Friday 20 April 2018

Will MPs use their power now?

The most intriguing and potentially significant aspect of the domestic politics of Brexit has always been the fact that the majority of MPs do not support it. Of course, that did not prevent them using the vote that the Miller case forced the government to hold to support the triggering of Article 50. But the justification for that (bogus in my view), that to do otherwise would have been illegitimate in the face of the Referendum result, does not apply when it comes to determining the manner in which Brexit is undertaken.

Many Brexiters, of course, claim otherwise, insisting that the vote to leave the EU was also a vote to leave the single market and any form of customs union. This is manifestly nonsense. They may point to this or that statement during the campaign that equated voting to leave with this manner of leaving, but the campaign overall was ambiguous and contradictory about what leaving meant.

This is easily demonstrated. If Brexit, by definition, meant what the Ultras say it does then there would not have been the seven month gap between the Referendum and the Lancaster House speech – a gap in which the various meanings of Brexit were heavily contested before that speech announced that Brexit meant hard Brexit. The only sense in which the Brexiters are right (and many remainers wrong) is that it is true that leaving the EU means leaving the Customs Union, because only EU members can belong to that. Britain cannot ‘stay in the Customs Union’. But Brexit does not preclude creating a customs union that replicates some, many or all of the features of the Customs Union.

In any case, since Article 50 was triggered there has been a General Election in which Theresa May called for a mandate for hard Brexit. She failed to get it, with implications both for the legitimacy of MPs now opposing this form of Brexit and for the parliamentary arithmetic of successfully doing so. The issue since then has therefore been whether MPs will make use of this situation, which requires both that the Labour Party and a sufficient number of Tory rebels do so. If those stars align – as they did with the passing of Amendment 7 to the EU Withdrawal Bill last December – then they can win.

As I wrote at the time, the main significance of that amendment lay not so much in the fact that it was passed but in the fact that it was not defeated. That is to say, had it been defeated that would effectively have represented the moment at which MPs had decided to have no substantive involvement in Brexit. It would also have signalled that there was no point at which the putative Tory rebels would act. And having done so may embolden them and others to rebel again – in a sense, having taken the flak once they have less to lose from future rebellions, whilst having won means that other potential rebels can believe there would be some point in sacrificing their careers.

We are now about to find out whether this is true, with votes on the specific issue of seeking an equivalent customs union with the EU after Brexit. On the one hand, the heavy defeat for the government in the House of Lords on the EU Withdrawal Bill gives the Commons a chance to do the same. On the other hand, there will be similar opportunities for the Commons to amend the Taxation (Cross-border Trade) Bill and the Trade Bill and, next week, to vote in the debate on a customs union initiated by the Commons Liaison Committee. Government defeats in the Commons on these votes are now possible because in February Labour changed its position on a customs union. Such defeats would, politically if not legally, put a major hole in the government’s approach to Brexit with consequences which are unpredictable, but could force the collapse of the government and another General Election (there are, admittedly, many complexities in that not least because of the Fixed Term Parliaments Act; still, we can say that there would be a political crisis).

Of course, it’s possible that the government might shift policy on a customs union in the face of such defeats (or, even, in anticipation of them) and seek to negotiate this with the EU (it is clearly not a given that the EU would agree, although most people believe that it is quite likely that they would*). That would require a major U-turn from Theresa May. It would also require the Tory Ultras both in Cabinet and on the backbenches to swallow very hard indeed, since an equivalent customs union would also, in practice, entail being bound by the EU’s Common Commercial Policy. That would mean no independent trade deals.

In any sensible political environment this would be of no consequence. There is little if any benefit in an independent trade policy. This is because such independence would require, first, re-negotiating all of the existing EU trade deals, with no guarantee they would be on as good terms and, even if they were, all that would have been achieved would be to restore the pre-Brexit status quo. As for new deals, the government’s own analysis shows that the benefits would be trivial, and far outweighed by the loss of EU trade. Despite all this, for the Ultras an independent trade policy has become a key symbol of Brexit. It has no rational basis, but then nor do blue passports. (No doubt some would say that it is rational if one puts a value on independence from rules set by others. If so, they miss the fact that making trade deals requires acting in accordance with rules set by the WTO).

Say, though, that the Ultras did accept this situation (calculating, perhaps, that once Brexit day has passed they might somehow, some time, claw back what had been conceded and/or that not doing so might precipitate a Labour government). It is not clear that anything very significant would have been achieved. A customs union would not, in itself, solve the Irish border riddle and it would mitigate only some of the economic damage, most notably to cross-border supply chains in goods manufacturing, of Brexit (it would do nothing to help services trade). To deal with both of these requires single market membership as well as (and, actually, more than) a customs union.

On the other hand, there is a real danger for remainers or even soft Brexiters if a customs union were created. Because it would not prevent the damage of Brexit, the Ultras would then be able to argue that this damage was caused not by Brexit but by not doing Brexit ‘properly’. They are going to make that claim anyway, no doubt, but will be able to do so the more vociferously (and, to some voters, plausibly) if they can point to having been prevented by ‘saboteurs’ from having an independent trade policy.

From this point of view, it might be said that the only way to completely discredit Brexit is to allow the Brexiters to have their head so that the full crash and burn effect of what they are advocating becomes undeniable. Against that, however, is the near inevitability that whatever happens they will always deny it and – more importantly – that all our lives and livelihoods will be strapped to the wreckage as it plummets to the ground. Which is a pretty unappealing prospect.

So perhaps there is a more optimistic scenario. A defeat for the government on a customs union might be a first step towards further defeats – on the single market, most obviously, on Brexit itself, conceivably. At some point on that road the Ultras would certainly rebel and, once again, we get all the unpredictability of governmental collapse, perhaps an election, perhaps another Referendum.

Or perhaps this will all turn out to be academic and the Tory rebels will not rebel after all. As I argued last March when the draft Withdrawal Agreement was published, the likelihood of agreement on a transition period seems to me to make such rebellion less likely. Writing in the Guardian this week Rafael Behr makes a similar point, seeing the possibility of the transition as having taken the time pressure of the government and opening up a scenario in which the Ultras “sleepwalk” us to Brexit. But as he concludes, and as what I have written here suggests, Britain’s fate lies firmly in the hands of parliamentarians. We will soon find out whether they, and most notably the Tory rebels, will use that power.


*Most notably because such a scenario would mean that, finally, the old Brexiter saws about the ‘German car industry’ and about the UK trade deficit with the EU would come into play, albeit not in the way Brexiters anticipated. A customs union would be helpful to EU-27 (and British) goods manufacturers. It would do nothing for services trade. The UK trade deficit with the EU-27 comprises a large services trade surplus offset by a massive goods trade deficit. For this and other reasons a customs union would be attractive to the EU-27 on economic grounds, and would not entail the politically unacceptable cherrypicking (of aspects of the single market) which Brexiters imagined would be over-ridden by EU-27 industrialists.

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