In the past three years there have been two constants in the Conservative Party through the Brexit process and the entire political landscape. Those are Theresa May and Philip Hammond. While this level of stability at the top level of a political party and a Government is sometimes a recipe for success, the last three years have been anything but. A total lack of imagination in policy and approach has left the Conservative Party, Brexit and the country’s reputation in an embarrassing state of disrepair.
When Theresa May was ‘anointed’ into office by MPs rather than party members in July 2016, after David Cameron cowardly resigned when he lost the EU referendum, she set about painting an image of a modern Conservative Party. This initially seemed popular with the public as her ‘big statements’ on reducing inequality and rewarding those individuals who work hard resonated with the public – in direct contrast to the clearly unorganised chaos of the Labour Party under Jeremy Corbyn. However, a vital pillar to May’s success was clearly about her delivery of Brexit – something which to this day has failed dismally. Any legacy which she wished to create as a ‘new Margret Thatcher’ will instead be one of failure.
This is in major part because of the approach taken by both the Chancellor, as well as the Prime Minister – both of whom have surrounded themselves with Remainer advisors and civil servants in key positions, who, to the public, are not intent on delivering the Brexit the majority voted for.
The Remain-dominated higher brass only served to reinforce the fatal mistake Theresa May made when she attempted to negotiate the UK’s exit from the EU. She, and those surrounding her, saw the entire process as a means of ‘damage limitation’, in which the UK has the least possible change in its relationship with the EU.
Just last week Philip Hammond said of future customs arrangements that there needs to be as little change as possible. Effectively, he was endorsing and laying the groundwork for a Customs Union/Arrangement – whichever way you spin it, any kind of deal with Labour he can help muster! This is something which couldn’t be further away from the reality of delivering Brexit.
This comes just after the Conservatives have suffered devastating losses in the recent local elections, with the root cause largely coming from a dissatisfaction with the handling of Brexit, and of Theresa May staying as Prime Minister. It seems, despite sky-high numbers of spoilt ballots – totalling over 1,000 in some councils, mostly scrawled with complaints about Brexit being delayed – the Conservative Party leadership is not listening, and continues to plough full speed ahead towards the softest possible Brexit.
As a result, we have seen the Brexit Party continue to rise in the polls for both the impending European election and a future general election. The Brexit Party has now topped the polls with 34% of the vote in a recent YouGov European Election poll – more than double second-placed Labour. Meanwhile the Conservative Party continues to fall, to fifth place on 10% of the vote in that poll.
It appears Theresa May has cocooned herself away from reality. She seems obsessed with passing her Brexit deal – with or without the support of her own Cabinet and the majority of Conservative MPs – at whatever cost to the party and the country. It even looks like she will try and add on a Customs Union in all but name, and perhaps another referendum. By whatever means, she is intent on forcing her deal through Parliament in any shape or form. She seems to believe this is necessary for the Conservative Party to retain any level of electability.
However, many in her own party clearly do not agree with her, and this is likely to dig them further into the grave if they do not deliver a true Brexit for Britain on the global stage.
May’s mentality and isolation from alternatives is only enhanced and encouraged by Philip Hammond. He is a man who has been so evidently anti-Brexit from the beginning, he barely attempts to hide his disdain anymore. Only last month he endorsed a second referendum as a legitimate prospect and idea! The Chancellor has continually pushed for the softest possible Brexit and has done all he can to push back against the idea of a no-deal Brexit, arguably doing more to damage Brexit as a whole than the Lib Dems and Change UK could ever do.
The Prime Minister needs to leave Government as quickly as possible, along with her Chancellor.
There have been complaints of the Treasury holding back No Deal funding for a long time, and regular briefings to the press and business leaders of supposed economic collapse which would occur should we not have a ‘Brexit in name only’. These briefings come from the Treasury, as well as civil servants who continue to peddle the same tired old messages of ‘Project Fear’. Philip Hammond simply picked up from where the former Chancellor, George Osborne, left off. Where May, Hammond, the Remainer hierarchy of the Government and the Civil Service are supposed to delivering Brexit, we actually have a complete and utter failure in the commitment to deliver what the nation voted for in the 2016 EU referendum. By hook or by crook we need to Get Britain Out of the EU as quickly as possible.
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It has been over one thousand days since the EU referendum: over one thousand days since the biggest mandate at a referendum in UK history; over one thousand days since a staggering 17.4 million Brits put a cross next to the Leave option on the ballot paper. Yet over one thousand days later, the United Kingdom is still a member of the European Union and we are still having the Remain/Leave discussion.
It should no longer be a question of Remain or Leave. That debate was settled on 23rd June 2016. It should now be about respecting the result of a democratic process. Democracy is at the heart of British values and to hold another referendum would be a brutal blow to such an important principle and an insult to the people of Britain.
Political apathy is already a problem in the UK: nearly one in three did not cast a vote at the 2017 General Election and if the result of the referendum were ignored, I fear the democratic deficit would only worsen.
I think it is a common misconception by Remainers that Brexiteers fear a second referendum. We are definitely not scared. We just think it would be wrong. In fact, if the referendum was not a big enough mandate for Brexit, let’s not forget that over 80% of current MPs were elected on manifestos saying they “respect the referendum result”.
Of course, the biggest elephant in the room is how on earth we secure Brexit after Theresa May’s Withdrawal Agreement was voted down three times. However, the truth is that this wasn’t Brexit at all. There were too many unnecessary strings attached — most obviously the backstop issue and that staggering £39 billion divorce bill.
Nearly every Brexiteer is united around the belief that “no deal is better than a bad deal”. However, at this point I don’t think any deal will get through Parliament — partly due to that Remain majority in the Commons of around 300. What did get through Parliament, however, was Article 50. Article 50 clearly stated that we would be leaving the European Union on 29th March 2019, two years after it was triggered — irrespective of whether we got a deal or not. Therefore, the United Kingdom should have left the EU on 29th March. But we didn’t.
The Conservative Party has let me down. I have been a loyal member since I was sixteen, spending many an evening canvassing for my local elections. Theresa May promised she would deliver on Brexit; however, allowing “No Deal” to be taken off the table, any chance of a respectable deal was gone. There seems to be no room for negotiation left. Why on earth would the EU budge on anything once they knew Parliament would not accept No Deal? Regrettably, it has come to the point where it seems to be a choice between Remaining or Leaving with No Deal – and the latter is definitely the better option.
This betrayal has led me to make the drastic decision to vote against my own party at the European election. I will be voting for the Brexit Party. I encourage other Conservative Party members, Labour Party members, people who were on the Remain side of the argument and indeed anyone else who truly believes in democracy to do the same. If the Brexit Party succeed in these elections, the likes of Change UK will be left with no line of argument — after all the only thing they seem to determined to change is the result of the referendum!
Wake up parliamentarians! The British people are strong and resolute. I urge you to join me in voting for the Brexit Party on 29th March. Democracy must prevail.
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For a long time, it looked as if Brexit was heading towards a definitive resolution. Even when the March deadline seemed to be drifting towards a no-deal scenario, small and medium-sized businesses (SMBs) at least had a deadline to work towards when making preparations for life post-Brexit. But rather than bringing clarity, the prolonged doubt caused by an extension has plunged companies even further into the dark.
The short-term benefit of the delay is that many small businesses will be able to continue with business as usual for a few months more, but planning for 31st October should also be taking place. Of course, this is easier said than done – a general election, referendum or further extensions could yet see the entire process prolonged even further.
How many SMBs will have the resources to hire additional storage space for an open-ended and indefinite period of time to build up stock? How much stockpiling should SMBs do and when should No Deal plans be enacted?
Planning for No Deal
My company started No Deal preparations a little over a year before the 29th March deadline, in early 2018. While many imports and exports like food and medicine have a short shelf life, we are lucky to handle materials that are typically long-lasting, so potential delays at ports are not a huge issue for us, thankfully.
In the first few months of 2019 we took on an additional warehouse to enable us to increase our stockholding of raw materials. Whatever happens, we will still need to carry on supplying our UK customers and it is important that we keep a suitable level of additional stock to sustain their needs.
We are a classic case of a company that primarily imports our raw materials. While some fluctuation in the value of the pound is normal, there is a serious concern that the pound could take a tumble and take a very, very long time to recover. Due to our additional stock we would be able to continue for a few months, but we have finite financial resources. Keeping additional stock is vital to make the transition as smooth as possible, but it needs to be balanced with what is affordable.
Avoiding a skills gap
One tenth of the UK plastic industry’s employees are from the EU. The lack of certainty about the future is already slowing recruitment in the industry. If these people decided to leave to find work in another EU country, it could be a major challenge to replace them. Increases in training and recruitment would become essential, diverting investment that would otherwise be used for research and innovation.
Generally, I think the issues will vary on a sector-by-sector basis. Those looking for workers for packing or warehouse roles may have issues, while those recruiting highly-qualified EU nationals are likely to have fewer issues.
The growth of Technical Foam Services over the last decade would not have been so successful without our EU staff. We want to build on our success by retaining them and helping to improve their skills, while also recruiting new employees from the EU with the same outlook.
80% of our workforce are from the EU, but are UK-based. We are supporting them through the settled and pre-settled status process to secure permanent residency, meaning that our current workforce will not be affected by Brexit.
The importance of monitoring the supply chain
If a company were to begin Brexit contingency planning today, the very first thing to do would be to examine their supply chain closely. Investigate different scenarios to see what the effects are likely to be on existing European trade. Do you need to change the frequency of deliveries or secure stock from other locations? Identify the day-to-day issues and develop a strategy so these issues do not come as a shock.
Perhaps to minimise delays you might want to begin to route your imports and exports through minor ports. It is a small change to make now, but avoiding congestion at somewhere like Dover could prove invaluable further down the line.
The future of British industry
One of the real benefits of a modern SMB is the ability to be dynamic and flexible in ways that larger or older companies may not be able to. By looking ahead and planning in detail, you can make sure that you are looking to adapt to challenges and react quickly should it become necessary.
Ultimately, the fundamentals will not change. You will continue to have clients and suppliers that have the same objectives, Brexit will not change that. By ensuring you have strong relationships and clear communication then you can all work together to find a way around any challenges that may appear.
I get the impression that many small business owners would like to see the whole situation put to bed. But while a second referendum or general election could help to bring about a resolution, it could complicate things even further. It is likely that this limbo will continue for the rest of the year. Things may have changed a lot by then and there could be some difficult periods, but as soon as there is a semblance of stability, British businesses will show their resilience, find their feet and regain their strength.
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The Labour Party has been sidelined in the Brexit process by a Prime Minister who has persistently brought back a betrayal deal which utterly fails the British people and those in Labour who voted Leave at the EU referendum. Theresa May’s deal locks us into an Irish backstop which will break up the Union of the United Kingdom. Labour, as the ‘Party of the people’ must offer a Brexit the people want. We must end talk of a second referendum and deliver a complete and comprehensive exit from the EU. If Labour does not do this, they will risk aliening and betraying all Labour Leave voters.
Second referendum advocates – like Deputy Leader Tom Watson and nearly 90 Labour MPs – do not represent Labour Leave voters. The National Executive Committee’s decision this week “to keep the option of a ‘Confirmatory Vote’” within the manifesto for the European Parliamentary Elections betrays Leave voters within the party. We have already seen advocates of a second referendum such as Chuka Umunna leave the Labour Party because they are unwilling to recognise the result of the EU referendum and deliver on the Labour Party 2017 General Election manifesto. Labour voters do not want a divided party. They want Brexit to be delivered.
The Labour Party has a duty to deliver for the 17.4 million Leave voters and all those who value Britain’s democracy.
The only Brexit which delivers on the result of the referendum is a no-deal, WTO rules Brexit. Theresa May’s Government failed to deliver on her numerous promises to Leave the EU on 29th March 2019, as well as the people’s desire for a no-deal Brexit. Labour must not make the same mistake. They must advocate leaving the EU on WTO terms, without a deal and as soon as possible.
For far too long the Labour Party has fought Conservative governments and the EU over workers’ rights. The EU has upheld workers’ rights but did not improve them to the standard Britain wants or expects. The UK must ‘Take Back Control’ of our own labour laws so we improve workers’ rights beyond what the EU would grant. The EU has kept trade unions passive and not allowed them to protect their workers in the way they deserve. After the last recession, the millions of unemployed in Spain, Greece and elsewhere in the EU received no benefits from their trade union rights. We cannot fall into the same trap. We must break free of the EU and secure proper working rights for British workers.
Labour must advocate a Brexit which gives British business and workers the opportunities for success which EU membership denies us. We must grow our digital economy and ensure our future trade agreements are international. The world does not end at the EU’s borders. We would limit ourselves by remaining in the Customs Union and the Single Market. The growth in international trade will bring business growth, job security and a higher standard of living for British workers. Labour must protect workers by securing their jobs and improving their rights. We cannot achieve this if we are dictated to and shackled to the EU.
The EU is anti-democratic and anti-socialist and goes against the principles of the Labour Party. It takes decisions away from national governments and through the weed-like growth of the euro, it has limited the economic independence of EU members.
The UK has dodged the euro bullet, but has fallen victim to the Common Agricultural Policy (CAP) and the Common Fisheries Policy (CFP). The CAP and CFP have restricted British business and damaged the livelihoods of British workers by reducing competition and subsidising Britain’s competitors in the EU. British farmers and fishermen must have unfettered control over their own success in the future, by being able to trade with the rest of the world, on global prices, without EU quotas hampering them.
So, I repeat, the only way Labour can deliver on the result of the referendum and for the millions of Labour Leave voters is to leave the EU without a deal, on WTO terms. This would secure jobs and livelihoods for British workers within an independent economy and with global trading potential. Workers’ rights would be enhanced and guaranteed by British courts, no longer subservient to the European Court of Justice.
It is imperative we Get Britain Out of the EU as soon as possible, so we can look after our workers, build industry and move forward. The Labour Party must present a united front and give the leadership and direction which the UK has lacked for far too long by delivering a no-deal Brexit.
Wales’ achingly europhile First Minister Mark Drakeford turned his St David’s Day address into a fanfare to Brussels this year when claiming: “Wales is a European nation and always will be”. Earlier his predecessor Carwyn Jones had told S4C’s Pawb a’I Farn: “I said we had to respect the result” before publicly backing a second referendum..
The current and former First Ministers personify Welsh Labour’s approach to Brexit. Firstly, Welsh Labour is deeply invested in a pro-EU identity that it incorrectly projects onto Wales. And secondly, Welsh Labour is trapped in a Brexit denial loop that attributes Wales’ historic Leave vote to the false consciousness of the workers.
While Plaid Cymru has long sought ‘independence in Europe’, Welsh Labour seeks devolution in a ‘Europe of the regions’. In their political self-perception they imagine Wales is a more left-wing and supranationalist nation that alongside the Celtic fringe is being dragged out of the EU by eurosceptic England.
Yet Britain’s Celtic Fringe is hardly more pro-EU than England. 57% of Celtic Cornwall voted Leave. Two fifths of Scotland voted Leave. Wales voted for Brexit, revolting against its pro-EU establishment and Remain-supporting media.
Drakeford’s ersatz version of Wales only exists in the minds of Wales’ elites. Cardiff and Edinburgh universities’ YouGov Future of England Survey found that in Wales 47% primarily identified as Welsh and 34% as British, but only 4% identify as European.
In reality, Wales has always been a global nation. The Maritime Clock on St Mary’s Street in the nation’s capital speaks to this. It was commissioned when Cardiff was the coal and shipping metropolis of the world and the global price of coal was set in Cardiff Bay.
The globally diverse heritage of Cardiff’s ‘Tiger Bay’ and Wales’ diasporic links to the USA (Wales’ largest overseas investor over the last seventy years) shows the New World is just as important to modern Wales as Old Europe.
Then there is the tendency of Welsh Labour politicians to attribute Brexit to the false consciousness of the workers who are deemed not to have understood what they were doing when they voted Leave.
Former MEP and sitting Labour Welsh Assembly Member Baroness Morgan of Ely channelled this when she said: “People need to understand that they will pay a high price for the vote that took place last year.” More recently a Labour councillor in car-manufacturing Bridgend said of workers at Nissan’s Sunderland plant “all those who voted to leave should be laid off first”.
When the Labour Deputy Leader of Cardiff Council claimed to be stockpiling dried food for schools (“next it will be gas masks”) she blamed this on “the liars who sold Brexit” and “those who believed the lies” as though Welsh voters are open to being gulled.
Welsh Labour wants votes for prisoners and 16-year-olds while the Welsh Government ran a ‘Brexit Consultation’ of 11-year-olds. Yet the one group whose votes they do not respect is Wales’ 854,572 Leavers who outnumbered ‘Yes’ voters in the devolution referendums of 1979, 1997 and 2011 and voters for anything in Welsh elections since 1997.
This is despite House of Commons Library estimates showing 53.44% of voters in seats returning Welsh Labour AMs in the 2016 Senedd elections subsequently voted Leave, a higher percentage than across Wales. Perhaps this is why their 2017 manifesto said ‘Welsh Labour accepts the Referendum result’ and will ‘make Brexit work for Wales’. And it explains Welsh Brexit minister Jeremy Miles’ recent warning to their Llandudno Conference not to ‘misunderstand Leave voters’.
This didn’t stop Welsh Government health minister Vaughan Gething (on £100,000 a year) and Lynne Neagle, Labour AM for the 61% Leave-voting Torfaen (on £64,000 a year) joining the ‘People’s Vote’ march in London so Welsh voters have “the opportunity to think again”. Owen Smith, MP for Pontypridd in the Brexiting Rhondda Cynon Taff (on nearly £80,000 a year) has even claimed Brexiteers including those in his seat are part of a “racist, xenophobic, right-wing, reactionary project.”
Ten Labour MPs for Welsh seats (almost half majority Leave) and Wales’ Labour MEP signed a ‘Love Socialism, Hate Brexit’ letter (on House of Commons notepaper) to Labour’s NEC demanding a ‘confirmatory vote’ on any Brexit deal features in the their European manifesto so as to secure a ‘socialist European Commission President’.
And all four Welsh Labour candidates on the Labour list for the European Parliament publicly back a ‘People’s Vote’ despite Walesonline reporting a YouGov poll (2-5 April) showing opposition to a second referendum in Wales rising over the last two months to 46% (up 2% since February).
In a similar anti-democratic flourish, First Minister Drakeford told the Senedd he would sooner vote for ‘revocation’ than allow a clean no-deal Brexit despite YouGov (31 March – 1 April) finding 46% of Wales favours no deal, 15 points ahead of those favouring Remain.
Siloed in their CF99 postcode bubble what Welsh Labour politicians cannot accept is that Welsh Leavers voted intelligently in their own interests when they rejected a broken EU system that favours elites, oligarchs and the men of always.
It isn’t hard to see why Welsh Labour’s grandees like Lord Kinnock thinks Brexit is ‘appalling’. Open Europe found Neil and Glenys Kinnock both earned £10million from Brussels over fifteen years in wages, allowances and five pensions. Nothing, they would say, is too good for the working class.
Yet Welsh Leavers also had good reasons for voting to end the EU’s free-for-all freedom of movement that give employers fewer incentives to invest in human or physical capital contributing to lower productivity and wage growth, a point ‘Trade and Invest Wales’ made when it boasted Wales’ workforce “has up to 30% lower salary costs”.
Brexit has galvanised efforts to tilt the UK growth model away from a reliance on consumption to sources of demand including exports. Triggering a readjustment in the Sterling exchange rate points the economy in the direction of export-led growth, favouring Wales’ manufacturers.
Unrestrained by EU state aid restrictions and procurement law, the UK Government can operate a more proactive industrial strategy. Regional spending can be better tailored to the future of Wales’ economy.
A sovereign regulatory regime can better support cutting edge sectors like Wales’ burgeoning life sciences and semi-conductor industries and cut the red tape that burdens the small businesses that form the backbone of the Welsh economy.
Taking back control of our tariff schedules can enable a reduction in the cost of living for Wales’ poorer households. And the Brexit Dividend invests in the NHS keeping Wales’ workers healthier and more productive.
In the real economy, the dragon spirits of Brexit are flying high as recent HMRC figures show Wales’ goods exports, including to non-EU markets, were up 4.2% to £17.2 billion in 2018. Firms like Cardiff-based SureChill that featured in the Department for International Trade’s ‘Local to Global’ podcast show Welsh exporters are venturing into new markets.
By contrast, Welsh Labour prefers to work with the fanatically pro-Brussels SNP in coordinating Senedd and Scottish Parliament debates, calling for No Deal to be taken off the table and extensions to Article 50. In a joint statement First Ministers Drakeford and Sturgeon called Brexit a ‘catastrophe’ despite Wales’s Leave majority and two fifths of Scottish voters backing Brexit.
They are hopelessly out of touch with public opinion. A ComRes poll for Leave Means Leave (21st March) found that 46% of Welsh voters think Remain-supporting politicians have damaged Britain’s negotiating position, 44% believe thwarting Brexit would harm Britain and twice as many think a ‘People’s Vote’ would betray the Referendum.
Hard Remain Welsh Labour rejects solidarity with working class voters in Wales’ Brexitlands at its peril. No party has a right to exist least of all one that refuses to compromise with the Welsh electorate.
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Yesterday afternoon Theresa May appeared before the Liaison Committee of Select Committee Chairs, following what was probably the dullest session of Prime Minister’s Questions that I can remember for a long time, with Brexit not even being raised by a single MP during the 50-minute session.
But Brexit took up most of the 90-minute session with the Committee Chairs and despite someone close to May confiding to me beforehand that she had “no intention of creating any news”, there were several extremely telling exchanges.
To many observers it was the day when May buried her erstwhile mantra that “no deal is better than a bad deal”, with her saying in her opening statement that in her view the “only acceptable” choice before MPs was “to form a majority to ratify the Withdrawal Agreement”.
Then, challenged by Public Administration and Constitutional Affairs Committee Chair Sir Bernard Jenkin as to whether she would contemplate leaving the EU of her own choice without a Withdrawal Agreement, she used the following formulation of words:
“I stand by the references I have made in the past that no deal is better than a bad deal, but I actually happen to think that we have a good deal. When I first made that reference, I was talking in the abstract — it was at Lancaster House. We now are no longer talking in the abstract; we are talking against the background of a negotiated deal, hard fought, that I believe is a good deal for the United Kingdom. That is why I say — and it remains the Government’s position — that we will continue to work to leave with a deal.”
Watch a clip of that here.
Welsh Affairs Committee Chair David TC Davies later took up the theme in a series of straight questions to which simply no straight answer was forthcoming. I think it’s worth reproducing the transcript to comprehend the level of evasiveness on display:
Davies: If you don’t get what you want, which is the Withdrawal Agreement passed — which I personally, as a loyal backbencher, have always supported — and if we are unsuccessful in persuading our colleagues to support that, would your preference be a no-deal Brexit or to remain in the European Union?
May: My view is we should leave the European Union because that is what the British people…
Davies: But we may not get what we want. We may have to choose between things that we don’t want, and the choice may be…
May: I think that we should leave the European Union, and my job is to try to make sure that we leave the European Union with as much of what we want as possible.
Davies: As we have just agreed, we are not necessarily going to get what we want. You and I would both like the Withdrawal Agreement to pass, but if we don’t get that, would you be happy to support a no-deal Brexit?
May: As I have just said, I believe that the important thing for us is to deliver on the result of the referendum and that means leaving the European Union, but I hope that we can both…
Davies: Can I turn the question around then, because I think this is important? I detect a change in Government policy here. Can I conclude from what you are saying to me that you would not support a no-deal Brexit under any circumstances?
May: The position of the Government is that the best option for the United Kingdom is to leave with a deal. That is what I believe. That is what I’m working for. That is what the Government have been working for. I believe that we should leave the European Union. I believe that it is important to deliver on the result of the referendum. I believe we’re also in a set of circumstances where Parliament has made it clear that in the circumstances where it looked as if no deal was happening, Parliament would act again to try to ensure that there wasn’t a no-deal situation. I would have hoped that we could all just agree that we recognise, as you do, that the Withdrawal Agreement doesn’t give everybody what they want, but that actually leaving with it is the best option for the UK.
There then followed another to and fro between Davies and the Prime Minister where again no question was knowingly answered:
Davies: Do you think that you have been undermined by members of your own Cabinet who have suggested semi-publicly that we couldn’t leave without a deal?
May: Parliament has said that they don’t want us to leave without a deal. That is the reality.
Davies: But members of your Cabinet — do you think they have undermined you?
May: I think that what is important is that we work to deliver Government policy, which is that we leave — that the preference is to leave with a deal and we work to leave with a deal.
Davies: It was Government policy to leave by 29th March. The failure to leave by that date is a failure, isn’t it? It is a failure.
May: I wanted to leave on 29th March. I voted to leave on 29th March. Others voted to leave on 29th March. Sadly, not sufficient numbers in the House voted to leave on 29th March.
Davies: But it is a failure, isn’t it?
May: Well, people wanted us to leave on 29th March. We wanted to leave. We weren’t able to achieve that. What we must not fail in is leaving the European Union. We must ensure that we deliver on leaving the European Union. But as we’ve said, and as you’ve indicated you agree with, it is better to do that with a deal.
Watch a clip of those exchanges here.
Earlier in the session, Sir Bernard also put the Prime Minister on the spot to challenge her with the suggestion that she was “under no legally binding obligation of any kind” to accept the extensions to the Article 50 period offered to the UK by the EU. In respect of the first extension, she said “the Government took a decision that it was right and appropriate at that time to accept that extension”. Then, following the passing of that legislation to mandate her to seek the further extension, Sir Bernard pointed out to her that “You were obliged to seek an extension, but you were not obliged to accept an extension”. But she refused to accept that, replying: “I think if one is obliged to seek an extension, the expectation is that one is going to accept an extension”. Click here to watch that exchange.
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The Prosperity UK Alternative Arrangements Commission, which launched earlier this week, is a serious attempt to address the complexities of the Irish border and break the Brexit logjam. Co-Chair Nicky Morgan and I have decided to take an entrepreneurial approach to solving the conundrum of the Irish border, and ask the private sector for its help.
Our starting point is to find out what is possible by asking a panel of technical experts to develop credible Alternative Arrangements for the Irish border, which can be delivered in a timely fashion, and without the presence of physical infrastructure at the frontier.
The Commission will be made up of a broad spectrum of MPs and Lords, representing many different views on Brexit. The Commission is agnostic on the preferred future relationship between the UK and EU. Our work will be compatible with virtually all of the EU-UK end states currently under consideration and will ensure that the UK retains full flexibility in its future negotiations with the European Union.
There are three common misconceptions about Brexit which are relevant to the Commission.
The first is that Alternative Arrangements will not be necessary. But in every single scenario bar staying in both the EU Customs Union and the Single Market, for goods and agrifood, alternative arrangements of some kind will be necessary. And if we are in that scenario, we would have no ability to execute an independent trade policy or improve our domestic regulations, taking away all the potential economic gains of Brexit.
It is not well understood that free circulation of goods comes from both the Customs Union (CU) – and the rules of the Single Market. If the UK were a full member of the EU Customs Union, this would only address rules of origin. Checks would still be needed on animals, animal products (including processed food), plants and plant products. Technical regulations and standards that define specific characteristics of a product would also require checks. If the UK was in a CU, not the CU (like Turkey), the UK would need movement certificates for all relevant goods. For these very reasons, a customs union on its own does not solve the Irish border question.
Let us look at some of these potential scenarios:
- Membership of the EFTA/EEA? We will need to prove origin, and consequently, there will be customs checks.
- Membership of a Partial Customs Union? We will need movement certificates and there would need to be checks for standards, TBT (Technical Barriers to Trade) and SPS (Sanitary and Phytosanitary) issues.
- A Customs Union and EEA? We would still need movement certificates and some customs checks.
- A comprehensive Free Trade Agreement between the UK and the EU? Yes, this will require the complexities of the Irish border to be addressed.
- But what about leaving on WTO terms, a so-called ‘no deal’ scenario? Leaving the EU without a deal doesn’t absolve us from finding a solution to the Irish border. If anything, it makes it more important.
The second misconception is that there is no majority in Parliament for any Brexit alternative. But as avid BrexitCentral readers will know, the Brady Amendment was the only amendment during the recent Brexit debates to gain a parliamentary majority. Central to the amendment was the need to come to an agreed path on alternative arrangements for the Irish border.
The Alternative Arrangements Commission is – and was designed to be – a broad church. We welcome any parliamentarian who is committed to finding a workable solution to the Irish border, which means the UK can leave the EU.
The third misconception is that Alternative Arrangements for the Irish border would be a hi-tech unicorn, dreamt up by some futurologist in Silicon Valley and which would take years to develop. To that, I say, no, absolutely not. We are seeking solutions based on existing, working technology and processes. There just has not been sufficient practical work done on this by the Government or anyone else. And whilst this lack of work is regrettable, it does no good to look backwards.
The Commission has engaged a Technical Panel comprising border and customs experts, practitioners and lawyers with detailed knowledge of Ireland as well as the EU, UK and international trade regulations in order to create draft processes and procedures to fulfil our goal. In addition, the Commission will engage with established technology providers in order to develop a comprehensive set of solutions and timelines for review.
The Technical Panel will address the most challenging aspects of the Irish border including small traders, tax issues, security and movement of people, trusted trader schemes, rules of origin, financial settlement and issues relating to Sanitary and Phytosanitary Measures (i.e. treatment of food and plant-based goods).
The Commission is seeking solutions that are both realistic and sustainable and recognises that their formulation and implementation will require the engagement of many stakeholders in the UK, the Republic of Ireland and Europe. Central to the proposals will be a commitment to protecting the Good Friday Agreement.
There are no easy answers with Brexit, but I hope this Commission into Alternative Arrangements is the impetus for finding both the technical solutions and the political consensus for a deal with the EU. We owe it to the country, and Northern Ireland in particular, to do everything we can to create a seamless border in Ireland. Just because it has not been done before, does not mean it is impossible.
Anyone wishing to offer their expertise or to make a submission to the Commission can do so by emailing Greg Hands.
The post Here’s how I want to address the complexities of the Irish border and break the Brexit logjam appeared first on BrexitCentral.
For the last 40-plus years the United Kingdom has been wrapped in a debate surrounding its relationship with the European Union. Then in 2016 the Great British Public finally had the opportunity to have their say – and they voted to Leave the EU. While this was a severe shock to the establishment – and something they had on the whole campaigned against – they did not realise there would be the backlash and resentment we are currently seeing from those who are angry the Brexit negotiations have been handled so badly.
Within the Conservative Party, Brexit truly presented a chance to bring the party together, with the conclusion of the single most divisive issue between its membership and its MPs. Delivering Brexit could show the Conservatives as an effective force in government, which also cares about the wishes of the working class and Labour voters. The so-called ‘nasty party’ tag could have been consigned to history. How ironic it would be for Theresa May to throw this opportunity out of the door.
The Labour Party, on the other hand, was presented with the opportunity to shift away from the London-focused viewpoint which has developed since the Blair years. With a traditionally eurosceptic leader in Jeremy Corbyn, the stage was set for a principled Labour Party to drive Brexit negotiations forward in an attempt to deliver for the forgotten parts of the UK – people the Labour Party has long claimed to represent.
Instead of these two outcomes, we have seen the two leading parties within the UK throw away their chances of electoral success.
Labour have narrowed their focus even further on its young urban-centric membership. They are pushing ideas – such as a Customs Union and membership of the Single Market – which are an abject betrayal of the reasons for which many around the country voted to Leave the EU. In addition, sections of the party are even denying the result of the referendum – and calling for another – blatantly disregarding the fact 60% of Labour constituencies voted to Leave.
The Conservative Party, on the other hand, gambled in 2017 with a general election to try and increase their majority. A bad campaign, projecting Theresa May as a true statesman – which she clearly is not – lost them their majority. Since then, they have largely ignored their grassroots supporters.
Theresa May – seemingly wearing blinkers – obstinately refuses to consider any suggestion other than her own so-called ‘deal’ – a deal which is rumoured to have been wholly drafted by the EU, and not our own ministers! Even now the Prime Minister seems to be in the process of trying sneak her deal through with the support of Labour MPs, and by using sly terminology will no doubt accept having a Customs Union with the EU in everything but name. However, the negotiations with Labour do not seem to be going well – with Labour dragging their feet, perhaps believing that in doing so, they will have a greater chance of winning in any general election when May is cast aside by the Conservative Party.
Neither party seems to understand what I believe the Great British Public increasingly really want, and this is to Leave the EU on No Deal WTO terms – and now.
These failures will only grow. Through their failure to address the current major political issues, both Labour and the Conservatives are currently facing a backlash in this week’s local council elections in their traditional heartlands. This will clearly get worse if we are forced to hold the European Parliament election on 23rd May, as now looks inevitable. The majority of these disenfranchised supporters seem to be flowing into Nigel Farage’s new Brexit Party – a party which will not tiptoe around the Brexit issue, but instead push for a true and solid Brexit and create mayhem in the European Parliament.
If these elections go ahead in Britain, they will certainly be a sign of things to come, should the non-traditional parties exceed expectations. The latest opinion poll by YouGov has the Brexit Party winning the European Elections with 28% of the vote. This would not be surprising, as the majority of the public who voted to Leave will want representatives in the EU who will inflict as much damage on the European institution as they can.
It is clear from their behaviour that both Labour and Conservative politicians are looking after their own personal interests, rather than those of the whole country.
Who is listening to the single biggest electoral mandate ever given? Clearly not the major parties, who are effectively killing off what little trust much of the country had in our own political system.
One of the most significant results of this may be to bring about radical change to our electoral system. With trust in political parties falling away, the likelihood of any of the current main parties achieving a majority in any future general election is likely to be quite small. This would mean we may need a change to a more proportional system of representation, allowing effective governance which would truly represent the will of the people in the future. This would need to be a ‘Single Transferable Vote’ system as used in the Scottish local elections, or the ‘Proportional List’ system used in the European elections – and not the AV system which was rejected by the public back in 2011.
Such a change would certainly give more power to Leave voters and others who have long been ignored. They could then vote for parties other than the Conservatives or Labour and see these votes actually turn into real representation. No longer would there be a situation akin to that of the 2015 general election when UKIP received nearly 4 million votes, but only won one seat in Parliament (when ex-Tory MP Douglas Carswell held the Clacton seat he had retained at the 2014 by-election following his defection). Voters deserve a legitimate voice in Parliament, breaking down the dominance of the Conservative and Labour parties. Every vote should matter.
The EU Elections in 2014 – which UKIP won under the Proportional List system – clearly demonstrated the strength eurosceptic parties have in a proportional representative system. Should general elections follow the same path in the future, we could see MPs who actually represent the people and follow through with the will of the electorate, rather than their own agendas once they sit on the green benches in Parliament.
Should the establishment wish to avoid more discontent and a reduction in their political opportunities in the future, they need to Get Britain Out of the EU now on WTO terms. The Government must abandon the idiotic polices of a soft Brexit and Mrs May’s abhorrent Withdrawal Agreement – essentially a ‘Brexit in Name Only’ – or be consigned to the Opposition benches for a very long time.
The post Both the Tories and Labour face an electoral backlash over their handling of Brexit appeared first on BrexitCentral.
Life is unpredictable. A year ago, with a newborn baby, returning to politics could not have been further from my mind. Even six months ago, I still held hope that Theresa May would deliver her promise of us leaving the European Union on 29th March. She had repeatedly said no deal was better than a bad deal and foolishly I still believed she would act accordingly. One by one the straws fell. Her deal was appalling; we didn’t leave in March; she opened talks with Jeremy Corbyn and considered keeping us in the Customs Union; hundreds of MPs voted to take no deal off the table. This is not Brexit. It is betrayal.
Friends across the country cut up their Conservative membership cards. Labour Party members publicly shredded their local election ballot papers in protest at their own party abandoning them. Graffiti declared: “Don’t Vote – Act”. Democracy was dying and I felt unable to sit by and watch.
Having joined the Conservative Party in 1984, it was a wrench to leave but I could no longer support a party whose leader appeared hellbent on riding roughshod over the largest democratic vote our nation had ever seen. I couldn’t just not support it, I felt compelled to highlight that what it was doing, driven by Mrs May, was destroying it. Many Conservative friends – Leavers and Remainers who believe in democracy – have supported my decision to join the Brexit Party and stand in next month’s European Parliament election. Dozens have pledged to vote for me, despite maintaining their membership in order to have a vote for the next leader.
The extraordinary success of the Brexit Party – for which I will be fighting the East Midlands where I live – is a demonstration of just how much disillusionment in Westminster politics there is. No new party has ever previously topped the polls within a week of launching. As one neighbour said to me: “Thank you for standing here, I voted Leave but I’ve been made politically homeless.”
This is true of Leave voters up and down the country. We were promised our vote would be honoured and it has not been. It has been disregarded by remote, elitist politicians in London who believe they know better than the people who put them there. We, the people of the United Kingdom, everyone who believes in democracy must show them they are wrong. We need to change politics for good through the ballot box.
This is not a time to re-run the arguments about leaving or remaining in the European Union – we did that ad nauseam in 2016 and Leave won. Now is the time to unite behind our historic democracy, that we proudly exported across the world. Whether you supported Leave or Remain is no longer relevant – democracy is. We need to pull together to restore a belief in voting. One man, one woman, one vote: one say in how we are governed. It is not we, the voters, who have broken the pact, it is the politicians in their gilded cage in Westminster, talking in their echo-chamber, dismissing the people who make up the backbone of our country as fools. We are not – but even if we were – democracy demands that they listen to us.
Mrs May’s 2017 manifesto, upon which people voted and returned her to Downing Street, said: “We continue to believe that no deal is better than a bad deal for the UK”. As her deal is terrible, we must just leave. Leaving the EU on WTO rules is not to be feared, it should be embraced. 164 countries are signed up to WTO, accounting for 98% of world trade. Thanks to Most Favoured Nation rules, countries cannot discriminate against us just out of pique. Leaving the protectionist EU bloc would allow us to negotiate and implement free trade deals across the world – with countries which are growing rather than the stagnant and sclerotic EU.
If our parliamentarians don’t come to their senses and deliver the Brexit that they promised, I fear for the future of our democracy. The trust has nearly evaporated, but we can begin to rebuild it if they finally listen. This fight is as much about democracy as it is leaving the EU. We need to change politics for the better before it is too late. Our fight is just as important as the suffragettes and we must vote for the Brexit Party on 23rd May to ensure our country remains a truly Great Britain.
The post If MPs don’t deliver Brexit as promised, I fear for the future of our democracy appeared first on BrexitCentral.
In the below article, Patrick Minford writes in a personal capacity.
In the latest discussions on the Brexit Withdrawal Agreement and Political Declaration (WAPD), two views have emerged about the UK’s future choices. One, which I will call the lawyer view, is that once signed, the WAPD binds the UK indefinitely; this view is held by many of my friends and Brexit allies who are largely lawyers and as such tend to believe that the letter of the law will prevail. The other, which I will call the realist view, is that it can be ‘evolved’, to use a word popular with some politicians, in line with the mutually evolving interests of the two sovereign parties, the EU and the UK. The latter view is the one generally adopted in the economic analysis of international treaties, as the following quotation from a recent paper in a leading economic journal makes very clear.
At the national level, such conflicts [over payment for/usage of public goods] between individual and collective rationality can be resolved by the intervention of the government (Demsetz, 1967). At the international scale, however, there is no supranational authority that could coerce states into adopting efficient policies if they run counter to national interests. Filling the void are international agreements. Under the terms of the Vienna Convention on the Law of Treaties, a state that ratifies a multilateral treaty chooses partially to surrender its sovereignty and to subject its policies in a specific domain to the rules and prescriptions of the treaty. In so doing, sovereign states agree to coordinate their policies in mutually beneficial ways. By the very nature of sovereignty, however, the agreement is fundamentally non-binding and states can always withdraw from it. Therefore, the fact that public good provision is implemented through an international agreement should not change a country’s incentives to contribute per se — unless the treaty alters the country’s incentives to cooperate in other ways. (Wagner, 2016)
The point of economic analysis of treaties therefore is that a sovereign state only continues as a party to any treaty if it remains in its interests to do so. Therefore one must analyse treaty development over time with reference to how these sovereign interests evolve; and how at any time the sovereigns reach an accommodation based on their mutual interests. The basic reason, as explained in the quotation, is that there is no supranational power that enforces treaties in the way that a national state, with a monopoly of force, enforces domestic law.
The realist view is therefore asserting that once the UK is out of the EU, how it deals with the WAPD is a matter of subsequent choice and negotiation with the EU, which also has freedom of the same sort. Anyone supporting the lawyer view must therefore demonstrate that the WAPD remains an agreement that it is in the interests of both sides to maintain in the same form. It is not sufficient to say that because it has been signed it is indefinitely binding; this would only be sufficient if there was a supranational power that could enforce this, and I shall assume it as obvious that indeed there is no such power. In a recent posting on the Lawyers for Britain website my old friend and longtime Brexit ally, Martin Howe, argues that the Treaty of Utrecht binding Spain into Gibraltar’s status illustrates that treaties bind long-term. However, in fact this well illustrates the point about self-interest. Spain, like the UK, has had a strong interest in Gibraltar not accidentally becoming a casus belli, much as the Falklands, with a population similarly determined to remain British, became, at great expense to both the UK and Argentina. Ceaseless ongoing diplomacy on both sides to accommodate mutual complaints has found the Treaty a useful figleaf.
In the rest of this piece I will discuss what the interests of the UK and EU are and how, if at all, they might evolve, and with them the UK/EU future Treaty relationship. This type of analysis is a branch of game theory, which can involve highly complicated mathematics, as in the paper cited, but fortunately not in this case here.
Current UK and EU interests and the Withdrawal Agreement
Based on economic analysis within a rather standard World Trade model and other models described in Should Britain leave the EU? An economic analysis of a troubled relationship by Minford et al (2015) I suggest the following broad interests of the EU and the UK:
The EU: for the EU the status quo is optimal. The UK contributes 10% of the EU budget. Its food and manufacturing industries sell to UK consumers at 20% above world prices because the Customs Union places trade barriers of this tariff-equivalent value against products from the rest of the world. EU regulations prevent UK practices that would reduce UK costs and so undercut EU competition, driving down margins. Unskilled EU workers can be exported to the UK labour market where their wage is supplemented by the UK taxpayer by about 20%.
The UK: for the UK the optimal policy is abolition of protection against the non-EU; this ‘free trade’ policy eliminates the 20% premium paid to EU producers of food and manufactures and it also lowers consumer prices, pushing up productivity via trade competition. At the same time the UK would want to sign a Free Trade Agreement with the EU that keeps the current free access with zero tariffs between them; nevertheless it turns out that any tariffs or equivalent that are imposed will benefit the UK and be paid by EU traders, because UK prices of both imports and exports are set by world prices, so UK tariffs must be absorbed by EU exporters while EU tariffs must similarly be absorbed by EU importers. It follows that although the UK would be willing on the ‘good neighbour’ principle to sign an EU-UK FTA, it would strictly speaking be better off under WTO rules with no deal.
These descriptions of economic interests take no account of current political pressures. A natural question is: given its interests why on earth did the UK Government sign up to the WAPD? This effectively makes the status quo the most achievable agreement, given that the backstop endows the EU with effective veto power over anything it dislikes; under the backstop the UK effectively stays in the EU as now until the EU deems there to be an agreement.
The only way to account for this is in terms of the votes in Parliament. With a part of the Tory party led by Philip Hammond having a Remainer view of UK interests – that is wanting protection for reasons of preserving current jobs (notice not gaining the most jobs in the long term as would occur under free trade etc), following vested interests like the CBI – the Government of Mrs. May seems to have assumed that only the ‘soft Brexit’ WAPD could get through Parliament. Similarly, it assumed that Parliament would not support No Deal, because this too would sacrifice some current jobs to a free trade strategy under WTO rules; as a result the Government did not prepare for No Deal and so lost its only bargaining counter with the EU so that the WAPD failed to favour UK interests. As a result, the WAPD too cannot get through Parliament because the ERG Conservatives and DUP votes oppose it.
Now Mrs May is trying to get Labour votes to push through some even ‘softer’ WA, with a PD promising EU customs union in some shape or form. Hence the EU have not had any difficulty achieving a WAPD that favours its interests, because of parliamentary politics. Add to this that the EU was in any case determined – due to its own politics – to show that exiting countries get a bad deal, to discourage others. It is clear that the politics of the divorce situation was bound to produce a bad deal from the UK viewpoint. One does not need to go further and accuse Mrs May of being a closet Remainer, which she may well be, to account for what has been agreed.
The Economic Analysis puzzle
How those Remainer ideas took hold in the face of strong economic arguments to the opposite effect, as set out above, for the long-run gains of Brexit, is rather baffling. As I explained in a recent paper in World Economy, Remainers and their economist allies (e.g. Breinlich et al, 2016) used ‘gravity theory’ to argue that leaving the EU would be damaging to the UK and that gains from free trade with the rest of the world would be small. However, the ‘gravity models’ they used did not obey the canons of good general equilibrium modelling, in which all causal factors are simultaneously analysed for the effect of a major policy change like Brexit. All the gravity models were ‘partial equilibrium relationships’ in which trade, GDP, FDI and productivity were separately related without any overall inter-linking.
This approach was originally – in 2016 – also adopted by the Treasury; but at the end of 2017 the Treasury for this reason finally abandoned it, in favour of a full general equilibrium model, the GTAP model, bought in from the Purdue University Trade Modelling Project. This was used to reevaluate Brexit in the Cross-Whitehall Civil Service Report of that time. Given the strong Whitehall bias against Brexit the new model was given assumptions that produced similar negative results to the previous ones. These consisted of a) few and limited FTAs with the non-EU world; and b) large border barriers, even with an EU FTA, between the UK and the EU.
However, plausible alternative assumptions reverse the Brexit effect on GDP under a WTO No Deal for example from highly negative (-7%) to firmly positive (+3%).These assumptions are that the UK uses FTAs with the non-EU to eliminate all trade barriers on goods against them while also gaining wide market access; and that it signs an FTA with the EU that prevents any new barriers, or if it goes to WTO rules then only tariffs spring up at the border, other interferences being illegal under WTO obligations.
As this debate has unfolded between our critique and the Treasury, academic economists espousing the previous gravity methods have stayed strangely quiet while the Treasury dropped their methodology. Meanwhile we published another paper in which we tested a full ‘Computable General Equilibrium’ (CGE) model with gravity mechanisms against a plain Classical CGE trade model without them, to see how well each matched the UK trade facts. Using an elaborate and thorough Indirect Inference test we found that the gravity version was strongly rejected while the Classical one fitted the facts. Furthermore when we did the Brexit policies on the Gravity version the effects were much the same as with the Classical, our main tool; this was because Brexit gives gains with the rest of the world while not much disturbing our relations with the EU and so stirring up the negative gravity effects. Therefore it is clear that the anti-Brexit claims based on the gravity approach are invalid.
Unfortunately in the present fevered atmosphere, calm academic debate cannot take place; it is reminiscent of wars of religion where each entrenched side only wants to hear confirmation of its prejudices. One of the side benefits of Brexit occurring is that people may move on to normal technical discussions about optimal UK policies.
The way forward in Parliament
There are now three main parliamentary scenarios. In two of them, one or another WAPD – Mrs May’s or some even softer one agreed with Labour – gets through Parliament. The UK then leaves the EU in these two scenarios, initially for the transition period, as soon as either gets through.
In the third, there is no WAPD agreed and the possibility strengthens of a second referendum with Remain on the ballot paper, leading to either no Brexit or a renewed demand for Brexit. This third scenario is one in which Brexit uncertainty continues for a year or more, with unknown political consequences, given that the Leave voters in the first referendum would feel betrayed. This third scenario will only be welcomed by Remainers determined to reverse the democratic referendum decision. From a Brexit viewpoint, the only hopeful outcome would be a new Conservative leader and government determined to change the WAPD and get it through Parliament before exit. But how could this be achieved without an election to change Parliament’s composition? Also, what would be the odds on the Conservatives winning such an election, given the fury of the populace with the Conservatives for failing to deliver Brexit? Such hopes look forlorn.
Scenarios 1 and 2, if Brexit occurs: What of UK and EU interests post-Brexit?
In this section I ask what, given we have a WAPD as described, opposed widely by Brexiteers, is likely to occur if, as seems probable, Mrs. May steps down and is succeeded by a Brexiteer Conservative leader? Such a leader is likely to agree with my account above of UK interests. If so, what can such a leader do, if saddled with the WAPD?
Under the realist view espoused by economic analysis, this leader’s government moves to re-open bargaining with the EU. This would be done via normal diplomatic processes, in which the EU would face a possible general lack of UK political cooperation in a wide array of areas, including key ones like security and military matters; also the WTO option would be reactivated as a ‘walk away’ trade strategy, should the EU be unwilling to move away from its status quo aims.
The UK having left the EU after resolving basic administrative issues such as citizens’ rights, aviation/transport/visa agreements, there would probably be little appetite to revisit these issues; and the focus should be on the trade relationship quite narrowly. Nevertheless were it to be widened, the new government would make active preparations for a breakdown in these areas.
At the same time the UK would proceed to negotiate FTAs with non-EU countries, informing them of their aims on EU relations. These would be widely welcomed, as we already know.
How would the EU/UK bargaining go from here? We can think of the ‘game’ now as a series of proposals and counter-proposals. Start from the opening WAPD ‘proposal’ for the status quo. This violates UK interests radically, breaching its basic ‘red lines’. The UK counter-proposal is to walk away to WTO rules and No Deal. This UK counter-proposal damages EU interests radically, as we have seen: they face world prices in the UK market and tariffs in both directions are paid by EU traders. In order to counter this the EU now offers an FTA: Canada+ which consists not just of zero barriers on goods (Canada) but also the plus of mutual recognition in services where EU interests are served by free trade, given a wide reliance on UK service industries. The UK wants either Canada or Canada+ more or less indifferently as its service industries are all highly competitive around the world. As noted earlier, while No Deal gives strictly better gains, the UK is likely to agree to this proposal for the sake of neighbourly relations.
The bargaining round, which may well take a few years to play out, is therefore likely to be resolved by Canada+. We can essentially rule out any other resolution because all other alternatives leave one side unacceptably badly off – beyond its red lines – or can be improved on by one side without making the other worse off.
What I mean by ‘unacceptably’ is literally that it will not accept it in the long run, when by walking away or co-operating it can avoid it. The EU can avoid No Deal by co-operating. The UK can avoid the status quo by walking away.
All this is illustrated in the following diagram: the top line shows how the UK ranks all options, with No Deal the best; the second line shows the EU rankings, with the status quo the best. Each side’s red lines of unacceptability are marked out on each side. Any resolution must be inside these. Canada+ within these is better than Canada for the EU and an equals with it for the UK. So Canada+ gets chosen.
Notice that all this diplomacy is carried out between ‘consenting sovereigns’. Neither will bring in outsiders because no outside power has jurisdiction or indeed wants it. In so far as third parties have preferences, they tend to favour the UK as they typically want to agree FTAs with the UK. As for the WTO, it allows states to negotiate FTAs freely; and in general favours all agreements that in net terms reduce trade barriers, just as will occur under the EU-UK renegotiation.
The need for a new Conservative leader and government
In order for this new diplomacy based on the UK’s true economic interests, not sandbagged by Remainers within the tent like Hammond and Co., there plainly needs to be a new Conservative leader and government, fully seized of the Brexit case for free trade and so on. The current leadership/government has proved that it has neither the understanding nor the will to pursue the UK’s true interests. Without it changing no progress along the lines discussed here is possible.
It is now very likely that the Conservative Party will change its leadership, if only for reasons of pure survival. With the agreed extension, the Conservatives face carnage in the local elections and if the European elections take place, annihilation in those. This will inform the party of how unpopular its failure to deliver Brexit has made it. Its best hope then is for Mrs. May to go and for a new leader to chart a new direction, while making it clear that the new government rejects and regrets the old government’s failed Brexit agenda.
What are the implications of the realist view for parliamentary votes?
MPs now have some time for reflection during their Easter recess. They need to ponder the effects of their votes. Any MP that wants to avoid the chance of that third scenario of possibly No Brexit needs to consider voting for one or other WAPD. With either of them, Brexit occurs and the renegotiation can be launched under a new Prime Minister.
An ERG Brexiteer will prefer Mrs May’s original WAPD since it does not contain extra ‘soft’ commitments put in to satisfy Labour. These become yet another element to be renegotiated. In principle that too will be jettisoned; but it adds complication.
A DUP Brexiteer will remain nervous about the backstop in Mrs May’s WAPD; and could be less nervous with a softer one including a customs union because with that the backstop does not come into play. Nevertheless a DUP MP should reflect that none of these will survive renegotiation and should not therefore be unduly concerned. What it really needs from Mrs May and her potential successors is a guarantee that whatever is renegotiated it will never include differential treatment for Northern Ireland, or indeed any other devolved part of the Union. But they should feel confident on this: the Conservatives have been robustly and consistently a unionist party.
It should be noted by both these groups that in opposing any WAPD they are playing the role of ‘useful idiots’ to Remainers who want no Brexit, leading to a second referendum.
When one turns to Labour MPs and Mrs May, both involved in negotiations over a softer WAPD, they should reflect that their new WAPD causes both sides difficulties – Mrs May because it infuriates most Conservatives, Labour because it will infuriate the substantial Labour group that wants a second referendum rather than any sort of Brexit; but at the same time achieves no extra long-term ‘softness’ in the outcome, as the added-on soft elements will simply be the first to go in the inevitable renegotiation.
Reflection on all sides should therefore have the effect of terminating the May-Labour negotiation while logically inducing ERG and DUP Brexiteers to push the May WAPD over the line.
The realist view of post-Brexit affairs clearly implies that the UK, once it is out of the EU will behave like any other sovereign power and see that its foreign relationships evolve to suit its interests. So far, these have been stitched up in talks with the EU due to a Remainer group of Tories who have opposed the Government’s Brexit policies in favour of industrial vested interests, in alliance with Labour opponents, and undermined its bargaining position vis-à-vis the EU which was in any case politically determined not to agree a good trade deal. No sovereign state could put up with this sort of stitch-up in the long term. This piece has described how a new government, fully seized of the UK interest in free trade and domestically set regulation, besides control of borders and the ending of budget transfers to the EU, will have both the incentive and the scope to achieve a logical renegotiation that reaches an EU agreement tolerable to both sides.
Under this view the key aim for Brexiteers should be to get the WAPD in some form – it does not much matter what form – over the line, so that Brexit definitely happens as demanded in the referendum. Policy in the future will then evolve to meet UK interests.
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