Johnson's 'no deal 2.0' virtue signalling

The first week of Johnson’s new administration has seen both speculation about, and the beginning of some answers to, how he intends to undertake Brexit. The outrageousness of that situation shouldn’t pass without comment. We have just had an election campaign in which Johnson made ‘getting Brexit done’ the central theme. Yet, as pointed in a previous post, he avoided saying almost anything about how it would be done – and neither the opposition parties nor the media were able to pin him down.

So he will now claim a mandate from voters for doing it any way he wants. It is a travesty of democracy, which replicates the way that during the Referendum Brexiters refused to tell voters what they were voting for, only to define it later and claim it as the ‘will of the people’. Thus whilst a reasonable interpretation of the election was that people were voting for ‘Johnson’s deal’, as expressed in the Withdrawal Agreement (WA) with the EU and operationalised domestically by the Withdrawal Agreement Bill (WAB), Johnson is already changing the latter.

Amongst these changes, the most striking is to make it illegal for the government to seek an extension to the transition period, with the associated removal of a parliamentary vote on extension. It might be argued that this is consistent with Johnson’s campaign pledge not to seek such an extension, but that pledge did not entail (legally) removing the option just (politically) not exercising it.

Of course, doing so is, in a way, a meaningless gesture. Just as with the ‘enshrining in law’ of the 29 March leaving date, it is something that can always be removed by further legislation if necessary. In that sense, it is simply what in other contexts would be called ‘virtue signalling’.

A signal to the Tory Party

Yet gestures and signals matter, and so in another way it is not meaningless. It carries a message, perhaps to voters though I think at this point more to his party, that Johnson will not renege on his campaign pledge. This in turn underscores that, as I pointed out in my post-election post, the ERG remain a powerful force.

Indeed, given the near unanimously pro-Brexit character of the new intake, the ERG are larger and more powerful than ever before. As this new signal indicates, any idea that Johnson’s majority frees him to pursue a softer Brexit – even assuming he wanted to – is surely mistaken. Forty-five rebels can take it away, and there are certainly that number who would have no compunction in doing so, as their track records show.

This incipient possibility is underscored by the very fact of the ERG’s continued existence. For what is the purpose of this ‘party within a party’ now that the Conservatives as a whole are fully committed to Brexit and are led by the erstwhile figurehead of the Leave campaign?

The answer to this question is, as again pre-figured in my earlier post, that the endless civil war within the Tory Party is far from over, and is almost certainly going to revive in the coming months. Indeed, less than a week after their landslide win, it is reported that there are splits within the cabinet (£) over, precisely, revisions to the WAB (although, in this case, potential changes to the powers of British courts vis a vis the ECJ, rather than over the transition period extension).

These splits probably won’t amount to much now, but they lie waiting in the wings. And they were manifested in a different way this week. Early reports suggested that the revised WAB would scrap the previous commitments to workers’ rights. Later, this was disowned. Then it emerged that they had indeed been removed from the WAB. In this can be seen how there is still a political juggling act going on, and very likely a degree of administrative chaos. Far from being master of all he surveys, Johnson is, like any other Prime Minister, subject to diverse pressures (e.g. from the ERG but also from his new ex-Labour seats). But, anyway, just as enshrining no extension to the transition period in law does not mean that the law can’t be changed, neither does the enshrining – or not – of workers’ rights.

So the conclusion is the same: what matters about these legal signals is not that they set in stone what will happen, but that they reflect the political messages Johnson wants to send which, in turn, reflect the political exigencies he faces.

A signal to the EU

Party issues aside, there is another audience for the transition period gesture and it is the EU. Johnson, and the Brexiters generally, have always believed that Theresa May failed to be sufficiently hardball in negotiations and think that they can do better. One aspect of that is, simply, having a majority. Interviewed on Radio 4 this week, the former Brexit Secretary David Davis – a man who has been wrong in just about everything he has ever said about Brexit – opined that this in itself strengthened the UK’s hand because it meant that remainer politicians would no longer be able to disrupt the government’s plans.

This is based on the Brexiter myth that what happened in the WA negotiations was that the UK was undermined domestically – and by remainers rather than by the Brexiters who opposed May’s deal - rather than it arising from the UK’s own negotiating red lines, as enthusiastically approved by the Brexiters. But even if that were not a myth it could actually be argued that having a majority makes negotiations more difficult – the familiar tactic of international negotiations of saying ‘we cannot agree to this because we will never get it through parliament’ is eroded.

That aside, the signal the transition period law is meant to send the EU is that the UK is ready to leave without a future terms deal if necessary, and to pressurise the EU into agreeing such a deal quickly, a point made this week by, again, David Davis. It is about as ill-judged an approach as could be imagined, having learnt none of the lessons – or the wrong lessons – from what happened with the Article 50 (A50) negotiations.

For, then, as soon as A50 was triggered, it was the UK which was always most under time pressure. And that pressure was all the greater because of not having an agreed, detailed, plan for what was being sought from the future terms during phase 2 of the A50 negotiations. The latter is likely to be the same this time, because of the tensions between ERG purism and business and economic pragmatism.

Time pressure exists in the future terms negotiations anyway, since the transition period cannot be easily or endlessly extended. Johnson’s WAB gesture just increases that, making it more difficult, politically, to extend. So it just recreates the time dynamic which was so damaging to the UK in those previous negotiations. For, make no mistake, the timescales proposed are ludicrous. It is not even just a matter of the eleven months between the UK leaving and the end of the transition period, since some, at least, of this will be needed for ratification. And the timescale for extending the transition period is even tighter – just until the end of June.

For the EU, the effect of Johnson’s signal was only ever going to be to lead them to say – as they immediately did (£)  - that, given this self-imposed additional time constraint, only a very minimal deal will be available. As before, the threat of no deal is a rather empty one (and may even breach the good faith requirements of the WA)  since it would be so much more damaging for the UK than the EU for simple reasons of economic scale and the asymmetry of the trading relationship.

It could have been different, but it’s going to be the same

So all that Johnson has achieved so far is to limit his options, purely for reasons of domestic politics despite the fact that his majority might have freed him from such constraints. As with Theresa May, but with even less excuse, he is repeating the errors which have dogged Brexit from the beginning.

For whilst I’ve never thought Brexit is viable, still less desirable, those who do have consistently made a mess of it. It’s not completely unimaginable that a self-confident, pragmatic Brexit government could approach the complexities of undertaking it in a realistic way. That would entail dropping the confrontational, aggressive and paranoid posturing towards the EU and instead approaching the negotiations as the technical, bureaucratic exercise they to some large extent are.

It would also mean eschewing all the grandstanding about deadlines and recognizing that it would be a long and gradual process, requiring extensive consultation with parliament, businesses, civil society and others as to how to deliver it. By contrast, the revised WAB removes the role of parliament in setting negotiating objectives and even its right to receive updates on progress.

It would – again, for those who seriously believe in it – be conducted with the confidence of knowing that it was about building a desirable and durable new national and geo-political strategy which involved patience, the formation of new relationships externally, and the development of consensus domestically. Nothing like that has happened. Instead, the process has been, and continues to be, rushed, and conducted in a way which has destroyed trust and good will with the EU and credibility beyond the EU.

Meanwhile, at home, remainers – or even just those who are concerned or perplexed – have been stigmatised and insulted, and consultation confined to those who are ‘true believers’. Yet if Brexiters want their ‘great national project’ to succeed they need to bring with them a decent proportion of the nearly half who voted to remain, the more than half who would now do so, and the two parts of the United Kingdom which did so.

Theresa May set the stage for most of this – not least in her desperate wish to be accepted as a true convert – and Johnson is continuing it. At root, it is driven by the constant suspicion of the Brexit Ultras, both inside and outside the Tory Party, that they will be betrayed, and fear of what they will do as a result. Like a metastasising tumour, that suspicion and that fear have now spread throughout the body politic.

If there was a chance to press the re-set, it would have to have been begun by Johnson immediately. It would take great leadership, and it might well fail – but it is already clear that he isn’t even going to try. And, thus, any possibility of doing Brexit in a half-way sensible manner has now disappeared.

Hence, now, Johnson even with his big majority is still making the same mistakes for the same reasons and is now digging himself, and the UK, into a deeper and deeper hole. He is either going to have to do the mother of all U-turns and extend the transition period, or do an extremely limited deal – perhaps to be followed by several years of supplementary deals – or end the transition period with no deal.

No deal 2.0

It’s important to clarify that the ‘no deal’ now being entertained at the end of the transition period is not the same as that which would have obtained had there been no WA. The new version – call it no deal 2.0 – would be different because the WA terms would be in place. That is, primarily, the agreement on the financial settlement, on Citizens’ Rights and on the Northern Ireland arrangements. So it would be somewhat less damaging than the original no deal (‘no deal 1.0’) and that matters, in particular for EU-27 nationals in the UK and for UK nationals in the EU-27. Moreover contingency planning for ‘no deal 2.0’ will presumably be more advanced than before.

Equally, it’s important to recognize that there are three, partially overlapping, features to what has to be done during the transition period.

Trade

The first, which gets by far the most attention, is future trade terms. I’ve written a lot about that on this blog, but just briefly to recap. Future trade terms matter, economically, because about half of UK trade is with the EU. It is true by definition that even the most ambitious Free Trade Agreement (FTA) will have little provision for services, because that is the nature of FTAs and one of the ways they differ profoundly from single market membership.

Thus any FTA will be worse for a service-based economy, such as the UK’s, than single market membership. But even considered as primarily goods-based agreement, FTAs can have varying depths and extents. The quicker a deal is done, and the less that the UK agrees to in terms of Level Playing Field (LPF) conditions (e.g. state aid rules, competition rules and environmental standards), the shallower and more limited it will be.

Johnson has already indicated an unwillingness to accept extensive LPF (some think that could change, but if so it will open up a row with the ERG), and the added time pressure he has created simply increases the chance that any deal done will be so limited – for example with respect to coverage of intellectual property rights and data management - as to significantly damage even goods trade. The more limited it becomes, the closer it is to the no trade deal position of falling back on ‘WTO terms’ which would be the least advantageous of all the outcomes.

Non-trade

The second feature of the transition period negotiations, which gets far less media attention than it should, relates to future terms for all the non-trade issues as set out in the Political Declaration. These include security, law enforcement, aviation and other transportations, fishing, science, energy and much else. Here, again, the less time there is the more difficult and more limited a deal becomes.

However, on these issues, there is not even the fall back of something like WTO terms, as there is for trade. Instead, what would happen under ‘no deal 2.0’ would be some limited, temporary workarounds in at least some of these areas. Some have already been developed by the EU in preparation for ‘no deal 1.0’, for example a basic framework for aviation.

This shouldn’t be mistaken for the ‘micro-deals’ that ‘managed no-deal’ Brexiters used to speak of. They are not deals at all, they would be unilateral measures taken by the EU and in the interests of the EU which might have the side-effect of protecting the UK from the worst disruption. Even so, the implications of no deal for, perhaps especially, security would be very serious.

Northern Ireland

The third feature of ‘no deal 2.0’ relates to Northern Ireland. Failing to reach a trade deal would have particular consequences for Northern Ireland since, by virtue of the WA, it will be in a different position to the rest of the UK and, in this scenario, there would be a sudden and sharp divergence. Moreover, with or without a trade deal, the Northern Ireland protocol of the WA needs to be operationalised.

This entails considerable complexities, as set out by Professor David Phinnemore of Queen’s University, Belfast, some of which would vary according to the nature of any trade deal that might be done, others of which need to be resolved anyway. Under ‘no deal 2.0’ the time available to do so would be extremely tight, perhaps impossibly so.

So this is a qualitatively different aspect compared with the first two features of ‘no deal 2.0’. For whereas the first two arise from what does or does not develop from the political declaration on future terms, this third one, whilst interacting with those future terms, arises from the way that an unextended transition period would impact on the capacity to deliver the agreed terms of the WA which, of course, will be a legally binding international treaty.

Whether Boris Johnson, given his comments during the election campaign, begins to understand what this treaty entails must be open to question. But his government will have to get to grips with it, and fast, especially given his clear intention not to extend the transition period.

Johnson’s gamble

Just from the first week of his new premiership, it’s possible to see that Johnson has embarked on a series of gambles in the domestic management of his party and in the negotiations with the EU. But he is taking a far bigger gamble without, apparently, realising it.

That gamble relates to the UK economy, and the investment and location decisions of businesses from some of the very largest right down to some self-employed individuals. An indicator that this is indeed the story of the week can be seen in how the pound, having risen on news of Johnson’s election victory, returned to its previous level when the transition period policy was announced.

For Johnson is saying, unequivocally, that from January 2021 businesses will be outside of the single market and customs union and that, unequivocally, if necessary that will be without any new trade deal being in place. He is also, therefore, telling them that they will face increased barriers to trade of a greater or lesser extent, whatever happens. For example, even if there were a zero tariffs, zero quotas goods trade deal, there will still be the extra costs of new customs procedures and, of course, new barriers to the hiring and deployment of staff.

In the time horizons of both business and personal planning that is a short period. Johnson perhaps believes, like so many Brexiters, that despite all the evidence to date the ‘Project Fear’ warnings were just that, so he can virtue signal about no deal with impunity. He’s doing so for political reasons but, in doing so, creating a potentially horrible economic trap. For the more his party, the electorate and the EU believe him the more likely it is that businesses will do so too, and act accordingly.



Huge and heartfelt thanks to Matt Roxburgh @mattroxburgh for responding to my Twitter appeal for help and patiently fixing the technical problems that prevented some readers from accessing last week’s posts, a task made more difficult by my techno-uselessness. Hopefully, no problems with this post – but if so down to me not Matt - although previous posts may still have problems until I have completed work on them.

This will be the last post on the blog this year. I will resume at the beginning of January. Many thanks to all who have read, publicised or said kind things about it this year. Very pleased to have the 3 millionth visit recently. Hugely appreciated, and never taken for granted.

General Election 2019: the aftermath

In my previous post, the morning after the election, I discussed what the result is likely to mean for what follows with Brexit. Even in the short time since then we have seen the beginning of the contours of what was said there developing. In particular, as Tony Connelly’s assessment of the election implications spells out, the practicalities for the construction of the Irish Sea border will now have to be worked out. Agreed to by Boris Johnson in his almost indecent haste to get a deal done, possibly without even understanding what he had agreed to, it now has to be turned into a reality, with all the economic and political consequences that will bring.

We also see the beginnings of the row over transition period extension, with reports that the EU (rather than the UK) may propose such an extension, perhaps via a sequencing process in which some sectors are dealt with first and others deferred to an extended period. On the other hand, Michael Gove has repeated the promise that all the future terms negotiations will be completed by the end of December 2020. The only way I can see that coming true would be if, first, the UK effectively accepted whatever terms the EU propose or, second, if the deal done was so limited in scope as to be highly damaging to the UK.

But these and other issues will be the stuff of the future. This post is going to finish off the series concerned with the analysis of the General Election itself, by considering some of the causes of the result. Clearly there is already a mass of commentary about that, but here the focus will be mainly on the Brexit-related aspects.

What just happened?

The first thing that happened is that the Tory Party made a good fist of Brexit, in an electoral sense. The ‘Get Brexit Done’ theme was, as pointed out elsewhere, deeply dishonest and will set up many problems for the future. But, as a slogan, it had undeniable political cut through. They were also lucky in that Farage lost his nerve and did not stand in Tory-held seats. Yet, in another way, by standing in Labour held seats he deprived the Tories of an even bigger win and saved several Labour seats where the BXP vote was larger than the Labour majority. One side-effect of the campaign is that it should now see the end of Farage as a political figure, if only because the Tories have now embraced ‘Faragism’.

Even in the face of this, it is surprising that the LibDems did not manage to make some gains, even allowing for their longstanding disadvantage in the first-past-the-post system. When, before the election, they announced their ‘revoke Article 50’ policy I received a lot of criticism from some for writing that this was a mistake of both principle and tactics that would dog them if and when an election came. But on that it is pretty clear that I was right. In particular, it made it far less likely that they would attract the votes of Conservative remainers, and its partial abandonment late in the campaign was, simply, too late.

On the other hand, the criticism of the LibDems and Labour, made by Anna Soubry and many others, for having facilitated the election in the first place is probably unfair. It’s a difficult judgment, and we’ll never know if it was the right one, but I thought then and still think that – once the Withdrawal Agreement Bill had passed its second reading - the alternative would have been that it would eventually have passed and Brexit would happen. And there was no sign of a parliamentary majority for another referendum. In those circumstances, an election was the last hope but, clearly, it proved a false one.

Labour's disaster

As for Labour, they deserve some though not all of the criticism they are receiving. It is nonsense to claim as many, such as Len McCluskey, are that they would have done better, still less won, had they embraced Brexit and not had a confirmatory referendum policy. That claim ignores the fact that had they done so they would have lost support amongst the majority of its 2017 voters, who were pro-remain.

It also wrongly assumes that it would have been appealing to Labour leave voters. For it is very clear that, irrespective of Brexit policy, those were exactly the kind of Labour voters who were repelled by Jeremy Corbyn – seeing him not necessarily as ‘too left-wing’, but as unpatriotic and just plain alien. It doesn’t matter whether that perception is fair or not, or whether it was trumped up by the media or not. Whatever its cause, it was the case, and it would have been the case whatever Labour’s Brexit policy had been. The polling evidence is clear that Corbyn rather than Brexit was the main problem amongst those who ceased to support Labour.

What is certainly the case – and has been highlighted on this blog many times over the last three years - is that Labour’s entire positioning on Brexit since 2016 has been a disaster of oscillation, ambiguity, and shifts that came too late or with too little clarity. From Corbyn’s early call for an immediate trigger to Article 50, through to his belated acceptance of a confirmatory referendum, to his dithering over what side he’d be on in such a referendum to his, in my view reasonable but far too belatedly adopted, ‘neutrality’ stance, it has always been grudging, shifty and unconvincing.

Moreover, Labour were wrong to vote to trigger Article 50 – thereby being forever open to the accusation of having supported Brexit in principle – wrong to eschew single market membership as a compromise form of Brexit, if Brexit was to be done, and wrong to wait so long before endorsing another referendum. By the time they got to this election, they were still talking in the meaningless terms of single market access (or variants of that) which had been so misleading during the Referendum itself. Their ultimate ‘renegotiate and then refer to the people’ position made the best of a bad job given what had gone before, but it was too late to atone for what had gone before.

Much of the blame for all this can be laid at Corbyn’s – or his inner team’s – door. He never showed much interest in or understanding of Brexit, which would be bad enough given that it is the dominant issue of the day. But, worse, he did not seem to understand that delivering on his preferred terrain of anti-austerity policies could not be separated from Brexit itself.

In fact, polling evidence suggests that the actual policy platform was not unpopular with those former Labour voters who abandoned Labour. Things like rail nationalisation, for example, are vote winners. In that sense, despite being widely mocked for it, Corbyn’s claim about having ‘won the argument’ is not entirely risible. And it should be of some comfort to the Left were it not for the diversion of the personality cult around Corbyn as the person to deliver it: singing ‘oh, Jeremy Corbyn’ was never a substitute for serious politics.

Deeper roots

However, asking what happened in this election is, in a way, the wrong question, in that some of what happened has been building for years, if not decades. There’s always been a tension between working-class and middle-class Labour, between nationalists and internationalists, and between class-based and identity-based politics. In particular, the decline of Labour’s traditional vote reflects the long-term decline of the regional, industrial, unionised working-class. Similarly, the tension between the remnants of that and the middle-class, public sector worker and London-centred parts of its base has been going since at least the New Labour years.

But Brexit and its aftermath have inflected, sharpened and perhaps finally cemented these divisions. Immediately after the Referendum I wrote an academic analysis in the Socio-Economic Review of how it had clarified a new politics of ‘cosmopolitans and locals’. Many others have made a similar diagnosis, even if using different terminology (e.g. ‘nativists and globalists’) to make essentially the same point. I speculated that in due course the two party structure of UK (or, at least, English) politics would come to reflect that.

Arguably, that has come half-true in this election, with the Tory Party having emerged as the ‘local’, or English nationalist, party. If so, and assuming that there will be no change to the first-past-the post-system, then what now needs to happen is the construction of the other, ‘cosmopolitan’ party – reflecting the cleavages of age, education, social liberalism that are already in play. Tactical voting is not, as we have just seen, going to be the answer. That implies not the reconstruction of the Labour Party but the wholesale merger of Labour and LibDems with, in the process, a redefinition of each of them.

A new party?

This would not be the ‘remain party’. Painful as it is for remainers to accept, remain is now a dead cause. Pointing to the fact that 52% of voters backed ‘remain parties’ in the election is as much of a dead end as the ‘only 37% of the electorate voted to leave’ rabbit hole. In the medium to long-run it might become a ‘rejoin party’, but for the time being it would be pushing for the least damaging Brexit deal, developing a wider policy programme within the confines of the fact of Brexit, and opposing what is already emerging as the populist agenda of the new government.

Nor would it be a ‘centrist party’, because the very notion of centrism is predicated on a politics that has now disappeared. It would be on one wing of this new local-cosmopolitan landscape. One reason to think it could emerge is that it is already clear that the ‘Local Party’, despite Johnson’s talk of “healing divisions”, is going to humiliatingly grind its victory into the faces of what that horny-handed son of the soil Dominic Cummings (Durham School and First Class degree from Oxford) sneeringly calls “educated remainer types”.

It’s a strange, Pol Pot-like, move for the Tories to turn on the educated in this way but it reflects the peculiar mix of Maoist and Silicon Valley disruptor thinking which has now captured that party. It's no longer the party of business and the professions. It's not even the party of 'grammar school aspiration' in the way it was under Heath or even Thatcher. Rather, it's a bizarre melange of public school entitlement and the resentment of those with no post-compulsory schooling. This new positioning can only have the effect of cementing the new divide, since the more it asserts a new ‘them’, the more it creates a new ‘us’.

However, calls for a Liberal-Labour rapprochement are almost as old as the Labour Party itself and so it’s probably unlikely to happen now. Even so if, as many now think, the break-up of the United Kingdom is not very far away, and if, as is at least possible, Labour suffer another crushing defeat in 2024 then it’s perhaps not impossible in the not too distant future. It would be a vehicle for, as Timothy Garton Ash wrote this weekend, a ‘European England’ that might still eventually emerge from the wreck of Brexit.

The future of this blog

Coming to the more immediate future, and to less weighty matters, several people have asked me if this blog will continue now that Brexit is a certainty (and been kind enough to suggest that they hope it will). The answer to that is ‘yes’, for two reasons.

One is just because, to repeat a point made ad nauseam, Brexit will not end with Britain’s departure from the EU at the end of next January. It will continue for many months, and very likely years, to come. Over that time, it may become (even) more difficult to separate out Brexit per se from British politics more generally. Still, the blog will continue to focus primarily on Brexit-related issues. Some of these may be highly technical, for example on trade and customs issues, but my approach will continue to be one of trying to place these within a wider political analysis.

The second reason is the original rationale for this blog. At the time of the first post in September 2016, when of course there were very few readers, I wrote that “the blog will not attempt to re-argue the case for remaining in the EU or for the reversal of the decision, as I do not think that this is in prospect. Instead, I will analyse the unfolding consequences”.

In the intervening years, there have been many times when I thought that the decision might, in fact, get reversed. This was partly because of the total incompetence with which Brexit has been pursued, but mainly because of the extraordinary resilience and ingenuity of the remain campaign. That campaign has made some mistakes but, overall, has done far more than could ever have been expected. It nearly won - and may yet be the springboard for a future movement.

So now that it is once again the case that there is no prospect of Brexit being reversed, the rationale for the blog remains as it was from the beginning. So too does my original sentiment in that first post that Brexit is a national catastrophe. But that does not take away the need to provide an ongoing analysis of it which, whilst clearly and avowedly partisan, aspires to be based on evidence, logic, and fair and rational argument.

If nothing else, there may be some value in creating a more or less continuous record of what Brexit has done to our country, not least as a reminder that this is so very different to what, in 2016, Brexiters promised. So it can make its own very small contribution to holding them to account for what they have done.


Note: I am aware that in the last few days some people have been having problems reading the blog, with a large yellow box covering over most of the text. It seems to only affect Android devices. I’m sorry about this but I do not know the reason or the solution, though some people have reported that it also depends on what browser you use.