Friday, 26 April 2019

Britain looks set to squander the extension period

Decades ago, when I was an impecunious student, from time to time I would receive the dreaded letter from the bank warning me about the size of my overdraft. In those far off days there was actually a branch manager who knew you and, moreover, summoned you in person for a stern lecture on financial responsibility. In response, I would make suitably contrite noises in the hope of securing the manager’s indulgence until – another reminder of a long-vanished time – the arrival of my next grant cheque or housing benefit payment.

The sensible response, having warded off disaster, would have been to mend my ways and become the model of financial rectitude my bank manager urged me to be. Instead, I would breathe a sigh of relief and resume my spendthrift ways until the next, inevitable, crisis.

The British polity seems to be approaching the stay of execution on a no-deal Brexit in a similarly cavalier way.

Nonsense, absurdity and worthless platitudes - again

The government’s talks with Labour are, supposedly, continuing but almost nobody genuinely believes these will yield anything. In the unlikely event that their proposal for a permanent customs union were to be agreed, it is a racing certainty that Labour would find a reason not to support this agreement, because there’s no political mileage for them in sharing responsibility with the Tories for the Brexit mess. But, even if they did, it probably wouldn’t get agreed by parliament. And even if it did get agreed by parliament, then it couldn’t be enforced once the future terms negotiations start. And if, even so, it were pursued in those negotiations then it wouldn’t, in itself, yield either ‘frictionless trade’ or a solution to the Irish border issue. So the talks are nonsense piled upon nonsense.

Equally nonsensical are the main parties’ current positions as regards the European Parliament elections. The Tories don’t really have a position, and still seem to be hoping that the elections won’t happen. Assuming that hope is not realised then, presumably, they will go into the election with Brexit policy of supporting May’s deal which many of their MPs and most of their members don’t agree with, and many of their voters won’t vote for.

Labour’s members support another referendum and, for the most part, are opposed to Brexit. Yet, at least for now, all that their party has produced is a document with vague pieties about seeking a “better deal” on Brexit, including the absurdity that this will mean businesses not having to pay to trade with Europe (this is code for a customs union, and implies that tariffs are the only cost of Brexit to business). Yet the UK will have a “proper say” on EU trade talks (this is code for what is itself a coded defence against the accusation that a customs union means not having an independent trade policy, and is so vague as to be meaningless anyway). Also promised is a “close relationship” with the EU, which is code for not having a policy at all. These platitudes are utterly worthless.

Malthouse madness - again

In the meantime, unbelievably, Tory MPs have decided that the best approach to Brexit is pointlessly to resurrect a proposal that is literally impossible and which therefore has precisely zero chance of success. This is the idea, variously referred to as the Brady amendment or the Malthouse Compromise, of removing the backstop arrangements for the Irish border from the Withdrawal Agreement (WA) in favour of non-existent ‘alternative arrangements'. The latest twist of this madness is to do so via an amendment to the UK legislation for Brexit, rather than the previous version of seeking to do it by re-negotiating the WA with the EU, which either removes the backstop altogether or puts a one year time limit on it (which, of course, would mean that it was no longer a backstop).

The ‘logic’ of this – and to describe it this way, even in scare quotes, is painful – is that it will demonstrate to the EU that only by removing or time-limiting the backstop in the WA will a deal pass through the British parliament – and if they don’t then no-deal becomes ‘their fault’. The fatuity of this is extraordinary. For one thing, it’s not even clear that parliament would pass such an amendment. But that isn’t the main point. For many months now, in various guises, this idea has been rejected by the EU for the very obvious reason that it cannot possibly work, for reasons outlined numerous times, not least on this blog (see, for example, the previous post).

The fact that anyone thinks it is remotely serious to go around this Mobius Strip of Brexiter madness again is yet another indication that Britain looks set to squander the latest extension period. There is also every possibility that at some point before next October there will be a Tory leadership contest, even though it has been decided not to change the ‘no confidence’ rules, using up a fair bit of that time without any prospect that the outcome of it will in any way provide a viable Brexit policy.

Whether or not there is a contest, the repetitive drumbeat throughout the coming months will be provided by both the Ultras in the Tory Party and Farage’s Brexit Party, and by their bag carriers in the media, insisting that we ‘just do’ Brexit. Still unable, and not even interested in trying, to explain how to ‘do’ it, this message purports to be a solution to the political mess when in fact it is just a restatement of its underlying cause. That, and pretending it is a message endorsed by the sacred cloak of ‘the 17.4 million’ is at the root of why Brexit, and the British polity, have fallen into such chaos.

I was in Germany this week where, amongst other things, I gave a talk on Brexit. In it and in the questions afterwards, as well as in various conversations with people, I tried to explain what was happening and why. Over and over again I was asked some version of the question ‘but, surely, that’s just nonsense’? And, embarrassingly, so it is: to almost anyone outside of the Brexit debate in the UK what is happening makes no sense. If – as sometimes seems the case in the British media – it were just a matter of domestic politics then that would not much matter. The problem comes when, as the nature of Brexit means it must, this domestic nonsense comes up against the realities of the outside world.

Time is running out - again

It cannot be emphasised strongly enough that the latest extension is not a long one. Just because of the normal run of the political calendar a good chunk gets knocked out by summer holidays and party conferences. Joe Owen of the Institute for Government has just produced a very useful outline of the main time constraints, and how they would play out in different scenarios. It notes that “the timetable is much more constrained than it looks”.

In December 2017 I wrote a blog post arguing that Britain had to finally get real about Brexit because there were, in effect, only nine months to go. This was predicated on the original timetable in which the deal had to be ready by September or October 2018 for ratification. That realism never emerged and, hence, there is still no deal ratified now. And there is still no sign at all of any realism on any of the things identified in that post as needing to be addressed.

But just as I wrote in that blog post that businesses would have to make decisions well in advance of the political timetable so, now, are there reports of a “stockpiling panic” with a shortage of warehousing capacity in the event of an October no-deal because it would coincide with normal Christmas increases in stock holding. More generally, with little reason for confidence in a political resolution, it’s reasonable to assume that business relocations will continue in the coming months.

For unless something changes soon, the new 31 October deadline will be upon us. In a report this week for the European Policy Centre, Andrew Duff argues that “the most likely scenario is continued political paralysis in the UK leading to a demand for a further extension of Article 50 in October”. If this paralysis means there has been no progress by the time of the June review, he predicts that the position of EU leaders and, especially, Angela Merkel will harden (indeed, the German foreign minister has already suggested (£) that the October extension will be the last).

In a similar vein, writing in the Financial Times this week (£), Wolfgang Munchau suggests “the UK does not really have more than five months to make a decision. In reality, the effective timescale is just a few weeks”. He also goes on to argue that the consensus of EU leaders is likely to shift against the granting of a further extension beyond October.

When the extension to October was granted, Donald Tusk, the President of the European Council, advised the UK not to waste this time. For now, there is little evidence that his advice is being heeded. Worse still, there is no evidence of a will or a way to do so.

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