Wednesday, 21 June 2017

Britain's Brexit attitude problem

You have to be a bit of an obsessive to keep a blog so it's only natural to fixate on certain issues and individuals. Just recently I have developed something of an intense hatred for Jacob Rees Mogg which far surpasses my usual contempt for Tory Brexiteers. He epitomises the crassness and hubris of his creed. Mendacious to the core.

What piques my ire today is his assertion that we don't get the benefits of Brexit if we stay in the customs union ie "cheaper food, cheaper clothing, cheaper footwear". Again we must note that we are leaving the customs union come what may because we are leaving the EU. That though does not preclude the possibility of having a customs union agreement.

The absence of such an agreement would lead to complex rules of origin procedures where goods shown not to be entirely from the country of origin incur a tariff. In short, unless we can find some other workaround then it most definitely will hurt UK exports to the EU.

I want to park that issue though. What is more relevant is that Rees-Mogg still thinks the gains are to be made by tinkering with tariffs. With average tariffs being around 2%, and in many instance zero, the gains to be had from tinkering with tariffs are barely a rounding error. You have to go through the tariff regime with a fine tooth comb to find scope for improvements. We might be able to make the odd improvement that will benefit some sectors but it is unlikely that there will be any revolutionary developments in this field. Nothing that would justify the disrutpiton of Brexit.

We are told that the customs union is a "protectionist racket" preventing Lesser developed countries from trading with the EU. This ignores the Anything But Arms agreement which exempts LDCs from quotas and tariffs. If anything excludes lesser developed states it is the non-tariff barriers such as regulation.

We have already heard from Rees Mogg that he sees Brexit as an opportunity for deregulation. He is blissfully unaware that doing such a thing would have very serious ramifications for trade with the EU. Lowering standards increases the rate of inspection of goods travelling into the EU. Massive overheads.  

More to the point, deregulation on standards, for the most part, is simply not going to happen. Because the EU uses global standards, it cannot drop them, nor can we, in or out of the single market. We are obliged to adopt the global standard as per the WTO TBT agreement. The way to include LDCs is to use aid and technical assistance to help them conform to global standards. There are very obvious economic benefits to doing so - eliminating customs delays, fraud and counterfeiting. 

We should also note that a race to the bottom on standards is against the grain. The effort is ever more toward global regulatory harmonisation - to remove red tape and customs barriers. This is where the most substantial gains can be made. This is why the flagship drive of the WTO is Trade Facilitation. 

Further to this, deregulation would certainly be viewed as uncooperative, if not hostile. We could very well open ourselves up to retaliatory action - and not just from the EU. Going rogue is the very last thing we want to do. 

If we take Theresa May at her word, that we are seeking a deep and special relationship with the EU, then it follows that we will wish to continue cooperating on standards and widening particpation in the global rules based system. Her backbenchers though, seem to have completely different ideas, adopting a wholly hostile approach to the EU. 

If we are to make a success of Brexit then we need to adopt a pro-EU stance. Whatever happens we will wish to influence EU trade policy and we will seek joint ventures. Our independence and agility though could allows us to work in different ways toward the same goals. 

By expanding the reach of global rules and assisting in their implementation world wide, building a network of mutual recognition of conformity, we can build a global single market to the advantage of all, while weakening EU control over it. Since the EU, of its own volition, is ceding control of the regulatory sphere, we should make that a foreign policy priority. In this we need to be building alliances of third countries who have difficulty exporting to the EU and press the EU for internal reforms. It has been done before. 

If our attitude to the EU is hostile and if our approach to trade is to go into direct competition with it then we will lose every time. We have to work as partners and allies. At the moment Brexit is being driven by arrogant Tories, bereft of any original thinking, bogged down in the mud of obsolete ideology - with a deeply misplaced assessment of the UK's clout. It's the sneering, "superior Brit" attitude - personified by Rees-Mogg. If we don't change our tune then we will be punished for their narcissism. It will take years to rebuild trust and the damage will be lasting. 

Angry? You betcha!

If I could have stretched to a blog post yesterday it would have been exactly this. Chancellor Hammond, though, was not alone in grasping at straws. The Brexiteers were out in full force. Suella Fernandes, IDS and Jacob Rees Mogg. Worse still was Martha Carney and Eddie Mair. Still, after all this time, the political circus is still failing to master the basics - and have made no attempt to get themselves up to speed. Whatever they are told goes in one ear and out the other. 

If Brexit demonstrates anything it is that Westminster parties and the media place very little value on research and knowing what they're talking about.

Yesterday we heard Rees-Mogg telling us that leaving the customs union was not a complex thing and that goods "fly off the docks" at Southampton. He and IDS were both referring to the AEO system - but that only applies to certain types of goods - not animal products or food - and says nothing of inspections, certifications and testing. A classic case of a politician not understanding a complex process and therefore assuming that it must be simplicity itself.

What we are looking at here is very typical of Westminster culture. Being bereft of ay answers they will latch on to the first piece of overheard technobabble and rinse it for all it's worth. It doesn't matter if it's nonsense just so long as the true believers keep believing. That is the fundamental dishonesty and cynicism of the Brexiteers. 

We have seen this before from the same gang on Conservative Home, abusing terminology all over the shop in trying to justify a no deal scenario. The media won't be any the wiser and neither will their audience. This is how the game works. These people have no shame. 

I think this explains, to a point, the smugness of Rees-Mogg. He doesn't have to be an expert in his field. All he needs is to be half a step ahead of the media to be able to get away with saying virtually anything. He won't be challenged on it. The media lacks the intellectual equipment. Thanks to the likes of Eddie Mair these poisonous creatures are able to tell virtually any lie.

After three years of intensive blogging and social media activity I am now reputed to be an angry person full of bile and bitter invective. That's because I've been paying attention. It is difficult to say who is worse - the idle politicians on both sides of the debate or the equally crass media who let them get away with it. Thanks to them the debate has barely progressed beyond the basics and we are still going round in circles even now Article 50 talks are underway. The future of the nation hangs in the balance and it has descended into farce. 

For all that I get passive aggressive barbs from the likes of Allie Renison, we see an equally timid business community unable to say, unequivocally, that the government is making a royal mess of this. All we get from trade associations is mealy mouthed and vague recommendations when if they were doing their jobs they would be going on the attack. If their job is to defend business interests then they need to be pelting rotten tomatoes at these people. Figuratively and actually. There is an underlying assumption that we need be polite about this and uphold a sense of decorum while we are being utterly shafted. If we're not being impolite now, then when?

If there is one thing I have learned is that the Tory Brexit claque are in transmit mode only. They only put their heads above the parapet to make assertions and fill the debating sphere with lies before retreating. They are not honest enough to debate their ideas and the process is one way only. Why in gods name are we supposed to be polite about that?

Today the left are having a "day of rage". I am of the view that when it comes to government incompetence a single day is not nearly enough. It's a full time occupation. There is no justification for politeness. The bits of the government that aren't killing us are endangering the entire economy simply because they are incapable of fulfilling their basic obligation to understand the issues. We are way, way past politeness. 

Monday, 19 June 2017

More issue illiteracy from the FT

Writing in the FT Martin Sandbu pretends to know about Brexit. He explores how you might justify a soft Brexit.
"So consider the most obvious soft Brexit option: joining Efta and the European Economic Area, which would keep Britain in the single market on the same basis as Norway, and negotiating with the aim to remain within the EU customs union. (Note that even this is not the softest imaginable Brexit, as the EEA does not cover fish and agriculture. Scottish Conservative leader Ruth Davidson explicitly excludes fish from her call for an “open Brexit”, and her view may command a consensus. Agriculture, however, may face difficulties if trade barriers with the European market go up.)
How can advocates of this soft Brexit solution answer the hard Brexiters’ assertion that this would disrespect the referendum? It is not enough to say that the ballot paper only mentioned EU membership, not the EEA or the CU. The meaning of the Leave vote was what the Leave campaign said: “taking back control” of “our laws”, “our borders” and “our money”, and allow for more trade deals to be struck.
There are sensible answers that soft Brexiters can give on each point. On trade: this was one argument that was always made on pragmatic grounds. Unlike the other considerations, few argued that Britain must strike its own trade deals for the sake of it, but because they would be better and done more quickly than the EU manages. That assertion is rightly losing credibility with the public.
First, because it is now sinking in that leaving the EU customs union entails customs controls on the land border in Ireland. Second, because more people are realising that an independent UK trade policy would have to run just to stand still: before it could improve Britain’s trade position, it would have to recover the more than 50 trade agreements the EU has in place with other countries — not to speak of negotiating a trade agreement with the EU itself. Third, but less recognised, the EU is in fact rather committed to striking trade deals.
One with Canada has just been wrapped up, one with Japan is near completion, while the one with the US has stalled because of Donald Trump rather than anything to do with the EU. If trading more with the rest of the world is the goal, it is easy to make the case that being part of the EU trade bloc is the best available way for the UK to do so.
I'm not going to play silly buggers and split hairs over the mandate. Let's just look at the facts. Norway is not in the EU. It is, however, in the single market because of an agreement. The EEA. Since we want a deal that delivers the benefits of the single market then the EEA agreement is that agreement. Even if we do not go for the EEA/Efta route we will be going the long way around to replicate most of its functionality - but will be forced to flip a coin over which sector we wish to obliterate to get a total cessation of freedom of movement. For the most part, whatever happens we will be a quasi member of the single market to about 80% of where Norway is.

The point of using EEA/Efta is that it serves as the most workable transitional mechanism and is the fastest way to leave the EU. The only other means of transition is ECJ supervision over a much longer term - which is effectively continuity EU membership. That is why I, as an emphatic leaver, would prefer the EEA because at least then we are out of the EU even if we achive no other thing. 

As to the Customs Union, as EU Referendum explains, one cannot be a member of it. We are leaving the EU thus we are leaving the customs union. Turkey is a partial "member" of it but it is a customs union agreement - not membership. We should also note that it is regulatory union and customs cooperation that brings about seamless borders, and is in fact very little to do with the customs union. This is the second hack from the FT today who evidently does not know what the customs union is.   

As to trade policy, the customs union is not the common commercial policy. The UK could still negotiate its own trade agreements with other countries on services, investments, regulations, e-commerce, food, and agriculture. It would leave Brussels to handle the negotiations on tariffs on cars, industrial equipment, trains and electronics. That though is no biggie. The direction of travel, and the EU's own policy is to drive tariffs downward or eliminate them entirely.

Again, though, we need point out that tariffs are really not the issue. There is no low hanging fruit to go after. What concerns us more is our ability to act as an independent agent on international regulatory forums. Readers of this blog will know why that is important. FT hacks will not. As far as this blog is concerned this is one of the more fundamental reasons to leave the EU. 

Sandbu asserts that "Unlike the other considerations, few argued that Britain must strike its own trade deals for the sake of it, but because they would be better and done more quickly than the EU manages. That assertion is rightly losing credibility with the public". Unlike Sandbu I do not have a crystal ball as to the public mood on such matters, but actually if he wanted to know Brexiteer views on trade he could have read one of the many excellent independent Leave Alliance Brexit blogs. 

We very much did argue that if we changed our approach to unbundled sectoral deals then in all likelihood we can achieve a lot more in a shorter time. EU deals drag on for years and as we see this week, CETA has stalled again over the matter of a dispute on cheese quotas. That's very typical of these such agreements. Our view is that individual product types should feature as individual multilateral agreements. The point stands and we will continue to argue that case. 

As ever I could go to town on the rest of the article but if I had to spend my days correcting FT hacks I would never get anything else done. The basic point is that even if we do wish to depart entirely from the single market we will need to evolve out of it - especially if we want to avoid a cliff edge. For the most part the EEA covers all the bases and over time we can use the country specific annexes to gradually opt out until such a time as we were ready to make the switch to some other regime. EU membership has to be reverse engineered. We went in gradually and we shall have to depart gradually. 

This is why we have given little attention to any other model, largely because it is the only fit for purpose model available. More to the point, Switzerland is not a model. It is is the product of several years of diplomacy and bickering, is far from settled and exists as a rag bag of bilateral deals and agreements. It is not an artefact in the same way the EEA agreement is with all its structures and institutions. 

Looked at as a whole we take the view that anything that isn't an EEA brexit will be a hard Brexit largely because there are no other means to reverse engineer the mess we have made for ourselves. But if we want to dispense with the hard/soft/clean Brexit terminology we can reduce it to just two options. We either do it intelligently (EEA) or we go on pretending there is another way and make a massive pigs ear of it. You pays your money, you takes your choice.

A deep and special relationship?

For all that we are told we are leaving the single market and the customs union, we have little more than platitudes to go on as to what our future relationship looks like.

Chancellor Philip Hammond told the BBC’s Andrew Marr Show, in his first interview since the election. "The question is not whether we’re leaving the customs union. The question is what do we put in its place in order to deliver the objectives which the Prime Minister set out in the Lancaster House speech of having no hard land border in Ireland and enabling British goods to flow freely backwards and forwards across the border with the European Union".

As readers will now be well aware, the customs union has little to do with border controls. Free flowing goods depends on regulatory harmonisation. If we are to preserve free movement of goods then a regulatory union of a sort will be a prerequisite. We are adopting EU regulations as part of the repeal bill process chiefly so that we can maintain equivalence.  Any trade agreement will require a mechanism of co-determination to ensure future regulations stay in line with EU requirements.

To ensure that we can continue to free trade goods there will need to be a mutual recognition system of authorising bodies and testing houses. All of this is a requirement if we wish to continue the same level of market particpation. This will be an asymmetrical relationship simply because Brussels is the regulatory superpower in this arrangement.

As to tariffs, Hosuk Lee-Makiyama is one of the very few people with anything intelligent to say on this matter. He argues on his blog that given the onerous procedures involving rules of origin (an issue I might well have underestimated), having a customs union agreement would save thousands of jobs from leaving the UK – including the car-manufacturing jobs in Sunderland. Since cars are more than 40% foreign components they do not qualify for tariff free entry into the EU.

He says a customs union agreement would let the UK have the cake and eat it too: The UK could still negotiate its own trade agreements with other countries on services, investments, regulations, e-commerce, food, and agriculture – i.e. on all the areas that the UK disagrees with the rest of the EU. Meanwhile, Brussels would handle the negotiations on industrial tariffs on cars, industrial equipment, trains and electronics.

"Since the EU always negotiate these tariffs down to zero, the only rational reason to reject a customs union is if UK wants to impose protectionist tariffs against non-EU countries. In other words, a hard Brexit doesn’t seem like a very free trade proposition".

We can quibble over the exact syntaxes but broadly speaking I think he is probably right. Breaking away from the customs union regime probably doesn't give us much scope to tinker with tariffs to our advantage, no least since we already enjoy a number of tariff free agreements via the EU - and there are international conventions on a number of products - where those tariffs that do exist are difficult to remove for intensely political reasons.

Political opposition to a customs union agreement doesn't really make all that much sense. At best we save about £2bn which we would otherwise pay to the EU. It's a basic question of whether we want to keep the £2bn in tariff revenues or keep our car industry. The question, therefore, is how comprehensive will a customs union agreement be and what carve outs will we require. Not forgetting, of course, that this would have to be within WTO rules.

From a purist's perspective having the EU negotiate anything on our behalf is a red line but for me, even though I am concerned with sovereingty to a point, I really don't see why we should be precious about this. I'm certainly not going to jump up and down with rage if the government seeks such an agreement.

On that score we're going to have to put up with a torrent of stupidity. I've just been listening to a podcast from Spiked Online featuring Tom Slater waffling about politicians seeking to soften Brexit being "antidemocratic". All a customs union agreement would be is a trade deal of a particular type. The only way you get absolute sovereignty is to not have any trade deals at all. Makes me wonder precisely how much we have to self-immolate before these people are satisfied.

As to the single market, Switzerland is not a member of it but has a massive bundle of bilaterals, nearly all of which require the adoption of EU rules and ECJ authority. Nobody seems to bat an eyelid at this - yet can find ample reason to seethe about the possibility of a Norway EEA agreement. In the rush for a "deep and special relationship" that is the single market while also not being the single market, the likelihood is that we replicate the Swiss experience and end up with an inferior deal to Norway with much less sovereignty.

And this is why I get so very irritated with these such people. They're not actually interested in Brexit. They have no idea what they want or how to get it. They prattle on demanding the impossible or the monumentally stupid without the first idea of the consequences - without being able to specify what it would actually achieve - except for this nebulous "sovereignty" concept which only really exists for North Korea and Belarus.

In the end it really comes down to the sort of Brexit you want to see. I want to see Britain break away from EU political integration with a lot more power of veto and to be able to pursue different foreign and trade policy goals. I don't see any reason to create barriers where none presently exist. It's not anti-democratic to want a soft landing and nobody but a nihilist revolutionary wants to see Britain's export sector wiped out.

There has always been a Hotel California aspect to Brexit. Total independence is unobtainable since interdependency is the global model now. It is a fact of life. There are only degrees of independence largely dictated by proximity and volumes of trade. I don't really see a problem with that so long as the UK retains ultimate right of veto where it actually matters - and we are not simply a star on someone else's flag. If Brexiteers propose that we go far beyond that then they are obliged to provide us with something a little more concrete than "Brexit means Brexit".

We should note though that the focus on free movement of goods is an utterly misplaced focus. Though important the matters of financial services, aviation, space, nuclear and intellectual property open up a world of questions. Though there are pockets of useful debate, very little of this is breaking into the mainstream - nor indeed are the many practical issues we face in repatriating competences. 

We are all now well aware of the need for a transitional arrangement but we have seen no discussion as to what that looks like or how it comes into being. Somehow this will all be ready to fly before 2019. What are they smoking? The only transitional arrangement that isn't the EEA is... the EU. 

More to the point, neither a system of bilaterals or an umbrella FTA will actually address the matter of controlling "laws, money, borders and trade". There is no scenario where we can expect cooperation will come for free, there is no scenario where we are not heavily influenced by EU law. We will no doubt produce a fudge on freedom of movement but it certainly won't be the miracle cure for our immigration woes. 

All of this underscores the absurdity of seeking a bespoke agreement. As much as there is zero possibility of accomplishing all this inside a decade, we are not really going to achive much from doing it. If it really did produce a "clean Brexit", restoring ultimate regulatory sovereingty then I could see the point but if Switzerland is the benchmark then we're going to end up with a very messy bundle of agreements to accomplish the same thing on far less preferential terms. 

More than anything, naivety and ignorance is driving our Brexit approach. It is unconquerable. If at this point the Chancellor is still struggling with the basics, what hope is there? Worse still is the hubris - and the assumption that we realists are being overly negative. Despite the best brains from both sides of the debate pointing these issues out, they are certain they know better. 

Sadly this isn't just academic. The first obligation of this government is to remove the uncertainty but for as long as we are kept guessing, and for as long as we are set on a path that has little chance of succeeding, businesses will be exploring other options. As indeed they are already. The slow bleed will become a flood the longer this drags on. Who can blame them?

Ultimately we are starting Brexit off on faulty premises - that Brexit is the cure, not the catalyst and that Brexit is an event, not a process. What is not generally understood is that any deal is not a one shot deal. This is about reshaping our relationship and the institutions and frameworks for it to continually evolve. This is not a matter of tying up loose ends with Brussels and sailing off into the Atlantic. We remain anchored to Europe whatever happens. We seem to have forgotten that. 

Another day in Brexit limbo

It is not often I take a break from this blog but every now and then, with weather like this, you can forgive a man for choosing to do something else entirely. It's not like I was going to miss anything. Unless the government magically stumbled upon a Brexit plan over the weekend then nothing has changed.

As it happens I rather suspect events will be somewhat more pedestrian that e might have expected. I have seen suggestions that the "Brexit bill" will be substantially lower that the FT's guess of 100bn Euros - and though there may be areas of disagreement on the matter of citizen's rights, in spirit, it would appear both sides what the same thing.

Only when we get to the vexed question of Northern Ireland and what to do about that do things get interesting because any arrangement will have to touch on trade and our future relationship with the EU.

As we noted last week, public debate seems to have settled on the EEA as a large part of the solution and from whichever angle you look at it, any bespoke agreement is going to have to reinvent the wheel. As many have noted, as we have been saying for some time, the obvious merit of the EEA is that it already exists, the institutions and the treaty frameworks are already in place and widely understood. It would seem though, that this is beyond the grasp of our government.

All the while there is still a debate as to whether leaving the single market was part of the mandate. I would venture that this is wholly irrelevant. There are no stipulations in the Brexit mandate which dictate the mode of exit. The EEA as a transitional mechanism honours that mandate.

In this we have seen Philip Hammond tell us that he wants to see a "ramp" down from EU membership. How else could it be done? And if this is the only way to do it then very obviously, the starting point is the framework closest to EU membership without actually being EU membership. The EEA.

Again though, reality does not intrude on our government's thinking and they intend to go ahead with the deception that there is another way for as long as they can get away with it - hoping that circumstances will offer them a way out.

In this I have seen some suggest that the crunch point will come and the EU will offer an ultimatum of EEA or nothing - and though the government will put up a fight for show, it will reluctantly agree, while instructing the right wing press to make a climbdown look like a victory. That is the conclusion this blog reached many months ago. The only other possibility is that we walk away - or talks collapse.

They might well maintain the pretense that we are leaving the single market for now. Politically I suppose they have to. The last thing Mrs May wants is howls of "betrayal" and a leadership challenge. But I suspect May knows what we know. Eventually the bullet has to be bitten - the truth will have to be told and that reckoning with the hard liners is coming whether she wants it or not.

Only then do we see what Brexit looks like. This is when the battle becomes wreckers versus thinkers. Only time will tell.

Wednesday, 14 June 2017

Toryboy navel gazing

There are few things in this world more hilarious than toryboy navel gazing. Mark Wallace of Conservative Home is trying to find out what went wrong - and is pointing the finger at CCHQ.

I might venture a slightly different theory. Probably the same one as everyone else. For a start, Theresa May is ghastly. She has all the charm of an overflowing ash tray. Secondly, she made this election about Brexit yet her entire campaign was a reiteration of her thin gruel Lancaster House speech. Anyone who is concerned about Brexit would find this disturbing enough, but the "no deal" business basically rules out the possibility of a remain inclined voter going blue.

Then there was that care costs debacle. Ideologically sound, but a rubbish policy, badly presented. Probably not a good idea to say in the middle of an election that if you get sick we'll nick your house.

Most of all though was the overall contempt for voters. The lack of Brexit detail, the evasiveness, the repetition of empty mantras, the contempt for the press and the phobia of voters. Meanwhile the election strategists play their games with party literature, insisting on embedding crass slogans which everybody, without exception, is utterly sick of.

Then there's Tory activists. There are a few of them on my Facebook slavishly repeating Tory party propaganda. Who exactly do they think they are persuading? Why would anybody vote for a party of zombies who have suspended their critical faculties?

In this I suppose you could point the finger at CCHQ in that short of "Brexit means Brexit" and a firm commitment to liquidate pensioners with dementia, I cannot name a single Tory policy. There is no vision to speak of and nothing all that conservative to buy into.

The fact is that this is a caretaker government on notice. If there is any message to be taken from the election it is that we don't want any of you and there was no real enthusiasm at all. Of those I know who did vote did so tactically and reluctantly.

The bottom line is that this iteration of the Tory party is a very shitty party indeed. It is loaded with hasbeens, failures and incompetents tolerated largely because of the damage they would do if outside the tent. Worse still, the only reason I'm not calling for May to resign is because all of the alternatives are manifestly worse.

Were I Mark Wallace, though, I would be finding better things to do with my time. Y'see the Tories are finished. Andrew Lilico remarks today that the sole mission is to stop Corbyn at all costs. That will likely be the common view in the party. What we can expect is a full blown scare campaign much like the last one only a magnitude more intense.

It's almost like they've learned nothing from the referendum. The Toryboy claque believes it was the skill of Vote Leave's polling jiggery pokery what won it. A wondrous self-deception. In the end, I would venture, Vote Leave was an irrelevance and what we saw was a last minute act of defiance in the face of being called all the names under the sun.

But there's bigger reason why the Tories are finished. We know May won't be fighting the next election and whoever follows her will be another placeholder. The Tories will either select a safe moderate or a known personality - neither of whom will have a dedicated movement behind them. Say what you like about Cameron, but there was an energy behind him and a mission to take power. The Tories are now on a mission to hold on to it. It is a wholly defensive posture.

But then there's that elephant in the room isn't there? Brexit. Right now, unless there is a radical change in direction we are headed for a boneheaded Brexit executed by two of the least informed people in the business and a rather toxic junior Brexit secretary. They genuinely believe that walking away is a feasible option, have equally flawed ideas of how trade works - and what we can accomplish in the time available.

The short of it is that there is no possibility of this clan making a good go of it. They will look foolish. They will be outclassed in every single way. And there's a reason for this. There is something about modern Toryism which is far worse than the bog standard mode. In Redwood, IDS, Davis, Johnson, Rees Mogg (and the likes) we have a staggeringly ignorant bunch who think they know everything and cannot be told anything - and if pushed will lie through their teeth.

As much as they will dissemble and deflect, the public will be in no doubt as to who is to blame for their manifest failings on Brexit (and other matters). You can wail all you like about Corbyn being unelectable, but when you have a party full of Toryboy vultures who would deny the sky is blue, there is nothing left to vote for. I'm a conservative minded person but I have no intention of voting Tory for the foreseeable future - and I will be making that recommendation to others.

In normal times you could argue quite easily that Corbyn's economics would be a disaster for the country but when you're likely to deliver a trainwreck Brexit, and collide head on with the consequences of self-cultivated ignorance, you cannot lay any special claim to economic ability. Face it kiddo, you've blown it. You're done.

Brexit: why we are doing this

Sovereignty is a nebulous term. We are notionally a sovereign nation as a member of the EU. In practice, for as long as we elect to be a member, we acquiesce to a supreme government for Europe. A government which can issue instructions and exact penalties. I have a problem with that in that remote government can never be good government. The more power it acquires the less power the people hold.

In that regard the EU is not a democracy. Whoever we elect to the EU parliament, the underlying agenda (the acquisition of more power) remains the same. The programme of government remains the same also. Initiatives started a decade ago are pushed forward regardless of the message sent to them at elections. Where the parliament proves to be convenient it is consulted, and when not it is sidelined. This is what makes Brexit a matter of principle. It is about power. Who has it and who gets to wield it and in what circumstances.

In this we have a legion of tearful remainers asking "why are we doing this?". It's a good question since there are no immediate economic advantages and I would struggle to name a single economic benefit that wasn't entirely serendipitous. The words democracy and sovereignty are of little immediate comfort to those in fear of losing their jobs.

First of all we need to be honest about this. This is a political revolution. Many of the classic eurosceptic arguments are now redundant and were I to vote on the basis of the arguments deployed by Brexiteers I would vote to remain. The one thing we on the leave side all share though is an instinct that Britain is sufficiently different to require a different relationship with the EU and that leaving is in the best interests of democracy.

In this you have to look closer to home. Since the end of the Thatcher era we have has a succession of near identical administrations, each governing in the same paradigm of using power to bribe their respective power bases. Retail politics. For sure there are differences in approach but the general trend is pay more, get less, all the while our public accounts spiral out of control and governments slips further out of reach.

As more and more power over critical infrastructure ceded to the EU we find our politicians increasingly engaged in displacement activity and trivialities, making ever more incursions into the private lives of citizens - dictating their choices and limiting their freedoms.

Brexit has already made an impact on that. Many have remarked that Brexit is a distraction that ties up parliament so that it cannot address other matters. Great! Now we are revisiting policy areas long abandoned like energy, trade, fishing and agriculture. Best of all we get to see in broad daylight just how little our government knows about governing. Their ignorance of the respective policy areas hitherto controlled by Brussels is profound. It has exposed the whole sorry lot of them as dilettantes and wastrels.

In this we are forced to ask why our trade department knows so little about trade. Quite simply because they have handed it all over to Brussels technocrats, none of whom are elected or accountable in any meaningful way. What one would observe is that the level of incompetence we see presently is not something that has spawned overnight. This is a deep seated and cultivated incompetence which has largely been obscured by way of them never being tasked with anything of note.

Brexit has unleashed a tsunami of political reality where we can all now see that we need major reforms to policy but also major structural political reform. Brexit has become the catalyst for a new era in politics and a new age for government. And it is very necessary.

It would appear that the main complaint from remainers is their aversion to the disruption Brexit causes. What they miss is that democracy is meant to be disruptive. That is the whole point of it. It is the peaceful means by which people can achieve real change. And that really is the yardstick. For all that we voted in eurosceptics to the European Parliament, it did not in any way impact or slow the agenda of the technocrats. Thus the remainers chief objection is that democracy is bloody inconvenient.

Well, folks, you are right there. Democracy is bloody inconvenient. Governments seeking consent and having to forge coalitions and seek a consensus is democracy in action. What is happening right now is probably the closest to democracy I have ever seen.

Best of all, it shatters the status quo. We heard over the course of the general election that Labour had a "fully costed manifesto". I am not alone in noting that if you do not have a coherent Brexit plan and an impact assessment then you do not have any such thing. And what the absence of such tells us is that our political class is absolutely oblivious to the realities of what lies ahead. They are not in command of the issues and they are not in control. They are still in business as usual mode and seemingly something as seismic as the referendum has not shaken them out of their slumber.

We can even say the same of the Tories who just the other day promised us that "austerity is over". What are they smoking? I rather expect Brexit will result in austerity on steroids the way they're going about it. It rather seems to me that the only way to wake up our political class is for them to suffer a short, sharp shock and be forced to confront the consequences of their own ineptitude.

And though remainers might observe that more austerity is a miserable consequence of Brexit I am not nearly so moved in that hard choices will have to be made about the future configuration of the country and precisely who is entitled to what. That brings the decades old paradigm of retail politics to an end where people vote on issues rather than protecting their respective handouts and electoral bribes. Hopefully it will reignite voluntarism and social entrepreneurship, bringing about a much overdue cultural shift away from our entitlement culture.

I am asked to supply evidence of any tangible benefits of Brexit. I'm afraid I cannot put any numbers on it. All I can say is that eventually we will recover from it, things will settle down into the new paradigm and we can take it from there. It's not about the perks and goodies of EU membership. This is a political and cultural question.

What I would also venture is that with politics being as rotten as it is, it is only a matter of time before we face a major national incident that puts our prosperity in the balance. If we are to preserve our prosperity then it requires of us that we have this political reckoning, dragging all the divisions out into the open and set about mending them.

We are told that Brexit divided the country. I would venture that it was already divided and that Brexit merely exposes it. Let us not forget that in 2014 we came very close to the departure of Scotland from the union - and the referendum results show a major dissatisfaction with the performance of London. Culturally, economically, politically we have been divided for a very long time and only now are we addressing these things. It wasn't going to happen any other way.

Over the last two decades we have seen a major transformation of Britain. Not all for the good and the needs and concerns of ordinary people have been ignored. Government has been on autopilot and though we have alternated between Labour and the Tories the same underlying technocratic trends have continued unabated. As much as it lacks political legitimacy, our political parties also lack any real mandate. Again, Brexit is already resolving that in that it will most likely destroy the Tories and bring about new political movements.

All the while there is a broader cultural war. We have a political elite, remain inclined who hold the public in low regard. Contempt even. They believe that we are racist and stupid and ill placed to decide our own fate. They believe we were taken in by the "Boris bus" and that our brains are of such mushy consistency that we will lap up anything we are told by the media. Curiously we are told that the better than expected polling for Labour marked a turning point in the media's influence - defying the will of the tabloids. Y'see the people are independent of mind when they vote for *their* preferred choice! More likely that people do not like being told who to vote for and being taken for granted. That as much as anything explains the Brexit vote.

More than that though, it was a desire for change - and Brexit, warts and all, is bringing change we could never have secured by voting to remain or by voting in a general election. Now it is all to play for, and for once, everything from our relationship with the EU right down to the nature of our democracy is up for review and debate. From here we get to design our own destiny. I think that's wonderful. Sorry if it inconveniences you.

Brexit: what needs to happen

What our Tory friends have not yet worked out is that you cannot design a replacement for 40 years of evolutionary integration inside two years - or even ten that this rate. Just supposing you could, you would need to spend some considerable time working up a proposal that is not only realistic but also one the EU could agree to. You would want such a proposal in place before triggering Article 50.

This they have not done. As much as there is no vision behind Brexit, there is nothing even approaching a consensus on how we get out. This is largely in thanks to Vote Leave who insisted that we don't need a plan at all. This view is supported by noted thicko, Steve Baker MP, who is salivating at the prospect of walking away without a deal.

In any other circumstances we would point and laugh at them as indeed we did with Ukip when they produced their manifesto. The problem here is that these such people are actually in charge and the wheels are falling off the bus. The supporting cast in this carnival of incompetence is a clueless media unable to make even the most basic distinctions. Only now we're heading over the cliff do they start asking the right questions. All of this, though, is a little too late. To have anything like a sensible approach we should have started the ground work months ago.

As we have said from day one, Brexit is a process, not an event. If you treat it as an event, seeking to tie up all the loose ends and build all the institutional infrastructure in a single hit you will fail.

As much as anything the single market is made up of a number of intricate regulatory systems whereby a transition out of them would require masses of new resources, a re-write of the law and a complete redesign of the IT infrastructure. There are no shortcuts to this and to pull it off we would need a detailed transitional scheme well in advance. IT procurement alone is fraught with problems and delays.

Then there is the matter of the Great Repeal Bill. We are assuming that we would wish to maintain a high degree of harmonisation and free trade, therefore the adoption of EU laws is our starting point. This is a lengthy piece of legal engineering and we cannot copy and paste. EU law gives effect to certain EU institutions.

Speaking of institutions, since we have offloaded a lot of our domestic administration capacity we would have to rebuild it. In the interim we would have to continue using EU systems from food safety to maritime surveillance.

If the aim is to leave the EU that leaves us with two choices. Either write a bespoke transitional deal and a bespoke destination - or use the EEA - the only instrument that comes close to resolving these issues. Since we have opted for the former, we have chosen to open up multiple cans of worms regarding the jurisdiction of a number of EU bodies along with the intractable problems regarding the border in Ireland. From the outset we have made the job ten times more complex than it needs to be with many times the risk.

We would also note that designing a bespoke system is no small undertaking. It will likely take years. All the while we must stay in the EU. As a leaver I would have thought that the EEA agreement presents the fastest way out of the EU with the least complications. But what do I know?

The problem with that approach is that it prompts our Brexiteers to whine that we haven't left the EU if we haven't left the single market. Of course this isn't true. I know that, you know that, they know that. It's just not Brexity enough for them. But this is where they have failed to understand the exam question.

What the Brexiteers want is for the Article 50 process to deliver a substantial practical change to our relationship with the EU. They see Brexit as the ends, not the means. This can only ever deliver disruption and chaos along with a number of legal and political challenges, the ramifications of which will be felt for years. This is entirely the wrong way to go about it.

As we argue in Flexcit, the measure of Article 50 success is for there to be no change on day one of Brexit. We negotiate entry to the EEA, we carry over the CAP/CFP exactly as before but enter a treaty mechanism that allows for our gradual departure. Agriculture alone is a major headache where we will need to take our time and have a think about the direction of travel.

If we have done the job right, all it means on day one is that we have, in name, left the EU as per the instruction of the referendum - having minimised the perturbations, and given ourselves the tools to evolve out at our own pace - avoiding any cliff edges.

We have explored this issue from probably every other angle and we do not see any other way of doing it without self-harm. We would also note that even this is not without complexity and risk, but at least it avoids opening up lengthy discussions that would delay our dilute our departure. Best of all it would give a us breathing space to form a strategy as to how we leave the EEA, if ever.

If we leave the EEA then we will need one hell of a plan and a big idea. We take the view that there are few advantages to leaving the single market and we are better off expanding and enhancing it, moving the regulatory functions to the many international organisations from which the EU inherits its standards. That though is a debate for another time. The purpose of Article 50 more than anything is damage control and achieving the one goal the government actually has a mandate for - leaving the EU.

This though is not good enough for the Brexit headbangers who believe that Brexit of itself is an economic miracle and we should rush to get it all done as fast as is humanly possible. What is more likely to happen is that we will get bogged down in the quagmire to the point where we either crash out without a deal or the process gets kicked into the long grass, an election is called and then who knows?

What we need is a bit of political maturity from our government, accepting the realities of our predicament, coming clean about the many compromises we must make. It requires that the government treat the electorate like adults and start spelling out a few home truths. There is nothing to lose from doing so since at this point Tory fortunes do not look salvageable. The absolute truth is that there is no way to make everybody happy and it is pointless to try. It is therefore incumbent upon the government to take unpopular choices. Preferably ones that do not leave our economy in tatters.

As to how Brexity this approach is, is really in the eye of the beholder. What matters to me is that we are out of the EU with the necessary tools to move forward. We should not seek for the Brexit process to be transformative - only transitory. Leaving the EU was never going to be easy and the referendum was just one battle in a longer war on the road to a truer democracy. It should be viewed as D-Day rather than VE Day - and if we treat it as the latter then we run the risk of throwing it all away. Best if we take the victory for what it is and then start thinking about the next significant battle.

Tuesday, 13 June 2017

Brexit: very serious trouble

The reason the appointment of Steve Baker is such a disaster is that he believes Brexit can be concocted by way of a series of Mutual Recognition Agreements (MRAs). MRAs have only ever been used as a precursor to full regulatory harmonisation. It is one thing to establish an MRA but you are then faced with the problem of maintaining and agreed level of convergence which means any new laws have to be put to a joint committee to ensure they fall under the MRA.

What we tend to find is that MRAs are issued in those circumstances where third country regulatory regimes are too alien in culture but of the same standard. In practice this turns out to be unsatisfactory with many annexes and embargoes being added to the agreement where it is found that divergence presents either an unfair commercial advantage or presents a direct threat in terms of product safety. This can be anything from formaldehyde traces on dildos to chlorine wash on chicken carcasses.

Where it is found that there is significant divergence, anything in that product group loses its preferential risk assessment score and is subject to extra testing and customs checks.

In the past the EU has used MRAs to establish lines of supply into the EU, making third country exporters dependent on EU trade and then they shift the goalposts knowing that there will be foreign support for full regulatory harmonisation. While this was previously viewed as an aggressive strategy, the WTO agreement on Technical Barriers to Trade (TBT) compels all parties in an FTA to comply with the agreed global standards which all interested parties have a voice in.

In that respect an FTA with the EU would likely result in us adopting the usual standards, with no capacity for divergence. Standards wise that is no change but by leaving the single market we would likely not have a mutual recognition agreement on conformity assessment meaning we would still have to submit goods for testing and inspection. We could reach an agreement on conformity assessment but that certainly would require a joint committee and the adoption of EU rules on conformity evaluation. Right back where we started.

Now keep in mind that this is just the bare bones on trade in goods. There are three hundred other areas of concern all the way up to aviation safety and phytosanitary measures. We are stripping away forty years of systems development for the free movement of goods only to have to rebuild them one component at a time. In all likelihood the EU is not going to diverge from its own standard requirements or deviate from WTO law so there is no scope to negotiate a special set up that gives us any commercial advantage whatsoever.

By the time we have finished with this we will have pretty much negotiated exactly what Switzerland has only to find we have the exact same barriers to trade they have where we end up trading ECJ jurisdiction for market access. Exactly where we didn't want to be. Switzerland's meat export regime falls almost entirely under ECJ jurisdiction with zero say in the rules. That then ends up with mission creep where you end up with pretty much the same regulatory harmonisation as an EU member but no EEA firewall and no system of co-determination.

So what seems superficially appealing in having a more basic agreement with the EU, ignores the fact that trade deals develop over time and come under constant review. We will prune the single market only to end up rebuilding it through the respective strands of our new relationship but ending up on a tether. So much for ending Brussels influence. We suffer a decade of trade limbo for absolutely nothing.

Meanwhile all this assumes our government is competent and mature enough to be able to negotiate any of this. We have nether the expertise or the intelligence in government and in reinventing the wheel we will probably unwittingly concede to things we presently opt out of. As I keep saying, this nebulous notion of absolute sovereignty does not exist.

The reason Baker is committed to this is because he believes that out of the single market we have the ability to trade away our regulatory standards - lowering ours in exchange for preferential access elsewhere. That would have been a fine strategy twenty years ago before the advent of the TBT agreement and before the hyperglobalisation of regulation - a time when bilateralism was the obvious mode of trade, but it's all different now.

There can be no regulatory race to the bottom because there are global benchmarks. More to the point, British consumers and business does not want to contend with lowering standards and multiple regimes according to their customer bases. Absolutely nobody thinks it's a good idea. By doing so all we would end up doing is losing a lot of our preferential access to the single market.

Ultimately the Brexiteers are dinosaurs. They haven't understood the concept of global trade, they haven't updated their ideas since 1992 and these people are in no position to be preaching the merits of MRAs since they have only just in the last year got their tiny brains round the concept of non-tariff barriers. There are intelligent modes of trading with regulations but only at the top tables and only if you have a collaborative approach. Unilateralism in the modern world is a ticket to isolation as Trump has just discovered. The USA can probably handle it. The UK, as a small island dependent on food imports cannot.

With this approach, even with the best will in the world, the best we can hope for is a lost decade of trade while we rebuild an inferior relationship and then we are worse off and have gained nothing. That's the best case scenario. The worst case scenario is that Baker and his corrupt Toryboy pals will cause friction by way of their lousy attitude to such an extent that we only get a basic deal if we get one at all. Since these trigger happy Toryboys are just itching to walk away for the most spurious of reasons, there is every reason to believe that we are unequivocally screwed.

Game over?

With the appointment of Steve Baker, unless this government collapses, there is now no possibility of a sane Brexit. Worse still I believe that any attempts to campaign for an alternative would be a waste of time since this is a clear message that May does not intend to modify her approach even slightly. This current configuration might actually be worse than just last week.

All that remains now is to the chart the many unforced errors that will bring about the biggest economic calamity in living memory.

I had hoped for a more intelligent Brexit but ultimately I accepted the risks when I voted to leave. It has always been there at the back of my mind that Britain probably needs to fail politically in order to rebuild it into something fit for purpose. The silver lining is that this will, unequivocally, destroy the Tories.

We are now looking at a period of major austerity the likes of which we have not seen since the war. The people in charge of Brexit now have zero idea how trade works - no idea what can be accomplished and they approach this with the worst possible attitude to the EU. Not only do I not think this government capable of succeeding, Baker is one who would quite gladly see it fail - since he believes the WTO option is viable. Combined with David Davies who already has a cavalier attitude - we have the most toxic combination possible.

On the back of this we can also expect for out trade policy to be outsourced to The Legatum Institute. Baker has been lining that up for a while - taking his advice from the utterly clueless Shanker Singham. Our trade policy with the rest of the world will fail at the first exposure to reality. Nobody serious thinks it is credible. Singham is widely thought of as a charlatan and a fraud.

There is now no doubt in my mind that we are totally fucked. The message May has sent to British business today, agriculture especially, is "pack up your shit and leave".

If there is any hope at all it is that the EU will attempt to save us from ourselves. That though is contingent on a government capable of compromise. This one isn't. The one remaining hope is that this government collapses. If then Brexit is halted, Brexiteers only have themselves to blame for their irrationality, juvenility and galactic stupidity. Ho hum.

The binary little world of Spiked online

Writing in spiked today, Mick Hume asserts that "To be a member of the Single Market, a nation must submit to key EU rules and control from Brussels. As David Davis pointed out this week, the EU has insisted ‘you cannot stay in the Single Market and have control of your borders. There’s no sign of them changing their mind.’ So the growing insistence among Tory Remainers that Britain must somehow remain in the Single Market is a coded demand for the UK to Remain an EU member state in all but name".

This is, putting it politely, total issue illiteracy. As a regulatory superpower the EU is in a position to set out the conditions of market entry. In or out of the single market those same rules will apply if we want to export to the EU. And given that half our exports go to the EU it's safe to assume that we do. The question, therefore, is whether we are part of that rule making process and whether we have an effective right of veto.

Outside of the single market you are a passive recipient of those rules without a firewall like Efta to put the brakes on Council decisions which determine the meaning of those rules. As a member of the single market the process of adopting EU rules is very much a system of co-determination because the single market is a collaborative venture between Efta and the EU. Every rule is debated and negotiated through the EEA secretariat. As a whole it represent only abut 20% of the EU body of law - none of which is under the direct jurisdiction of the ECJ.

Should we leave the single market we will still enter a comprehensive FTA with the EU - and like all agreements of its type it will establish either a court or a joint committee for the adoption of rules because free trade is contingent on regulatory harmonisation. Any bespoke agreement would have to replicate most of the institutional functionality of the EEA agreement simply because we have been in the EU for forty years. We are not actually capable of repatriating all of our administration. The process of leaving will have to be gradual.

The short of it is, even an FTA would make us a partial member of the single market - but I rather suspect that without the combined clout of Efta we would have substantially less power to veto the more intrusive rules while losing a great many trade advantages.

As to the assertion that you cannot have single market membership without freedom of movement, this is a myth put about by both sides. The headbangers do not want to be in the single market (mainly because they haven't understood it) and the remainers say the same because they have always been keen to kill the idea that there is a viable solution to many of the intractable problems created by Brexit. The truth of the matter is that there are unilateral safeguard measures in the EEA agreement and they are there to be used. We can negotiate sectoral adaptations and convert them into a permanent waiver. If we want to keep an open border in Northern Ireland this is probably the only way to do it.

Furthermore, the repeated assertion that single market membership is remain in all but name is a lie. Mick Hume is, probably wilfully, repeating a stone cold untruth. That though is not surprising coming from Spiked who think the grubby details of Brexit are just for the technocracts and the "metropolitan elite" - which is actually why leavers don't have a voice in shaping Brexit. Nothing they say can be taken seriously.

I would once again point out that the single market may not be optimal but it is a fact of life. We cannot pretend otherwise and if we really do want to leave the EU it's the safest and fastest way to do it. At least then the political integration is ended and we'd have the Efta firewall. On present trajectory, chasing an illusory perfection, we are likely to crash out with nothing to show for it and will have to rebuild our trade relations over decades only to achieve what we could have had now.

We are risking the UK's prosperity on the back of the profound ignorance of our politicians and media. This is the debate that was lacking from the election and it seems to be absent now. There is a wilful refusal to get to grips with it. That will be our undoing.

We should also note that since much of our administrative capacity has been closed down because of our EU membership we will have to rebuild much of it, which won't be fast or cheap. So before an agreement can go forward we have to effectively agree to stay in the EU for ten years or more until we are ready to repatriate regulatory competences. You've all seen what can happen in just a year - or even six weeks. Ten years is more than ample time to kill Brexit. In that respect anyone who is serious about leaving the EU should be pushing for the Efta EEA option because otherwise we will never get out. It may not be ideal but at least the deed would be done with minimal disruption to the economy. The rest we can sort out later.

The way it's going will end up with negotiations going round in circles just long enough for Brexit to be sabotaged. It's time for leavers to ask just how serious they are about leaving. If they are serious then they need to get to grips with the issues and face a few home truths. You have one option and one window to get out of the EU intact. Insisting on a pointless self-immolation Brexit will ultimately be self-defeating one way or another.

In the binary little world of Spiked there is such a thing as absolute sovereignty, there is no need for compromise, everything is simple and there's an easy answer for everything. They think that we are leaving the regulated sphere of the EU to join an unregulated wild west. That world has not existed since 1992. That was the last time Brexiteers bothered to examine the issues. Spiked has only produced one position article on the single market - largely based on the findings of obsolete Tory think tank publications designed to cloud the issues. As much as it was riddled with errors it is basically the same position as the Toryboy zealots who think the WTO option is viable. Unequivocally, it is not.

Hume is right that Brexit very much is a democratic realignment and I concur that it is necessary and timely, but I do not support this unhinged clamour to inflict as much economic pain as possible on the back of a very slender mandate in a referendum we won by accident. There isn't a mandate for a self-immolation Brexit and most people are grown up enough to realise that there will be compromises. We must go forward on the basis of a national consensus. We cannot give way to those who only see the world in black and white - especially when they hold such obviously erroneous and infantile ideas.

I would also remind Hume that he does not speak for all leavers and not all of us are in a hurry to sever forty years of economic cooperation. I can't say what others voted for but I voted to end political union with the EU, not to put up trade barriers and enter a regulatory race to the bottom. There are no economic advantages to doing so.

If this really is just about democracy and politics, and not economics, then Efta is perfectly sufficient. Since we are witnessing the globalisation of regulation and the weakening of the EU as a regulatory superpower (not least because we are leaving) there is no reason to fear the adoption of technical regulation - and when you look at the substance of them you really have to wonder if it's worth going to the barricades over aubergine marketing standards. That is not what I have been vexed about for the last twenty years. It's time for Spiked to ask what it is about the EU that really bothers them.

Monday, 12 June 2017

Not optimistic.

We are a week from beginning the most intensive negotiations since World War Two. Bizarrely we have already initiated the proceedings yet still there is no plan, no indication that the government understands the territory and there has been no preparatory work. By now we should have seen evidence of shuttle diplomacy and scoping yet there is nothing of note to slip out. The entire political establishment has turned inward and still there is no substantive debate about Brexit. Anything but thus far. This is farcical. A lot of what we're seeing is displacement activity - as if it were business as usual.

What passes for Brexit debate is largely limited to Twitter but it's thin on the ground and still bogged down in the usual inaccurate tropes. I hesitate to wade in simply because these debates fall into familiar patterns where nobody can be convinced of anything regardless of how much effort you go to. There are some encouraging signs among the Brexit thinkers that the EEA is the closest thing to a solution but whether this permeates the political bubble remains to be seen. There are too many conflicting agendas and there is no coherence on any side.

One might now venture that if the government has not got its act together by now then it probably never will. If it's as bad as it looks negotiations will be short lived and we will crash out over an inconsequential and unnecessary spat. At this point I don't see the EU doing anything to stop us largely out of exasperation. It will simply let us self-destruct.

Worse still it now looks like there is nothing we can do to stop it either. Since we are without a rudder and drifting toward the rapids all we can really do is cling on for dear life. For it to be any different we would need to see a rapid turnaround in both attitude and tone. We need our politicians to get informed and start taking it seriously instead of grandstanding and pratting about. I don't see it happening.

I'm no longer one to make predictions but it seems to me at the moment that Brexit talks will crash well before the next election - and May will not be the leader to fight it. I cannot say who is likely to replace her. Be it Johnson or Rees-Mogg, or one of the remain inclined nobodies, it's fair to say that the Tories won't be able to stop Corbyn.

There is no coming back from a failed Brexit. I may even vote Labour myself just to see the Tories sent to oblivion. From there Corbyn will be so awful and so divisive that he'll wreck the entire political system. The government will crash within months and the Tories won't be able to recover anything from the wreckage. From there we will be at ground zero. A failed state with a blank slate. Perhaps that really is where we need to be to sort out this mess. If that is our fate then let it be sooner rather than later.

The Brexit headbangers will keep us in the EU

With most modern supply chains operating on a just in time basis, multinational assembly lines like Airbus and Toyota have to meticulously plan contingency suppliers in the event of disruption. Something like an earthquake or a tsunami can interrupt production at great cost.

We've seen seen the effect of this in recent times where manufacturers have been forced to switch suppliers of components and typically, unless there is a price advantage they take their time to go back to the original supplier. This is why we cannot afford a bodged Brexit. Though Brexit may not be a natural disaster, in many ways it has similar effects with blockages in the supply chain, a sudden ramping up of costs and IT systems unable to cope with the sudden change in conditions.

With Brexit you have the double whammy in that you first have the change in customs regime and then the added risk of another big change when a new settlement is found. The short of it is that any business we lose from not having a transitional agreement is never coming back.

Businesses may be worried about tariffs but tariffs are going to be the least of their concerns. The collapse in the value of the pound offsets that. Average tariffs are about 2%. The pound has fallen sharply. The real worry is that the UK simply won't be a reliable link in the supply chain - prone to regulatory divergence and major bureaucratic interruptions. It's actually astonishing that a number of trade bodies have not picked up on this - but the financial planners most likely will have done and the ones who have will already be planning to leave the UK. I wouldn't blame them.

The short of it is that unless we stay in the single market we are going to have serious problems. Without a commitment to doing so we will lose a lot of business in anticipation of an omnishambles. Our government has little idea of what is involved in transitioning to a basic free trade agreement and they are oblivious to the fact that we have no customs protocols of our own which would mean a lengthy consultation followed by commissioning of software to handle the new regime. Goods registrations would exponentially ramp up at customs, requiring fifty times the IT capacity - and when you look at the government's track record on IT procurement we won't have anything close to a workable system inside ten years.

We should also note that since much of our administrative capacity has been closed down because of our EU membership we will have to rebuild much of it which won't be fast or cheap. So before an agreement can go forward we have to effective agree to stay in the EU for ten years or more until we are ready to repatriate regulatory competences. You've all seen what can happen in just a year - or even six weeks. Ten years is more than ample time to kill Brexit. In that respect anyone who is serious about leaving the EU should be pushing for the Efta EEA option because otherwise we will never get out. It may not be ideal but at least the deed would be done with minimal disruption to the economy. The rest we can sort out later.

The way it's going now we will either end up crashing out of the EU and losing a substantial amount of international trade (which absolutely nobody but for a small band of Tory zealots wants) or negotiations go round in circles just long enough for Brexit to be sabotaged. It's time for leavers to ask just how serious they are about leaving. If they are serious then they need to get to grips with the issues and face a few home truths. You have one option and one window to get out of the EU intact. Insisting on a pointless self-immolation Brexit will ultimately be self-defeating one way or another.

Saturday, 10 June 2017

Brexit: don't tell me what I voted for

Concerning Brexit, there are a number of leave inclined groups and pundits wishing to take ownership of the entire process by telling us what we did and didn't vote for. Speaking as someone very closely involved in the pre-referendum planning debate, I would point out that both Vote Leave and Leave.EU fiercely resisted having any kind of plan.

Had they set out any kind of vision they would have some leverage over the direction right about now but the fact is the only "promise", that of the £350m is one they now disavow and consequently their ownership of the issue stands only on the decision to leave. They have no right to tell anyone what we voted for and they do not own the debate as to how we leave.

Though some senior voices within Vote Leave categorically stated that we would leave the single market, others were less emphatic. One should not however, that Vote Leave was appointed not elected and famously ignored all the grassroots groups including CIB, Ukip and TLA. They were speaking entirely for themselves, falling in behind Dominic Cummings, who would struggle to offer a working definition of the single market.

The closest Vote Leave came to offering a plan of any kind was an assertion that we could simply repeal the European Communities Act. This was never a realistic proposition and we have already departed from that by way of invoking Article 50.

As to the assertion that remaining in the single market is not leaving the EU, this is a zombie argument used by liars. The single market as it stands now is a collaborative venture between the EU and Efta states - and Norway etc only adopt about one in five EU rules by way of a system of co-determination - laws which we will likely have to adopt even if we left the single market - but without any means of disputing council decisions. Not least since many of them are rooted in global conventions.

I won't go into the gory details because I will revisit these issues in the near future. The point of this post is simply to say that leavers do not get to call the shots on how we depart. They were given that opportunity over a year ago and declined the opportunity. It is therefore up to all of us to debate. Democracy is a continuum and though the decision to leave may well be sacrosanct the mode of departure still hangs in the balance and there is everything to play for.

You probably already know my views on this. There is no economic gain or utility in terms of sovereignty from leaving the single market. The main objective and the the single most important one is that we end political union with the EU and an off the shelf treaty is the fastest and safest path to that outcome. The rest can be sorted out later and revisited by way of EEA review.

There is no scenario where we don't have to make compromises and fetishising sovereignty for its own sake is pointless since absolute sovereignty no longer exists unless you're a regulatory superpower like China or the USA. Diverging from the existing regime brings us no efficiencies and comes at the cost of European trade. That was a tough pill to swallow for me being a long standing critic of EU regulation - but that is the reality of it nonetheless.

I would be more inclined to take the risk of leaving the single market if there were a plan on the table or a realistic alternative but there isn't. Our entire polity has only a very superficial grasp of international trade and there are no credible plans in circulation that could compensate for a substantial loss of European trade.

The trade benefits from Brexit only come from cumulative minor increments over many years. There are no "bumper trade deals" waiting in the wings and the only people salivating at the thought of the UK leaving the single market are those with ambitions of asset stripping the UK. Staying in the single market still means we can make our own deals so I see no good reason to self-harm. If leavers wanted it some other way they should have exploited the opportunity when they had it.

As it stands I have yet to identify a single mainstream leave politician with even the remotest grasp of how trade works in the real world. Of the trade negotiators I do know, none of them thinks we would get a better deal than the EEA and if we want to avoid a major long term recession even a bespoke deal would have to replicate 90% of EEA functionality. We could do a lot of damage trying to reinvent the wheel, adding to the uncertainty to only achieve what we could have had from the outset. This is the ultimate folly of the Tory approach and this is what cost them my vote - and I am not alone in that.

In that regard do not let anyone tell you the debate is settled or let them interpret the result of the election for you. The question of how we leave has always been open ended and there is every reason to get involved. Plenty of people want to close down the debate by telling lies. The usual suspects. I'm not standing for it and this ain't over til it's over. The fight over Britain's destiny did not end in June last year. The referendum was only the beginning and hardline leavers do not own this debate.

Friday, 9 June 2017

Brexit is a mess - and I'm fine with it

I'm a bit of a rubbish Brexiteer. From the beginning I shot down most of the classic eurosceptic arguments. I made no promises of sunlit uplands and my estimations of economic prosperity are heavily caveated and set sometime in the distant future. Worse still, having learned a great deal more over the last year I could probably shoot down some of my own arguments as either as wrong or highly unlikely.

But then in my defence I've never really made the case that this is an economic issue. Having looked with an open mind at a number of studies, measured against my own understanding of the issues I'm pretty certain that Brexit is, economically, a kick in the balls.

You would think that would be sufficient to turn me into a remainer but then I keep coming back to that one single basic fact. I do not want the EU as my government. I want Britain to be an independent country and if we create laws governing social and economic policy then the authority to revoke them must reside exclusively with the people of the UK. That is what makes this process worth the pain - to a point.

In this there are some things we can let slide in that I'm never going to get too excited over aubergine marketing standards and I'm not going to go to the barricades over that. This is why I have no real objection to the single market. I don't deny it oversteps the boundaries but it's still a vast improvement on being in the EU.

More to the point, it's par for the course these days with any trade agreements having to comply with WTO rules and increasingly adopting common regulations and standards up to and including labour rights from the ILO. There is no absolute sovereignty as such. To take back full control you'd need to pull out of a number of treaties and conventions and terminate our WTO membership. I feel I don't have to outline why that wouldn't be a good idea.

In basic terms the sovereignty argument is a bit thin when you consider that when it comes to technical regulation we tend to opt for evidence based best practice. As some have noted, many aspects of the replacement for the CFP are going to look very similar to the CFP as it is now.

The one argument that still stands, though, is that we are overdue a political sort out. As much as this is a mess worsening by the day I'm watching it with wry amusement and delight. We have a way to go before we hit rock bottom but given the determination to get there I am confident we will achieve it.

We do not as yet know what the ramifications of the election are for Brexit. Though May has lost her mandate there is still no assurance of a more measured Brexit - and even if we do see a change of tack there is still every probability they will make a complete hash of it. Sooner or later Theresa May will be gone and someone even worse will be installed and soon after we will be out of the EU, in a mess and will probably see Corbyn take Number Ten. That's when you've hit rock bottom.

That though is where I reckon we probably have to go. Like a drug addict you cannot help them until they want to be helped and it's usually not until they're in a total mess. The only thing that will revive Britain and dislodge Crobyn is a self-confident conservative movement. We haven't had one of those for a very long time.

Last night I was watching the results roll in. Many of the names are all too familiar to us. Clarke, IDS, Redwood, Hague and the rest. These are the dregs of the Thatcher era and for all that we have had the Cameron episode, the Tory party is still basically the same beast with the same old donors and same old influences. Their back benchers are party hacks who come and go but at no time since the eighties has the party really undergone any sort of revival.

The Cameron era was just a very effective marketing campaign headed by a determined inner circle who were able to capture the Tory party in the same way Momentum captured Labour - simply because it has no bottom. There is no moral or intellectual foundation. It is just a branded vehicle which occasionally changes owners.

In this, if you think back there was never any philosophy or big idea behind Cameron. It was merely a matter of managing perceptions. Cameron positioned the Tories so as to vomit all the garbage into the Ukip sickbag in order to sanitise the image and capture the centre ground. Well, that dynamic is dead now. You have to pick a side and you have to offer a vision.

To that extent May, for a moment, had the right idea. She did indeed set out a vision. It just wasn't very conservative and it wasn't very appealing. There were elements I quite liked. I happen to think May is absolutely correct about citizenship and that really does speak to my provincial sensibilities but there was no real drive to it and May's big brother interventionism is more akin with Blair than Thatcher.

I'm not the only one to notice that there is a real gap in the market for a vibrant liberal movement on the right - but that is actually not going to happen until the conditions are right. It would seem that the new generation is not going to take our word for it that socialism sucks and they are going to have to learn first hand why us righties revile Corbyn. Lucky for us, Corbyn will give them a crash course and it won't take very long for them to realise their folly. That's when the conditions will be right for bold conservatives to come forward, unapologetically pro-markets. A movement with a resolute determination to take on the health industrial complex doing to GPs what Maggie did to miners.

Someone on Twitter posed the question today asking how bad does it have to get before we Brexiteers will change our minds. The answer is it will get pretty bad, it probably has to - but we won't change our minds. You see, the status quo may well be adequate compared with the path we are about to walk down but every adult in the land instinctively knows this mode of retail politics is unsustainable and there needs to be substantial change. Since this hollowed out shell of a Tory party is never going to have the political courage to do the necessary then we have to force the issue.

In that respect we're just giving ourselves a head start on Europe who will also have to re-evaluate their decaying post war paradigm. We are the early adopters - and this is why we are in the longer term going to be better off out of the EU because we'll have bitten the bullet and adapted to the new century.

It's probably going to take more than a decade to sort out but it does need sorting out. The economy can't go on like the and politics can't either. We can't put it off any longer and we can no longer be held to ransom by the left. For a long time now we have been in a political stalemate which cannot last simply because all ponzi schemes fail. We cannot prop it up with immigration indefinitely.

Britain's last great revival was born of a socialist induced slump. Without the political liberty to arrange our own affairs as we see fit, we can neither fail nor thrive. We can only stagnate. In order to have an economic revolution - and by the gods we need one, we need to first burn away the foliage so the green shoots can see the light.

I promise you it won't be pretty - and political forest fires never are but with politics being in the state it's in, it's only a matter of time before it all crashes into the rocks of reality. All the EU has done has kept the lid on it so that we can luxuriate in denial. Better that we face the music and get to grips with it rather than trying to put the genie back in the bottle. Change is healthy and it's long overdue.

The kicking that May deserved

Apparently it's a "cynical remain plot" to say the election result was about Brexit. Curious. I have no doubts that people voted for a multiplicity of reasons but the vote against the Tories was largely a punishment for their hubris and May's overall indifference to the electorate. May's execution of Brexit is a huge part of that - taking us for utter fools, refusing to add any substance to the empty matras, maintaining the pretence that we can achieve her twelve point "plan" without any sacrifice or compromise - with absolutely no intention of opening up a debate about Brexit.

Then we have the idiotic Brendan O'Neill presenting the issue as entirely binary as though anyone seeking a more moderate and sane approach to Brexit - or at the very least to not be taken for a fool is somehow part of the anti democratic "urban middle classes" in seeking the thwart Brexit.

He asserts that "MPs, the majority of whom oppose Brexit, see in Corbyn’s gains an opening for reinterpreting Brexit to mean staying in the market – which really means staying in the EU". This is categorically untrue. Moreover, there is now a broad acceptance that Brexit must happen and any serious campaign to derail Brexit was over the night of the Article 50 vote. The debate now is a question of how we leave the EU and how we satisfy the criteria of Brexit without wrecking the economy.

It is an intellectual pygmy who cannot see shades of grey. There are plenty of people who voted to leave but do not what to see the wholly nihilistic and technically flawed Tory approach - and many of the leave groups who operated alongside the Leave Alliance accepted from the beginning that the single market would have to play a role. None of this exists in the minds of metropolitan bubble dwellers like O'Neill and the rancid Julia Hartley Brewer. Idiots still fighting last year's battles completely oblivious to the fact that we are in a whole new phase of the debate.

If anything is likely to give the remainers the upper hand it is those Brexiteers who have, of their own volition, opted out of any of the technical discussion, leaving remainers and technocrats to make the running while they laughingly knock down the cardboard cutout ranters like O'Neill who have nothing of substance to offer.

The fact is that we do deserve some clarity and some answers. How are we going to reconcile the needs of Northern Ireland when it necessarily will require a high degree of integration with ramifications completely at odds with what people thought they were going to get? We need some honesty about our potential and capacity to strike new deals. We need a debate about the shape of our future EU relations. We need to discuss the rather urgent matter that none of this can be achieved in two years. Something our government cannot even admit - and perhaps is still under the illusion it can accomplish.

Quite rightly people want to hold the government to account and want more than the glib "Brexit means Brexit" mantra. Why should we have given her a mandate to drive us over the cliff without a plan and without some acknowledgement of the intractable complexities? And why should we simply roll over and let them get on with it without demanding certain assurances? I did not vote to obliterate a quarter of our European trade.

We are long overdue a grown up debate about Brexit. We're not getting it from the pundits, we're not getting anything substantive from leave MPs and we're being spoonfed bullshit by the government. If there is an anti-democratic conspiracy in motion it is to take us down the hardest path possible without ever seeking a mandate. This is why I did not vote Tory. So please, don't pretend this election wasn't about the Brexit mandate - and do not presume to speak for all leavers because not all of us are salivating at the prospect of a deep decade long recession.