Wednesday, 18 July 2018

This theatre of the absurd is making another referendum more likely

In the history of political speeches, there can be few which provoke such ironic, if painful, laughter as David Cameron’s first address as leader to the Conservative Party Conference in 2006. Then, he warned his party of the dangers of “banging on about Europe”. Little over a decade later, not least because of decisions that Cameron himself took, the entire country has been sucked into the vortex of what is no less than a political civil war within the party being played out daily in the House of Commons. And it is dragging the entire country to the brink of an unprecedented disaster.

The theatre of the absurd

It is difficult to keep up with unfolding events, which have in any case been widely discussed elsewhere. But it is worth pondering their increasing absurdity. First the government produced a White Paper with a plan for Brexit - which few think could be agreed with the EU, and everyone knew would be anathema to the Ultras - but then supported ERG amendments to the Customs Bill which directly, if not fatally, undermine it.

This provoked ‘remainer rebels’ to oppose those amendments precisely on the grounds that they undermine the government’s plan – one of them actually resigning from it to do so, prompting wags to point out that it may be the first case of a member of the government resigning in order to show support for government policy. The rebels then tabled amendments to the Trade Bill which are broadly in line with the thrust of the White Paper, only to lose on the crucial one because the government applied thumbscrews to block it. In which they might not have succeeded had it not been for a few Labour MPs voting with the most antediluvian elements of the Tory Party, thus preventing, conceivably (at least according to the Tory Whips), the collapse of the government and an election which, again conceivably according to the Tory Whips, Labour might win.

So we now have an open, furious conflict between at least three factions – government, ERG, and remainer rebels – the first of which has an unworkable policy, the second of which has no policy, and the third of which has a policy which it is too scared to actually mention. Brexit, which started as a kind of Ealing comedy, along the lines of Passport to Pimlico, has become the theatre of the absurd, along the lines of Marat/Sade. Unfortunately we, who might otherwise be the audience to this spectacle, have been forced to become participants in this weird psychodrama, strapped unwillingly to it like hostages in a plane taken over by criminally insane.

The changing world order

Meanwhile, as Donald Trump’s various visits this week have underscored, the tectonic plates of the world order are shifting at pace. All the relationships within which Britain has been embedded for two generations are being reconfigured. The ‘special relationship’ may have been – apart from intelligence cooperation – a polite fiction for many decades now. But this is the first time that a US President has treated the UK, and our Prime Minister, with open contempt, sneered at NATO, and cosied up to a country likely to have been responsible for using biological weapons to commit murder on British soil (something our closest ally apparently felt no need to mention to his new chum). Brexiters who swoon at the thought of 'regaining our seat on the WTO' might also want to ponder Trump's attitude to that body.

So Brexit now looks as geo-politically reckless as it is economically reckless. There is a serious and growing case against Brexit on national security grounds as well as economic ones. And the economic tectonic plates are shifting, too. Who, observing the new EU-Japan deal, would give much chance for the future of the UK car industry? For that matter, who, observing the febrile British political scene, would think that this made the UK a better rather than a worse place to invest in?

Future scenarios

It remains the case that all kinds of future scenarios are now possible, and these are set out with great clarity in an excellent analysis by Kirsty Hughes of the Scottish Centre for European Relations on the Federal Trust site. But as Federal Trust’s Director, Brendan Donnelly, argues “a brutal and chaotic Brexit in March is becoming more likely”. This is so not least because, as one of the ERG amendments suggests, the Ultras are shaping up to make it impossible for the government to agree the backstop arrangements for the Irish border which, without any doubt whatsoever, will be the precondition of any Withdrawal Agreement and, therefore, any transition period (and, don't forget, was signed up to by the UK government in the phase 1 agreement).

It’s notable that the Ultras have always denied – and Boris Johnson did the same thing in his predictably fact-free resignation speech – that the Irish border issue is a real one, regarding it instead as having been confected by Brussels or by Dublin. That is manifest nonsense: as soon as the UK decided to leave both the single market and a customs union it had to be an issue. Not least because of the Brexiter desire to strike independent trade deals with potentially different tariffs and regulatory standards from the EU. If there were not to be such differences, what would be the point of making such deals? If there are to be such differences, how could they be policed without policing borders? Neither the EU nor the UK - nor for that matter the WTO – could allow such borders to be ignored.

So we are heading in the direction of no deal, and therefore no transition period. That would mean major disruption to travel and to trade including, most immediately and most damagingly, to food imports, and much more besides. Leading Brexiters – David Davis and Bernard Jenkin being examples this week – play this down as, of course, more Project Fear and suggest that, in any case, it would be a consequence of EU decisions and, by implication, punishment. Again, that is manifest nonsense. It would flow directly from the decisions of the UK government and, if it does, it will happen in just eight months’ time.

Another referendum is becoming more likely

It is possible, I suppose, that the government could go ahead and make a deal anyway, but in practical political terms I am not sure that any government could survive doing so without parliamentary approval (the defeat of the ‘meaningful vote’ amendment earlier this year notwithstanding). In fact, for what it is worth, I don’t think that things will get to that point. If no deal comes more closely into view the political crisis would almost certainly result in a further referendum. If the House of Commons as currently constituted could not agree on the necessary legislation for that, then there would be an election. The routes to all this are unclear – and would almost certainly, just because of the time frames involved, entail getting EU-27 agreement to extend the Article 50 period. In the context of a crisis of this sort, such agreement is not inconceivable for all the difficulties (EU Parliamentary elections, EU budget cycle) it would create.

I’m very well aware of all the problems with and arguments against another referendum – the timing, the question, the franchise, and many other things – and I’ve discussed these before. But it can’t be stressed enough that there is no course of action or scenario available now which does not have huge problems. The one thing which another referendum does have going for it is that it if it yielded a vote to remain in the EU (which is very far from certain) it is the only way such a scenario would have any hope of being regarded as legitimate.

At all events, it looks a more likely possibility than a week ago now that for the first time (I think) a senior Tory MP has proposed it, with the result that it is now being reported as, at least, a possibility by the BBC. Moreover, with the Vote Leave campaign now having been fined by the Electoral Commission for financial irregularities and referred to the police, not to mention growing unease about Russian interference, a public sense that the original vote was flawed can only grow. I think it is a racing certainty that the Labour Party will come out in favour of another referendum, probably very soon, meaning probably this Autumn. The logic of internal party management and of party politics itself points ineluctably in that direction, and if it happens it would be a game changer.

A crisis rooted in lies

It is at all times vital to recall – as, surely, at least some leave voters are – that none of what is happening is remotely like what was promised by the Vote Leave campaign. Then, it would all be quick and easy: the fifth largest economy in the world, German car makers, they need us more than we need them. It was promised that we would be “part of a free trade zone stretching from Iceland to the Russian border”. It was promised that Brexit had no implications for the Irish border. It was even promised that the negotiations would be undertaken before the Article 50 process started.

It was all lies. And from those lies the present, parlous situation – fast turning into a national crisis – has followed.

Friday, 13 July 2018

This White Paper should be put out of its misery

The new Brexit White Paper has now been published, filling out the three page summary of the Chequers proposal and, in doing so, has both confirmed and amplified the obvious flaws of that proposal, discussed in a previous post.

As commentators including Chris Giles, Economics Editor of the Financial Times and Piet Eeckhout, Professor of EU Law at University College London quickly pointed out, the White Paper is cakeism or cherry-picking writ large. Or, as Ian Dunt more colourfully put it in a detailed and damning assessment, “they have a cake, they have eaten it, some of it is still magically on the plate, and the rest is being vomited up on the floor”. I don’t think he meant it in a good way, either.

The central problems, as pre-figured by Chequers, are the idea of separating the single market in goods from that in services, an ambiguous role for the ECJ, a customs arrangement that is pure hokum, and the rejection of freedom of movement of people. But beneath that there are a myriad of ways, relating to trade and non-trade matters, where the proposal is to continue to participate in EU institutions – for example those relating to aviation safety, medicines and policing – as if Britain were still a member state.

There is even a proposal that – as pointed out by Ed Conway, Economics Editor of Sky News - the EU would re-write its existing and future trade agreements with other countries so as to count UK components as if they were of EU origin. Not so much ‘I’ll have my cake and eat it’ as ‘I’ll have my cake, eat it, and eat yours as well’.

The government is clearly aware that what is being proposed is completely at odds with what being a third country to the EU means, and say as much (p.7). Specifically, the idea is that the agreement “should reflect the UK’s and the EU’s deep history, close ties, and unique starting point”. This I think lies at the absolute heart of the problems of the White Paper and, indeed, the government’s entire approach to Brexit since the Referendum. It is based on the notion that there is a kind of alumnus status which is different both to membership and to non-membership.

It is a fantasy. No such status exists, and the EU have been clear both before and since the vote that it can’t exist. Either Britain wants to leave, or it doesn’t: it can’t both leave and not leave in what some have called ‘Schrodinger’s Brexit’. At the very best, the White Paper is the basis – far too late in the day – to begin a negotiation. Yet some are suggesting that, far from being negotiable, it should all be accepted by the EU because it is as far as the government can go given the domestic political constraints imposed by the Ultras.

But that is to view matters entirely through the prism of Tory party infighting. That’s unrealistic. Although as a continuing member Britain was able to extract numerous special concessions in part because other countries recognized those domestic issues, it has far less traction coming from a departing member. For the EU-27, Britain’s political problems are its own and are recognized only to the extent that the EU will (and are) making polite noises about the proposal rather than rejecting it immediately. But reject it they surely will. And if the response to that is to say that ‘no deal’ would be bad for everyone, consider that it is Britain, not the EU-27, which is drawing up plans to stockpile food, medical supplies and portable generators.

As for that Tory infighting, it is becoming more intense. The Brexit Ultras are back in their comfort zone of protest and victimhood – there is a real spring in their step now that they can drop any pretence of having to take any responsibility for this mess. A few weeks ago they were decrying the Tory ‘rebels’ for having the temerity to seek amendments that would ‘bind the Prime Minister’s hands in the negotiations’. To do so, they fulminated, was to sabotage the will of the people. Now, suddenly, tabling amendments to Brexit legislation is back in fashion with them.

In this context, Labour’s stance becomes more important – and the extent to which Labour MPs back it. For the time being, the official position remains as absurd as the government’s, albeit in a different way. No single market, but something ‘as good as it’, and a customs union. But, listening to Emily Thornberry at this week’s PMQs, it does not seem that Labour even understand the difference between a single market and a customs union anyway. And whilst they are, rightly, talking about the damaging effect of the government’s (lack of a) plan for services they are committed to leaving the single market for goods as well as services. So in some respects, the Labour position on Brexit is now slightly ‘harder’ than the government’s. But it hardly matters, as neither is remotely realistic. What does matter is that the parliamentary arithmetic is now so peculiar that it’s possible that no one Brexit policy would command a majority. That makes a General Election or another Referendum more likely.

As all this grinds on, it’s impossible not to be struck by the sheer pointlessness of it all. What is being gained? An independent trade policy? That is effectively precluded by the White Paper but even if it were not it is no prize at all in economic terms. If it is supposed to be a symbol of sovereignty, it’s illusory (all trade agreements entail diminished sovereignty in the Brexiter sense). Is it sovereignty to exit all the EU agencies just to rejoin them and pay with no say? Was it the will of the people, when these agencies were scarcely mentioned in the Referendum? As for freedom from the ECJ, virtually everyone I talked to before the vote who was concerned with this issue confused the ECJ with the ECHR.

Of course, in the new political correctness of Brexit we are not allowed to suggest that the people did not know what they were voting for, for fear of being labelled elitist by some billionaire, ex-public schoolboy, or tax exile (or all three). But it’s plainly true that they did not, and for that matter that they could not. That is easily demonstrated by the fact that it is only now, over two years after the result, that the government has produced any detailed plan for what leaving means.

It’s no good Brexiters saying that people voted for a different plan: there was no plan at all on offer at the time. And it’s no good them saying that all would be well if their hard Brexit plan had been followed. This is exactly what May’s government has tried to do and, finding it unworkable in practice, it has morphed into the hopeless effort that was produced yesterday. Hopeless because it certainly won’t be accepted by the EU, is already not accepted by the Brexiters, and probably won’t be accepted by Parliament. If it were a horse, then it would be put out of its misery as an act of kindness.

But, then, the same could be said of Brexit itself.

Tuesday, 10 July 2018

May's pain with no gain crisis leaves Brexit snookered

Towards the end of my previous post, I wrote that it was still perfectly possible that the Tory Party would implode into civil war over the Chequers proposal. Now it has. This has obviously always been on the cards throughout the Brexit process, and not simply because the party has been split for 30 years over the EU.

More, it reflects the structural paradox I have been writing about for months now: the irreconcilability of declaring that hard Brexit is the inviolable will of the people with the general political imperative of not following policies that do major damage to the country. This entails, as has been clear since the February 2017 White Paper, that Brexit must be done and yet must not be done: an impossibility.

May’s ill-judged decision that Brexit meant the hard Brexit of the Lancaster House speech (which may have been at the behest of her then advisors, but she, as PM, has to take the responsibility) meant she was always likely to have to dial back towards a softer Brexit. In the process, she gave those who would always have cried betrayal anyway a semi-legitimate reason to feel betrayed.

After all, she had promised them that hard Brexit was both deliverable and would be delivered. She could never quite bring herself to say it was desirable, of course, but that isn’t the reason she has diluted her stance. The reason is a combination of the realpolitik of what it would mean economically and of what the parliamentary arithmetic allows.

Hence the Chequers proposal and hence, to an extent, the resignations. I say to an extent because there is more to them than purist Brexit principle. Such principle may have been behind the resignations of Steve Baker and Chris Green (who he?), but Davis and Johnson are more complicated.

The resignations

Davis, it has been clear from the outset, was too vain, lazy and incompetent to do the job and was completely out of his depth (see Ian Dunt’s excoriating profile for more detail). He’s been looking for a chance to jump for a long time. Now he can claim that he was undermined, rather than having to accept that he failed to understand the most basic things about Brexit. It was he, amongst many other Brexiters, who claimed that “within minutes” of a vote to leave German car makers would be busy insisting on a great deal for Britain.  More charitably, it’s fair to say that the governmental machinery of DExEU vis a vis the Cabinet Office was never properly designed nor viable (it is surprising that May hasn’t taken this opportunity to address it).

Johnson, of course, has never had any principled attachment to Brexit. The issue for him is, obviously, just personal ambition and, I also think, the fact that he revels in making a drama just because he can. It’s the lazy politics of ego and entitlement. I doubt, by the way, that he will ever become PM so shop-soiled is his reputation, and my sense is that even Brexiters regard him with contempt. But he has his uses to them as a figurehead for the ‘betrayal’ narrative.

It is telling what that consists of. As per his resignation letter, it is that the “Brexit dream is dying through unnecessary self-doubt”. Note the complete absence of any concrete alternatives or practical plans. It’s all about dreams and beliefs. As with his ‘road to Brexit’ speech in February it shows that whilst he can campaign for Brexit he has not the glimmerings of an idea about, or any interest in, how to deliver it. That is singularly useless in the present circumstances.

Whatever the reasons, the resignations were triggered by May taking just a small step away from hard Brexit. This can be read as showing that the Brexiters were always on a hair trigger, ready to jump. This is an illustration of a point I’ve made before – the Brexiters are far more ready that the remain or soft Brexit ‘rebels’ to act forcibly and ruthlessly (witness the ‘meaningful vote’ climb down). It can also be read as indicative of how narrow is the tightrope that May must walk – although, again, note that she created a rod for her own back in her early embrace of the Ultras. She should have known that whatever they were given they would want more, so to offer them what they wanted and then take some of it away was always going to be a problem. Maybe she thought she could boil the frog. If so, it has jumped before the water has boiled.

May is taking the pain without making the gain

The crucial consequence of this is that May is now experiencing the ‘pain’ of resignations and party civil war without having got the ‘gain’ of a pragmatic, workable, soft Brexit policy. For the Chequers proposal is most certainly not workable for reasons pointed out it in one of my recent posts. In brief, the split of goods and services is a nonsense (and highly unlikely to be negotiable with the EU-27), and the role of the ECJ and the issue of freedom of movement of people would almost certainly need to soften further. As, indeed, the Brexiters suspect.

So Chequers now looks like a big mis-step. It would have been better to have got all the softening out of the way – in other words, to go full on to proposing soft Brexit – and get all the resignations and rebellions out of the way as well. Then May would have got the gain of something workable – and eminently acceptable to the EU – and paid the price. Instead, she’s just paid the price.

Further softening remains quite likely, but what then? Dominic Raab, for a start, would surely walk. Presumably in taking the job he has accepted Chequers, but it’s inconceivable (to me) that he would accept the next logical step of softening it further. How many Brexit Secretaries can be shed? And others – Fox, Leadsom, Mordaunt – might well go with him in this scenario, extending and deepening the crisis.

The Brexit that no one wants

The other main consequence of what has happened is that, rather extraordinarily, pretty much every one, regardless of where they are on the Brexit spectrum, is now unhappy. The hard Brexiters see it slipping away, the soft (EEA/EFTA) Brexiters are not getting their version of it, the remainers are still stuck with it, and those that might be called ‘pragmatists’, who just want some kind of workable solution, haven’t been offered it. Brexit in its nature is divisive, but it’s quite an achievement to have alienated every shade of opinion.

Worse than that, wherever people are on the spectrum, there’s no obvious route to achieving what they want. For various reasons – time, political numbers, party political structures – there are almost insuperable barriers to getting to hard Brexit, to soft Brexit or to remain. All of these outcomes are still possible, but each of them is currently snookered. That makes the possibility of an application to extend the Article 50 period slightly more likely, as David Allen Green argues in the FT today (£), but of course there are many barriers to that as well. Ultimately, it will not be until there is an even greater political crisis, which throws all the pieces into the air again, that one or more of the outcomes will become possible. But no one knows where the pieces would land and whether their preferred outcome would be the one that the new configuration would favour.

In the absence of the logjam being broken, of course, there will be an outcome simply by virtue of the Article 50 process: no deal. Which is, indeed, the outcome that some of the Ultras want. For almost everyone else this would be a disaster on an unprecedented scale: massive economic and social dislocation leading to goodness knows what political calamity. This now seems more likely than it ever has done before, simply because it is the default if all other outcomes are rendered impossible (and the prospect of it is what increases the chances of an extension to the Article 50 period).

We are not there yet, but we are getting close. Standing back from the detail of the domestic political drama it is simply extraordinary that just a couple of working months before the Withdrawal Agreement is meant to be ready for ratification Britain has an entirely new (and yet still unworkable) model of what Brexit looks like and a new person in charge of negotiating it (and one, moreover, who almost certainly doesn’t really agree with that model). Some of that might have been avoided. Most of it stems from having elevated to the status of the sacred ‘will of the people’ a narrow vote for something unspecified, which then became interpreted as something impossible. The end game is fast approaching.