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.

No comments:

Post a comment

Note: only a member of this blog may post a comment.