Brexit: a mug's eyeful

When I was a teenager, after much saving up from my ‘Saturday job’ money, I bought my first ever stereo device, a portable radio cassette player (younger readers may need to consult a dictionary). Not only did it have – gulp! – two speakers, but a whole array of controls, lights, and little graphs printed on it, as if precisely measuring all sorts of important sound variables.

It was my pride and joy until I showed it to my brother-in-law, a marketing manager, who took one look at it, laughed, and said “that’s what we call a mug’s eyeful”. I had never heard the expression, but he explained it meant something which was made to look impressive with all sorts of superficial features but, not only did they have no real function, they disguised the underlying shoddiness of the product itself. And, indeed, he was right. The only control that served any purpose was the volume knob, and that soon broke, although not as soon as the cassette player began to mangle tapes, the aerial snapped, and the carrying handle fell off.

To anyone with any understanding of what it meant, it was obvious from the outset that Brexit was a mug’s eyeful. All the things which it was promised would follow from ‘taking back control’ were as illusory as the supposedly sophisticated controls on my pitiful boombox. Meanwhile, all the technical-sounding explanations, from the UK’s trade deficit guaranteeing a great deal to semi-digested factoids about, for example, GATT Article XXIV, that were littered throughout the Brexit prospectus were as meaningless and misleading as the pathetic fake graphs on its stupid plastic case.

Damaged goods

It is now four years since the UK actually left the EU, and, despite the government producing a predictably misleading though highly glossy anniversary brochure extolling ‘Britain’s Brexit success’, it is obvious to all but the most dull-witted or obtuse of Brexiters that it has been a failure. Nigel Farage said as much months ago. And just this week, Ben Habib – the creepy Brexit Party ex-MEP now standing for Reform in the by-election caused by creepy Brexiter Tory Peter Bone’s scandal-ridden demise – tweeted that those who voted for Brexit had “got nothing”. But of course, since they were the ones who sold this mug’s eyeful to a gullible public, they ascribe that failure to it not having been done properly. Thus Daniel Hannan, rather than apologise for his magniloquent visions of a post-Brexit utopia, discussed in last week’s post, can now only offer a threnody (£) for what might have been, but for “the Blob”, illustrated by a peculiar, and somewhat inaccurate, discussion of tariffs on Moroccan tomatoes.

And where once Brexiters petitioned for January 31 to be celebrated annually as ‘National Independence Day’, the best Roger Bootle, a one-time member of the ‘Economists for Brexit’ group, could come up with (£) was that it has not “brought the disaster that some other economists envisaged”. Underwhelming as that claim is, it was only achieved by the now-standard tricks of referring to parts of one of the pre-Brexit Treasury forecasts, whilst also dismissing as “elaborate guesswork” the various post-Brexit estimates of its costs.

Perhaps the nearest thing to an admission of their folly came in an article on the Institute of Economic Affairs (IEA) website, suggesting that “in retrospect, the libertarian argument supporting Brexit appears to have been fundamentally flawed in its understanding of the European Union’s nature and functions”. It’s the closest I’ve seen to a recognition that it’s not just that Brexit hasn’t led to the UK becoming ‘Singapore-on-Thames’, but that it was never likely to – something rarely acknowledged by either the libertarian Brexiters who wanted that outcome or, for that matter, by those anti-Brexiters who feared it was ‘the real agenda’ behind Brexit. It is also an interesting piece in revealing what to others is obvious, given their anti-state ideology, which is that libertarians never had any interest in the UK state ‘regaining sovereignty’, even though many of them opportunistically parroted that line.

Meanwhile, back in the real world, evidence of the damage of Brexit mounts up at an alarming, and possibly accelerating, rate. Recent examples are chronicled by Anthony Robinson for Yorkshire Bylines and Edwin Hayward in the New European, and I won’t try to cover them all here. But it is fitting that, around the time of this anniversary, the three biggest of them relate to very central parts of Brexit.

Trade in British and Canadian goods

The first is the stalling of the UK-Canada trade talks. This is important both in itself and for wider, partly symbolic, reasons. One of the things which I, and many other commentators, got wrong in the early days of the Brexit process was to think that it would prove very difficult, and perhaps impossible, for the UK to ‘roll over’ the Free Trade Agreements (FTAs) made between the EU and various third countries, and especially do so on the same terms, and by the end of the transition period. In fact, this was largely achieved, usually maintaining similar terms and occasionally, as in the case of Japan, slightly improving them (although to little, if any, practical benefit according to the UK Trade Policy Observatory).

As regards Canada, a continuity agreement was reached in November 2020, but certain parts of it contained temporary provisions, the permanence of which formed part of negotiations for a new trade agreement to replace the continuity agreement, and it is these negotiations which have now broken down. This does not put an end to the continuity agreement in its entirety, although it was originally intended only to be an interim agreement, but it does mean that those parts which were temporary will lapse or have done so. The most high-profile example of the temporary provisions related to the quota for tariff-free exports of British cheese to Canada, which expired at the end of 2023, and to rules of origin for tariff application in the automotive sector, as well as, in rather more complicated ways, trade in beef and pork.

Along the lines that I suggested in my previous post, it is necessary to be careful not to treat this simply as a Brexit bad news story. After all, the main criticism of the new trade deals the UK has done with Australia and New Zealand was that, in its desire to demonstrate its ‘post-Brexit freedom’ the government had simply accepted any terms they were offered, regardless of their effects on, especially, British farmers. So this breakdown of talks with Canada, which was initiated by the UK, can be read as a sign of a less dogma-driven approach and, certainly, has been welcomed as the “right decision” by the National Farmers Union mainly because the alternative would have been to lower UK food standards, especially as regards hormones in beef, in exchange for tariff-free access for cheese.

Nevertheless, as the British Chambers of Commerce emphasised, it is a blow for British cheese exporters and also for car-makers, and a blow which is, specifically, a cost of Brexit since it was the continuity agreement which made temporary what, under the EU-Canada agreement, would have been permanent had Britain stayed in the EU. This may only be a small blow to the Brexiter claim that they would be able to rollover trade deals, but it is a much bigger blow to their proposition that, outside the EU, the UK could negotiate deals which fitted its specific interests rather than for those interests to be subordinated to, and diluted by, those of the EU and its members.

This matters, because the central plank of the Brexiters’ trade case is the freedom to have an independent trade policy, and it’s pretty much the only argument they have for not being in a customs union with the EU. The benefits of that freedom are never remotely going to outweigh the costs of leaving the EU single market – and it is a mystery why so many ‘free-trader’ Brexiters, like Bootle, continue to insist that those costs are very low, whilst also insisting that the benefits of trade deals could be high – but it’s not even clear that they outweigh the costs of having left the customs union.

It also matters in particular ways because the country in question is, specifically, Canada. On the one hand, that is significant symbolically given the idea held by ‘Ladybird Brexiters’ like Hannan, that Commonwealth countries and, especially, the ‘Dominions’, would fall over themselves to ‘renew old friendships’. That, and the associated ‘CANZUK’ fantasy, was based on a mixture of imperial nostalgia, ignorance about the modern nature of those countries, and quite breath-taking naivety about the tough realities of trade negotiations. On the other hand, it is significant practically, at least potentially, because Canada is a member of CPTPP and has yet to ratify Britain’s membership, something the Brexiters have made the centrepiece of their claims for the benefits of Brexit. As things stand, the Canadian government has said that this latest development will not affect CPTPP accession, but it is quite possible that it will revive opposition from Canadian farming lobbies to ratification.

Import controls on EU goods

The second big story is the next stage of the introduction of import controls on certain goods coming from the EU. It isn’t quite accurate to say, as some media reports do, that it is the beginning of such controls, because controls on some high-risk imports did start when the transition period ended. However, these latest controls on medium-risk goods, mainly cut flowers, fish, meat and dairy products, have been much delayed.

I discussed last week, as I have done in the past, what the likely consequences of their introduction will be, but one thing left hanging was what last week’s announcement about fruit and vegetables meant. My understanding now is that it moved most such produce into the medium-risk category, thus including it in the new paperwork requirements that started this week and the new inspection regime which will come into force at the end of April, but temporarily kept it as low-risk until the end of October, at which point fruit and vegetables, too, will require paperwork and be liable for inspection.

All of this will necessarily add to the costs of trade, and comes against a background in which already, according to a survey reported in the Financial Times this week (£), three-quarters of British firms who trade with the EU say that their sales and profitability have declined as a result of Brexit. The new controls will add to this burden, and, for consumers, adversely impact prices and choice, and probably shelf-life.

I also discussed last week why it is that import controls are necessary, despite some Brexiters still being unable to grasp this and, right on cue, up popped Jacob Rees-Mogg to squeak that introducing them is “totally stupid”, and that he had opposed doing so when Brexit Opportunities Minister (a post, be it noted, that no longer exists, and small wonder since it was the definition of a sinecure). That ignorance or dishonesty goes to the heart of why Britain was not ready to introduce the controls on time, for, astonishingly, it was not officially admitted by any government minister  –  Michael Gove – that they were inevitable until February 2020, after Britain had actually left the EU.

That in turn points to a deeper dishonesty. Anyone who understood the issue knew this from the moment that Theresa May explicitly confirmed that Brexit meant hard Brexit, in January 2017, and the government itself began to prepare for it from at least 2018. The reticence about telling the public was surely because, whilst there was even the thinnest chance of Brexit being abandoned, the government didn’t want to be open about what it meant.

Great Britain and Northern Ireland Internal Market goods

And finally, Northern Ireland, the hardy perennial of Brexit mess and dishonesty. That the Northern Ireland Assembly will resume sitting because the DUP have done a deal with the government is unalloyed good news. What that deal consists of and how it will play out in both practical and political terms is much less easy to assess, and no doubt I will write more about it in the future. Its detail was released by the government as a Command Paper entitled 'Safeguarding the Union' on Wednesday, parts of which need to be read in conjunction with a draft decision of the Joint Committee overseeing the Withdrawal Agreement (JCWA), released rather more quietly the evening before.

These documents are quite long and, in places, highly technical but my initial understanding* is that the changes are substantive in offering easements to border processes, especially on movements from Great Britain (GB) to Northern Ireland (NI). In very brief, the most important of these is to designate most goods (though not including most of those designated for further processing in Northern Ireland) moving between GB and NI as ‘low risk’, therefore exempting them from customs paperwork and removing routine checks if they come from companies signed up to the ‘Trusted Trader’ register and if they are destined never to leave NI.

Such goods will now be able to use the ‘green lane’ which, symbolically, but in a context where symbols greatly matter, is going to be renamed the UK Internal Market line. There is also some relaxation of processes and checks relating to products, including agrifood products, imported from the rest of the world so long as they are not at risk of entering the EU, and this also means that Northern Ireland will have the benefits (such as they are) of the UK’s independent trade policy.

However, the fundamental architecture of the Northern Ireland Protocol and the Windsor Framework remains unchanged. This is important, since it explains why there is very little indication, at least so far, that the EU (or, especially important, Ireland) are or will be unhappy with what has been agreed, though there was just a hint yesterday that that could change. Indeed, much of the Command Paper seems to be a restatement of the ways in which the Windsor Framework acts to make the Protocol more workable with, in some cases, proposals to ‘enshrine’ these in UK law by amending various pieces of legislation including the EU (Withdrawal) Act and the Internal Market Act.

Even so, aspects of the changes mentioned in the Command Paper and fleshed out by the JCWA document do amount to legal changes in the Windsor Framework, at least according to Sir Jonathan Jones (the former head of the Government Legal Service who resigned over the potentially illegal clauses of the Internal Market Bill) who surely speaks with authority. Actually, that in itself is an indication that what is under way is occurring within the Windsor Framework and in conjunction with the EU, and the Command Paper is explicit that some of its proposals will need further JCWA agreement. In other words, we do not seem to be back to the days of the Internal Market Bill, or for that matter the Northern Ireland Protocol Bill, where there had been proposals for the UK unilaterally to change the terms of what had been agreed with the EU.

At the same time, that de facto legal changes have been made to the Windsor Framework could be regarded as a victory for the DUP, who say it confounds critics who had said this was impossible, but such changes do not affect the fundamental fact of there still being an Irish Sea border, claims by DUP leader Sir Jeffrey Donaldson notwithstanding. Nor do they change the fact of Northern Ireland still being in the EU single market for goods. This means that there continues to be some opposition to the deal from within the DUP, and even more from other unionist parties, most notably Traditional Unionist Voice. Perhaps all these changes amount to is a ladder for the DUP to climb down, knowing full well how limited they are. Or perhaps the DUP have been gulled into believing them to be more significant than they are. Nor are these two possibilities mutually exclusive, since it may suit the DUP to accept them now but, in the future, to declare that they were deceived. In this and others senses, the long-run impact on Northern Irish politics remains unclear.

Regulation of goods

There is also a UK political dimension, since these changes entail the use of Statutory Instruments and some legislation, the crucial pieces of which were passed yesterday. This haste was presumably in order to get a swift resumption of the NI Assembly, but that may, as has happened before in the Brexit process, lead to very technical things having been agreed without anyone quite knowing what they mean in practice. There is a particular question, which is already exercising Brexiters (£), about whether the implication of it all may be to make future UK divergence from EU rules harder. This is because part of the deal means that parliament will have to be told if any future UK legislation has “significant adverse implications for Northern Ireland's place in the UK internal market”, as regulatory divergence related to goods surely would.

The government has denied that this prevents future divergence, and to the letter of the law I suppose that is true, since such legislation could still be passed regardless of what it means for Northern Ireland’s place in the UK internal market. But were that to happen, it would (or could) immediately re-open the issue of what checks are needed for the Sea border. Equally, it’s clear that the DUP believe the deal ensures that there will be no dynamic alignment of EU law and Northern Ireland law, yet it is hard to see how that can be true (as regards goods) under the basic terms of the Protocol, so again it suggests that what it will mean in practice is the UK as a whole staying aligned with such law so that unionists can depict the situation as simply one of Northern Ireland being the same as the rest of the UK whilst, effectively, still following EU law.

To add to the confusion, what I have not seen discussed anywhere yet is what all this means for any passive divergence from EU regulations. That, by definition, would happen without UK legislation being passed, yet it, too, could have implications for the need for border checks. Might we end up with de facto ‘dynamic alignment’, at least for goods, through the back door and, if so, why not gain the greater advantages of doing so by de jure dynamic alignment? Might we even end up with something not so far from the ‘common rule book’ for goods and agrifood envisaged by Theresa May’s ill-fated Chequers Proposal?

In all of this, it bears saying that, apart from those technical changes to the Windsor Framework being agreed with the EU through the JCWA, the legal changes envisaged are solely changes to UK law. Some of these, as noted above, simply make explicit what is already in the Windsor Framework. This is utterly pointless, since the UK is already bound to these by its agreement with the EU.

Pointless in a different way (in that neither is an existing treaty obligation) are the commitments to legislate for the government’s existing policy of making ‘Not For Sale in the EU’ labelling mandatory across the UK, and to ‘enshrine’ in an Act of Parliament that no government will be permitted to agree a new Protocol with an adverse effect on Northern Ireland’s position in the UK Internal Market. But such legislation is effectively meaningless, given that no parliament can bind its successor. So, as with much – but not quite all – of this ‘Safeguarding the Union’ deal announcement, there is a great deal of fluff and rather less to it than meets the eye.

If that gets the Assembly up-and-running again, then all to the good. But there is much in it which remains unclear, practically and politically. Four years since leaving the EU, and over seven years since deciding to do so, the question of what Brexit means for Northern Ireland can still not be said to have a settled answer.

Utterly defective goods

It’s said you can fool all of the people some of the time, and some of the people all of the time. Brexit never fooled all of the people, and a poll this week found that only 13% of people think that Brexit has been more of a success than a failure. Even so, other polling shows that 33% still think Brexit was the right thing to do, the discrepancy presumably being explained by yet another recent poll showing that 26% think it was the right thing to do but that the government has handled it badly.

Given that a hardcore will no doubt always support Brexit, it’s that latter group, along with the many ‘don’t knows’ in all of these surveys, who are probably the key to where public opinion eventually settles. If and when these groups swing to the view that Brexit has not only failed but was never going to succeed the demand for a refund will grow, as will the demand for those who sold the public this mug’s eyeful to be held to account.

 

*For more detailed and, no doubt, better-informed analysis (though I don’t think it is incompatible with mine), see Professor Colin Murray’s post on the EU Law Analysis Blog.

Update (02/02/2024 at 10.40): One aspect of the Command Paper/ JCWA changes I was aware of, but didn’t discuss as I didn’t understand it, relates to Tariff-Rate Quotas (TRQs). This has since been explained by trade expert Sam Lowe in his latest Most Favoured Nation Substack. Interestingly, this somewhat contradicts what I said (and it was not my invention, it is what the NI Secretary Chris Heaton-Harris said in the House of Commons) said about how the deal would enable NI to benefit from the UK’s independent trade policy. At least as regards TRQs, this seems not be true (see Lowe’s comments about the UK-Australia trade deal). Perhaps this is an example of what I warned of about how all this is being passed very quickly with MPs and others possibly not understanding all of the implications?

Update (02/02/24 at 15.15): An update my previous update! Sam Lowe has now amended his Substack post to explain that NI will be able to use the new TRQs in FTAs such as UK-Australia. A reminder of just how complex some of this stuff is, even to the experts!