unless something drastic changes on the UK red line on the ECJ (and that’s not impossible: we already see signs of it softening over Citizens’ Rights and security), then ‘ambitious managed divergence’ is a dead duck. It simply won’t work to have some sectors of the UK economy in the single market on the basis of the UK sticking to EU regulations for this or that sector or having some form of mutual recognition agreement (itself a much more complex matter than the government seems to understand, which would need another post but in the meantime see this briefing from the Institute for Government). The reason it won’t work is simple: what happens when there are differences between, or disputes about, the application of regulations? Some body has to decide, and that has to be a supra-national body. The UK courts by definition are national not supra-national, so it has to be the ECJ. This the key take away from a detailed assessment of ‘sectoral Brexit’ from the UK Trade Policy Observatory (which is well worth a read not just on the ECJ issue, but also those of mutual recognition agreements and the WTO constraints on sectoral Brexit).

So, still, the Brexit government is trying to square the circles of incompatible demands. What they want is logically impossible to deliver, and it doesn’t matter a jot how often Brexiters invoke ‘the Will of the People’ to insist that it ‘must’ be delivered. You can vote that the earth is flat, but it doesn’t make it so, and it doesn’t enable ships to sail or aircraft to fly to insist it ‘must’ be so. It is extremely unfortunate – and, frankly, embarrassing - that it falls to the EU to keep having to  tell the British government that its demands are impossible because that, of course, feeds the Brexiters’ narrative of ‘punishment’. It would be far preferable if our own politicians were to have the courage to tell the British people the truth.

The Conservative Party, of course, is hamstrung by its ERG Ultras, who have been out again in force this week demanding a scorched earth Brexit (for a revealing analysis of this group and its motivations see Otto English’s blog, and for an analysis of the inadequacy of the ERG letter’s understanding of the WTO issues it raises, see ex-WTO official Peter Ungphakorn’s twitter thread). As a result, the government shows only occasional flashes of realism (for example, this week, on the likely need for a longer transition period and on an acceptance that EU nationals arriving in the UK during the transition period will have full rights), and these only after having resisted the obvious for so long that this realism can be positioned as a betrayal by the Ultras.

It is Labour who hold the key, because although politics is a complex business sometimes it can be thought of in the very simple way of parliamentary arithmetic. For the time being, they are only inching towards something realistic in terms of a customs union, but it is too little and too slow. It’s actually quite strange that the Labour leadership seem to have reservations about a comprehensive customs union only on the grounds that it would entail the Common Commercial Policy (CCP; i.e. no independent trade policy), since business doesn’t care about that (as the business benefits are almost non-existent whilst the costs are huge) and the Corbynite objection to the EU is on the grounds of global neo-liberalization.

It is a tantalising thought that if Jeremy Corbyn were to come out in favour not just of a comprehensive customs treaty but also single market membership then he would be both the most left-wing leader of the Labour Party in modern times and the champion of the ‘jobs first Brexit’ he apparently wants, whilst also positioning Labour as ‘the party of business’. That term used to be the unquestioned possession of the Conservatives, of course, and one of the strangest political turnarounds of Brexit is how unequivocally they have become an anti-business party as well as becoming committed to damaging British geo-political standing and influence. Above all, the Conservative Party used to pride itself on being ‘non-ideological’ and pragmatic. In its Brexit incarnation it is neither. Hence we have a government committed – and there is no precedent for this in modern British history that I am aware of – to the art of the impossible.

Sunday 18 February 2018

May's Munich speech: seriously ambiguous

Munich may not be the most historically auspicious place for a British Prime Minister to give a speech about European security, but Theresa May delivered what Charles Grant, the widely respected Director of the Centre for European Reform, rightly called a serious speech. This, perhaps, reflects that after her years in the Home Office security is an area where she feels comfortable and knowledgeable. Even so, it contained many ambiguities when the time for ambiguity is running out.

Was the speech intended to be conciliatory and reassuring in stating “unconditionally” Britain’s commitment to Europe’s internal and external security? Or was intended to be threatening in its detailed references to Britain’s intelligence and military capabilities? Was she saying we need each other, or that you need us more than we need you? Perhaps both, and, if so, perhaps for difference audiences?

Was the reference to the need to prevent “rigid institutional restrictions or deep-seated ideology” getting in the way of a deal on security a staggeringly unreflective remark given that the Brexit Ultras, indeed Brexit itself, are the most obvious embodiment of such dogma? Or was it a warning to those same Ultras of the need to be flexible? Was it saying to the EU that whereas the options for trade have been framed in terms of pre-existing models (Norway, Canada) that for security could be bespoke (though, strangely, she invoked trade as an area where there are precedents for a bespoke deal)? Or did it mean that if security could be dealt with on a bespoke basis then why not trade and everything else? Or did it in fact imply, as Sky News’ Political Editor Faisal Islam suggested, a different model, that of the Ukraine Association Agreement?

The references to the role of the ECJ were potentially highly significant, but again ambiguous. She accepted that “when participating in EU agencies the UK will respect the remit of the European Court of Justice”, but the sentence before said that any agreement “must be respectful of both the UK and the EU’s legal orders” (and a spokesperson later said that she had just meant that the UK would pay “due regard” to ECJ rulings). So does this mean Britain accepting actual, or perhaps de facto, ECJ jurisdiction with respect to participation in those agencies or not? Does it imply, instead, some kind of new UK-EU legal body (I have thought, ever since the White Paper was published, that this was where things were heading) and if so how would it work and what would the implications be for participation in other agencies, such as Euratom? The ECJ red line, first drawn by May in her Party Conference speech in 2016, has created some of the most intractable problems for Brexit – but was she softening it or restating it in the Munich speech?

The meaning of these ambiguities is itself ambiguous. Is it that she dare not be clear for fear of causing uproar within her party? Or that she is not clear in her own mind what she means? Sometimes, I have the sense that May is simply not alive to the implications of the phrases that she uses. Going right back to the ‘Brexit means Brexit’ months, before the Lancaster House speech, she used to speak of retaining frictionless trade in goods and services. This seemed to code a soft Brexit, since that is the only way of achieving such trade. But subsequently it emerged that this was not what she meant, even though she still uses the same phrase, and it sometimes seems that she does not understand the complexities and subtleties of what is involved in Brexit – for example the full implications of having set herself so firmly against any role for the ECJ. That may seem an extraordinary thing to say of a Prime Minister and seasoned politician, but if the picture created by Tim Shipman’s widely acclaimed book Fall Out is accurate it may be correct. There, she is portrayed very much as a blank canvas on to which her advisers painted pretty much whatever they wanted.

Whether studied or uncomprehending, her ambiguity has in the past served her well, allowing different people to project on to her whatever they find conducive. This has enabled her to walk the line between EU and domestic pressures and between different factions in her ever-more fractious party. The Munich speech reflects that: it can be read as slowly inching her Ultras towards pragmatism or slowly inching the EU towards creating the bespoke Brexit that she apparently thinks possible. (Shipman’s book is again revealing on this, both in suggesting that she does, indeed, reject the ‘Norway-Canada’ duality and, also, that she regards the ‘opt out and selectively opt back in’ approach that she adopted to the EU whilst at the Home Office as the template for Brexit, although few regard it as realistic. Tellingly, she made reference to exactly that experience in her Munich speech).

However, such ambiguity is fast becoming a fatal weakness. Had we but world enough and time, to use the words of Marvell’s famous poem, it might be viable to keep walking the tightrope and, perhaps, to gradually push whoever it is she wants to push towards whatever it is she wants to push towards, if indeed she knows. Since she sent the Article 50 letter, though, time has been at a premium and has now all but expired. May’s speech in Munich may have been serious but the ambiguities within it, as well as her wider ambiguities about Brexit, cannot persist for much longer. Within the next few months, if not indeed the next few weeks, she will need to come off several carefully-constructed but inherently fragile fences.

Friday 16 February 2018

The Brexiter elite are lining up their excuses, but it may backfire on them

Boris Johnson’s much-trailed speech – discussed in more detail in my previous post and witheringly dissected by John Crace – seems already to have sunk without trace. It certainly hasn’t injected the optimism and positivity which he believes is lacking in the government’s approach (and one can, at least, agree that Theresa May hardly exudes or inspires enthusiasm). The reason is something I touched on in that previous post: it was a speech campaigning for Brexit, not a speech about delivering it; a speech for 2016, not 2018.

That is partly about Johnson’s own manifest limitations as a politician, but it is also indicative of the much wider mess that the Brexiters have got themselves – and thereby our country – into. It is by now obvious to all but the most unreflectively doctrinaire amongst them that the process of leaving the EU is going to be far, far more complicated, risky and damaging than the Leave Campaign told voters would be the case. During the campaign every warning was contemptuously dismissed, and yet every one of them has proved to be correct – from the implications for the Irish border, to those for business (see here for the latest damage), to the time constraints on negotiating a deal, to the economic and cultural benefit of freedom of movement to Britain and to Britons, to the impossibility of cut and pasting EU agreements with third countries, right through to the absurdity of the overarching claim that Britain could retain all of the features of EU membership it wanted without having those that it (or at least that Brexiters) disliked.

For that matter, many issues have surfaced which were scarcely, if at all, discussed before the vote. Things like Euratom membership, chemicals and medicine regulation, and all the arcana of international trade such as Rules of Origin, Most Favoured Nation status, or Mutual Recognition Agreements. Almost every day some new aspect or consequence arises, even as the time until Brexit happens drains remorselessly away. On the other hand, no one suddenly discovers some previously unexpected benefit of Brexit. Indeed about the only concrete benefit Brexiters now routinely try to claim is that of having an independent trade policy, the economic value of which will be, at best, nugatory and more than offset by the costs of leaving.

The profound difficulty this poses for Brexiters is that they now have responsibility for what happens. Their policy is the government’s policy, and many of their leading figures – for example Johnson, Fox, Davis, Fernandes, Baker, Raab, Mordaunt, Gove, Leadsom – hold government positions and in some cases have direct responsibility for implementing Brexit. There is no longer any escape from dealing with all of these complex practicalities and they can’t bear it. The absurdity of that is well-illustrated by the way that these Brexiters in government dismiss their own economic forecasts as worthless, if not deliberately biased. But that trick won’t work anymore. Outside of the hardcore, most people, including probably most leave voters, have wised up to the fact that, whatever the exact figures turn out to be, they are only going in one direction.

Johnson’s response, of trying to pretend he is still campaigning, rather than being responsible, for Brexit is ludicrous but relatively urbanely expressed (albeit, not benign). Far more widespread is the vicious aggression exemplified by Digby Jones this week, accusing “remoaners” of “undermining our country” and saying they will be “to blame” for Britain getting a “lousy deal”. This Brexit McCarthyism has been on display since the day after the Referendum – the day, in fact, that, according to this same Digby Jones, “Germany would immediately want a free trade deal” - but will only grow as things get worse for the Brexiters. Anything rather than take responsibility for their failed promises, their ignorance of basic realities, and their lies. Anything to sustain their sense of betrayal and victimhood.

A different kind of evasion comes from those Brexiters who claim that leaving the EU was always going to be damaging, in particular economically, but that people had voted for cultural reasons or for sovereignty and both knew and were prepared to pay the economic price. That may have been true of some leave voters, but it certainly isn’t the way that Brexit was pitched to them. On the contrary, the constant rebuttal of ‘Project Fear’ was in the main an economic claim to the effect that Brexit would at the least have no adverse consequences if not, indeed, that it would have positive consequences.

Moreover, the infamous £350M a week for the NHS lie was nothing if not an economic argument for Brexit. Most Brexiters lightly dismiss this now, with word games or just the open admission that it was a lie. But it was believed by many voters, including some of the poorest (as, for example, this recent report shows). Even the argument about immigration was in part an economic one (the supposed negative effect on wages and public services). Whatever they say now, Brexiters ran a campaign that was every bit as economic-focussed as it was cultural, and that’s not surprising: had they argued for Brexit on purely cultural lines they would have lost the vote. That, indeed, has been admitted by Vote Leave director Dominic Cummings. The deeper point is that economics and culture are not separate things: I heard some leave voters explain their decision in terms of the de-industrialization of their towns. They were bemoaning loss of jobs and loss of community, not just one or the other.

We also now begin to hear another evasion, of a sort beloved by proponents of many political and religious ideologies and for that matter by many a management consultant, that nothing was wrong with the ‘idea’ of Brexit but that its ‘implementation’ was mishandled. So whatever mess we end up with is not ‘proper Brexit’. It’s true that the government have approached Brexit in an incredibly incompetent way – the premature triggering of Article 50 and the consequent election being the most egregious examples – and in this sense have made it even worse than it needed to be. But however it had been handled it would have been damaging, and most (though not all) peddlers of the ‘not a proper Brexit’ line are advocates of UKIP’s approach of unilateral withdrawal without Article 50 or, now, walking out of the talks. Incompetent as the government have been, a Brexit on UKIP lines would have been an order of magnitude worse.

From the moment the Referendum result was announced, when Johnson and Gove stood shocked and blinking like frightened rabbits at their press conference, Brexiters just haven’t been able to get over winning. As I’ve remarked elsewhere, there’s long been a sense that they would really have preferred to lose. Now there’s an increasingly tangible feeling that they see things going wrong and are getting their excuses ready: blame and betrayal being the key words.

Those words may boomerang on them. At the moment there are only small signs of ‘Bregret’ in the opinion polls but there does seem to be a growing realization that the promises made were false. Perhaps for now the sentiment amongst voters is that ‘we should get on with it’ and ‘hope for the best’ – showing the more endearing qualities of the British rather than some of those that have been on display since the vote. Plus, undoubtedly, many voters have tuned out the daily twists and turns of Brexit and will not take much interest until there is some decisive outcome or event. When they tune back in, they are not going to like what they see. Brexiters are preparing for that by lining up a list of culprits and excuses and they may succeed. But they have also ramped up hostility to the ‘out of touch London elite’. When the dust settles, voters may just decide that since it is the Brexiters who are now in charge it is they who now constitute that elite – and they who must shoulder the blame for betraying the unkeepable promises they made.

Wednesday 14 February 2018

Boris Johnson's speech: leadership ambitions without leadership qualities

It is hardly a great secret that Boris Johnson harbours leadership ambitions. What is less clear is whether he has leadership qualities. His speech today was billed as one which would reach out to heal the divisions over Brexit and to provide a unifying vision for how it would be undertaken. Had he delivered on this it would indeed have been a demonstration of leadership of a sort which has been much needed since the Referendum result.

That vote was so close as to reveal little more than a near equal split of views and endorsing, if anything, only the policy of leaving the EU but not any one of the many ways touted during the campaign of doing so. Johnson of all people should realise this, since he reportedly saw the arguments for and against leaving as so finely balanced that he wrote two articles - one making the case for, one against - before he belatedly announced his support for leaving. Once the result was announced, or at least once May became Prime Minister, the leaderly course would have been to acknowledge those facts and to seek a consensual way forward. Doing so would have had political difficulties (as would any course of action) but the form it would have taken is clear. A soft Brexit that would have given some voters all that they wanted and most voters at least some of what they wanted.

May blew that chance, which is why Britain is now in such a state of disunity and bitterness. Perhaps Johnson could, even at this late stage, have done what she failed to do. But he did not. Instead, apart from a few slightly conciliatory words, he doubled down on the preposterous position that the ‘Will of the People’ is for the hard Brexit of seeking neither single market membership nor a comprehensive customs treaty. Indeed, he implied a position even harder than that which appears to be that of the government by suggesting that during the transition period, which Britain needs and has asked for, we should not be bound by EU law. So his ‘unifying’ message came down to telling remainers and soft Brexiters alike to suck it up.

As for the supposed intellectual core of his speech, it was based on an absurdity. The EU, he opined, is a political project rather than a trade project. That is in one way a statement of well-known fact; well-known since Britain joined what was then the EEC. Johnson was simply channelling one of Brexit’s foundational myths, that ‘we did not know what we were joining’ (see this excellent blog for a detailed debunking of the myth). In another way, it is a profound misunderstanding of how politics and economics inter-relate, a misunderstanding that has permeated British Conservatism since its embrace of Friedman and Hayek in the 1970s.

The misunderstanding is that markets exist ‘naturally’ and prior to regulation, with regulation coming second and distorting what would otherwise naturally occur. In fact, regulation is a prior condition for markets, certainly for effectively functioning markets. So whilst it is true to say that the EU (going right back to the original European Coal and Steel Community) used economics as a means of pursuing political goals, it’s also the case that political integration has been a way of pursuing economic goals. It seems to have been a continual surprise to Conservative Eurosceptics ever since the Thatcher government pushed so hard to create the European single market that such a market entails as its prior condition a trans-national legal and regulatory framework, up to and including the ECJ.

That is the only reason why the single market, unlike free trade agreements and areas, is able extensively to dismantle Non-Tariff Barriers and, as a consequence, liberalise trade in services as well as goods. It is this liberalisation that Johnson wants Britain to turn its back on, but the irony is that if he succeeds it will not mean an escape from the world of politics to one of idealised free trade and free markets: free trade deals and, for that matter, the WTO are themselves arenas in which political horse-trading and power-plays abound and within which various forms of transnational regulation and arbitration occur, often with little or no democratic accountability and control. ‘Global Britain’ outside the EU doesn’t escape the politics of globalization, it just puts itself in a weaker position both politically and economically by absenting itself from the regional blocs that frame the politics of globalization.

In any case, this version of 'liberal Brexit' is very far from what many who voted leave were told they were voting for. Immigration and protectionism may not have been the only issues in leave voters’ minds but it would be absurd to suggest that they played no role. The Leave campaign was fought and won on largely illiberal, nationalist lines, not on liberal, globalist ones. So Johnson is telling those voters, quite as much as remainers, that they have to suck up the version of Brexit he endorses. It is a strange kind of unifying speech that is contemptuous of so many on both sides of the divide.

Finally, if Johnson’s speech was both divisive and intellectually flawed it also failed to deliver on what is perhaps the most pressing leadership challenge of all at the present time. What are the concrete, practical details of how Brexit is to be achieved, even if it is to be a Brexit on Johnson’s preferred lines? On this, he had nothing whatsoever to say. Like every speech he gives it was long on rhetoric and devoid of practicalities, as if “confidence and self-belief” can substitute for pragmatic details.  A campaign speech, not a speech for governance. It’s reported that this is also how he conducts himself in cabinet discussions. He has nothing to say on the practicalities because he knows nothing of the practicalities, and he knows nothing of the practicalities because he does not care about them. And he does not care about them because he cares about nothing - perhaps not even, in itself, Brexit – except his own naked ambition. An ambition which is not, it seems, even to lead, since leadership requires the hard effort of consensus-building and attention to detail, but the burning, narcissistic desire simply to be the leader.

Friday 9 February 2018

Britain's Brexit self-punishment

We hear very little now of what used to be the Brexiters’ favourite line about the EU negotiations: that ‘they need us more than we need them’ and so the deal would not only be an excellent one, but completed in double-quick time. If this blithe assurance was questioned, we were loftily told with faux-worldly certainty that the UK trade deficit combined with the German car industry (which apparently dictates EU policy) would make assurance doubly certain. It was always a ridiculous idea, and is repeated now only by the most bone-headed and inattentive.

Instead, what we hear more frequently are complaints about being punished by the EU. That trope has been growing almost since the Referendum result, and this week has been especially vocally expressed. Michel Barnier’s rather anodyne observation, during his visit to Britain on Monday, that leaving the single market and customs union inevitably meant greater barriers to trade was merely a statement of the most obvious of facts. Yet Brexiters treated it as a dastardly threat, as if it were being forced upon them rather than being the policy that they, themselves, insist on.

That was nothing, though, compared with the furore over the revelation that the EU are planning for sanctions to be used if during the transition period (if such there is to be) Britain were to break the terms agreed for it. Even the Guardian lapsed into the language of punishment to report this, whilst the pro-Brexit press went berserk. Yet in one way it is hardly a surprising development – all sorts of agreements have penalty clauses – whilst in another it reflects a situation of Britain’s own making.

That is because the way that the government have conducted themselves during the negotiations hardly inspires trust, with David Davis suggesting when the ink was still wet on it that the phase 1 agreement was not necessarily binding. For that matter, bellicose talk of a Brexit ‘war cabinet’ does nothing to engender confidence of good faith, any more than did May’s (now abandoned) implication of using security cooperation as a bargaining lever, or ‘remainer’ Hammond’s threat of Britain pursuing a different economic model of low taxes and deregulation if a deal isn’t done.

But there is a wider and more fundamental issue. Given the fragility of the present administration no one knows what the composition of the British government will be by the time we get to any transition period. It’s perfectly conceivable that the Ultras will be in full control with, say, Johnson or even Rees-Mogg in Number 10. Given the noises they have made, it’s easy to envisage such a government reneging on whatever had been agreed to in the negotiations. It is humiliating to think that the British government might not be trustworthy: but it’s a humiliation brought on Britain by the wild rhetoric of the Ultras.

Brexiters are now locked into an endless tricycling around three different modes of conduct. There’s the Pollyannaish naivety of ‘it will all get sorted out by German car makers’; the bullish aggression of ‘no deal’ Ultras; and the outraged self-pity of ‘punishment’. Sometimes all three modes are on display at the same time. What is never on display from the Brexiters is any kind of practical plan to deliver what they want. That is fundamentally because what they want is undeliverable – in essence, undiluted political nationalism as well as undiluted economic globalism – and secondarily because by refusing to recognize that impossibility they are unable to come up with some diluted version of it which, if not desirable, might at least be achievable.

The consequence of being trapped in this cycle, to which, as argued in my previous post, May’s government are now shackled is the paralysis seen this week with the Cabinet Brexit sub-committee (that ‘war cabinet’) again having failed to come up with a plan of action. There will apparently be an Awayday to discuss it again in a couple of weeks’ time. But until some basic realities are accepted – and more especially the incompatibilities in what Brexiters want is accepted – there will be no progress. An impossible question cannot be answered no matter how long you spend discussing it.

In any case time is what we do not have. Whilst Brexiters keep going through the same old loops the rest of the world is trying, as forcefully as it can, to get them to realise this. Michel Barnier professes himself mystified that Britain will not make (and apparently doesn’t understand) the choices it needs to make. This is the nearest that diplomacy-speak can come to telling the government of another country that it appears to have gone completely round the twist. Meanwhile, the Japanese Ambassador, following a meeting of Japanese businesses with May and others ministers, warns: “if there is no profitability of continuing operation in the UK – not Japanese only – no company can continue operations. So it’s as simple as that. This is all high stakes that I think all of us need to keep in mind”. In diplomacy-speak that means not only do you seem to have gone completely round the twist, but also that if you don’t come to your senses soon your economy is going to go down the toilet.

The whole situation is beginning to resemble the plot of William Golding’s Lord of the Flies, with Jack being the Brexit Ultras, the mythical Beast being the EU, Ralph being, perhaps, Theresa May, and the Conch being the Referendum result. Remainers play the role of Simon, whilst the British people have to be cast as poor old Piggy. Alas, there seems as yet to be no one to take the part of the adult who arrives to rescue the children and chide them for their un-British, brutal behaviour.

Friday 2 February 2018

May and the ERG Ultras are manacled together

There are perhaps 50 - I have seen estimates varying between 40 and 80 - Tory MPs in the so-called European Research Group (ERG; ‘so-called’ as this is not some anodyne bunch of researchers, but a group of fanatical, extremist ideologues). They include several Ministers, perhaps nine Cabinet members, and many of the media’s darlings for Brexit commentary including, of course, the ERG’s current chairman Jacob Rees-Mogg. Even before becoming its leader he seemed to appear on the BBC quite as often as any of the Corporation’s most senior journalists. Now, he might as well have his own dedicated studio. It is this group of, for the most part, middle-aged white men who are holding the government, and hence our country, to ransom. They speak – they speak splenetically - for themselves and no doubt some, possibly many, leave voters, but they purport to speak for all leave voters and hence, of course, for ‘the People’.

May made a fatal miscalculation in thinking that the Ultras would be appeased by hard Brexit. As Major and Cameron had found before her, every concession made to them only produced a new and even more extreme demand. Thus whereas before the Referendum many of them said that a soft Brexit (i.e. staying in the single market and having a comprehensive customs treaty) would be enough, immediately afterwards they insisted that only hard Brexit would do. But when that became the government’s policy, they started agitating for a no deal Brexit. Some of them, such as Nadine Dorries, seem to have no idea what they are advocating or why. It might be thought that Dorries is an outlier and that all the other members are well-apprised of the practical meanings of hard Brexit, but a glance at the list of their names suggests that this might be excessively charitable.

By promising hard Brexit at the point that she was politically strongest, May created an impossible situation which has become clear now that she is so weak. What she accepted was that the lies of the Leave campaign could be made true. That is, that it would be possible to have all of the economic benefits of being in the EU without any of the politically unpalatable consequences in terms of, in particular, free movement of people and ECJ jurisdiction. This could never be delivered, not because the EU would never agree to it, but because they couldn’t agree to it since it was based on a fundamental misunderstanding of what the single market is: an entity which by definition entails free movement and which by definition requires a supra-national regulator.

Trapped by her own choices into delivering an undeliverable policy, May is now stuck. She can’t easily retreat from hard Brexit having promised it, and she can’t follow the ERG punks to a no deal Brexit without comprehensively wrecking the British economy – meaning not just mass unemployment but the end of air travel and the introduction of food rationing that would occur as a consequence of a ‘no deal’ Brexit. The Ultras don’t care about that – some of them probably believe it would be a good way of toughening us up – but for anyone with any remote sense of public duty, let alone any political nous, it’s a complete non-starter. In recent weeks it seems as if business leaders and civil servants have convinced May of this.

It’s against this background that the various storms and spats of the last week are to be understood. As predicted in my previous post, the quiet period of recent weeks has come to an abrupt end. The leak of the government’s economic forecasts produced no real surprises. They are in line with what most previous forecasts have suggested in showing that all forms of Brexit are economically damaging, and the harder the Brexit, the greater the damage. But the response underscored just how rabid the Ultras have become, denouncing not just the forecasts themselves but impugning the motives of the civil servants who prepared them. Such criticism of the civil service was always inevitable, as I have said since the first post on the blog, and has been bubbling away for a while. But as the realities bite they are becoming more vociferous, and although Steve Baker (former ERG Chair, now DExEU Minister) had to apologise for having voiced them in the House of Commons there can surely be little doubt that many Brexit Ultras are convinced that the civil service is part of a great remainer elite conspiracy.

But the more vociferous the Ultras become the greater the sense that events are moving away from them. The response to the leaked economic forecasts as a new instalment of ‘Project Fear’ is not just predictable, it’s shop-soiled; whilst the Will of the People in which they have so successfully cloaked themselves now looks distinctly moth-eaten. Time has taken its toll on the Ultras mainly because just as having agitated for a Referendum for years they were unable to produce a plan for how Brexit should be done, so too have they failed to come up with anything workable since the Referendum. On the contrary, what has been exposed is that a government that has adopted their hard Brexit position has been unable to craft it into something deliverable. That’s the real significance of Baker’s apology: when in government posts the Ultras are forced to take responsibility in a way that they are free from outside of government.

It’s for this reason that the Ultras hold off deposing May, which they surely have the numbers to do, as Rafael Behr argues in a superb essay in Prospect this week. They don’t want to take responsibility for delivering something which has already been shown to be undeliverable, and prefer to complain of betrayal. Victimhood, as I have argued several times on this blog, is their comfort zone. That can, as we have seen in abundance over Brexit, make for effective politics; it doesn’t make for effective policy. The moment for the Ultras to strike, if they were going to, passed with the phase 1 deal. If they strike now they are as likely to see Brexit slip through their fingers as get anything close to what they want than they will get from May’s government. Hence Liam Fox this week telling the Ultras they must learn to live with disappointment.

Yet if the Ultras are not able to bring down May, she is also not able to stand up to them. So she continues to grind out her mantras of ‘deep and special partnership’, the ‘Brexit the British people want’ and refusing to commit one way or another on the current question about a UK-EU customs treaty. Maybe she doesn’t want to stand up to them, and believes this tosh she comes out with – but if so, what’s clear is that at every stage she ends up conceding on things the Ultras hold dear. They know that she’s done it, they know that she will continue to do it, but there’s nothing they can do to stop her. But she can’t tell them that that is what she will continue to do, and maybe doesn’t even realise that this is what she will continue to do.

And so, for the time being anyway – for it surely can’t continue forever – Brexit Britain limps along with a terrified, mauled zoo keeper chained to a snarling, feral beast; each reliant on the other, but each loathing the other. At one moment the keeper lashes the beast spitefully with her whip; the next moment the beast lacerates the keeper savagely with its claws. Each time, a little blood is drawn but they remain manacled together because they have manacled themselves to each other. Meanwhile the rest of us, and the rest of the world, look on in horror, dismay and disgust at this revolting spectacle.