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.

Friday 20 November 2020

Crazy time

I am not sure which cliché to apply to the current Brexit situation. Nail biting? Like having teeth pulled? Like watching paint dry? Perhaps it is some grotesque combination of all three and is like watching someone having their fingernails pulled out. At all events it is still unclear what is going to happen as regards a deal.

Most reports are now giving the first half of next week as the absolute crunch point. It surely can’t be much later given there are already problems for how any deal would be ratified in time for the end of the transition period in terms of both the UK process and, even more, the EU process. That said, it was reported yesterday by RTE’s Tony Connelly (an invariably reliable source) that the EU is looking for workarounds on its process.

The now perennial ‘will there, won’t there be a deal’ question is actually one of those occasions where it would be quite legitimate to show ‘balance’ by reference to expert opinion on both sides of the debate. For it really is the case that highly well-informed people are split pretty much equally. For example, Mujtaba Rahman, Managing Director for Europe at the Eurasia Group cautiously envisages a deal whilst John Peet, Political and Brexit Editor of The Economist, is sceptical that it is in prospect.

There’s certainly little point in trying to decode the various leaks and speculations in the press since there’s no way of knowing to what extent these derive from the spin operations of politicians or political factions and, in some cases, they are reported by what are self-evidently client journalists. The wisest words, perhaps, about the growing speculation that a deal is about to be struck come from Katya Adler, the BBC’s Europe editor: “all the rumours and whispers you hear are just smoke and mirrors” so such speculation should be “handled with care”.

Meanwhile, there are now just 41 days to go, which include the Christmas holiday, before ‘economic Brexit’, and the country is in a mixture of lockdown and other restrictions due to the coronavirus. And the talks have been temporarily suspended because one of the negotiators has been infected, and Michel Barnier is in self-isolation.

It is a crazy way to be trying to settle an issue of such complexity and importance, and which will have such consequences for years to come.

The roots of this last-minute crisis

Despite the familiar Brexiter claim, we are not in this situation because ‘EU talks always go to the wire’. That is to confuse the internal talks at various summits between member states with those between the EU and third countries, which is what Britain now is. Rather, it arises because of the spectacularly incompetent way in which British governments, the Brexiters, and the wider British polity have conducted themselves since 2016.

That is most obvious in what almost everyone can now see was the utter foolishness of the government not requesting a transition period extension when it was possible, and saying it would not accept such a request from the EU. That period was always going to be too short and with Covid-19 impossibly so. The decision was not taken thoughtlessly, but derived from two things. The first was the belief – naïve in my view, but I suppose it remains to be seen for sure – that ‘the EU always blinks at the last minute’. From this perspective extension was pointless as it would only delay that last minute.

The second reason goes deep into the entire Brexit process. It was that any extension would immediately have been denounced by Brexiters as backsliding and betrayal. Their power and their paranoia have been recurrent themes since 2016 and are the main reason for the UK persistently boxing itself into time constraints and deadlines of its own making. The most obvious early example was that it led Theresa May in her 2016 party conference speech to promise to trigger Article 50 by the end of March 2017. That was a totally arbitrary date – there had been nothing in the Referendum result that dictated a time frame – and sticking to it meant that Britain entered the time-constrained Article 50 period with no real plan for how to enact Brexit.

That was part of a wider story of how much of the last four years has consisted of rushed decisions (such as Cameron’s resignation and the truncated leadership contest that installed May) and self-imposed deadlines some of which, unlike that for the Article 50 trigger, were then broken (such as May’s repeated pledges not to seek Article 50 extension and Johnson’s ‘die in a ditch’ promise). This story is in turn nested within an even wider one, which is that so much of the last four years has been about internal UK politics rather than about a negotiation with the EU.

On the one hand, there have been two general elections and two Tory leadership contests. On the other hand, there have been intense efforts to construct versions of Brexit that might get domestic political support (e.g. the first Brexit white paper, the Chequers proposal, the Malthouse compromise) without any consideration for the fact that they had no chance at all of being agreed with the EU. Then, when the outlines of future terms were agreed in the Political Declaration, Johnson, again for domestic reasons, repudiated it so that the negotiations during the transition period had effectively to go back to a blank sheet. And now, at this final moment of those negotiations, and amidst all the coronavirus disruption, the inner circle of the government – I don’t mean the cabinet, which hardly matters these days, but the unelected advisors formerly known as Vote Leave who have been running the country for the last year – has fallen into infighting and disarray.

I don’t think that Brexit could ever have had a good outcome, but for it even to have had a chance of avoiding total disaster what was needed was first to carefully build a domestic political consensus around something that could realistically be agreed with the EU,  and only then to trigger Article 50, negotiate with the EU and, finally, to deliver something that might have at least been a stable end-state. In the meantime, the organizational preparations needed to implement this plan would have been made. But Brexiters were too impatient, too suspicious of betrayal, and simply insufficiently interested in the practicalities of Brexit for such a process to have been followed.

So the situation we now find ourselves in did not arise by accident and it isn’t just something to do with the current phase of Brexit. It is the latest stage and the latest consequence of years of incompetence, if not worse. For, of course, the incompetence is inextricably linked to the dishonesty of the claims and promises made. To give just one example – but a major one – the years of lying about how the UK could leave the single market and customs union but still have ‘frictionless trade’ or something very close to it explains both why no realistic plan for the future was developed and why preparations for border controls were not begun until far too late.

Paying the price

The price for all this is being, and will continue to be, paid by British businesses and their customers, and by the general public, in costs, inconvenience, job losses, and numerous other ways. There are now almost daily reports of the lack of readiness for the end of transition, irrespective of whether there is a deal, unless as part of a deal there is an agreed ‘adjustment’ or ‘implementation’ period as many business groups are now vociferously calling for.

A small round up of recent examples includes: shortage of warehouse space, lack of information for road hauliers (final guidelines are apparently due on 7 December!) alongside lack of awareness amongst truck drivers (£),  no regulatory equivalence for financial services in place (this is a separate issue to the negotiations), several trade agreements not yet rolled over, Felixstowe container port in chaos (partly because of pre-Brexit stockpiling), projected labour shortages across numerous sectors (including social care and – yes – fishing), and the dire lack of preparations for the border between Great Britain and Northern Ireland with attendant risks of a “bonanza for organized crime”.

Whilst much of this is indeed in prospect even if there is a deal, things will be even worse without one. Yet in an extraordinary interview last weekend, DEFRA Secretary George Eustice spoke of such a scenario in terms which suggested he has not the tiniest understanding of how business works, or of the impact of import tariffs on prices and consumer choice, and of export tariffs on costs and jobs. Blithely saying that he “didn’t accept” what a dairy industry leader warned the effect of tariffs to be, he went on to opine that Arla, the Danish manufacture of Lurpak butter, would re-locate to the UK in order to sell to the British market.

This provoked immediate incredulity but, in an interesting micro-example of how the Brexit narrative operates, that incredulity brought forth a torrent of (orchestrated?) social media comments that Lurpak was already produced in Leeds in the UK. In other words, that those deriding Eustice for his lack of realism were actually indulging in another bout of Project Fear, that everything would continue as usual and so on. Such claims get circulated so quickly and in such volume that they quickly lodge as established truth. But, in fact, as Lurpak subsequently clarified (no pun intended) it is not true – it is, and can only be, produced in Denmark. As with Eustice’s casual dismissal of industry expertise, it’s a minor, but revealing, illustration of how we got into this mess.

No deal is still the worst outcome

Eustice is evidently not alone in ignoring business concerns. It’s reported that some in the cabinet think that the difference between deal and no deal is too small to matter as no deal “would only be 20% worse than the deal on the table”. This is a dangerous myth which has been put about in recent weeks by some Brexiters and, it has to be said, by some erstwhile remainers. It is true that both outcomes are bad, in the sense of being very substantially worse than being an EU member, and substantially worse than a soft Brexit would have been. It is also true, and should never be forgotten, that both are far worse than what Brexiters promised in the referendum and for years afterwards. In that sense, the recently launched Voices for a Better Deal campaign is well justified.

But even as things stand the difference between deal and no deal is a very significant one for goods trade, because it is this which will be affected by tariffs. To belittle this as a minor matter is deeply irresponsible on economic grounds alone but, also, it shouldn’t be forgotten that this is not just a trade negotiation. No deal would also have other malign consequences, for example for security cooperation.

In addition, a deal, however limited, would be a basis for something better in the future, and might at least presage more harmonious relations, and of course any possibility of an ‘adjustment period’ is dependent upon there being a deal. Conversely, whatever ‘no-dealers’ may think, ending transition without a deal would not be an end-state. As I’ve been arguing for months now (and for years in relation to the original no deal scenario) It would simply initiate a whole new set of negotiations in the context of zero good will.

At first, these would be on the urgent mitigations needed to deal with the immediate disruptions. So, yet again, Britain would have imposed time pressure on itself and, crucially, would be entirely dependent on the EU to create those mitigations (e.g. to enable continued air travel). Then, shortly after that immediate crisis, all the other issues of trade, security, data, fisheries and so on would still be in need of resolution. They would not have disappeared by virtue of ‘no deal’, they would just have been postponed.

Moreover, the political implications of no deal for Northern Ireland could be considerable. Although in principle the Northern Ireland Protocol exists to cover this eventuality, in practice there would still be much detail to be worked out. Presumably in these circumstances the UK would enact and implement the illegal clauses of the Internal Market Bill that have caused such consternation, and perhaps would also make other unilateral decisions about the operation of the Protocol. This in turn would sour relations with Biden’s America as well as with the EU. Indeed, more widely, no deal would inevitably see the Brexiters pushing much harder in their campaign for the government to renege on the Withdrawal Agreement in toto, with dire consequences for Britain’s international relations.

For all these reasons, no deal would be the final folly of the botched implementation of the terrible idea of Brexit. I understand that some believe that, thereby, the entirety of the Brexit project would be discredited in a cathartic moment of truth. However, the practical consequences would be so dire as to make that a pyrrhic victory, and it is by no means certain that the scales would fall from the eyes of the public in general or of leave voters in particular. I am sure that it would not result in the leading Brexiters recanting and, actually, that it would cause them to become ever more extreme in their demands and ever more convinced of their rectitude.

Deal or no deal, the Brexiters will call it betrayal

It seems so obviously rational and sensible that there should be a deal that anyone waking from a coma would wonder (amongst many other things) why there is even any question of it not being done. But, alas, those of us who have been awake for the last four and a half years are only too well aware that rationality and sense have nothing to do with it. Indeed, the capacity of Brexiters, within and outside government, to in any given situation make foolish and irrational choices based on ignorance, prejudice and lies is so great that if a deal is done it will come as a surprise to many.

What will not be a surprise - because it is a certainty - is that, if a deal is done, it will be denounced by many Brexiters as a betrayal of ‘true Brexit’ (even though some of those saying this will have been advocating a free trade deal as their desired outcome). In the same way, if there is not a deal, they will say that this is because of EU ‘punishment’ (even though some of those saying this will have been advocating no deal as their desired outcome) and so ‘proves’ that we were right all along to leave, but also that it is because of the failure of the government to negotiate effectively, due to betrayal by remainer politicians and civil servants. (Needless to say, any delay in ending the transition period or even implementing anything agreed will also infuriate them).

These reactions are inevitable both because the promises made for Brexit were undeliverable, and because, as I wrote exactly four years ago today, some of its most enthusiastic adherents are so psychologically invested in victimhood that betrayal is not what they most fear but what they most crave.

That is the real tragedy of Brexit. Not just that it is being done against the wishes of so many of us – now, in fact, the majority – but that whatever now happens those who want it most will be the most unhappy with it. It is about as perfect a definition of a lose-lose situation as could be imagined.

Friday 13 November 2020

Brexit, beached

With Joe Biden’s victory now assured, millions of words have now been written – in the UK, if nowhere else – as to what it means for the US-UK relationship and for Brexit in particular. Of these, I’ve found the analyses of CNN’s Luke McGee, James Kane of the Institute for Government, and Lisa O’Carroll, the Guardian’s Brexit correspondent, especially insightful. There are also some intriguing thoughts about the wider consequences of a Biden presidency, so far as I know only in the form of a twitter thread, from Charles Grant, Director of the Centre for European Reform.

2016 recedes into history

My own take is that it’s worth taking a step back from Trump’s defeat to recall what his victory in 2016 meant for Brexiters, namely to validate their project as being not an anomaly but as having caught the tide of history. With the self-proclaimed ‘Mr Brexit’ in the White House, and plucky Brexit Britain at his side, the EU would shortly collapse and a new era would begin. And it’s important to clarify what the Brexiters and Trump shared in their imagination of that new era – it was one of separate nations, unhampered by the constraints of international organizations or multi-lateral agreements, but making bilateral agreements if and when it was in their interests. A US-UK trade deal would be emblematic of how that new world would be, as well as a symbolic affirmation of Brexit itself.

It’s true that Trump’s hostility to NATO, the WTO, the UN, the WHO and so on was never matched, or even shared, by the UK government or by most Brexiters. Indeed, the latter seem to find the prospect of obeying ‘WTO rules’ positively exciting. But they very much shared his vision of the nation state. Ironically, Brexiters failed to appreciate that, by definition, that meant that for all his talk Trump was never going to grant the UK a trade deal on any terms other than his own, and actually he blew hot and cold on the whole idea. In any case, despite his delusions of grandeur he operated within his own constraints. In particular, it has been plain since at least August 2019 that Congress would not ratify any trade deal if Brexit posed a threat to the Good Friday Agreement (GFA).

Much attention is now focused on the prospects of such a trade deal with Biden’s America, and his own very strong and stated commitment to the GFA. But the more important point is that his election strips away the last vestige of Trump’s 2016 boost for Brexit. The EU has manifestly not collapsed and is not going to, there is no sign of any other member wanting to follow the sorry path of Brexit, and the populist wave has not triumphed. And of course all the predictions of how as ‘the fifth largest economy’ the UK ‘held all the cards’ in delivering Brexit have long ago been discredited.

Now, there will be a US administration strongly committed to the EU and more generally to multi-lateralism and international co-operation. It’s only necessary to read Nigel Farage’s snivelly lament for the hours he spent in Trump Tower to see how fatally isolated the Brexit project now is. That sense is compounded by the emerging news of the imminent departure of Dominic Cummings and the rest of the Vote Leave team from Downing Street. Far from having caught the tide of history it is now beached on the mudflats of a failed international putsch, the ghastly remnants of an experiment that has gone so horribly wrong that government ministers are supposed to no longer refer to it by name.

Can the government recognize what’s changed?

So the question now is whether the UK government recognizes all this or whether it is so captured by Brexiter ideology as to be incapable of doing so. As it happens, there is a very precise litmus test immediately available to answer that question in the form of the Internal Market Bill (IMB) or more specifically those clauses relating to Northern Ireland which, on the government’s own admission, would be in violation of international law. If the government persists this will make not just a trade deal but harmonious relations with the US generally impossible, as it will with the EU.

It is increasingly clear that this is not simply because of what the effects on the GFA might be but also, more broadly, because of the disdain of the EU and, now, the US for Johnson’s brazen disregard for international law even if the GFA isn’t damaged. In that sense it is irrelevant whether the IMB clauses do or – as can certainly be argued - don’t in themselves threaten the GFA, or even whether or not they are ever invoked. What matters is simply their existence if they are passed into law. Comments this week from both Simon Coveney, the Irish Foreign Affairs Minister, and US Congressman Brendan Boyle underline this. For both, the key issue is the betrayal of trust over an agreement so recently signed by the UK government.

Sovereignty and independence in an interdependent world

This in turn goes to the heart of the inadequacy of the Brexiter understanding of what ‘independence’ and ‘sovereignty’ mean, which seems to be one of untrammeled freedom of action. On the one hand, this is what led them to believe, as no other EU member does, that being in the EU meant not being an independent and sovereign state (a lie nailed by the very first Brexit White Paper in February 2017, which stated that “Parliament has remained sovereign throughout our membership of the EU”). On the other hand, it led them to think that as an ‘independent’ country the UK can operate without constraints.

This was the gist of Suella Braverman’s advice that the IMB was legal: “Parliamentary supremacy means it is entirely constitutional and proper for Parliament to enact legislation, even if it breaches international treaty obligations”. It also permeates Johnson’s negotiating position with the EU within which the idea of being ‘sovereign equals’ translates into the accusation of ‘bad faith’ if the EU doesn’t give the UK exactly what it wants (£). It even drizzles right down the food chain to the boorish antics of the Brexit Party in the European Parliament, as if ‘independence’ is a licence to ridicule and insult others.

The way the Brexit Ultras think about independence was well-illustrated this week by Iain Duncan Smith’s insistence that Brexit has nothing to do with the US because “we are a sovereign nation” as if this precluded the US – also a sovereign nation, after all – from taking its own view of Brexit. In a similar vein was John Redwood’s letter to Joe Biden (draft text here), which can be read as “a warning” to the President-elect to recognize the significance of the UK “becoming a truly independent nation again”.

Despite insisting that the UK will uphold the GFA (and, following the bizarre new line of Brexiters, that it is the EU that threatens it), it is clear that Redwood does not understand the Biden concerns about the IMB and, from his tweets, that he doesn’t accept that it breaks international law. Instead, he waves the size of the 2016 leave vote as if it had any significance now that Britain has left the EU, and as if it provided an alibi for Britain to conduct itself however it wants. That vote is all they now have, since they are incapable of identifying what benefits this ‘independence’ has, what they actually want to do with it, or how it can possibly justify the mounting damage it is causing (for which, see the latest updates to Yorkshire BylinesDigby Jones Index)

‘So what?’ would be an obvious reaction and, presumably, that of the third assistant letter-opener to the Biden junior staffer who is most likely the closest person to him to read it (although, that said, it is unlikely, along with the Foreign Secretary’s equivocation, the Prime Minister’s terse – and botched - congratulations and the putrid tweet of some previously obscure peer that got reported in the US, to have done anything to endear the UK to the incoming President). But, unfortunately, we in this country are obliged to take notice of Redwood, Duncan Smith and their fellow ERG backwoodsmen since they continue to exert a grip upon our politics. Indeed, to read Redwood’s letter one could be forgiven for thinking that he spoke for the British government, rather than being a mildly eccentric backbencher who has not held ministerial office for 25 years. So their understanding of what ‘independence’ means matters.

And it is an understanding based on fantasy. The real world is an interdependent one, in which nations face constraints, their actions have consequences and, indeed, they must reckon with the sovereignty of others. Even if the formal enforcement mechanisms of international law and of international agreements are relatively weak, the realpolitik is that other countries, especially those with which you want to do deals, have ways of showing their displeasure. At the other end of the scale, behaving insultingly to other countries does not make them admire your independence of action but reduces their respect for, and goodwill towards, you.

Same old issue: purism vs pragmatism

So in the coming days, even hours, Johnson’s government is going to have to decide whether to prioritise the purism of this ersatz independence above pragmatic reality and, in a way, that is just the latest version of the choices Brexit Britain has faced all along. And, as has also always been the case, the answer lies in the internal battles of the Tory Party. In general, these have always pushed the government towards purism – the main, almost the sole, exception having been when Johnson agreed his deal which, awful as it was, was more pragmatic than no (withdrawal) deal at all.

But the political circumstances are very different now. Johnson was far more popular and powerful within his own party, and the Brexiters had glimpsed the possibility of losing Brexit altogether. So they supported a deal they hated and which they have since sought to repudiate. Now, he is beleaguered on every front, especially because of Covid-19, his inner team is in disarray, and his backbenchers are in a febrile and rebellious mood. The Brexiters have got Brexit – there is no going back on that – and no longer have the fear of losing it, and many would be happy with a no (trade) deal outcome. So if Johnson moves to do a deal with the EU they are likely to strike. It’s true that their parliamentary scope to derail it is fairly limited, but they have other weapons, most potently that of challenging his leadership, something which is already rumoured in any case.

Yet pragmatism suggests that if Johnson wants to avoid quite serious international isolation he will need to do a deal with the EU – it will be a thin deal, though potentially could develop into something more extensive in the future – both for its own value and as a way of aligning with Biden’s wider agenda. To do so will entail not only U-turning on IMB but also offering substantive concessions to the EU on one or all three of fisheries, subsidies and governance. And it can’t be assumed that the concessions EU will seek will be unchanged by events. After all, just as the Biden presidency leaves the UK isolated so too does it strengthen the EU.

Some regard it as inevitable that he will now do a deal, although the apparent insistence on retaining the offending clauses of the IMB, even though their rejection by the House of Lords provided a ready get out, suggests otherwise. As Peter Foster, writing in the FT (£), suggests it would be wrong to “underestimate the emotional attachment of Mr Johnson and his inner Brexit circle” to the clauses as “a vital assertion of British sovereignty”. But with that inner Brexit circle now dissolving, as Cummings and Cain depart at the end of the year, does that mark a shift away from their purism making a deal more likely – or even, as some rumours suggest, does it arise from that shift having happened - or will no deal be the last hurrah of their final weeks in power? What, if anything, is the significance of the rumours that David Frost was about to resign but that he has now decided not to?

The deep roots of Brexit’s failure

My own view is still that even now it is impossible to predict which way Johnson will go, and pointless to try not least given the chaos of his administration. But clearly the IMB issue is going to come to a head very soon – the negotiations as a whole are going to the wire but 19 November seems to be the absolute deadline – and when it does then, whatever the outcome, it will represent the latest episode in one of the deepest flaws in the Brexiters’ entire project. For as Jon Worth outlines in detail in an excellent blog this week the IMB mess arises from the Brexit Ultras’ refusal to accept or even to understand the ‘trilemma’ posed for (hard) Brexit by Northern Ireland (see also this explanation from law Professor Phil Syrpis).

At root, that comes from an even deeper failure, as outlined in my post of March 2017, to understand the nature of borders – both why they exist and what is needed to make them disappear. Brexit has been constantly caught on the ‘cakeist’ hook that Brexiters want both to leave all the institutions that make borders disappear whilst refusing to accept that this means that borders must re-appear.

It is, as ever, worth recalling what Boris Johnson, like other Brexiters, had to say about the Irish border when they were selling Brexit to the British people: “the situation would be absolutely unchanged”. Even in September 2018 he described the border problem as “a gnat”. He rejected the initial idea of a sea border, rejected May’s backstop arrangements, then signed up to a sea border and has ever since sought to deny the consequences of having done so, with the IMB being the result. As to what he does now, with no pain-free choices left then as Rafael Behr argues it will simply be a matter of how he calculates he can best avoid blame.

Johnson is Johnson, and bears a heavy responsibility for Brexit. But it shouldn’t be forgotten that he was one of many leading Brexiters who, orchestrated by Dominic Cummings, cajoled voters into leaving the EU without knowing or caring about what happened to Northern Ireland, to the GFA, and certainly to Ireland. For that matter, they didn’t know or care what Brexit meant for everything from creating customs arrangements to disrupting medical supplies to road haulage (£) to musicians’ tours to financial services (£) to data transfer, police and judicial cooperation to the millions of lives left in limbo, and so much else besides. They didn’t know or care at the time of the Referendum and, for the most part, they haven’t bothered to find out since. Worse, throughout all these years they have vilified and belittled those who did know and care.

So as Brexit limps on, the unloved orphan of a failing populism, to some kind of resolution of at least what the end of the transition period will mean, we shouldn’t forget the lies shamelessly told, the promises blithely made, and the fears viciously propagated which have brought us to this shambolic point.

Friday 6 November 2020

While we are waiting

The absence in the last week or so of the sound and fury that has accompanied the Brexit future terms negotiations since the end of the summer holidays might betoken that they are proceeding well. Early this week there were reports of substantive progress on fisheries. Tediously if predictably this was described in the Brexiter press as Michel Barnier ‘caving in’ and “handing” fishermen a “huge boost” but, in line with the general confusion of Brexiter logic, the same paper on the same day disapprovingly described it as a “compromise” between the UK and EU negotiators which will “anger leavers”. It’s an interesting illustration of the impossibility of satisfying Brexiter demands.

On the other hand, suggestions of a fisheries breakthrough were subsequently downplayed, and Barnier himself gave a decidedly downbeat assessment when briefing the European Parliament on the progress of the negotiations on Wednesday, re-iterating the same areas of contention as there have been for months. His remarks were echoed by David Frost. Talks, it seems, will resume on Sunday or, on some accounts, Monday but it may be of significance that the European Commission’s new economic forecast assumes there will not be a deal.

So for now the bogus drama of ‘will they or won’t they?’ continues and remains as pointless as ever, as do the breathless faux-scientific assessments that a deal is now ‘X% likely’ and the faux-worldly pronouncements that ‘a last-minute deal was always the plan’ or, with equal certainty, that ‘no deal was always the plan’. It is abundantly clear that there has never been a plan ‘all along’ and very likely that there isn’t one even now.

The pilots in the Brexit flight deck have never been able to agree on their destination and, for that matter, have never qualified for their flying licences. To the extent that there has been a plan, in recent months it appears to have been the belief that the large mountainside to which the plane is heading will disappear at the last moment. And whilst that is hardly a comforting prospect for those of us strapped in the passenger seats, it’s better to be honest about our situation than flatter our leaders by crediting them with a competence, even if a malign competence, that they so manifestly lack.

The US election and ‘Global Britain’

If a last-minute swerve to a deal is in the offing it is at least partly bound up with the outcome of the US presidential election, which (for anyone who has missed hearing about it) seems increasingly likely to be a victory for Joe Biden, for the largely symbolic reasons discussed in my previous post. Indeed many commentators believe it makes a deal with the EU almost certain, since it supposedly makes a UK-US deal less likely (this, according a spectacularly deranged column in the Express, is all ‘remainers’ fault’). If this is so then the important question it gives rise to is what, exactly, the UK will do in order the make a deal happen? Clearly it will be necessary to give ground on at least one of the three issues of fisheries, subsidy policy and governance, and very likely more than one. A further important question is whether there will be time for any deal struck to be ratified by the European Parliament so as to be in place by the beginning of 2021.

That what the UK decides about its relationship with the EU should be contingent upon the decision of the US electorate gives the lie to the naïve ideas of national sovereignty propounded by Brexiters. It also  reflects the still unresolved question of what Britain’s post-Brexit geo-political strategy consists of, given that the ‘Global Britain’ slogan remains as meaningless as ever. It can’t just mean rolling over trade agreements that it used to have via the EU, and it surely isn’t compatible with mean-spirited and draconian immigration and asylum systems aimed solely at the Tory electoral base, still less with brazen assertions of the willingness to break international law.

In a select committee appearance this week the International Trade Secretary, Liz Truss, appears to think that the big advantage of Global Britain being an ‘independent’ state is that it is “now helping set global rules with like-minded democracies”, which she links to the goal of “ultimately” joining “the Trans Pacific Partnership” (sic*). Yet that would be a better description of Britain’s role when a member of the EU than as an aspiring member of a much more limited entity, not least as regards the setting of global regulatory standards, on the other side of the world.

In a typically acute article in The Atlantic this week, Tom McTague posed a series of questions about why the outcome of the US election mattered so much for the UK: “if the election of one president or another is an existential challenge, then perhaps the issue is Britain’s strategy itself. If Britain’s global trade policy is dependent on reaching a deal with the US, then is that strategy wise to begin with? … In the end, all these challenges reveal the essential question that lurks underneath: what kind of country does Britain seek to be?”

Unusually, and surely a considerable feather in McTague’s journalistic cap, this question was taken up in the House of Commons and posed directly to the Defence Secretary who, perhaps unsurprisingly, “did not agree at all” (and, indeed, did not answer at all). Of course that kind of question is, in a strict sense, unanswerable. Countries can’t meaningfully create mission statements in the way that companies do, and even when companies do so they invariably conceal or gloss over disparate and often contradictory realities. And countries, like companies, fall into strategies by virtue of events as much or more than by design.

Even so, it’s a legitimate question in the context of Brexit, which enacted a deliberate rejection of a central anchor of what Britain’s post-imperial, post-war place in the world had become. It wasn’t asked during the Referendum campaign and, four years later, it remains unanswered. At its heart, as I’ve argued before, is how to reconcile Brexit, which was, contradictorily, both a nationalist and a globalist project, with a world which is neither of those things but, instead, regionalised.

Back on the home front: Coronavirus nudging Johnson to a deal?

Global politics aside, domestically the Covid-19 situation also nudges Boris Johnson in the direction of doing a deal with the EU. I started arguing in March, and it is now so obvious as to be a truism, that the politics of Brexit and of the coronavirus pandemic are inextricably bound together. With a second English lockdown now underway, and very widespread criticism of Johnson’s inept handling of the crisis, it’s arguable that he just can’t afford to fail to secure the deal he promised in the election

The counter-argument, obviously, is that the lockdown would distract attention from no deal but I think that’s less plausible. Apart from the additional trauma it would heap on the economy it would only cement the sense, eloquently described by Rachel Sylvester in The Times this week (£), of a Prime Minister whose administration was in a downward spiral of failure. Nor would this just be a matter of one disaster on top of another, since both can be seen to flow from the same deficiencies (£) of inane boosterism and an inability to master complex policy detail and, indeed, a pathological aversion to even attempting such mastery. Ultimately, both reflect the inability of Johnson and those around him to meet the challenge of governing rather than campaigning.

But – and it is a big but – this imbrication of Covid-19 and Brexit does not unambiguously make a deal with the EU the path of least resistance for Johnson, which is the path that this most unprincipled and unserious of politicians will invariably seek. Many of those within his own party who are most vociferously opposed to the new lockdown – the Redwoods and Swaynes – are also those most likely to attack any deal which he might strike and, more fundamentally, most likely to see no deal not as a failure but as their desired outcome. Having faced their challenge over the lockdown, he may be less willing to risk doing so over the far more incendiary issue of an EU deal, especially with Farage poised (£) to ginger up opposition on both counts.

A role for Labour?

In this context, the Labour Party’s position becomes important. On lockdown, Johnson was able to defeat his backbench rebels because of Labour support, and their numbers were probably curtailed by the knowledge that this would be so. But will Keir Starmer be so compliant in supporting any deal that may be reached? There are grounds to think not since, political tactics aside, there are good reasons of principle why he should be critical of it. For whilst some may greet any deal with relief it is virtually inevitable now that its terms are going to be fairly thin, and certainly cannot yield anything like the “frictionless trade” that for so long was promised.

It may be said that such promises, which were always nonsense once Theresa May insisted on hard Brexit, have already been abandoned but even without insisting on that as a benchmark any deal will manifestly not be the “super Canada-plus” one Johnson promised during the election either. At the very least, the near abandonment of the services sector by any conceivable free trade agreement ought to be fertile ground for Labour to argue, with complete accuracy, that Britain is going to suffer grievous economic damage. Clearly all of this applies, in trumps, if no trade deal is made.

However, there is a ‘big but’ to this, as well. Starmer has been remarkably – and in my view mistakenly – silent on Brexit since becoming leader. Of course the reasons why are obvious and well-known, and in their own way good. It deprives Johnson of his culture war comfort zone of burbling on about the will of the people, and whipping up his base, and avoids Labour having to confront the divisions amongst its own voters. But whilst that justifies Starmer in not foregrounding Brexit, it makes no sense to treat something so important as totally off-limits.

In particular, Starmer would have been wise to set down a small, quiet marker in the summer that the failure to extend the Transition Period when it was possible was a mistake. For it has now proven to be not just a mistake but a catastrophic error of judgment (and, tactically, saying so would fit well with the Starmer narrative of how such errors have characterised Johnson’s approach to Covid-19).

Even without having done so, and irrespective of whether a trade deal is reached in the coming week or so, the very real problems of the imminent end to transition, now compounded by the lockdown, ought to be meat and drink to the leader of the opposition. I flagged some of these problems in my previous post, and did so in more detail in an article in Prospect this week. Without reprising that here, a key point is how the failure to prepare has deep roots right back to the Referendum campaign’s dismissal of all adverse effects of Brexit as Project Fear.

That’s not a point that it would be useful for Starmer, or any other politician, to pursue now because few will care and many will see it as re-litigating the whole Brexit question. Nevertheless, it is one which continues to matter for those of us who are not willing to ignore how the present mess has not just arisen by some quirk of nature as from a blue sky. Rather it grows directly and inevitably out of the grotesque mendacity, ignorance, and irresponsibility of Brexiters going back years. It should never be forgotten or forgiven in the swirl of news about its daily consequences.

A country unprepared

Those consequences continue to be somewhat under the public radar for the time being, mainly eclipsed by coronavirus but also because each in itself can seem trivial or even dull. An example this week is the problem Scottish potato farmers are having in selling their goods to Northern Ireland because of uncertainty about post-Brexit trade rules (and, specifically, the application of phytosanitary rules). It is an instructive example in that in agriculture, as in many other industries, decisions about what to produce and where to place orders are necessarily having to be made now (as they have been for some time). It’s just not viable to continue to insist that businesses need to ‘get ready’ for the end of transition when they already have to make such decisions without knowing what they are facing.

One thing that businesses in Great Britain sending goods to Northern Ireland do know is that they will have to make customs declarations – as many as 30 million a year, it was reported this week. But exactly how this and other aspects of GB>NI and NI>GB trade will actually work remain unclear. The Institute for Government** produced a highly informative report this week, authored by Joe Marshall, Maddy Thimont Jack, Jess Sargeant and Nick Jones, entitled ‘Preparing Brexit. How ready is the UK?’ and they describe the unknowns in some detail. They document how several major decisions about the Northern Ireland Protocol that have still to be made and, as regards GB-NI trade specifically, state that delays in information “[have made] it all but impossible for businesses to prepare to date” (p.22).

The report, whilst acknowledging progress that has been made, especially as regards legislation and some regulatory bodies, towards readiness for the end of transition shows that there remain significant gaps. Apart from those relating to Northern Ireland, these are to do with management of the GB-EU border and the preparedness of both businesses and individuals.

Overall, the report concludes that “the UK is still not ready for life outside the EU” (p.50) and makes the important point that the end of the transition period will in no way mark the end of the Brexit process. Whilst the tone is studiously neutral, on my reading (but judge for yourself) this report envisages significant disruption in January and regards the failure to extend the transition period as an error of judgment on the scale I suggested above.

The IfG report is entirely consistent with this week’s National Audit Office (NAO) report on UK border preparedness, which warns of “significant disruption” at the end of the transition period, principally because of inadequate infrastructure and IT systems, as well as lack of business preparation. Again, the lack of clarity about how the Northern Ireland sea border will work is highlighted. The response of a government spokesperson to the NAO report, that the government is running a major information campaign so that individuals and businesses know how “to grasp the new opportunities available as the transition period ends”, can only be the work of a comedian. For there are no ‘new opportunities’, except, perhaps, for smugglers, only new costs and inconveniences.

The insanity continues

And so what in my previous post I called the insanity continues. Since then, as anticipated, there is not only the new lockdown in England but also the (sensible) hesitance of the government to say that it will indeed end on schedule at the start of December, which suggests that it may well be prolonged. As even the most hard-pressed of civil servants and business managers can expect to take a Christmas holiday this means the actual time available to prepare for the end of transition is now nugatory. And whilst I have suggested that the Labour opposition could be more vocal in exposing the folly of what is happening, it is not in power.

The ensuing disruption, like the wider economic damage of Brexit, will be squarely attributable to the hubris and incompetence of Johnson’s Brexit government.


*She meant the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP, as it has been called for over two years. Interestingly, Truss seemed to assume that the US will join it even though this was when there was even less clarity about the election result. Trump, of course, pulled out of the talks for what was to have been the TPP. It has long been touted that the UK sees joining the CPTPP as creating a backdoor route to an agreement with the US if a Biden presidency were to also join. It remains an open question whether any of this will happen.

**I often refer to the Institute for Government’s work on this blog and would like to acknowledge, explicitly, just how excellent it is. Throughout the Brexit process the stream of high quality data and analysis its researchers have provided has been truly remarkable and, since it is freely available, a massive public service (and, no, I have no relationship or involvement to disclose).