Wednesday, 30 December 2020

So this is Brexit?

The protracted drama of whether or not there would be a Brexit future terms deal finally ended on Christmas Eve, and today it has been overwhelmingly approved by MPs. Perhaps, as some claim, that was always in prospect, and the last-minute timing was just a negotiating tactic by the UK government (though if so, as always, it’s unclear whether that was for domestic consumption as much or more than for the EU)? If so, it has placed British businesses, and many citizens, in a situation of huge and unnecessary stress, and made political scrutiny of the deal effectively impossible.

Or perhaps the defeat of Trump and the departure of Cummings shifted the government’s approach some weeks ago? Or perhaps Boris Johnson only blinked at the prospect of no deal at the very last moment, with the mayhem at Dover concentrating his mind? It may be a long time before we know, definitively, exactly when and why the decision was made and how close we came to the disaster of no deal.

And that is the first thing to be said about the deal – the fact that it exists is, unequivocally, better than if it did not. Better economically, and better in terms of the possibility of a future relationship which may become deeper or at least more harmonious in tone. However, as with all the gaslighting about the rollover or renegotiation of existing trade agreements, it should never be forgotten that, at best, the deal prevents some things getting worse. It is not, and could not be, a ‘good deal’ in any sense other than not making everything worse. Unsurprisingly, Johnson with his trademark shameless mendacity is already claiming that he has secured a ‘having cake and eating it’ deal. That is a flat out lie.

The broad shape of the deal is unsurprising

As for the deal (formally the Trade and Cooperation Agreement) itself, months of fevered speculation have now given way to days of equally fevered analysis of its detailed contents, which are complex and technical, and the practicalities of how some of it will work remain to be seen, with arrangements for Northern Ireland still especially unclear. Law and Policy commentator David Allen Green has created a very useful compendium of some of the early expert readings of the agreement, and the Institute for Government has provided a good initial summary of its main provisions and many of the examples given in this post draw upon it (if not, separate links are provided).

However, it’s important not to get totally lost in the detail because, standing back, what has emerged overall is broadly what we have known ever since Theresa May’s Lancaster House speech of January 2017 would be the shape of a deal, if there was to be a deal. By setting a course that excluded single market and customs union membership, and any role for the ECJ, what was left, as per the Barnier staircase, was, as regards trade, a deal in the shape of a free trade agreement.

That meant, at best, there being no tariffs and quotas for goods trade but inevitably – compared with single market membership - significant new non-tariff barriers to goods trade, and reduced liberalization of services trade. We knew that, because that is the definitional difference between a single market and a free trade agreement. Similarly, we knew that a trade deal, in the absence of a customs union, was never going to prevent the introduction of customs formalities. So whilst the precise terms of the deal do matter – and for specific industries, firms and individuals they matter hugely – what has emerged is not a surprise and is certainly not a triumph.

It is easy to forget now, but a deal of this broad type was precisely May’s aim. What is now referred to as ‘May’s deal’ was only a Withdrawal Agreement (WA). The waters of that got muddied because (in brief) few believed that any such deal would suffice to avoid the provisions of her backstop agreement, and so this got treated as defining the de facto future terms arrangement. That might well have been true – and, had it turned out to be so it is worth noting that, even then, there would have been little on services trade – but it was not her stated intention.

Her intended future terms deal would have been similar in form to Johnson’s, albeit with ‘alternative arrangements’ for what would have been the Irish land border. It’s true she had conceded Level Playing Field provisions in her WA, unlike Johnson’s, but Johnson has ended up accepting these, “the most stringent …. ever seen in a trade agreement” according to trade expert David Henig albeit less than what the EU originally sought, perhaps to no less of a degree than would have eventuated under May’s plan had her WA passed, especially had Johnson replaced her afterwards. Many other details would have been different, some perhaps in very important ways, but it would have been the same species of trade arrangement as we have now arrived at. In passing, it is therefore a bit rich for May (or any other MP) to now express bemusement (£) that Johnson’s deal does so little for services.

So without rehashing all the complexity of this past history, the second point to be made about the deal is that, fundamentally, it is the hard Brexit that May set in train, with all the attendant costs of that compared with what the UK had as a member state or could have had under soft Brexit. In this way, it falsifies the claims made before and since the referendum that there was some way of retaining similar or even the same terms of trade under the aegis of a free trade agreement. That was always a lie, and has been proved to be a lie.

Of course, as compared with what was in prospect under May, Johnson avoided any possibility of being stuck in the backstop by the expedient of creating the frontstop whereby Northern Ireland, only, will effectively remain in the goods single market and the customs union, with a regulatory and customs border across the Irish Sea. This we have known since his WA was signed but it is worth spelling out at this moment exactly what it means, because most media coverage is not doing so, or at least not in sufficiently stark terms: leaving the single market and customs union has been achieved for Great Britain only by breaking up the single market and customs union of the United Kingdom.

Nothing remotely like this was ever suggested during the Referendum campaign, and Theresa May had dismissed it as something no British Prime Minister could every agree to. From the outset, Brexiters either failed to understand, or lied about, what Brexit – and especially hard Brexit – meant for Northern Ireland. It was a failure of almost criminal irresponsibility.

The effects will vary by sector, but none will find trade easier

So far as the details of the trade deal are concerned, commentators seem split as to whether it should be regarded as a ‘thin’ or a thick’ one – perhaps because these terms are difficult to define. In some respects, it could have been better for the UK (for example on the extent of sanitary and phyto-sanitary checks, and on the recognition of professional qualifications for services trade); in other respects it could have been worse (for example, what was agreed on electric cars and on legal services was more than what a ‘standard’ EU trade agreement might have allowed). On the key ‘sticking point’ issues of Level Playing Field, fisheries and governance the EU largely got its own way, but the UK did achieve its primary, if negative, aim of being entirely free of the ECJ.

Just how badly affected particular industries are going to be will vary a lot, and there will be a mixture of impacts – the chemicals industry, for example, has been saved from tariffs, but faces complex and still uncertain regulatory duplication. The road haulage industry will continue to be able to operate within the EU but will be more limited in the number of pick-ups/ drop-offs it can make. The seed potato industry looks set to be devastated, and the situation for the processed meats industry is uncertain. These are just a few of many examples of the impact of non-tariff barriers to trade. It is fitting that in announcing the deal Johnson claimed that it meant there would be “no non-tariff barriers” since this showed that even at this late stage he is still either lying or does not understand what he has done.

Whilst the impact of the deal will vary according to sector, in one respect the impact is the same for all of them. For there is not a single case in which any firm or sector is going to find it easier to trade with the EU than it presently does and, again, that was baked in to the deal since May’s 2017 decisions. So whilst businesses would have been even worse off without a deal, they are to a lesser extent worse off as a result of the deal – with all that implies for investment, jobs, taxes, and public services. At the very most it provides some damage limitation, as the automotive trade body has stated. Again, this is something that the Brexiters never told the public, and for the most part still don’t admit.

The services sector is the biggest loser (though again with sub-sectoral variation) because the centre piece of the deal is tariff-free trade and services, of course, don’t attract tariffs. That matters not so much because of the oft-quoted fact that 80% of the UK economy is services (it’s true, but many of those firms don’t trade internationally), but because services have hitherto generated a trade surplus with the EU (£18 billion in 2019). So whilst the deal is particularly good for – yes – German car makers, French cheese makers and so on exporting their goods to the UK, it is a calamity for British services exporters to the EU. And, separately to the deal itself, the financial services sector awaits an EU ruling on regulatory equivalence (the UK also awaits a ruling on data protection adequacy). There is a good argument that the UK economy is in need of a rebalancing away from services, and financial services in particular, but doing so by taking a hacksaw to them, whilst applying a hammer to manufacturing, is another item on the charge sheet of the damage Brexiters have done.

Beyond trade

The deal is not just a trade deal, of course. It is also about numerous forms of cooperation, including security. Here the picture is similar in that whilst a considerable degree of cooperation will continue, there is nothing that will be improved by the Brexit deal and, in many respects, including real-time sharing of some EU databases, things will get worse. As former National Security Adviser Peter Ricketts puts it, “it’s going to absorb more time and effort in making the system work rather than going out and catching criminals”.

So things will limp along, with various fixes but a lot more sand in the administrative machinery so that, just as will be the case in the economic sphere, the damage may not be dramatically noticeable but consist of operations being that bit slower, or that bit more expensive. In the same way, whilst the coming weeks may see considerable disruption at borders because of new customs procedures it is just as likely that some trade may become too expensive to bother with. As a consequence, some firms may go out of business, or employ fewer staff than they would have done. Some items may be harder to find in the shops, or their prices will go up.

Certainly the end of freedom of movement is set to cause problems in several sectors, with social care being a prominent example and the fashion industry (£) and music industry perhaps less obvious ones. And as has been widely trailed – but may still come as a shock to some when they are encountered – new restrictions and bureaucracy for individual travel are about to become the new reality.

Also separate from trade is the issue of continued UK participation in some EU programmes, including the Horizon Europe research funding scheme, where these are open to third countries and with the appropriate budget payment. This is good news because though clearly not a benefit of Brexit, being simply the replication of the status quo (and probably with less say), there was always a fear that the Brexit Ultras’ loathing of all things European would preclude even this degree of cooperation.

Even so, the UK will not continue in the Erasmus + student exchange programme and, apart from being dismal news in itself, this is of note for two reasons. First, because it seems to be a piece of culture warfare based on the idea that the scheme indoctrinates young people with pro-EU attitudes and/or is a ‘middle-class perk’ and not ‘the people’s priority’. And second because it has already led to Ireland’s government saying it will support Northern Irish students on the scheme, and demands from Scotland for inclusion. Taken together, these two things indicate that, even now, the UK government has no interest in trying to repair the divisiveness of Brexit, and seems almost to be the willing handmaiden of the disintegration of the United Kingdom.

A defining, but not concluding, moment

The deal obviously marks a decisive moment within the Brexit process. It defines, for now, what Brexit means. But it is a moment, not an end point, and what Brexit means will continue to change. That is partly simply because having been cobbled together in such a rushed process there are numerous loose ends still to be agreed, some of them non-trivial, and no doubt many unforeseen issues which will arise.

The latter isn’t helped by the ludicrously compressed timescale for ratification. It is deeply ironic given that the heart of the case for Brexit was to restore the primacy of the UK parliament, that the deal is being rushed through so quickly that few if any MPs will have understood its full implications. And although Johnson will regard them having now done so as a triumph, Brigid Fowler, the highly respected Senior Researcher at the Hansard Society, who is not known for intemperate language, has described the proceedings as a “farce” and a “constitutional failure”, whilst political historian Professor Robert Saunders called it an “absolute travesty of parliamentary democracy” and a “charade”. It may very well be that the economic damage of Brexit will in the long run be dwarfed by the battering that parliamentary and constitutional norms have taken over the last few years, with this vote being its culmination.

For both parliamentary and wider political reasons it is hugely significant that the Brexit Ultras have for the most part accepted the deal. Nigel Farage endorsed it before it had even been published, which considering the extent to which he, UKIP and the Brexit Party drove the entire saga undoubtedly represents a big coup for Johnson. The ERG, after having convened its clown car ‘star chamber’ to read the text, pronounced that it satisfied their cartoonish understanding of ‘sovereignty’ (Northern Ireland seems no longer to figure in their thinking).

Neither of these endorsements may last for very long. Farage flip-flopped in his support for Johnson’s WA, and much of the ERG which voted for it later repudiated it (partly on the grounds that there had been insufficient time to scrutinize its terms). The same may happen with this deal. Even so, apart from some complaints about the agreement on fisheries, the betrayal narrative has, even if only temporarily, gone almost silent. That is noteworthy and, I admit, has surprised me.

Never-ending Brexit

So what is now in prospect is an entirely new phase of Brexit. Whilst I don’t think it is helpful to dissect the deal in terms of EU or UK wins and losses, one clear victory for the EU was to create a single, over-arching agreement rather than, as the UK government had wanted, a series of separate agreements. With that has come an immensely complex governance architecture, consisting of a Partnership Council along with a myriad of over thirty sub-groups. There are also a whole series of mechanisms for reviews, including a five-yearly review of the whole deal.

Taken together, this means that there will be the ongoing possibility of the relationship becoming closer or more distant over time, and even of the entire deal being scrapped and ‘no deal’ returning. This is not surprising – I’ve remarked many times on this blog that a deal would not be the end of Brexit, but the beginning of a new kind of process – but the extent and complexity of the institutional framework within which this is going to occur perhaps is surprising.

Numerous commentators have already remarked on the implication that the deal is “a five year political truce” (David Allen Green) and that “negotiations over something or other will continue for years to come” (Sam Lowe, Centre for European Reform) so that “we are going to see the same dynamic in future that we have witnessed over the last four years: constant talking and bickering” (Ian Dunt) with the deal “just the end of the beginning” (Tom Hayes, Brussels European Employee Relations Group). (Each of the commentaries linked to is well worth reading in full.)

In consequence, as the former Brexit Party MEP Alexandra Phillips recognizes (£), the deal “could turn out to be a springboard towards greater divergence or an umbilical cord leading us back to Brussels”. This situation has considerable economic significance – most obviously because it does not create a very promising environment for foreign investment – but an even greater political one. It creates a new context in which both pro- and anti-EU actors can work.

It’s not hard to see that the ERG and others will be agitating for greater divergence and perhaps, eventually, for an end to the entire deal. One obvious fight they may push for is over the linkage of the security parts of the deal to the UK’s continuing membership of the European Convention of Human Rights, which some of them long to derogate from. It is of note that this aspect of the deal is (apart from fisheries) the only one which is already being described as a ‘betrayal’ in the Brexit press.

But a future Labour, or even Conservative, government might well seek to make the deal closer or deeper. Indeed the Best for Britain campaign has already identified ten ways in which this should be done. Erstwhile remainers as well as business groups will certainly have the opportunity to lobby for such improvements, and Ian Dunt’s analysis is that the logic of economic and geographical proximity means they have a good chance of success. At the very least there is still much to play for, starting – as again I’ve argued in several recent posts – with the need to wrest from Brexiters control of the narrative of UK-EU relations so as to move it on from their monocular focus on Brexit and away from the invariable toxicity of their tone.

Brexiters have got their Brexit against what almost all opinion polls since the Referendum have shown the majority to want, and in a form which the majority never wanted. They own that, and we’ll see how it works out, but they do not own our future relationship with the EU.

This blog

All this will have major consequences for the future of the UK – including the future existence of the UK – and some for the EU. It also has the extremely minor consequence that I have decided to continue writing this blog, at least for as long as it continues to attract a substantial readership. As of the beginning of 2021 it will be re-named ‘Brexit & Beyond’ and will continue, normally on a Friday morning, to offer a weekly (or perhaps in due course less frequent) analysis of Brexit and its consequences. The first post will be on Friday 8 January.

Many thanks to all who have read and/or publicized the original blog since its launch in 2016. I do hope you will continue to do so in its new incarnation.

Happy New Year.

Sunday, 13 December 2020

Brexit debilitation

So yet another supposedly final deadline has come and gone, and the ludicrous ‘will they, won’t they’ theatre of the last few months continues. Ludicrous, but debilitating, too, in a host of ways.

Debilitating, certainly, for those desperately anxious to know just how much their lives and livelihoods are going to be damaged, with literally only days to go. Debilitating for those businesses and others who are expected to be prepared for changes as yet unknown or, where known, lacking in the necessary operational detail, as the head of the British Chambers of Commerce has outlined. Debilitating, too, for the reputation of the UK - already so battered by Brexit - with bellicose talk of deploying the Royal Navy to police ‘no deal’ fishing rights and the ramping up of jingoism and xenophobia in this weekend’s newspaper headlines.

If this is all supposed to be part of a ‘tough’ negotiating strategy, it is one which makes for deeply irresponsible government and which is having deeply destabilizing effects. Huge sectors of the economy don’t know what they are facing, and business leaders are reported to be in despair. We’re in the extraordinary situation of planning for a military airlift of vaccines to the UK (and, equally extraordinary, of not knowing whether there will be adequate supplies of general medicines). Already supermarkets and others are stockpiling goods, with consequent massive lorry queues. Nor should the uncertainty about non-economic issues, such as those of security co-operation, be forgotten.

Perhaps the greatest uncertainty is faced by the people of Northern Ireland. Whilst the Northern Ireland Protocol was designed as an insurance against every eventuality, including no deal, it has already come under strain. Last week, some agreements on how it would operate were reached and – whether as cause or consequence – the government agreed to remove the illegal clauses from the Internal Market Bill and other legislation. However, as a leading expert on this topic, Professor Katy Hayward of Queen’s University Belfast, explained this does not mean that Northern Ireland is ‘sorted’ and all the more so if there were to be no wider trade deal.

We don’t even know whether, if there is no deal, the UK will agree to the EU’s temporary mitigations which were announced last week. Under these, “basic” air and road connectivity will be assured for six months, subject to UK reciprocation, and there would be a one-year standstill on fisheries. If the UK didn’t agree, it would make the crisis of no deal even greater than it would otherwise be. So across the entirety of national life we are only a few working days from a completely unknown situation. Yet MPs asking questions about preparedness for no deal this week were berated by Paymaster-General Penny Mordaunt for not acting “in the interests of the country”. The very basics of democratic accountability, even of rational debate, are now deemed unpatriotic, debilitating our political culture.

The lies that bind us

As always, in the background are all the lies stretching back to 2016 about a quick and easy deal. But even without rehearsing those again it’s enough to recall how during the 2019 General Election Boris Johnson was pretending (though not quite saying) that he had already done the final Brexit deal. He covered himself verbally but the meaning of his continual slogans about ‘an oven ready deal’ that would ‘get Brexit done’ was designed to deceive and it did deceive. Now, of course, he and his apologists are pointing to the verbal tricks to deny that any such pretence occurred. We are no longer just in the territory of lies, but of lies about lies. Even now Johnson is incapable of telling the truth, with his smirking pretence that if there is no deal it will, in fact, be an ‘Australia-style’ deal.

And, as always, we are in this situation because a small but ruthlessly extremist group of politicians, journalists and ‘thinktankers’ have pushed to ever more extreme positions. The proposition just a few years ago that ‘it wouldn’t be so bad to be like Norway’ – a debatable but perfectly sane and practically deliverable proposition – has gradually morphed into one where, for the Brexit Ultras, any kind of deal with the EU would be a betrayal of a wholly absurd theocratic doctrine of sovereignty (£). It is the adherents to this doctrine to whom Johnson is in thrall if, indeed, he is not one of them himself.

It is a doctrine which makes no sense even in its own terms, because at the same time as it is deployed as an inviolable principle that may preclude any deal with the EU, it is necessarily compromised in the trade deals the government is agreeing with Japan or Canada, and in potentially embracing WTO terms for trade with the EU. On these grounds, simultaneously meaningless and hypocritical, the government is apparently still considering something which, from its own impact assessments, carries the dangers of creating “a systemic economic crisis” with food and medicine shortages, power cuts, and civil disorder.

Perhaps this won’t happen. Perhaps, as some rumours have it, a series of fudges and compromises are in the offing which will get some sort of a deal over the line – although, even if so, there would seem to barely be enough time to ratify such a deal in time for the end of the year. But why are we even in this situation of debilitating uncertainty?

Why are we in this situation?

It is important to be clear that the reasons the Brexiters are giving for why a deal has not been made and is proving so difficult to make are also lies. Their key claim is that the EU has made unreasonable and unprecedented demands upon the UK, many sprung on the UK at the last moment. Even taken at face value this is an odd claim. The Brexiters have spent decades saying that the EU is akin to Nazi Germany or the Soviet Union, totalitarian and dictatorial, and a ‘protectionist racket’. Yet they seem to have predicated Brexit on the starry-eyed belief that it would be cuddly and nice, and a pushover in the negotiations.

But, of course, the claim shouldn’t be taken at face value. In one way, it is true by definition that the terms of a Brexit deal would be unprecedented – never before has such an exit occurred – although the extent to which the EU is making unprecedented demands compared with those on other third countries is over-stated. The situation of the EU making a deal with a geographically close and economically completely intertwined third country is similarly unique. The UK idea, since Johnson came to power, of the negotiation being one of ‘sovereign equals’ with there being some set of rights of what is due to the UK as a third country is at best na├»ve and at worst disingenuous. Indeed, as the Spanish Foreign Minister acutely pointed out today, trade negotiations are a vehicle for managing interdependence between sovereign nations; using them simply to assert independence is to doom them to failure.

Equally disingenuous is the idea that the UK is only asking for the same as Canada (it has been asking for more, not improperly but it is dishonest to say otherwise). Indeed repeated claims from Brexiters that their plan was for a ‘Canada +’ or even ‘Canada +++’ or ‘Super-Canada’ deal give the lie to this idea. And also disingenuous is the idea that the long-standing EU offer of a ‘Canada-style’ deal meant ‘exactly the same as CETA’, as opposed to ‘in the category of free trade agreements’ (rather than single market membership). Let’s knock on the head once and for all the myth that Michel Barnier (with his staircase) and Donald Tusk promised a cut-and-paste of CETA. They didn’t – they said that UK red lines left a free trade agreement, of the type but not of the same content as CETA, which would be definitionally worse that single market membership. Moreover, at the time, Brexiters greeted this not as a promise but as a ‘threat’ of punishment

As regards the issues that have proved to be the main barriers to doing a deal, the unique circumstances of Brexit were always going to make disentangling fishing arrangements complex, even leaving aside anything else, just as they had been prior to EEC membership. That the EU would seek Level Playing Field commitments as a condition of a free trade deal was made clear as early as April 2017, and was in the Political Declaration that Johnson signed – and promptly dismissed as irrelevant. And there was always going to need to be a governance mechanism – if the EU has become more insistent in recent weeks that this be tightly specified that is because the UK has already shown it is willing to break both what had been signed up to legally in the Withdrawal Agreement and informally in the Political Declaration, thus destroying all trust.

It’s also worth noting something about these three sticking points. A key and utterly flawed claim of the Brexiters has been that a trade deal would be easy because the UK was starting from a point of total convergence with the EU, and it is agreeing convergence which makes making free trade deals so difficult and slow. This was the basis of, for example, Liam Fox’s now notorious claim that it should be “one of the easiest deals in history’. It was always nonsense (as pointed out in my post of July 2017) because the aim of this trade deal, uniquely, is divergence, and so it was the management of divergence which was bound to be problematic. And so it has proved – for all three of the potentially deal-breaking issues are about the terms of divergence.

Beneath all of this is a more basic issue. Questions of whether or not the EU is being ‘reasonable’ in its demands are entirely beside the point. Trade negotiations aren’t ‘nice’. They involve the parties pursuing what they see as their self-interest. The ‘what they see as’ bit is crucial – Brexiters have long sought to define for the EU what its self-interest ‘should be’, with their claim about the significance of the UK trade deficit being central. They were wrong, as they were told they would be. It doesn’t even matter if the EU has miscalculated (though there are good arguments against that being so) because the brutal reality is that this is its calculation.

And not only were the Brexiters wrong about the EU’s interests, so too are they wrong about the UK’s. For, as we are seeing, they have led us to paying a terrible price – exactly how high will depend on whether there is a deal - for the purely imaginary benefit of sovereignty. And, despite what is now claimed, that benefit was never presented simply as a matter of principle to be achieved at any cost, but as something which would also bring economic benefits, with the £350 million a week for the NHS being the headline example. They were wrong about that, too.

In short, we haven’t ended up in the present mess by accident. It has happened because when they were not lying the Brexiters were simply ignorant. They either fooled themselves or were fooling others. Every single step of the way, every single claim they have made has been discredited. And, of course, there is much more in the way of consequences of that still to come.

So what now?

In the immediate term, it’s impossible to know what will happen. The swirl of rumours, counter-rumours, predictions, counter-predictions, and rune-reading that has characterised the last few months is intensifying and will continue to do so. All of the rumours can be made to equally well fit a narrative of Johnson proclaiming a last-minute triumph, despite EU perfidy, as they can one of a last-minute failure, because of EU perfidy.

The stories after the Johnson-von der Leyen dinner last week seemed to point firmly to there being no deal (£). Today’s joint statement is being widely interpreted to suggest a deal is now more likely, perhaps the more so because it was a joint statement. Almost everyone thought that this weekend there would be a definitive announcement. There wasn’t. Perhaps it will come in the next few days, or perhaps things really will drag on until the very end of the month – it may be telling that today’s statement did not mention any new deadline. Perhaps even at this late moment some kind of fudged deal-but-not-a-deal will be created with implementation periods that mimic an extended transition. Perhaps there will be a very short no deal interim.

It’s easy to make out a convincing case for why both deal and no deal are likely because it is the same old issue as there’s been from the outset: the rationality of reducing the economic damage points in one direction, the rationality of reducing the political damage of offending the Brexit Ultras points in the other. The only thing that can be said with certainty is that nothing can be said with certainty (apart from this), and those who do so should be taken with a pinch of salt.

In the meantime, it serves little analytical purpose, as well as being psychologically debilitating, to try to follow each twist and turn at the moment. It may very well be that, as before his decision to campaign for Brexit, Johnson is even now drawing up two announcements, one for deal and one for no deal. There’s not much any of us can do except, perhaps, to refuse to play out bit parts in this theatre of horror. Better to simply switch off for a while and focus on Christmas.

 

I am going to try to take my own advice, so this will (probably!) be the last post until after Christmas.

Wednesday, 9 December 2020

The problems with the 'if only ...' debate

There are several important developments in progress this week, and I’ll write about them in my next post (depending on how events pan out, that may come hours or even a day or two later than the normal early Friday morning posting that regular readers will be used to).

So as not to make that an inordinately long post, I want in the meantime to discuss aspects of the interesting and sometimes heated debates which have occurred this week about whether, had MPs and others acted differently, especially during the 2017-19 parliament, we would not now be facing the outcomes we are. In particular, could there have been a softer Brexit than is in prospect, especially had remainers and/or soft Brexiters made different choices?

Such debates have been emerging since at least last summer, when I wrote a post anticipating that there would be intensifying ‘blame games’ as we got towards the end of the transition period. Most of what is in that post still applies to the current debates, including the points about whether MPs should have backed May’s deal, which I won’t repeat here.

This week’s discussion – even when not explicitly referring to them (£) - was prompted largely by two articles, one by Professor Anand Menon and Jill Rutter of the UK in a Changing Europe thinktank, the other by the Guardian journalist Owen Jones. Despite what I am about to write, I should say that both Menon and Rutter have, throughout the Brexit saga, done a huge amount of fantastic and valuable work (often referred to on this blog) and performed a huge public service in communicating the complexities of the process.

Even so, I think both pieces, and similar retrospective analyses, are deeply flawed not simply in the details of their execution but in their very conception, for three reasons: hindsight, circularity, and the counterfactual problem. A fourth problem is that, to the extent such analyses focus on the parliamentary votes of 2019, they tend to de-contextualise these votes from the wider process of which they were a part.

Hindsight and circularity

The first point is that in the 2017-2019 period almost all outcomes were potentially available (even if some were more likely than others) ranging from the hardest one of no Withdrawal Agreement (WA) at all, as some Ultras wanted, through to that of another referendum. Therefore, at the time, it made sense for each grouping to pursue its preferred outcome (albeit that, even at the time, there were debates and criticisms about the wisdom of them doing so). By definition, almost all of them would fail but it is only with hindsight that we know which of them that would be, and it’s only that which allows the judgment that, had they acted differently, they could have enabled an outcome closer to what they wanted.

As regards May's deal, in particular, she explicitly argued that the only alternatives were no deal or no Brexit. That very formulation, designed to scare both wings of opposition to it, inadvertently gave each an incentive to continue to oppose it. Each wing saw the possibility that their preference would prevail if they opposed May's deal, whilst both knew their preference would not prevail if they supported it.

The second, and related, problem is that what that hindsight reveals is only a circular truth, or truism: if only there had been a majority for a particular course of action then … a particular course of action would have commanded a majority. True but trivial, as mathematicians would say. The fact at the time, in that context, was that there was no such majority. MPs faced the choices available at that time not, for example, a run-off between May’s deal and Johnson’s deal.

Counterfactual history

Third, particularly as regards the way MPs voted, even if we envisage them having done so differently, there is no clear line from that to what the outcome would have been without inventing a counterfactual history. For example, had the indicative votes yielded a majority for ‘Common Market 2.0’, it doesn’t follow that that would have been the outcome since some government (May’s? Really? National Government? Really?) would have had to have delivered it, including all the multiple subsequent votes on legislation, within a hung parliament. Or, if they had voted for another referendum, it doesn’t follow that the outcome would have been remain, and if it hadn’t been there’s no way of knowing what the final form of Brexit under a second leave vote would have been.

Even if they had voted for May’s deal, recalling that she had promised to stand down if the third meaningful vote succeeded, it would still have been implemented by a different Prime Minister who, if presumed to be ‘harder’ than May, would have had scope to act very similarly to the way Johnson has. And that Prime Minister would still have been in charge of negotiating any future terms deal.

It’s true s/he’d have been constrained by Level Playing Field commitments being in May’s WA – but that might have pushed a hard Brexit PM towards no trade deal, making that outcome more likely even than it is – and also by the backstop. But given that even as it is many Ultras want to rip up the WA, it’s perfectly possible that the impetus to do that to a WA that included the backstop would have been even stronger and succeeded. After all, although he’s now backtracked, Johnson has proposed to renege on parts of it.

That’s not to say that any of these things would have happened, just that there is no way of knowing and, therefore, no basis to claim that different votes in 2017-2019 would have yielded a softer (or harder, or similar) outcome than whatever is about to happen.

So whilst it is quite true to say that what has, in fact, happened was not inevitable and could have been different, it’s a sterile exercise to say that things would have been different had people acted differently: that’s true by definition, but it doesn’t take us anywhere in terms of explaining why they didn’t or in terms of predicting what would have happened had they done so.

De-contextualisation

The fourth difficulty with this debate is that whilst there was no inevitability in what happened, the argument that the 2017-2019 parliament, and especially the numerous 2019 votes, could have created a consensus for a softer (or any) form of Brexit is to de-contextualise them. There’s obviously far more to be said about this than is possible here. But the key point is that those events and votes did not arise out of nowhere, and what had led up to them meant that even had some course of action commanded a majority of MPs’ votes that would not have constituted a ‘consensus’ in any wider political or civic sense.

For the reality is that there had never been any process through which such a consensus could have been sought, let alone reached. It certainly wouldn’t have appeared by magic had MPs voted for May’s deal or any of the indicative vote options. Such a consensus might have been reached – unlikely, I admit, but possible – if in the immediate aftermath of the referendum result Theresa May had constructed a consultative process not just across political parties but taking in businesses, unions, civil society bodies, the devolved assemblies, and perhaps using mechanisms such as citizens’ assemblies.

Of course, it would have been even more sensible to have done so before the referendum, but even afterwards it would have had value and would certainly have been legitimate. The Vote Leave campaign had insisted that it would be for the government to develop the concrete details of what Brexit would mean. That being so, it was for the government to decide on the process for doing so. Indeed, in the ‘Brexit means Brexit’ period there was a heated debate going on about what Brexit meant but it had no official status or formal parameters. Instead – reportedly without even any discussion in cabinet – May announced what Brexit would mean in her Lancaster House speech of January 2017 and the White Paper that immediately followed.

That doesn’t mean that the Lancaster House speech necessarily made hard Brexit inevitable – delivering on it was a different matter, especially after she’d failed to win the election – but that it removed the possibility of finding a middle ground. After it, it was never going to be possible (or, actually, reasonable) to expect hard Brexiters to subsequently accept that, no, after all, Brexit was going to mean soft Brexit. Similarly, it was only after all attempts by some remainers and soft Brexiters to soften Brexit that the Peoples’ Vote campaign was created, in April 2018. If there ever had been any possibility of a consensus or middle-ground it had disappeared by the time of the 2019 votes, not just because of the government’s decisions but the toxicity of the wider culture wars. And since the process never occurred, we'll never know what, if anything, that consensus would have consisted of (i.e. on this, too, we shouldn't fall into the trap of counterfactual analysis).

A different perspective

There is, however, another way of looking at all this: it’s instructive that the present debate should be about who is to blame for what is happening. We do not see any jostling for the crown of who should take the credit for it (though I suppose that Johnson will crow about his ‘world-beating’ deal, if he makes one, and probably even if he doesn’t). If Brexit were the great prize it was supposed to have been, we might expect a queue of such claimants. Instead, as the title of the Menon/Rutter article puts it, what is in prospect is “a Brexit that pleases almost no one”. And that, arguably, was inevitable by 2017 – and would certainly have applied had May’s deal been passed.

Remainers, by definition, were not going to be happy. But Brexiters, or at least the most committed of them, were never going to be either. For the reasons I’ve written about many times on this blog, any actual Brexit could never live up to their imagination of it, and for some delivering Brexit is their worst nightmare for it deprived them of their victimhood. That has been evident all along in Farage’s reactions (and his many followers) in which literally any attempt to implement Brexit has been immediately denounced as betrayal. The same applies to at least some of the ERG Tories. Adding these two groups together means that any Brexit would make the majority of people unhappy.

That is the ultimate tragedy of Brexit. However the events of the 2017-19 parliament are interpreted, and however they might have happened differently, by that time that, at least, was already baked in.

Friday, 4 December 2020

When the transition ends

It’s now less than a month, and less than 20 working days, until a massive change in the way that the UK trades with and relates to its own continent, and in many ways to the rest of the world as well. It is truly remarkable how little public discussion of that there has been, and what there has been has almost entirely focused on the ongoing ‘deal or no deal’ question largely ignoring just how much will change in either scenario, and what either scenario will cost (£). On that question, another week is ending with no answer and yet more speculation that all will be revealed within the next few hours or days. I’ve nothing to add to that speculation beyond what is in the last few posts on this blog.

As for relative lack of discussion of what the end of the transition will mean, the Covid crisis has obviously been a big reason for that, but there’s more to it than that. Some people actually believed that the UK left the EU immediately after the referendum. Many more will not have understood that when the UK did leave, at the end of last January, the transition period masked most of the practical effects of doing so. Johnson’s mendacious ‘oven ready deal’ and ‘get Brexit done’ slogans in the 2019 General Election contributed to that. And no doubt others have simply got used to so many changing deadlines and postponements and so are ignoring this one.

Everything will change, but still stay the same

But there is a more fundamental issue than any of these, which is the way that from the outset Brexiters claimed, and many millions presumably believed, that whilst leaving the EU was a fundamental and vital change, in some paradoxical way most things would pretty much stay the same. That was partly to do with decrying claims to the contrary as ‘Project Fear’, but it was also to do with making positive claims about how things would continue as before.

The most egregious of these lies have been mentioned many times on this blog and elsewhere. One was the Vote Leave promise that, come what may, the UK would remain in a European “free trade zone” (sic). Another was Boris Johnson’s airy promise that the Irish border would be completely unaffected by Brexit. A third was that the situation of EU citizens in the UK would be unchanged.

There are many other more minor examples. One, which has come to prominence this week, was about the impact on British owners of holiday homes in the EU. The Daily Mail ran a story on this under the headline “Furious British expats blast restrictive new EU travel rules” and there was a similar piece in the Telegraph.

Some may dismiss such concerns as those of the entitled middle classes, although the assumption that freedom of movement was irrelevant to working class people is stereotypical and outdated. Despite the prolier than thou protestations of the populists, there are plenty of ordinary people who have saved up for, say, a holiday flat in Spain, just as there are plenty who live and work in the EU. The British people who benefitted from freedom of movement were not all privileged members of the elite, lounging around in French chateaux like, say, Lord Lawson.

But that is a side-issue to the present point, which is that of course the complaints are nonsense. These are not ‘new EU rules’, they are the rules that apply to all countries outside the EU (and the single market). Their application to Britons is a consequence of Brexit. And whilst those voters who did not understand that can be criticized for their lack of attention, the real criticism should be reserved for those Brexit campaigners, such as Michael Gove, who explicitly promised that there were ‘international laws’ which meant that there would be no such consequence.

The idea that ‘everything changes yet ‘nothing will really change’ is an ingrained one, with the issue of freedom of movement of people showing some of the many forms it takes. Ending such freedom was foregrounded in the campaign and was undoubtedly the central factor for many leave voters (albeit not to the extent that remain voters believe). But the most galling and most common thing which almost all EU nationals in the UK will have experienced since is to be told by such voters ‘oh but we didn’t mean you’, as if individuals were not affected or, if they were, they shouldn’t ‘take it personally’.

Equally perversely, when the discussion is of UK nationals losing their freedom of movement rights in the EU, it’s common to hear Brexiters say ‘but British people worked and had houses in Europe long before we joined the EU’. The implication is that freedom of movement must be ended and yet … freedom of movement will be unaffected. Of course it is quite true that British people did such things, and will continue to do so, but with far greater restrictions and inconvenience.

Years of false promises

Nor is it just a matter of what was promised before the Referendum. Ever since, the Brexiters made repeated promises that there would be ‘frictionless trade’ and insisted that ‘we won’t be putting up borders, so if they go up it will be down to the EU’. Those who warned that this wasn’t true were pilloried, and the then head of the HMRC received death threats for explaining the costs of new border arrangements. So whilst some mocked the fish exporter quoted in an FT report this week (£) for regretting voting to leave because he “never looked at the implications for the paperwork”, it would be far better to recall the false promises made to him over all these years. Even now, The Sun is still pretending that, if there is a deal, it will mean frictionless trade.

In a similar way, in 2017 the then Brexit Secretary David Davis claimed that despite Brexit the UK could go on hosting the European Medicines Agency* and the European Banking Authority. It was patently untrue, and both have now left, to Amsterdam and Paris respectively. That may not have had much resonance with the general public, but for those directly affected it matters and, certainly, it damages the UK’s international role in those fields.

Along with pretending that nothing would change, and making false claims such as Davis’s, Brexiters have refused to engage in any realistic analysis of the costs of Brexit, either denying they exist or saying they are irrelevant. Thus they have continually resisted the publication of impact assessments of Brexit, and rubbished those which have been published. It is deeply ironic that, now, some of the same people are calling vociferously for the publication of such assessments of Covid restrictions.

Moreover, collectively, the British polity and media have persistently failed to take the opportunities to engage in a serious, public discussion of the practicalities of Brexit. That was not just the case during the Referendum campaign but also during the post-referendum but pre-Article 50 period, the 2017 and 2019  General Elections, and the Tory leadership contests.

How will people react when things do change?

The consequence of all these years of lies, avoidance, misinformation and misunderstanding is that the true implications of Brexit are going to come as a shock to many people. How that happens and with what effects is going to be a crucial political issue in the coming months and years. Of course much will depend on whether or not there is a deal, but either way how the public reaction plays out is difficult to predict. The political scientist Professor Rob Ford of Manchester University this week wrote an interesting Twitter thread suggesting that “strong Remain partisans” would be wrong to assume that it will lead to a widespread turn against Brexit. This attracted some adverse comment but I think he makes important points. So what is likely to happen?

Firstly, as has long been obvious and has long occurred, all the adverse effects will be ascribed by the Brexiters and the government to EU ‘punishment’. Brexit would have been fine, they will say, had the EU been ‘reasonable’. They will also argue (despite their earlier claims justifying Brexit by saying that leaving would be easy because the EU is so dependent on Britain) that the fact that it is not easy is what justifies Brexit, by showing the EU up for the bully it is. And they will also say that, anyway, the problems arise because Brexit was not ‘done properly’ because of ‘Theresa the remainer’ and the ‘remain establishment’. All that script is already written, and many will believe it.

Another script that has already been written is to ascribe Brexit effects to some other cause. In the past that took the form of, for example, arguing that the impact on the car industry was actually due to the collapse of the diesel market. Now there will be an easier line, which will blame Covid and, indeed, it will often be difficult to separate Brexit and Covid effects. That won’t work for some things, especially truck queues at ports and shortages, which will be fairly obviously due to Brexit. But they may be less dramatic or less long-lasting than expected. Other things, like rising unemployment, will be more easily decoupled from Brexit. It speaks volumes that for all their promises, the question for the Brexiters now is whether or not the biggest economic contraction for 300 years will be enough to disguise the consequences of their policy. Sunny uplands indeed.

Beyond that, there are questions about how visible the various effects will be and the extent to which they are seen as inter-related. On visibility, despite some misleading claims, the projected impacts on GDP are not of absolute falls but of reductions in growth that would otherwise have occurred. That matters in terms of prosperity and public services, but – as with the lost GDP growth that Brexit has already caused – not having what you would otherwise have had is very different to having something you already had taken away from you.

The economic effects of Brexit may well continue to be a slow burn, or slow puncture, rather than a conflagration or a blow-out. That fate already seems to be unfolding for the City of London, centre of one of Britain’s most important services industries, according to a Bloomberg report this week. The same is even more likely to be true of the waning geo-political standing and influence of the UK – Brexit will be less like a ‘Suez’ moment and more like Britain’s gradual post-war decline.

On stitching the Brexit effects together, the issue is that these will be felt by different groups of people and at different times. Tom Hayes of Brussels European Employee Relations Group has been writing for a while about the idea of the ‘Brexit of small things’ – that is, the way that people will come to encounter inconveniences in everyday things they used to take for granted. Good examples include ‘green cards’ for British motorists in the EU (£), or the impact on dual nationality families (that is not a ‘small thing’ for them, but affects a relatively small number of people) which, like the holiday homes issue, received some media attention this week.

Never-ending Brexit

As people feel such effects they will realise that, indeed, Brexit has real consequences and literally none of them make life easier. But, precisely because they are ‘small things’ (or affect few people), experienced gradually as they arise, there may be no ‘moment of realization’. Additionally, as a very interesting article by Sam Lowe of the Centre for European Reform explained this week, much will depend on how rigorously the rules that Brexit imposes on British people and businesses are enforced. There will, he points out, be much “accidental illegality” because of confusion and lack of preparation time. If all these are penalized from day one, the overt impact of Brexit will be more obvious.

The idea that penalties for rule breaches might only gradually be introduced is part of a wider issue, as discussed this week by Joe Marshall of the Institute for Government. For whilst the end of the transition will certainly be a major watershed, he points out that many changes will be phased in over time (including UK checks on EU imports) with, depending on what deal if any gets done, different implementation periods for different aspects. Moreover, deal or no deal, there will be on-going negotiations with the EU about all manner of aspects of their relationship, very much in the way that Switzerland and the EU are in semi-permanent talks. That’s inevitable if only because of the economic and geographical facts of the UK-EU relation.

This will serve to dilute some of the impact of the end of transition, but it will also mean that the consequences of Brexit will never be very far from the headlines for years to come and perhaps forever. It’s worth thinking about this and, more generally, about the bigger and more long-term picture. For even if the Brexiters manage to disavow blame for the immediate disruptions of ending transition, they may not be able to escape responsibility for what they have done.

The failure the Brexiters made of their success

Crucially, despite their trumpeting of Brexit as ‘the will of the people’, the reality is that it has never been a truly popular cause. Before the referendum EU membership was barely an issue for most people. Since, opinion polls have rarely shown majority support for it and that has now clearly disappeared. Stripped of ‘don’t knows’, the latest poll shows some 57% now think Britain was wrong to leave the EU and only 43% think it was right (these figures become 50% and 38% respectively if don’t knows are included). Since June 2018 there has only been one time (March 2020) when more thought it right to leave than wrong.

All this is before many of the concrete impacts have been felt. Having squeaked a victory in the Referendum, Brexiters have made no attempt to build any consensus for Brexit in general or for the way it is being done. In this, they have not only treated remainers with contempt but also leavers, for deal or no deal Brexit will not be anything like what they were promised.

Of course Brexiters would say that all that matters is the 2016 vote and in one, extremely important, sense that is obviously true. But in the longer run things are more complex than that. To undertake so major a change without widespread and deep popular support, and not just failing to build such support but actively promoting division, is profoundly dangerous. Where that danger leads is unpredictable, though is unlikely to rebound on the Brexiters in some moment of public shaming and with justice meted out. Still, it’s already clear that few will celebrate Brexit and, as time goes on, those who most assiduously promoted its cause may find their reputations most tarnished by its consequences.

In the meantime, rejoiners could learn some lessons from how what are now called Brexiters conducted themselves since 1975 and, especially, since the 1992 Maastricht debates. It will require a monomania and a ruthlessness of purpose. The very first challenge will be to be supportive, rather than disdainful, of those individual leave voters who come to regret their vote. Some rejoiners will find that an impossible challenge but, if so, it reveals elevating personal feeling above the rejoin cause and in that sense a lack of ‘monomonia and ruthlessness of purpose’.

What Brexiters could learn from remainers

To put all this another way, it is a very legitimate criticism of pro-EU British politicians and commentators that they did virtually nothing to promote and build consensus for it in the decades of UK membership. Even in the periods when it could most easily have been done, they, at most, presented membership in instrumental and transactional terms, and by the time of the Referendum the case for remain had no deep roots and it was far too late to develop them. By the same token, Brexiters now face the challenge of embedding Brexit.

Whatever else changes at the end of transition, the purchase of already shop-soiled slogans such as ‘taking back control’ and enacting ‘the will of the people’ will disappear. It will no longer be enough to be ‘against’ EU membership, for that will be a thing of the past. Nor will it be possible for them for long to blame the EU for all Britain’s ills. It will be necessary for Brexiters to show how being out of the EU translates into some positive and popular vision of post-Brexit Britain. If they fail to do so, they, too, may one day find themselves having to argue a case in the few short weeks of a referendum campaign that they had never bothered to make in the years before.

I suppose that that might sound like an optimistic scenario for rejoiners, but the kicker is that, even if it comes to pass, many will be dead by then and the United Kingdom, as such, will probably have ceased to exist.

 

*Whilst on the subject of the EMA, a ludicrous claim was made this week that the UK had been able to approve the first Covid vaccine virus for use because it has left the EU. It was demonstrable nonsense, of course. It would be easier to respect the Brexiters if they did not lie so incontinently.

Friday, 27 November 2020

Zeno's Brexit

The Ancient Greek philosopher Zeno articulated a series of paradoxes, one of the most famous being the ‘dichotomy’ or ‘race course’ paradox. In order to reach a destination, a runner must first reach the half-way point, but to reach that point must first get a quarter of the way there, and to do that must get an eighth of the way there, and so on. Since this generates an infinite sequence that never quite adds up to the full distance, it is impossible for the runner ever to reach the destination point.

Brexit has often felt like being stuck on such a never-ending journey, and never more so than over the last two months. Recall that the last of the scheduled rounds of the transition period talks finished at the beginning of October. Then Boris Johnson set 15 October as the absolute deadline, after which he would walk away, which he sort-of did but actually didn’t once Michel Barnier had placated him by using the ‘right words’ about the negotiations. Then it was reported that 19 November was regarded by the EU as the absolute deadline, but here we still are.

Endless rumours

Throughout, there have been leaks of progress and of the opposite, and speculations at the end of each week that ‘early next week’ will see the breakthrough of a deal, or the abandonment of the search for a deal. This week has been no different.

Early in the week it was rumoured that the EU was about to ‘cave in’ to British demands but by Thursday there were reports that the EU might pull out of the talks today (Friday). There were reports that Michel Barnier had called an ‘urgent’ meeting of fisheries ministers for Friday, with speculations this might betoken an imminent deal … or an imminent collapse of talks … but within hours it became clear that that it was not urgent, and probably betokens nothing. At the time of writing, it has just been reported that contrary to previous reports Barnier will be coming to London after all and there will be talks over the weekend. Some reports suggest a deal may be done – yes – early next week. Others are now talking of the EU summit of 10 and 11 December as being the crucial date.

So we remain in the hall of smoke and mirrors. We do know, so familiar have they become, that the stumbling blocks are level playing field, fisheries, and governance. One possibility that has been touted (£) as regards one or both of the former two is to use review clauses so as to, in effect, create interim agreements allowing a deal to be done in time (although even so it will take very nimble footwork in both the UK and the EU to ratify such a deal).

This is both a plausible and a depressing prospect. Plausible because it offers both sides a way of ‘kicking the can’ down the road in the way that has often characterized the Brexit process. Depressing because it would mean that, come 1 January, the answer to the question ‘is there a deal or not?’ would be a less than resounding ‘yes and no’. Actually, this will be the answer anyway because there will be a myriad of things left in the air even if there is a deal. These include financial services regulation (of which more below) and carbon trading. Still, it would be particularly anticlimactic if the very areas so long held up as preventing a deal were to be left hanging ambiguously.

Lack of trust

Even if this, or something like it, is what happens it seems (to me) that the issue of governance cannot be fudged in this way. An imprecise or 'gentleman’s' agreement to settle fine details later, on the basis of trust, might once have been possible. But it is no longer so because of the manner in which the UK has conducted itself.

It’s actually possible to identify a very precise moment when trust was broken: it was Sunday 10 December 2017 when the then Brexit Secretary David Davis said on the Andrew Marr show that the phase 1 agreement of the Article 50 talks was merely “a statement of intent” and not binding. It was this which led the EU to put that agreement into legal text (which Theresa May then rejected as unacceptable because of the Northern Ireland-only backstop, but to which Johnson later signed up).

Davis’s 'gaffe' was pivotal in undermining trust and was compounded by several other episodes including the way that Boris Johnson treated the Political Declaration in a similarly cavalier way. Both cases showed that in the absence of a legally binding text, Brexit Britain could not be trusted to keep to its agreements. Even worse, and the final nail in the coffin of trust in the UK, was the Internal Market Bill (IMB) with its clauses which even reneged on what had been the legally binding treaty.

It is such considerations, but especially the IMB, which surely lay behind Ursula von der Leyen saying this week that “'we want to know what remedies are available in case one side will deviate in the future, because trust is good but law is better. And crucially in the light of recent experience a strong governance system is essential to ensure what has been agreed is actually done”. It should be said that whilst many of the costs of Brexit are inherent to it, this squandering of goodwill and of international reputation by the UK is one of the costs that have arisen not because of Brexit itself but from the incompetent, antagonistic and dishonest way in which it has been executed.

Nowhere near ready

On the subject of incompetence, it is becoming ever clearer just how woefully unprepared the UK is for the end of the transition, even with a deal. Northern Ireland businesses, in particular, face “a very, very difficult time” in January. In England, a trial run of France’s new border procedures this week saw massive lorry queues build up in Kent. This was not, as leading customs expert Dr Anna Jerzewska explained, because the French operation wasn’t working correctly. It was because it was working correctly but the UK systems are not yet operational.

The scale of these problems was indicated in a leaked letter from the Road Haulage Association, describing the process of working with the government on border issues as “a complete shambles”, whilst many of the detailed practical complexities are explained by international freight forwarder John Shirley on the UCL European Institute website. None of this is news to those experts who work in this area, nor to those who have listened to them over the last few years (hence readers of this far from expert blog would have been well aware of it). But their concerns were dismissed as Project Fear and swept aside by unkeepable promises of ‘frictionless trade’.  

It is almost beyond belief, though also entirely predictable, that Michael Gove is blaming the now inevitable disruption on the EU for its ‘rules are rules’ approach to border controls. Nothing more clearly illustrates the moral and intellectual bankruptcy of Brexit than for one of its leading architects to eschew responsibility for the inevitable adverse consequences of what he advocated.

Whilst much attention is being (belatedly) given to the mechanics of goods trade, it shouldn’t be forgotten that built in to the government’s preference for hard Brexit are other consequences, including the still unresolved issue of data protection adequacy. This is hugely significant for both trade and for security cooperation, but does not form part of the negotiations being instead reliant on a decision by the European Commission. So no one yet knows what the situation will be on 1 January and probably will not know for a while afterwards.

Then there is the inevitability of a major worsening of market access for services trade of all sorts. That goes well beyond financial services, of course, but these – whatever their public unpopularity – are a major part of the UK economy and they generate significant employment and tax revenues. How they will be regulated is also not part of the future terms negotiations. It has long been known that they will lose ‘passporting’ rights and the remaining best hope is an ‘equivalence regime’. But as Vicki Pryce, former Joint Head of the Government Economic Service, has explained we know for a fact that this will not be in place for January. Within this general picture, there are also particular issues emerging for European derivatives trading in London (£), a market where many trillions of assets are traded under the regulation of the European Securities and Markets Authority.

Follow the money? (A short detour into political theory, which some may want to skip)

The chilling effect of Brexit on financial services leads to some interesting questions. I am regularly told (sometimes in rather lofty tones, as if such a thought had never occurred to me) that my discussions of Brexit would be improved if only I were to ‘follow the money’ which, apparently, explains all. What this usually implies is some version of the argument outlined by George Monbiot this week that Brexit is the creature of one kind of capitalism – which he calls “warlord capitalism” – that has captured the Tory Party and is at war with another kind of capitalism which he calls “housetrained” and is horrified by Brexit. That’s an important observation, and as he says relates to the extraordinary shift in the modern Conservative Party away from its traditional business base, including the City, which has in turn had a big impact on how Brexit has developed.

But an observation is all it is – it doesn’t explain why it is the ‘warlord’ money rather than the ‘housetrained’ money which is being followed by the Tory Party (or anyone else). Following the money is sometimes a good dictum, but it doesn’t take you very far when it points in quite contradictory directions. To understand why the Tory Party has taken the path it has would require a detailed study of its recent history and its funding, taking in why it incubated such extreme Euroscepticism (as it was then called) long before its funding base shifted, and considering the role of its mainly elderly and nationalist membership.

Beyond that, this type of analysis rests, at least implicitly, on a version of Marxist theory whereby the (economic) base is primary and to a greater or lesser extent determining of the (cultural) superstructure. Culture then becomes little more than the dancing puppet of economic paymasters and their interests. When it comes to political explanation, that almost inevitably leads proponents of such analysis to some form of ‘false consciousness’ argument in order to explain why so many people support and vote for things which are against their economic interests.

And, indeed, this is precisely where Monbiot ends up, when he writes that he sees “Nigel Farage and similar blowhards as little more than smoke bombs, creating a camouflage of xenophobia and culture wars. The persistent trick of modern politics – and it seems to fool us repeatedly – is to disguise economic and political interests as cultural movements” (my emphases added).

The limitations of such an analysis have long been identified. In particular, it’s instructive to recall how in the 1980s writers on the left, especially the sociologist Professor Stuart Hall, started to explain that Thatcher kept winning elections because contrary to the assumption of economic primacy, in Hall's words, “material interests … are not escalators which automatically deliver people to their appointed destinations, ‘in place’, within the political ideological spectrum”. It’s an important insight that remains true.

Coming to Brexit specifically, viewing leave voters as the unwitting dupes of ‘warlord capitalism’ and funded by Robert Mercer doesn’t take us anywhere. For whilst (some) remainers may believe that to be so, it has a precise mirror-image in the repeated claim made by (some) leavers that remainers are the mouthpieces of the ‘global elite’ and funded by George Soros. Of course remain voters no more accept that to be true of themselves than leave voters accept the mirror-image accusation aimed at them. Neither claim has any analytical value, or explains anything. Rather, they are tactics to discredit or demonize opponents.

Ultimately, the injunction to follow the money is not just reductive but is also a circular and unfalsifiable argument. For just as some now say that the fact of Brexit is explained by capitalist manipulation of leave voters so too, had remain won, some would have said that that was explained by the capitalist manipulation of remain voters. All you have to do, they’d say then as they do now, is to ‘follow the money’. In fact, it would very likely be the same people saying it, since Monbiot virtually does so when pointing to how the remain campaign was funded by the likes of Morgan Stanley and Goldman Sachs. Trying to explain Brexit by ‘following the money’ takes you into an analytical cul-de-sac.

So whilst the debate about the relationship between economics and culture is a perennial one, and discussing it is well beyond the scope of this blog, in general I think of them as inextricably bound threads, not base and superstructure. I prefer both/and explanations to either/or explanations, prefer contingency to determinism, and see as much cock-up as conspiracy.

In any case, what this blog does cover is the weekly goings on and how they fit into the wider Brexit process. It would be absurd to think that each twist and turn ‘is exactly what the hedge funds wanted all along’ but if one did hold so reductive a view it would be as tedious to keep writing it as it would to keep reading it.

Back to the same old stuff

Coming back now to the main line of discussion, namely preparedness for the end of the transition, overall, a government report leaked this week identifies “notable risks” of “systemic economic crisis” potentially leading to public unrest in the new year due to a combination of Brexit, Covid and other factors (flu, flooding). Again it is fair to say that such a scenario was not inherent in Brexit but arises from the way it has been done. In particular, it was blindingly obvious in June that Covid meant that ending the Transition Period in the middle of the following winter was utterly reckless. That it was not extended can be blamed primarily upon the influence of a relatively small group of Tory MPs – and the larger but still small section of the population who share their views - whose obsessional hatred of the EU has made them immune to all reason. That an entire country should have its fate decided by such people is both a tragedy and an indictment of the political system.

Even now they are proposing as tests for the acceptability of any deal that may be done criteria which, as Professor Anand Menon of King’s College London points out, are effectively impossible for a deal to meet and which have already been failed by the Withdrawal Agreement which has been signed. And even now, as Brendan Donnelly, Director of Federal Trust, writes it is the “specific dysfunctions of the Conservative Party” which will frame whether Johnson agrees to a deal or not. It is already reported (£) that the ERG will oppose a deal if it doesn’t respect their peculiar view of ‘sovereignty’.

Donnelly also mentions that Labour’s stance on backing any deal will also play a part. What that part will be is unclear, not least because the nature of any parliamentary vote that may be held is unclear. There will be no straightforward ‘meaningful vote’ to accept or reject a deal, and there are various different, including some quite complex, mechanisms the government could use for ratification. Depending which is chosen, parliament would have various more or less effective ways of delaying, and possibly even derailing, ratification, posing different choices and options for those wishing to do so.

It is clear that Labour are split on how to approach this (whatever ‘this’ turns out to be), and although the rumours suggest that Keir Starmer will want his MPs to support a deal whatever it contains others are arguing for abstention. I’ve been critical of Labour’s stance on Brexit for years, and of Starmer’s near silence on it since becoming leader, but I can see that this is a genuinely difficult dilemma. The reason for that is that whilst no deal would be worse than a deal – not least for Labour voters – they are both bad outcomes to different degrees. The Tories may have put themselves in the position of having to pick from them, but why should Labour allow itself to be complicit? Yet to the extent that supporting, opposing or abstaining might all affect the outcome (assuming a sizeable Tory revolt) then that complicity is unavoidable.

There will also be significant parliamentary issues in the event of no deal. Of course there would be no vote on that, but there would be votes on the Internal Market Bill and, with the possibility of a substantial Tory revolt on that, it is questionable whether the UK would have a functioning internal market of its own, at the very moment it left the single market of the EU. This would be a profound crisis in its own right.

Back to Zeno

All this remains up in the air, with – really, this is astonishing - barely more than a month to go. For now we continue on the journey that apparently never ends. But Zeno’s paradox may not be an apt reference after all because, as well as suggesting that the race course can never be completed (the ‘progressive’ version of this paradox), it equally means that it can never be started (the ‘regressive’ version of the paradox). And, alas, we know that it did start, over four years ago.

So perhaps we need to look instead to Classical mythology to describe our situation, maybe to Sisyphus endlessly rolling his rock up the hill or, as seems more appropriate to the painfulness of it all, poor old Prometheus having his liver pecked out by an eagle day after day.

Prometheus of course was being punished for having stolen fire from the gods and given it to humans, and Sisyphus was an all-round bad egg (murdering, cheating and generally getting above himself).

It is not clear what crime we have committed to have to endure the endless torture of Brexit.