The sound of silence

We’re in a strange kind of limbo period in which the UK has left the EU, and the Transition Period has started, and yet the crucial talks about future terms have not yet begun and won’t do so until March. That gives the impression that nothing much is happening with Brexit for, as Luke McGee of CNN observes, the government is “eerily quiet on the single most important issue facing the United Kingdom in 2020”.  And what little is being said has largely been drowned out by the cabinet reshuffle, HS2 and other stories.

An eloquent silence

Yet that silence, in its own way, gives and is intended to give a message. I wrote in my previous post about Boris Johnson’s childish refusal to use the word Brexit any more, a stance confirmed by the now former Business Secretary Andrea Leadsom in a visit to Sunderland this week. “That was something that happened”, she rather peculiarly said when asked, rather as if, to use a comparison I’ve made before, Brexit had been an embarrassing episode at last year’s office party. It must have been rather deflating for the Sunderland voters, many of whom may have wanted to celebrate that which they are no longer supposed to mention.

But, of course, there is a very serious side to this. Invoking Orwell, both Jonathan Lis and Ian Dunt have recently written articles about how a wholesale revision of language is underway which is expressly designed to prevent scrutiny and accountability. Whatever may or may not happen now is to be decoupled from Brexit. It is hardly a new political technique, but it is being deployed with a rapidity, ruthlessness and shamelessness that is chilling.

And yet this is developing into the latest of the many paradoxes that Brexit has created. For at the same time as attempting to relegate Brexit to distant memory, the government is also claiming all kinds of benefits from “having left the EU”. Thus Health Secretary Matt Hancock explained this week that it would allow Britain to train or re-train many new medical staff (the Daily Express, where his article was published, was rather off-message in its headline by invoking the B-word).

It was not explained how the EU had prevented this, nor whether it would compensate for the exodus of EU staff from the NHS. But the ‘now we’ve left the EU’ formulation doesn’t require any causal link to be claimed. If Brexit is something that ‘has happened’, well, this announcement is something which is ‘now happening’. If readers fill in the blanks and ascribe it to Brexit – or headline writers do it for them - that’s a matter for them.

“Traders’ wines and olive oils …”

More complex was this week’s announcement of a consultation exercise about the establishment of free ports (the policy itself is not new and was announced last August). These are areas, not necessarily on the coast, where normal tax, customs checks and trade tariff rules are suspended so goods can be imported, stored, processed or worked on, and then re-exported or sold in the domestic market (at which point any relevant tariffs would apply).

Free ports have long been claimed by Johnson and many Brexit ideologues on the free market right as one of the great prizes of Brexit. The government’s consultation document suggests as much. It begins with some airy guff about how “in the Ancient World, Greek and Roman ships - piled high with traders’ wines and olive oils – found safe harbour in the Free Port of Delos” (p.5). That language is cringe-making but it is not accidental, being all of a piece with the cod history of so much Brexiter rhetoric, as if cutters bearing spices rather than container ships bearing crankshafts were at stake, and Brexit was a remake of The Onedin Line.

There is more in this woeful vein, but then it gets to the point. Free ports (or freeports, as the document has it) are all about “the opportunities that leaving the EU brings” (p.8). The clear suggestion is that the EU prohibits free ports. That turns out not to be true. They exist in the EU and existed in the UK until 2012, at which point the UK allowed the relevant UK legislation to lapse.

This led to much adverse comment on social media that the government was lying but matters are more complex than that. The language being used is very slippery – including that of the incoming Chancellor Rishi Sunak - which makes it hard to hold on to what exactly is being claimed. But whilst free ports are allowed by the EU, they are circumscribed by EU Law as to how they can operate, including by state aid regulations (because, for example, certain sorts of tax incentives would amount to subsidies) and it was this, arguably, that led to the UK’s decision not to continue with them.

Beneath the rhetoric

So from that point of view the government is being half-truthful in suggesting that post-Brexit British free ports could be different from those within the EU (although they would not be a complete free-for-all in that WTO rules, so loved by Brexiters, create some restrictions). But nested within that are some other issues. The obvious one is that it reveals that what is really at issue here is not free ports per se but whether or not Britain agrees to the Level Playing Field (LPF, including state aid rules) which would prevent this divergence from EU free port regulations.

Since agreeing to LPF is one of the (this week hardening) EU red lines for doing a trade deal, it’s not unduly cynical to think that if the negotiations founder for that reason, one justification the government will give for not making a deal is that it will preclude these supposedly wonderful British free ports, especially as according to the consultation document free ports are to be a “cornerstone” of the government’s national ‘levelling up’ policy and, thus, the delivery of ‘the people’s priorities’.

That’s questionable because according to Sussex University’s highly respected UK Trade Policy Observatory the economic case for free ports is debatable anyway, and numerous criticisms of their role in lowering labour standards and promoting tax evasion and money laundering have been made. And where there are examples of successful free ports they do not really translate to the British context (£).  Moreover, the government proposals are actually a hybrid of various kinds of policy, including regional regeneration which is not seen as a rationale for free ports even by their advocates, and enterprise zones which exist anyway.

I’ve focused on the free ports example because it has been current this week, and because it may come to have an importance in its own right, but also because it is illustrative of the tangle of language which has the effect, and probably the intention, of bamboozling people. Hence the half-true implication that this is new freedom for Britain, and the disguised truth that what is new about it is not having to adhere to regulatory restrictions which, if explained, many might prefer to keep, and the tendentious claims for the benefits.

That itself is consonant with the way, as argued in my previous post, that the government remains within Brexit campaign mode. For it is very much like the linguistic chicanery of ‘Turkey is joining the EU’, defended on the grounds that it was true that, in principle, there was an ongoing process for Turkish accession whilst carrying the untrue implication that accession was an accomplished and imminent fact. Likewise, the “let’s spend” £350M a week on the NHS slogan was defended on the basis that this was merely a ‘suggestion’ for what could happen.

Fortunately, the English love a queue

However, in one respect at least the government did start talking about the practical realities of Brexit – though it was not generally reported as the headline story it should have been - and it turns out that these are not so liberating after all.

As with free ports, it was dressed up in bracing terms – the Border Delivery Group, no less – beneath which lay the stark truth that as of next January there will be border checks on goods coming into Great Britain* from the EU, whether or not there is a trade deal, as well as tariffs charged if there is no trade deal. There were promises of ‘smart border’ arrangements by 2025, but that’s a long way off, most experts think them unlikely to be ready that soon and, anyway, they do not mean an end to customs formalities.

At one level, such border controls have been the obvious implication of Brexit ever since it was decided that this meant the hard Brexit of a trade deal or the even harder one of no trade deal at all. Yet that reality had been obscured by all the gaslighting about lack of checks on the Swiss border, the endless promises of ‘frictionless trade’ continuing and fanciful claims of ‘alternative arrangements’ to deliver this (most often with reference to the erstwhile Irish land border but, by extension, to be used at all EU-UK borders).

Everyone who knew anything about it knew that this was nonsense but, extraordinarily, this week was the first time that any high-profile official announcement of the reality of border checks in the UK was made. In the preparation for a no-deal Brexit, the plan had been that, whilst it was accepted that there would be EU tariffs and checks on UK exports to the EU, there would be almost none on goods moving from the EU to the UK.

That was always a strange idea anyway (giving EU exporters a huge advantage over UK exporters), but was intended as a temporary measure, at least in the first instance**, born of a recognition that there was insufficient time to build the necessary customs infrastructure in the UK. For similar reasons, no-deal planning had waived or reduced many of the normal border formalities but with this week’s announcement these, too, will now be put in place by the end of December.

It remains an open question whether the ten months or so until then will be sufficient and, if not, there are likely to be serious queues at the main ports (‘unfree ports’, perhaps). But, more importantly in the long-run, it spells out the very clear fact that Brexit is going to put an end to businesses running EU-UK just-in-time supply chains, as well as adding substantially to the costs of other businesses which trade across the new border.

Conceivably, it is intended as a negotiating ploy designed to make ‘German car makers’ and the like realize the consequences of there being no trade deal (if so, Brexiters have learned nothing). But it looks more like an acceptance that the no trade deal scenario is increasingly likely and, in any case, that there is no trade deal which can re-create the frictionless trade of single market and customs union membership. Zero tariffs does not mean zero checks and zero customs formalities – all of which mean friction and also mean increased business costs.

On the other hand, if there is no trade deal and import tariffs apply, an obvious question to ask is what tariff rates Britain will be applying. Alas, there is no answer to that since it also emerged this week that it has not yet been decided (£). This is a peculiar situation for a nation seeking, and desperately needing, to make trade deals not just with the EU but around the world. After all, how can such negotiation proceed if the other party does not know the terms that would apply without a deal being struck?

That is part of a more general picture of lack of preparedness which is one reason why leading American officials to say that a trade deal with the UK is now a lower priority for the US than one with the EU. We’re no longer ‘first in the queue’ apparently. That may explain why Brexiter MPs like Iain Duncan Smith are spearheading opposition to the government’s use of Huawei – perhaps they have belatedly realised that the realities of international trade talks entail power plays that make a mockery of their windy rhetoric about ‘taking back control’.

Bait and switch

Businesses now have a greater sense of what the government intends to inflict on their trade with the EU and, to some extent, that at least has the benefit of increased clarity. But they have warned, again, what this will mean for product availability and prices. That will have no cut-through with either the government or much of the public, of course, having already been discounted as Project Fear. The calculation appears to be that there is no political price to be paid for having spent years promising sunny uplands and then delivering dank swamps. Such a bait and switch is the oldest technique in the conman’s repertoire, but it does risk the wrath of disgruntled punters.

Much will depend upon exactly what damage occurs and how quickly, and whether enough people make the connections. Will they, for example, remember cases such as the boss of Norton, the British motorbike firm that went into receivership this week citing Brexit as one reason, saying in 2018 that Britain “would thrive outside the EU” and urging the government to get Brexit done? Or, if they face shortages and price increases because of border delays and costs, will they recall the warnings that were dismissed as Project Fear?

More generally, will enough people remember that Michael Gove, who made the announcement of the new border controls this week, was the same person who in 2016 sold them the bogus Vote Leave campaign line that there “is a free trade zone stretching from Iceland to Turkey … after we vote to leave we will remain in the zone”?

The depressing thing is that they probably won’t, the more so if the government is successful in persuading people that Brexit was something ‘that happened’, rather than something that is happening, and which both in principle and in form the Prime Minister and other leading ministers made happen.

This is why it is important – especially in the media - to keep challenging the linguistic contortions, and to keep comparing the promises with the outcomes. For although it may seem that both rationality and honesty have now disappeared from our politics that is not inevitable, and will only become so if we all drop the attempt to keep them present.



*The arrangements for Northern Ireland will, of course, be different. How these will work remains unclear and appears to have experts baffled.

**I say ‘in the first instance’ because, whilst the plans were indeed billed as ‘temporary’, on the wilder fringes of Brexit debate there are some influential figures who do propose the unilateral abolition of (all) import tariffs by the UK. Apart from the devastation this would cause British manufacturing and agriculture, such an approach would, of course, make negotiating trade deals with other countries rather difficult. For (whilst trade deals aren’t just about tariffs) why should they remove tariffs on UK goods if the UK has already removed tariffs on theirs?

The phase 1 deal: initial thoughts

The most obvious feature of what has been agreed is that in all but a few minor details Britain has accepted all the terms set out by the EU at the beginning of the negotiations. That was always inevitable unless we simply pulled out of the talks and committed national suicide, and it would have been far quicker and squandered less goodwill had the government accepted it on day one. That they did not reflects the glacial pace at which Ultra Brexiters have to be forced, piece by piece, to face reality.

Thus past financial commitments will be honoured and the ECJ red line has been broken on citizens’ rights and by implication in other areas as well. As for the Irish border, the situation is exactly as outlined in my previous post. A word fudge - ‘full alignment’ between the UK and the EU if no alternative deal is reached which keeps the border open - has postponed but not resolved the fundamental issue. There is no known way of having a fully open border other than membership of, or at least complete conformity with, the single market and customs union. So although the British position is still that we will leave both of these we have also agreed that in the absence of solving this insoluble contradiction there will be a soft Brexit.

So where does this take us? It seems to mean that hard Brexit is not going to happen, because no free trade deal can solve the border issue, despite what hard Brexiters imagine. But it also seems to mean there will probably not be a ‘no deal’ Brexit, because the default position outlined in the phase 1 agreement effectively defines no deal as soft Brexit. I suppose it’s conceivable that Britain could at that point rip up the phase 1 deal, and make itself an international pariah, but that is far less likely now that we have agreed to that deal.

It might be wondered, then, why it seems as if the ultra Brexiters in the Tory party are willing to endorse the deal as a triumph for Theresa May. The answer to that is that although soft Brexit now seems much more likely, the possibility of reversing Brexit and simply remaining in the EU is now far less likely. If the Ultras do not support May now, her government collapses and everything gets thrown into the air again, which certainly would not ensure remaining in the EU but might make it possible. Now, she will probably limp on until after March 2019 at which point remaining in the EU becomes impossible. Moreover, to the extent that Brexiters really do believe that there is a form of free trade deal that can avoid a hard border they may not realise that hard Brexit is now very unlikely.

It’s a different situation for the Ultras outside of government, of course, who need take no responsibility for avoiding chaos and have nothing to lose from the government falling. Thus Nigel Farage and others describe the deal as a humiliation and a complete capitulation. And he is right – the consequence of the policy that he successfully urged on Britain was always going to be humiliation in one form or another, as I argued a while ago. In fact, the way Britain has conducted itself since the referendum compounds this: it is now a real possibility that rather than have a soft Brexit via EFTA/EEA, with the various rights that brings, by choice, we may have a soft Brexit with absolutely zero involvement in the ‘full alignment’ we have agreed to, ending up in a kind of ‘bespoke limbo’.

In the meantime, attention will now turn to trade talks but perhaps more significantly to the question of the length and terms of a transition period. It is already clear that this transition will be on the terms that the EU has set out – meaning continuation of every aspect of membership including ECJ jurisdiction and freedom of movement, but with no political representation at all. Brexiters will protest about that but will accept it, for all of the reasons they have had to accept the phase 1 agreement. It also seems obvious that this transition will last for more than two years – five or even ten seems likely – and therefore probably beyond the next General Election. Again, this will have to be extracted tooth by tooth from the howling mouth of the Ultras.

During that period, however long it lasts, we will continue to travel endlessly around the Mobius Strip of Brexiter madness. That is to say, on the one hand the Ultras will keep finding new ways to imagine that it is possible to have all of features of being in the single market without being in the single market, whilst the EU will keep finding new ways to explain that this cannot be so. To put all this another way, the trade choices will remain something like Canada or something like Norway. But something like Canada doesn’t prevent a hard Irish border so is effectively precluded by this phase 1 agreement; whereas something like Norway could (with some significant adjustments) prevent a hard border. Moreover, it should not be forgotten that phase 2 is not just about trade but about all of the non-trade co-operations and agencies, for which Canada does not offer a model but Norway does.

Thus it would be far better – but still, as yet, politically impossible – for the government to accept this and have as its negotiating aim, rather than its default position, something like Norway. That will require real leadership, both to build some kind of national consensus for it and to swallow what remains of the Lancaster House speech. Since that is likely to be where we end up, it would be better to make a virtue of a necessity. In fact, building carefully around and upon that model it could even become meaningful to talk of a ‘deep and special partnership’. Less good than EU membership in my view, but a better outcome than the other alternatives.

Update (08/12/17): A couple of updates to this rather hastily written post. First, on the conundrum of having a fully open border without being in the single market or customs union there is an excellent explainer in a recent article by Dr Emily Lydgate on the UK Trade Policy Observatory website.

Second, on Twitter Simon Carswell raises a good point – if soft Brexit is the end point, why is a 5-10 year transition needed? I think there are two issues here. One is that I anticipate a long period in which the Brexiters keep banging their heads against the brick wall of the incompatibility of hard Brexit and an open Irish border. But, secondly, even when the penny finally drops, no one should think that soft Brexit is some straightforward walk in the park where nothing really changes. For a start, the Norway model does not – as intimated in this post and discussed in greater detail in previous posts – solve the border issue in itself. That is partly because Norway is not in the Customs Union but also because it is outside many other aspects of the EU including – to take a particularly significant issue for the Irish border – the Common Agricultural Policy. So there would still be a great deal of detailed and complex negotiation, both political and technical, to get to this end point.

Finally, I don’t want to give the impression in this post that there is anything particularly good about any of this, even assuming it is an accurate analysis (and it may not be: don’t underestimate the potential craziness of the Brexit Ultras to drag us over the cliff). At the very most, it just avoids complete economic catastrophe at a very high cost, and does nothing at all to mitigate the geo-political and cultural damage done by Brexit. It might – just about – have been possible in the immediate aftermath of the Referendum to build some kind of national consensus for soft Brexit as an acceptable outcome for most, to have planned it properly for it both domestically and diplomatically, and then to have triggered Article 50. None of that happened, and so haphazardly falling back to soft Brexit by default will leave many – perhaps most – voters on either side dissatisfied if not bitterly angry. What May has managed to do is, first, to alienate remain voters by treating them with contempt by catering only for the hardest of Brexits and, now, to alienate hard Brexiters by having to concede that she cannot deliver what she promised them, and what they, so mendaciously, promised leaver voters.