Friday 30 October 2020

Beyond folly

The last ten days were supposed to be my break from Brexit hence, as trailed two weeks ago, there was no post on this blog last Friday. But escaping did not prove easy, gloomily conscious as I was of taking my first trip to the EU since Britain ceased to be a member and my last before the transition period ends. Even if that had not been in my mind, in motorway service stations and elsewhere was the unavoidable message of the government’s increasingly panicky campaign: “time is running out”. Brexit is not mentioned of course, for we are not supposed to recall that what were to have been the ‘sunny uplands’ turn out to be a quagmire of paperwork, cost, and inconvenience.

A further reminder, as I drove through Kent, was the sight of huge construction works for one of the lorry parks that will be needed post-transition. Then, taking the Dover to Dunkirk ferry laden with lorries from Portugal to Lithuania to Bulgaria, just a few of the 2.1 million that Dover’s port handles each year, it was hard not to wonder who thinks that what this huge, complex artery of international trade really needs is to have a whole lot of new disruptions. And, over in Dunkirk, the new sanitary and phytosanitary lanes were a visible indication of just what leaving the EU and the single market means in, literally, concrete terms (it is notable that the new facilities and systems needed for Brexit in EU ports have been in place for months whereas, for all the talk of taking back control, the UK is still developing them).

Petulant children and the role of the man-baby

None of this, as everyone should know by now, will be avoided by an EU-UK trade deal, although it will be worsened without a deal. On that issue, the outcome remains opaque. The talks have resumed after the UK’s sort-of-but-not-really walk out, a resumption enabled by Michel Barnier ‘conceding’ to British demands to use the ‘right’ words (intensification, compromise needed on both sides, British sovereignty respected).

In the Ladybird book of international negotiations that seems to be Boris Johnson and David Frost’s go-to text this perhaps counts as a victory and I doubt they have any inkling that to outsiders it resembles an adult placating a petulant child. As Tony Connelly of RTE reports – within a detailed explanation of how the talks faltered and resumed - an EU diplomat described the conversations that preceded the resumption as the UK being “in the therapeutic phase”.

Connelly and others also report that one reason the outcome remains unknowable is Johnson’s almost pathological aversion to making the necessary choices, with their inevitable costs. One widely discussed suggestion is that he will await the outcome of the US Presidential election before deciding which way to jump. In brief, if Trump were to win then Johnson would be more likely to opt for no deal with the EU, in the expectation that a trade deal with the US is more likely than it would be under Biden (for a wider discussion of what the US election means for the UK see Patrick Wintour’s excellent in-depth analysis, and for what it means for the prospects of a trade deal see my recent article in Byline Times).

It is a plausible enough theory of Johnson’s decision-making process if only because it is so inane. Economically, of course, no US trade deal could come close to compensating for the damage of there being no deal with the EU (government estimates being +0.16% GDP over 15 years for the former and -7.6% GDP over 15 years for the latter). And if Johnson hasn’t yet learned that Trump is a blowhard who, for all his talk, is not going to do Brexit Britain any special favours, then he simply hasn’t been paying attention. Not that that would be a radical departure from character.

Yet there is a political, or perhaps just a superstitious, rationale for this theory. Trump’s demise, if it comes, will be as symbolically important for Brexit as Brexit was for his election in 2016. It will mark the rout of the figurehead of nationalist populism and, as Rafael Behr observed some time ago, would scupper Johnson’s “bumbling English Trump tribute act” and the “tantrum diplomacy” that goes with it (of which the UK’s recent outburst over continuing the talks is a good example). Indeed the parasitical relationship of the Brexiters to Trump was made plain this week by Nigel Farage’s cringingly sycophantic endorsement of his idol, in which he underscored that a defeat for the Washington man-baby would be a defeat for nationalists globally.

So on this account a Biden win most likely heralds a trade deal with the EU (unless, something underpriced in UK discussions which are almost invariably parochial, such a win hardens EU demands upon the UK or at least reduces willingness to accede to those made by the UK). If so, for all that it will by definition make Britain poorer than the present trading relationship, it will be spun as a great victory by Johnson.

Turning Japanese

A tiny foretaste of just how dishonest that spin will be came this week in the government’s triumphant announcement that, as a result of the trade deal it has just signed with Japan, soy sauce will be cheaper from 1 January as it will attract a zero tariff. It turned out to be a lie of a strange and complex sort in that soy sauce currently has no tariff charged anyway because of the EU-Japan trade deal which the UK is leaving, so the deal with Japan doesn’t make it cheaper it just stops it getting more expensive by virtue of trading on WTO terms. Anyway, much of it doesn’t come from Japan but from the EU, with which the government says trading on WTO terms is fine. And, anyway, you’d have to use an awful lot of soy sauce to benefit by more than a few pence. These and other nonsensical or misleading features of the announcement have been documented by Full Fact.

As for the Japan trade deal more generally, it should be filed under ‘not bad news’ rather than ‘good news’ in that, despite some features which do go beyond what the UK had via the EU-Japan deal, it mainly continues those provisions. So if it hadn’t happened it would be a further example of Brexit damage. That it is being trumpeted as evidence of the virtues of Brexit is indicative of the shameless disinformation and ludicrous boosterism of this government, which will go into overdrive if there were to be a deal with the EU. If and when that happens it will be worth recalling how Johnson’s Withdrawal Agreement was also greeted as a huge triumph by those who, only months later, denounced it as a disaster.

Meanwhile in the real world …

Moving from Brexiter PR back into the real world what we find are new reports of impending labour shortages once transition ends in fields ranging from agriculture to dentistry (£), of regulatory uncertainty in industries from aerospace (£) to chemicals (£), and of ongoing difficulties in the recruitment of trained customs staff (£). Many of these stories are, as they have been for years, under the public radar, appearing in the business pages of newspapers or in the specialist media of particular industries. There is more cut through when the Brexit effects on holidaymakers are reported, as with last weekend’s outrage at the “petty EU” for “threatening” British tourists with longer passport queues from next year.

It’s a story that encapsulates so much of the Brexiter mindset. That this was likely to be an effect of Brexit is not a new idea, but they dismissed it as more Project Fear. Then, when it threatens to become a reality, they treat it as a form of punishment as if whilst leaving the EU Britain ought to retain the rights it had as a member. As the years have gone on, this mindset seems to have become so ingrained that there is no way of reasoning with it: all the adverse effects of Brexit are either denied (they won’t happen, it’s just scaremongering), ignored (they aren’t happening), displaced (they are happening but it’s not because of Brexit) or disowned (they shouldn’t happen, it’s only because the EU are punishing us).

Between this barrage of misinformation and the general lack of profile in the news of Brexit effects, it’s perhaps unsurprising that a YouGov poll this week found a very low level of public awareness of how things will change once the transition ends. It should also be noted that even where respondents believe they are clear about what will happen it doesn’t mean that they are. On one specific issue which will affect individuals travelling to the EU – the need to pay for electronic authorization to travel – just 9% knew that from 2022 this will be a requirement, whilst another 14% knew it would be required, but wrongly thought it would begin in 2021 (it doesn’t because the system isn’t ready yet).

The interesting and important question will be how people react as the post-transition effects become obvious and, crucially, who they blame. Another YouGov poll this week suggests that 57% of people would blame the government if the transition ends with no deal. But what of those adverse effects that will arise even if there is a deal? Clearly the Brexiter press will push the EU punishment narrative, but this may have much less traction than in the past, if only because public perceptions of governmental competence have been damaged by the handling of the Covid-19 crisis. That of course is now the backdrop to everything and whilst it does not diminish the significance of Brexit it does inflect it in new ways.

The blindingly obvious is undiscussable

As I return from France, it, like Germany, is going back into lockdown (and I am beginning a two-week quarantine). The clocks have changed, the weather is awful, much of the UK is subject to stringent restrictions and everyone can see that even greater ones are in prospect. Over 45,000 of our fellow citizens have died because of the virus – in March, it was hoped that 20,000 would be the maximum – and infections continue to rise.  We are heading for a long, hard winter and with some two-thirds of businesses at risk of insolvency along with millions of jobs  we face a potentially cataclysmic situation that will damage the livelihoods of all but the most comfortably cushioned.

Few of us have experienced anything like this and much that is familiar is being ripped up by force majeure. But, still, Britain pushes on with the one, supposedly inviolable, immutable policy of Brexit. A policy of such folly that the government no longer dares mention it by name and which even its most enthusiastic proponents have ceased to try to justify in any serious way. The Brexit Emperor lacks not just clothes but skin and flesh.

Yet even now – hugely difficult as it would be – it wouldn’t be totally impossible given the extraordinary circumstances for the UK to at least try to find some route to extending the transition, which ends in only two months’ time, rather than to just parrot that “time is running out”. It seems feasible that if the UK was open to such an idea the EU would be at least willing to explore how to make it work, if only because of the worsening Covid-19 situation in many of its member states.

There are plenty of people who can see just how ludicrous this is, but it isn’t in any serious sense within the realms of what is even politically discussable - and way beyond what Johnson’s woefully incompetent and incontinently dishonest leadership is able to deliver. And whilst the mechanics would be hugely complicated the proposition is not: in the face of so overwhelming a public health crisis, and with so much undecided even about the implementation of the Withdrawal Agreement (especially as regards Northern Ireland), there is just not enough time to agree and to move to a new relationship which by any standards is important for both parties. So - let’s just take some more time.

In any other context, political or personal, it would be so blindingly obvious as to not need saying. That it is near to unsayable and certainly won’t happen is down solely to the warthog stubbornness of a small group of fanatical Brexiters still fighting the battle to leave that they have already won, and totally indifferent to its costs.

So we blunder on, prisoners of a series of past decisions that we do not have the wit or the will to revisit, and of a small but powerful group of ideologues we are either too cowardly or too weak to face down.

It is worse than folly. It is insanity.

Friday 16 October 2020

In for the long haul

A month ago Boris Johnson set a deadline of 15 October for a trade deal with the EU to be done. That date has passed, no deal has as yet been done, but Johnson has not walked away from the negotiations. Perhaps he never intended to and it was just more empty bluster, as in July and September. Perhaps, as some pundits have been reporting, he will do so today when he is due to respond to the European Council meeting. Or perhaps he would like to, but is constrained by the resurgent Covid-19 crisis. Sometimes in politics manufacturing a new crisis can distract attention from an existing one, but it can also simply magnify the sense of a government losing control.

It is clear that the EU will not walk out of the talks and that whilst they continue, fisheries, state aid and the governance of any agreement remain the familiar, widely-reported, stumbling blocks. Of these, the third, governance, has grown in salience because the Internal Market Bill (IMB) has so badly damaged the EU’s trust in the UK (£). But the truth is that this lack of trust has been growing over years, as I catalogued in a post last May, accelerating with Johnson’s cavalier repudiation of much of the Political Declaration.

Lack of trust is now central

The IMB was just the last straw, and - even if the relevant clauses get abandoned, as they still may - its attempt at hardball tactics has badly misfired. For, especially given the new Covid-19 situation, Johnson might want to play the same trick as he did in January and sign up to some kind of deal which he could then try to backtrack on later. If so, the IMB has made that a great deal harder. He has played his tricks so many times that there is no longer any goodwill. Trust and goodwill can sound like airy-fairy concepts in the cold-eyed world of trade negotiations and international relations but they are indispensable, especially in such a complex and unprecedented negotiation as this one.

The fault is not Johnson’s alone. Apart from the back story going back to 2016, trust in the UK is also much damaged by the spectacle of Iain Duncan Smith, and other Brexiters (£), now repeatedly calling for the Withdrawal Agreement to be repudiated. At the same time, there are increasing concerns about the government’s commitment to the rule of law, not just because of the IMB but also the recent attacks from the Home Office on the legal profession, attacks repeated by Johnson in his party conference speech. The backdrop of the illegal prorogation of parliament and the grab of executive power in relation to both Brexit and the COVID-19 pandemic, especially through the extensive use of Statutory Instruments, contributes to these concerns. As David Allen Green, the Financial Times’ Law and Policy commentator, discusses, there is now a question as to whether Britain is moving towards “government by decree”.

Also rumbling away in the background is the long-standing hostility of many parts of the Tory Party – strongly overlapping with those that are the most pro-Brexit – to the Human Rights Act and, even, to the European Convention on Human Rights (ECHR). Indeed it is worth recalling that before the Referendum, Theresa May, whilst campaigning to remain in the EU, proposed that Britain leave the ECHR. Perhaps of more relevance at the present time is Dominic Cummings’ assertion that after Brexit “we’ll be coming for the ECHR”.

No doubt this would find considerable support amongst many leave voters. Throughout the Referendum campaign in conversations and on social media when leavers were asked to give examples of EU laws they disliked these were almost invariably judgments of the European Court of Human Rights (usually garbled versions of these, but that is another matter). Although this is only based on my own experience, I’m pretty sure it was the case more generally. It perhaps doesn’t need to be said here, but the ECHR and its Court are not EU institutions, and Brexit does not affect Britain’s participation in them.

At all events, the Tory 2019 election manifesto promised a review of the Human Rights Act, which translates the ECHR into UK law. This has itself been an issue within the future terms negotiations as it impacts on the EU’s willingness to share security and law enforcement data. Recent reports suggest that the UK has now agreed “not to materially alter” the spirit of the Human Rights Act in order to achieve agreement on such data sharing. Nevertheless, the very fact that Britain’s wholehearted commitment to the ECHR is in question is significant.

A problematic neighbour

So viewed from an EU perspective Britain now looks like a very problematic neighbour. In summary, its government has spoken quite openly of a willingness to flout international law. Influential politicians advocate reneging completely on an international treaty. Its commitment to the domestic rule of law is fraying and that to the ECHR is under debate.

It may well be that much of the noise in these areas comes from some rather cranky and even extreme individuals and thinktanks. But anyone observing British politics over the last few years will have seen how, again and again, ideas which have started there have become mainstream within a short period of time. For example, when in January 2019 Jacob-Rees-Mogg was urging Theresa May to prorogue parliament it was a very niche view. Eight months later, under Johnson and with Rees-Mogg’s connivance, it was attempted and the court ruling of its illegality remains much resented by Brexiters.

Indeed, more generally, one might see the entirety of Brexit as a story of a fringe idea colonising mainstream politics, and thereafter a progressively harder and more extreme version of Brexit become mainstream. So one way of thinking about the situation now is that, having seen Britain signally fail to confine the Brexit Ultras to the margins, and having seen every accommodation made to them by the British polity met with a still harder demand, the EU is now seeking to build a ‘firewall’, in the form of strict governance procedures, between itself and the country the Ultras have captured.

For who knows just how rogue the UK is going to go in the next few years? For that matter, what kind of state will it be if, as seems increasingly likely, Scotland departs and, as is by no means impossible, Northern Ireland also? Even if those things don’t happen – but especially if they do, leaving a mainly English rump – what is the EU to make of a country which, despite having achieved Brexit, still configures its relationship with the EU in wholly antagonistic terms? That may change with the passage of time and political generations, but it’s equally likely to become entrenched and even more bellicose.

The import of all this for the current negotiations is that even if from a British perspective the issue is (perhaps) to get some sort of deal over the line by the start of January so as to at least minimise disruption, from an EU perspective things look different. Not only would the disruption be less for the EU and it is better prepared for it but, more to the point, whatever gets agreed now will have long-term consequences.

Having been repeatedly stung by British perfidy – especially over the Withdrawal Agreement/ Political Declaration - there is a strong incentive to nail down the governance terms of any agreement, and if that is not possible to accept that there will be no deal this year. As Clement Beaune, the French European Affairs Minister said this week, “it’s a matter of how the UK is a partner of trust in the years to come”.

Britain unprepared

If such strategic considerations inform the EU’s approach to these final phases of the negotiations, in the UK it is short-term factors which mainly predominate. I’ve been writing since at least October 2018 about the lack of preparedness of businesses (and other organizations) for Brexit, and in several recent posts about how government information for businesses has come too late and been lacking in key operational detail. Throughout that time there has been a drumbeat of implicit criticism from the government of businesses for being unprepared (and – paradoxically – a veritable orchestra attacking business bodies for their warnings of how much will change).

In recent days, these criticisms have mounted. First, the Business Secretary, Alok Sharma, issued a panicky sounding “urgent message” to businesses to get ready for the end of transition. The next day Cabinet Office minister Lord Agnew accused them of “burying their heads in the sand”, attracting widespread condemnation (£). I’m conscious that I keep repeating that I am repeating myself but as I wrote a few weeks ago these criticisms of business are outrageous given the years of dishonest promises of continued ‘frictionless trade’, the lateness of government planning for the effects of Brexit, and the dismissal of the warnings about both.

Even now, although it is true that some of what is to come will occur with or without a deal, businesses that will face tariffs if there isn’t a deal are left in limbo since, in at least some cases, this is not something they can prepare for as it will simply sound their death knell regardless of any actions they take in advance. Nor are tariffs the only issue. It has long been explained to Brexiters that a ‘Canada-style’ Free Trade Agreement – actually, any Free Trade Agreement – will do relatively little for services trade and, certainly, will offer far less integration than single market membership. But for years they either ignored it, or pretended that a ‘Super-Canada’ deal would be done that would magically avoid this problem. 

The reason why trade agreements do little for services is because, even more than for goods trade, liberalisation requires removing non-tariff barriers. This in turn entails some loss of national regulatory control or, in Brexiter terms, sovereignty. An example of the kind of issue at stake is the mutual recognition of professional qualifications in, for example, law and accountancy, and in fact, despite its recent rhetoric of asking for no more than what Canada has, the UK has been seeking such recognition in the negotiations with the EU.

This seems to have been unsuccessful (though that cannot yet be said definitively) and if so that is unsurprising as it is a version of ‘cakeism’ – that is, wanting to have a benefit of single market membership without being a member. The consequence, as a House of Lords sub-committee reported this week (£), will be very considerable potential damage to the UK’s £225 billion professional services industry. As with sectors like pharmaceuticals, auto, aerospace, chemicals and also some that get less attention (e.g. music, computer gaming, fintech) the UK is ripping up some of its biggest economic success stories – areas where, to use the government’s favourite phrase, Britain is ‘world-beating’ – in the name of the Brexit theology of sovereignty.

Holding all the cards?

Also unsuccessful has been the “UK plea” for special allowances on electric car and battery exports (this would have meant an exemption for this sector from rules of origin which, in general, we already know will be applied). This, remember, is a sector identified by Boris Johnson in 2019 as being one in which the UK plans to emerge as a future world leader. And in the balance are arrangements for air travel at the end of the Transition Period if there is no deal. As things stand, it is not known what will be in place but, in the event of no deal, the Transport Secretary says “we expect the EU to bring forward contingency measures” so that flights can continue. Hardly reassuring for those wanting to plan travel for a time which is now less than eighty days away.

It’s worth noting the tone in both these stories. Whereas the Brexiters promised that Britain would ‘hold all the cards’ once it voted to leave the EU it is now a matter of ‘pleading’ with the EU for special treatment and being entirely dependent upon the EU to keep something as basic as air travel to the continent. That’s not the result of EU ‘bullying’ but the fact, as the air travel case illustrates literally, that if a country disconnects itself from an interconnected world then inevitably it becomes the supplicant when seeking to reconnect itself. Sovereignty doesn’t put planes in the air.

But there is small comfort in the spectacle of all the Brexiter claims being discredited. Between the ravages that Covid-19 is inflicting on businesses and those self-inflicted by Brexit it is becoming increasingly difficult to see what kind of economy Britain is going to be left with this time next year. And that self-inflicted wound isn’t just a result of Brexit, but of the way Brexit has been done and even just of the bone-headed refusal, in the midst of a pandemic, to extend the Transition Period, which would at least have cushioned or delayed much of the damage.

Time is running out but negotiations will never end

Having refused to do so when it was both possible and obviously going to be needed has now exposed the UK to a dire set of risks, for the end of year deadline is one that Johnson cannot now conveniently drop. It is ironic that David Frost is reportedly complaining that (£) the EU is “using the old playbook” of “running down the clock” when it was the UK that ensured that the clock stopped on 31 January. That of course was predicated on the theory that ‘the EU always blinks at the last minute’, a theory now being tested to destruction, with the most recent EU Council statement having a decidedly ‘take it or leave it’ tone.

This exposes the obvious difficulty with the government’s approach which is that it entails the UK being willing to ‘walk away’ without a deal. But apart from all the damage that would do, disproportionately to the UK, the story about contingency measures for air travel in the event of no deal shows the hollowness of the idea. For immediately after having done so Johnson would have to return to the table to agree these and other measures. So if later today, or any other time, he were to announce the end of future terms talks then almost the next day they would resume in a new form.

In several recent posts I’ve argued that it is pointless trying to predict whether or not there will be a deal, and I must confess to becoming increasingly irritated by the numerous pundits trying to do so. But, in addition to that, the wider implication of what I’ve written today is that if there is no deal – and, in a less dramatic way, even if there is a deal – that won’t be a ‘settled’ relationship, and so won’t be the end of ‘Brexit negotiations’. It will be the beginning of more negotiations.

So, depressing as it is to say it, the current ‘deal or no deal’ episode isn’t even the prelude to a resolution. For, given the irreducible fact that the EU is a major economic bloc sitting geographically right next door, there will be never-ending negotiations of one sort or another. Indeed it must be conceded that one, at least, of the Brexiters’ slogans has been proved true. Unsurprisingly so, since it was the truism that ‘we’re leaving the EU but we’re not leaving Europe’.


For the first time this year I will be taking a break from blogging next week. It may turn out to be a big week for Brexit news, which would be unfortunate. I hope to post again on Friday 30 October or shortly thereafter. Many thanks to all who read and help to publicise the Blog, which has this week hit the milestone of 4.5 million visits since its launch just over four years ago. I know that there are many other places people can go for Brexit news and analysis, so it is much appreciated and never taken for granted that you come to this site. Maybe this is also a moment to say that I’m sorry I don’t acknowledge every (mainly) kind comment made on Twitter – on ‘blog days’, especially, my notifications tend to go wild. But I do appreciate every one of them. CG

Friday 9 October 2020

An air of unreality

This will be the shortest post on this blog for some time, since little of note has happened in the last week. The Brexit negotiations continue, albeit in an unofficial and little-reported way and that is not because we have entered the much-vaunted ‘tunnel’ of leak-proof final talks. That may be imminent, as David Frost and Michel Barnier meet in London later today, but unless something has changed behind the scenes it’s difficult to imagine quite what they will say to each other. Last Saturday Boris Johnson and Ursula von der Leyen had a telephone meeting that some thought might produce a breakthrough, but it only led to a call on the negotiators to intensify their efforts.

Yet those efforts have hardly been lacking in their pains, and the reality is that whilst the negotiators have been given incompatible mandates by their political leaders there’s not much more progress to be made. The telephone conversation did not apparently see any change in the political directions being given. In some ways, even at this very late stage, it seems as if no progress has been made since before the Referendum itself. For Johnson is still blathering on about how the key to it all is the UK’s trade deficit with the EU as if he were still touring the country on the bus of lies.

Speculation is pointless

Despite some gloomy-sounding noises from the EU, occasional (though not, it seems to me, concerted) bullish-sounding bellows from the UK, and some optimistic voices in the media (£), I continue to think that there is no way of telling whether a deal will be done, or much point in speculating about it. That will remain the case even if ‘the tunnel’ is entered, because although that would indicate a deal is the more likely outcome it would not make it certain and it would not tell us what kind of deal was being made and with what compromises or by whom.

The reason speculation is so difficult is because, firstly, it’s impossible to know what tactics may lie behind the public statements and media briefings, especially when every optimistic report such as that linked to above is followed a few hours later by a pessimistic one, and vice versa. And secondly (or maybe it is just a version of the same thing), the game theory approach that the UK appears to be following means that we would expect exactly what is happening now whether or not the intention is to strike a deal, so there is nothing sensible to conclude from current events about what that intention is – even assuming Johnson and his shambolic government know what they are intending.

Possibly he still believes that the EU is about to ‘blink’. The signs suggest otherwise, and the relative strengths of the two ‘sides’ mean that there will either be a UK ‘blink’ or no deal. Some reports this week (£) suggest that the former is in prospect, with the UK shifting on state aid and governance issues. Such a blink might be accompanied by some face-saving compromise, with many commentators seeing fisheries as where that might lie, although Tony Connolly, the invariably well-informed Europe Editor of RTE, reports a hardening of the EU’s position on this issue.

Some speculation

My own thought, for what very little it is worth, is that Johnson (though maybe not those around him) thinks not so much that the EU will blink as that it will come up with a solution for him that will make all his problems go away. That isn’t such a strange suggestion because in some ways it has been the UK position all along: to present the EU with the British red lines and sit back. As Brendan Donnelly notes in his most recent Federal Trust blogpost, the EU was puzzled from the beginning by the fact that Britain “seemed incapable of formulating any coherent set of demands or aspirations for the negotiations”.

That was the background to a widely reported story in January 2018 about a private meeting in which Angela Merkel asked Theresa May what she wanted the UK’s relationship with the EU to be. May replied, “make me an offer” to which the German Chancellor pointed out that it was for the leaving country to say what it wanted. May reportedly just kept robotically repeating her “make me an offer” line.

A lot of water has flowed under the bridge since then, of course, but I don’t think it is fanciful to imagine Johnson’s conversation with von der Leyen as having had a similar character. It’s certainly easier to imagine than him engaging in a serious discussion about the nature of state aid regimes or the intricacies of the Northern Ireland Protocol, which he barely seems to understand. Brexit for him, even more than for most Brexiters, has never been about concrete practicalities, which he no doubt regards as the province of “girly swots”. This is consistent with reports this week (£) that Johnson is regarded by EU leaders as “detached” and “absent”. Perhaps, less politely, we could say that he is incompetent, irresponsible and out of his depth.

Be that as it may, if a deal does get done then the Brexit Party – and no doubt many Tory MPs – are gearing up to denounce it. This will be the final chance for Johnson to do what none of his predecessors as Tory leader have done and face down the Ultras. It’s not clear he has the political strength or courage to do so. But if he doesn’t make a deal with the EU then it’s doubtful he has the political strength and courage to cope with the fallout of that. He is approaching the moment at which all his political lies and personal flaws leave him with no place to hide. Tellingly, he barely mentioned Brexit at all in his party conference speech. In line with my speculations above, perhaps he’s just lost interest. Brexit simply isn’t fun anymore.

There’s been so much written about the negotiations and their prospects that, apart from not wanting to add much to it myself, I don’t see much point in chewing over it. The exception this week is a very interesting piece by Matt Ross on the Global Government Forum website. Based on interviews with two former DExEU Permanent Secretaries, it is notable for placing the current negotiating situation in the wider context of the entire Brexit process (something too often ignored, as there are so many patterns, paths and recurrences within it), but also for pointing out that, whatever the intentions of the various actors, there is considerable scope for an accidental no deal. I think, again for what little it is worth, that that is an underpriced scenario.

But the key point, as argued at length in my previous blog, remains that deal or no deal outcomes are just different degrees of bad news for Britain: far worse the EU membership, and far worse than what Brexiters promised. The theatre of the last-minute negotiations shouldn’t distract from that.

Drifting on

The current limbo may very well drift on beyond the October deadlines that both the UK and EU have given, into November or even December, thus compounding the destabilizing uncertainties for individuals and businesses. One piece of good news is that the House of Lords voted strongly for an amendment to the Immigration Bill so as to require the government to provide EU nationals with physical (not just digital) proof of settled status, though it remains to be seen if this will prevail. And good news at least for the big league management consultants, if not for taxpayers, as the extent to which Brexit has driven up what they earn from government contracts was revealed.

So the gloomy roster of Brexit damage continues to grow, and Yorkshire Bylines (whose coverage of Brexit has been excellent) have created a regularly updated list of Brexit-related job losses. This, with dark humour, they call the Digby Jones Index, named after the Brexiter Peer who inanely predicted that “not a single job” would be lost as a result of Brexit. Whilst a bit part player in the Brexit fiasco, Jones is one of the most pugnaciously unpleasant and stubbornly unteachable of the D-list cast so is a deserving target to be thus lampooned – but any amusement is small comfort for those whose jobs are being tossed on the bonfire of the Brexit vanities.

Somewhat beneath the radar, the most ominous development this week was an ECJ ruling that key parts of the UK’s data gathering regime violate EU law. This makes it considerably less likely that the EU will agree to approve the UK system as ‘adequate’ after the end of the Transition Period. This comes on top of a ruling in July about the legality of US data protection and transfer systems, with implications for other third countries such as the UK.

As with so much else about Brexit, this is a hideously complicated legal and technical subject, and it has huge implications for both security and trade, causing extra costs and delays for businesses and potential failures or delays in intelligence-sharing. A decision on adequacy is unlikely to be made until December. As so often, the Institute for Government has an excellent explainer of the issues (although note that it predates this week’s ruling).

Also less prominently reported than it deserved to be was the story that collaborations by UK businesses in the EU’s Horizon 2020 research program have almost halved since the Referendum, although academic collaborations have held up. The amounts of money involved aren’t huge – and actually what matters more is the loss of networks - but like so many of the Brexit stories that don’t make the national news bulletins, what is gradually being eroded are the long-term prospects of activities that are strategically vital to the UK. It’s that, rather than queues developing at Dover or other ports – of which, more news this week - which constitutes the biggest economic danger of Brexit.

Don’t make a fuss

There’s a strange air of unreality in the UK at the moment. Most of the media attention is on the national Covid-19 situation and the rest on Donald Trump. Brexit news is just a rumble in the background. Yet in a mere 12 weeks’ time there will be a fundamental transformation not just in how we relate to the EU but, in some significant ways, to the world as a whole. We still don’t even know the form of that transformation, but we do know that whatever form it takes will affect almost every aspect of daily life for the worse and that neither the government, nor businesses, nor individuals are fully – or in some cases even partially - prepared for it.

It continues to be reported (£) that a third of businesses believe that the Transition Period will be extended so unless that is based on dated survey data then there is an extraordinary complacency around, perhaps born mistakenly of the experience of the various Article 50 extensions. Perhaps also some businesses like many individuals just think all talk of damaging change is ‘Project Fear’, or simply that ‘things always work out somehow’. Or perhaps it’s just Brexit fatigue (allied with Covid worry) and nothing about it really registers any more.

It’s almost a caricature of Britishness, or maybe Englishness, in which we all sit around politely drinking tea and eating cucumber sandwiches and consider it a breach of good manners to mention that the drawing room ceiling has already fallen in and the rest of the house is burning.

Perhaps if a deal is done, no matter how meagre and damaging, the same spirit will persist and we will tell ourselves “mustn’t grumble, it could be worse, better not to make a fuss”. The public reaction to no deal is less likely to be so sanguine, though. It’s perhaps that disjuncture which, ultimately, will inform what Johnson decides is the path least likely to cause him problems and most likely to further his own self-interest. After all, it doesn’t seem unduly lacking in charity to suggest that this might be his sole consideration.

Friday 2 October 2020

The theatricals of 'deal or no deal' are a distraction

As this supposedly final week of Brexit trade talks ends, the ‘will they, won’t they?’ show continues to play out like an amateur production of an absurdist play or, perhaps more appositely, a Whitehall farce.

At all events, a theatrical metaphor is called for because what we are seeing is a manufactured drama. It is manufactured in the most obvious sense by the fact that the impending end of year time limit, and with that the timescales for agreement and ratification, are entirely down to the UK government’s choice not to seek an extension to the Transition Period. Even more important, the choreography of there being two opposing ‘sides’ going mano a mano until one of them blinks is almost entirely the creation of British Brexiters who have antagonistically constructed the EU as ‘opponents’ to be outwitted in some macho battle of wills.

None of this was necessary. The EU response from the outset has been one of sadness rather than antagonism, and its approach one of dry technical rationality rather than histrionics. It is the Brexiters who have both chosen and needed to make it otherwise, which can be traced right back to 2016 when, far from revelling in their victory, they displayed a sullen suspicion that quickly escalated to bellicosity at the slightest trigger, as with the absurd sabre-rattling over Gibraltar in April 2017. Now, like neighbours from hell with whom all reasonable discussion has been tried, the UK has goaded the EU into starting legal proceedings.

As for who the audience for all this is, that’s a matter of interpretation. Brexiters would claim that it is the EU – to show them that Britain is a ‘sovereign equal’ and will not be pushed around. But of course that is just another line from the play rather than a serious analysis of it. All the signs are that the EU, and the wider world, looks on with bewilderment at the peculiar and undignified conduct of a country formerly seen as rather sensible.

It may, as some think, be the government playing tough for the gallery of the Brexit Ultras as a prelude to letting them down. It may be for leave voters, via the headlines that the government can get in the pro-Brexit press. It may be for the electorate as a whole, softening them up for what is to come – deal or no deal – as being the product of EU intransigence which plucky Britain has fought tooth and nail. Or it may be aimed, again at the whole electorate, as a prelude to a ‘triumphant’ announcement of a ‘great deal’ having been struck at the last minute, much as Johnson did with the Withdrawal Agreement last year.

But even to engage in such speculations is to get sucked into the performance that is being put on, for they are really just another version of the ‘will they, won’t they?’ script. So too are the endless and contradictory predictions of pundits about what the outcome will be, including those who declare that a deal was ‘always inevitable’ and the equal number who declare with equal certainty that no deal was ‘the plan all along’ (whatever happens, half of these are guaranteed their moment of triumph).

Deal or no deal, this isn’t what was promised

What we should be focussing on is that we are approaching the point where all the possible outcomes are hideously etiolated versions of what was promised by Brexiters, let alone of what Britain enjoyed as an EU member. Any deal that is likely to be made, and no deal, and no deal followed (as it probably would be) by some piecemeal deals are all to varying degrees bad outcomes. I’ve argued before (and continue to believe) that a deal of any sort would be the best – or perhaps one should say least-worst – of these available outcomes, but that is all it is.

Thinking just of trade - although that is far from all that matters, as leading security experts pointed out this week (£) -  it is bound to be worse than EU membership. To leave the largest, most integrated, transnational market in the world and the one which is also geographically closest can’t help but be highly damaging, whatever terms on which the UK then trades with it. That’s a truism, but it is worth noting that whenever it is pointed out – as, most recently, by Ursula von der Leyen in January – it is greeted by hardcore Brexiters with paroxysms of fury. So, truism as it may be, it contradicts what some still see as an entitlement.

But what is in prospect isn’t just worse than what we had as members, it’s also far worse than the Brexiters assured us would be the case as a non-member. The words of the Vote Leave campaign documents, repeated with such authority by Michael Gove and others so many times in 2016, should never be forgotten: “there is a free trade zone from Iceland to Turkey to the Russian border and we will be part of it”.

Whether this meant single market membership, as it seemed to imply, and they later reneged on it, or whether they really believed that some other “zone” existed doesn’t matter. It is clear that whatever happens now it will not be this, and it has been for a long time. But, during that long time, they made other promises – of a ‘deep and special partnership’, of a Canada + or even Canada +++ or Super-Canada trade deal. Indeed during the 2019 Election campaign Boris Johnson promised “a super Canada-plus” deal by the end of 2020. All that has disappeared, since the only meaning such terms could have had would have entailed far more extensive integration than the UK is now willing to countenance.

None of this is ancient history. The referendum campaign itself was only four years ago, and voters are entitled to recall that what is happening now flows from, and claims mandate from, the vote. Nor do we have to go back that far, since the groundwork for Johnson’s “super Canada-plus” deal was laid with the Political Declaration (PD) that was part of the ‘oven ready deal’ he was elected on just last December. Yet he immediately repudiated the key elements of that Declaration that would have made a more extensive deal possible, and since then the UK has insisted that it wants no more than a Canada-style deal, with no ‘pluses’ or ‘supers’.

It’s true that even within this there is considerable disingenuity, for two reasons. On the one hand the UK is actually asking for more than ‘Canada’ (e.g. in terms of cabotage rights). On the other hand, the EU has always made it plain, and in the PD the UK accepted but now denies, that any form of trade deal would come with level playing field conditions. But the point holds that all talk of an ambitious deal going well beyond a standard free trade agreement has now been dropped.

One aspect of that is that whereas under the terms of Theresa May’s Withdrawal Agreement (WA) there was the possibility that the trade deal could have had generous terms on ‘rules of origin’, Johnson’s WA removed that option and as a consequence it has just been revealed (though it was not a surprise) that such terms will not be agreed, with significant negative consequences for several industries, including car making. Again, this contradicts what Johnson promised during the election about protecting automotive supply chains.  (Rules of origin are complex but important, see the primer by Alex Stojanovic of the Institute for Government).

It beggars belief that the government should now be contemplating, not as its worst scenario but as its best and indeed preferred scenario, the thinnest of trade arrangements with the EU. It was not entailed by Brexit – even leaving aside the soft ‘Norway’ model, an Association Agreement of the Ukraine type was a possibility, albeit one open to criticism, or some more imaginative hybrid could have been constructed. But Britain has been driven by the implacable extremism of the Brexit Ultras to a situation where the only future relationship options are distance or dislocation.

This is not what was sold to the British people. Nor is it what they currently want, given opinion polls showing that 80% think maintaining a close relationship with the EU is important and that the biggest gap since the Referendum between those thinking leaving is wrong and those thinking it’s right (50% to 39%) has now opened.

Deal or no deal brinkmanship is itself damaging

All this is not just the context for, but is actually more important than, all the excited talk about whether or not – and, if so, when - the negotiators are going to enter ‘the tunnel’ to finalise a trade deal. That matters, but it is the sub-plot to the bigger story and in many ways a distraction from it.

For that matter, the manufactured drama of ‘brinkmanship’ is not just a distraction but itself has serious adverse consequences in terms of the uncertainties facing so many people and industries as a result. For example, for both the UK in general, and Northern Ireland in particular, the present situation calls into question the security of medical supplies, with one Irish MEP saying that “people’s lives are at risk”.

It should be noted that the issues here relate not just to the future terms talks but to the equally important operation of the Joint Committee (JC), charged with implementing the Withdrawal Agreement and Northern Ireland Protocol (NIP), which also met this week. For whilst these are separate processes they have become very much linked in recent weeks as a result of the ongoing row over the Internal Market Bill (IMB). This has created a huge trust problem with the EU over the UK’s willingness to abide by the NIP and work through the JC, rather than to make unilateral decisions that flout the Protocol and thereby, on the government’s own admission, to break international law.

At this week’s JC meeting Gove confirmed the UK was proceeding with the legislation and, contemptibly, the Bill passed its final reading in the House of Commons, with the Tory backbench rebellion fizzling out. Even Theresa May, despite her much-vaunted opposition, did not actually vote against it but abstained. It is a new and shameful low, showing the extent to which all constraints and norms are being jettisoned in the name of Brexit. Unsurprisingly, as it had indicated would happen if the offending clauses were still in play by the end of the month, the EU began legal action. However it has given the UK a month to respond to its initial legal notice (it could have been shorter) and is meanwhile willing to continue trade talks.

The IMB now goes to the House of Lords, where no doubt it will be mauled, but as trailed in my last two posts the government has delayed the timetable for this. Taken together with the terms of the EU’s legal action, this means that there is a tiny window in which the trade talks can proceed without the Bill actually becoming law. That creates a theoretical possibility that the illegal clauses might be dropped in the light of a deal being done, according to Simon Coveney, Ireland’s Minister for Foreign Affairs, and others. Thus by the middle of October, conceivably, there might be a trade deal and an end to the threatened international law breach.

But massive damage to trust has already been done, with the result that the issue of enforcement for the governance mechanism for any trade deal has now taken centre stage in the future terms negotiations. The obvious concern is that the Johnson will once again sign a rushed deal with implementation details to be filled out later, perhaps especially tempting given the ongoing coronavirus crisis, only to backtrack later when it comes to putting what was agreed into practice as has happened with the IMB. Shamefully, thanks to the behaviour of Johnson’s government, our country is no longer trusted to behave honestly.

Deal or no deal, the outlook is unremittingly grim

Meanwhile, all the costs and inconveniences of Brexit, deal or no deal, continue to rack up. Having already lost the European Medicines Agency and the European Banking Authority – inevitably, though Brexiters claimed otherwise (£) – it has now emerged that the UK-based European Centre for Medium Range Weather Forecasts (ECMWF), a key body for climate change research, is all but certain to be ineligible to go on hosting EU funded activities and programs. Month by month, Brexit is already inexorably impoverishing and damaging us, in ways small and large, and which, as in these cases, reach deep into the core strategic strengths and priorities of our country. But as Brendan Donnelly, Director of the Federal Trust, wrote in a hard-hitting blog this week, “the worst is yet to come”, and Simon Nixon in The Times was equally forceful in arguing that “business is about the be thrown under a bus” (£).

As a Select Committee heard this week from leading figures in the aerospace, chemicals, and pharmaceuticals industries – again, all key sectors – trade will become “a day-to-day struggle”, with huge new costs and paperwork, reduced investment and some products being unavailable. Each witness was asked if any reason could be given to welcome the impending end of the transition period. None of them could give one.

Separately, a new report (£) shows that leaving the EU platform for electricity trading will cost hundreds of millions of pounds in increased energy bills. The latest figures on the financial services sector suggest that it has moved 7,500 employees and more than £1.2 trillion (yes, that is trillion) of assets to the EU since the Referendum, with accelerating relocations as the end of transition approaches. And Michael Gove officially confirmed the long-touted figure of £1 billion as the cost of regulatory re-registrations in the chemicals industry. It remains unclear whether the new UK regulatory system will even be ready by the end of the year.

An obvious huge change in January will be the end of Freedom of Movement, which is set to cause serious problems for many sectors of the economy, with a particular and immediate impact on care homes, already in crisis because of coronavirus. And those EU nationals living in the UK with settled status face the nightmare caused by the government’s refusal to provide physical, documentary proof of their status. The digital-only system is unreliable and creates horrendous problems for accessing housing and services, heaping further pain on the already shameful way this group of our neighbours, friends, colleagues and families has been treated since 2016.

The adverse effects in prospect – again, regardless of whether there is a trade deal - will touch every aspect of daily life. The RSPCA is warning of shortages of pet foods and medicines (£) and, although it’s not exactly news, the BBC has produced a listing of things that will change at the end of the transition, mainly focussed on individuals and travel. Unsurprisingly, and in line with the government’s ‘Check, Change, Go’ information campaign, every single thing makes life worse and more difficult. Every single thing.

We are no longer at the point of debates and claims, in which ‘balanced’ coverage supposedly meant pitting a rosily optimistic Brexiter against a ‘Project Fear’ remainer. We are now at the point of news reporting, in which every Brexit story is a bad news story because there aren’t any good news stories.

Nor can this be ascribed to anti-government bias, because if the broadcasters did nothing but read out, North Korea style, every single page of the government’s ‘Check, Change, Go’ website then it would be an unrelenting diet of misery. And this isn’t precautionary stuff for the event of no deal. Everything on that site is bad news – there’s literally nothing that makes life easier or better - it’s just even worse if there were to be no deal. This all comes on top of the COVID-19 crisis but, unlike the virus, is entirely self-inflicted. Britain is doing this – not just Brexit, but the way it is going about Brexit – to itself.

Deal or no deal, the highest price of all?

The previous section summarised only a selection of stories and reports from the last week. Multiple other examples can be found, not least in many previous posts on this blog, all testifying to the terrible price – economic, political, cultural and even moral – of Brexit largely irrespective of a trade deal. The final example is at first sight more trivial. It was reported this week that the Tory MP Esther McVey has accused teachers of left-wing indoctrination of their pupils and more particularly that “white working-class lads” in Brexit-voting areas would be alienated by having “their family’s beliefs” questioned by anti-Brexit teachers.

Everything about this is obnoxious, not least its evidence-free assumptions about teachers’ beliefs and conduct, the homogenization of whole areas, social classes, and ethnicities in terms of their Brexit stance, its faux-egalitarianism - and, even were it all true, why is it only the ‘lads’ who are so delicate? Worse is the grotesque implication that teachers’ political views be monitored. Whilst only a fragment, it forms part of a bigger picture in which being pro-Brexit is being made a condition for appointment to public bodies, or for being rewarded with ennoblement, or is being used to re-shape the civil service – with supposed remainers within it being described by an ‘anonymous Whitehall source’ this week as “the enemy within” who “will be rooted out”.

The noisy barrage of the ‘enemies of the people’ headline is giving way to the quieter but more lethal seeping poison gas of political loyalty tests conducted under cover of populist rhetoric – populist, but not even popular given that support for Brexit is now a minority opinion. Each example in isolation seems trivial, or can be given some justificatory spin, but their accumulation may end up being the highest price of all that Brexit inflicts.

There is a telling line in Sam Byers’ post-Brexit satirical novel, Perfidious Albion: “Brexit was over, but the energy it accumulated had to be retained. Fears needed to be redirected. Hatred had to pivot” (2018, p.119). It seems prophetic in the light of Farage’s new hobby of hanging about grubbily on beaches looking for migrants to denounce. And it conjures up a country – of which the McVey story provides a tiny glimpse – in which the Brexit divide segues into a wider assault upon immigrants and intellectuals, on ‘woke’ culture in schools and universities, on ‘unelected judges’, on civil service neutrality, and on the rule of law (the latter link is to the first of a three-part blog by David Allen Green, so check the follow-on posts for the full argument).

There’s nothing new in the existence of such ideas, but this is the first time that Britain has had a government that subscribes to them. Governments doing so is the script of a story we know well, and it doesn’t have a happy ending.

So as the uncertainty over whether or not there will be a deal continues – and it will for a little while yet – and, for that matter, when that uncertainty ends, it’s important to see it for what it is. Not without any significance, certainly, but a distraction from what is much more significant: the damage, decay and danger of Brexit itself. That drama - of lies told, promises broken, and a country on the brink of calamity - is the etiology of what afflicts us, rather than the tedious theatrics and accompanying breathless predictions which are one of its symptoms.

Updated 04/10/20 to correct misleading phrasing of the story about the ECMWF.