Friday, 5 February 2016

The most honest case for Brexit you will ever see.


At this point Leavers should be organised, with a realistic and credible Brexit plan. They should be pragmatic and flexible on the details, just so long as the destination is the same. They are not.

Instead they are whining, disorganised headbangers who are so blinded by their hate of the EU (and a general dislike of immigration) that they can't even see the need for coherent arguments - and will spit on anybody trying to do them a favour. Only the most unworkable, extreme position will do, implemented in the fastest possible timescales - regardless of how much damage that would do.

These people don't understand the technical issues or the political realities. They don't know what they want or how to get it, and have no conception of how long it will take to achieve. They have no idea of the scale of what they are proposing.

Having put all the Brexit scenarios to the test we find that they are all suboptimal and none of them put us in a better position than we are in now. Moreover, the central complaints of the headbangers don't stand up.

Asylum isn't as bad as most seem to think, we don't save that much money by leaving the EU, we won't see a slash and burn of regulation and we're not going to see a marked decline in immigration - and if we did totally abandon freedom of movement, that would have costs and externalities that most definitely will hurt business. It doesn't even begin to address the real immigration issues nor does it ameliorate the symptoms of high immigration.

What people actually want is a decent pay-cheque, affordable energy and rents and to feel like they have some control in the decisions that affect them. Brexit alone wouldn't accomplish this and would require our own government to be in command of the issues and have the political will to follow the right path. That's just not going to happen. Ever. To expect different is unrealistic and irrational.

That, for europhiles, is the central case for remaining in the EU. They are not so much pro-EU as anti-Brexit in that it marks a huge effort for apparently minimal gains. That is where I part company with europhiles in that I do not see this as a basis for remaining in.

But in this, anybody with their head screwed on can see that if we really were to set about leaving the EU we would have to do it in stages. To get to where we want to be we would have to undo it almost as gradually as it was done in the first place. It's the only way to minimise the risks.

In the first instance, you would be looking at something as close to EU membership as possible without actually being members. That to my mind is the Norway Option. It has distinct disadvantages but it trumps the other options by way of being the most easily achievable. Arranging it calls on legal instruments that already exist.

We have the presumption of continuity as laid down in international law so that we can carry on trading with third parties as normal, and we don't have to renegotiate trade deals, there are no tariffs - and there is no regulatory divergence any time in the next ten years at least. As far as business is concerned, nothing will change much and the pace of change will be glacial. Thus we can say with complete confidence that the scares promoted by europhiles are complete, total and absolute fiction.

The reason business sounds off as much as it does is that their own policy wonks are just ordinary bean-counters with fancy titles, with no more command of treaty and trade law than your average Ukipper. Actually, in this regard, the average Ukipper obsessive probably does know a bit more. Just not enough to make a winning Brexit case.

So the simple answer to the burning question is yes, yes it can be done, it doesn't cause the sky to fall in and business has no reason to worry even if it did have the right to intervene in the question of who governs us.

But if it doesn't address all the typical kipper complaints, why on earth should we bother? After all I did say all the Brexit models were suboptimal. Well, it's really more of a philosophical and moral question than it is an economic question. In this you have to understand a bit about what the EU is and its history.

I won't bore you too much with the official history because you can pick that up elsewhere. But the vision is essentially that a united Europe where resources and sovereignty is pooled ensures that there will never again be a repeat of the two most destructive wars in history. The destination for this grand project is a single federal European state (with one or two caveats).

The modus operandi of the EU has never been to put this proposition of front of voters. Voters would never go for it, thus "Ever closer union" really means integration by stealth, where every crisis is just an excuse for "more Europe". You know this is true. The Euro crisis means that eventually the EU will "require" more powers to save it. The direction of travel for power is always away from the people.

In terms of what it set out to achieve, it has in the main worked. It has to an extent been a stabilising and peaceful influence (give or take the odd clumsy and bloody intervention) and the single market has been a welcome development for trade, insofar as it is practised and enforced in reality.

And though it is corrupt as indeed all government is, it is not nearly as corrupt as the governments of many member states. It is transparent to a large extent, and it certainly isn't malevolent in the way the USSR was. To draw any such comparison is wholly daft. Of all the political entities to hate, in the grander scheme of things, it doesn't make the top ten and probably not the top twenty. As a supreme government for Europe, it works quite well and better than its critics would have it.

In fact, at this point I've almost convinced myself to remain. I'm rubbish at being a eurosceptic. But there's a problem. Being violated without your consent is still rape even if you learn to enjoy it. What we have in the EU is benign managerialism that strips away politics and replaces it with administration. It has decided that the largely philosophical questions are settled, and that a regulated market system will form the basis of the new Europe.

And even in that, I don't disagree either. It works quite well, I can't envisage a better model and it is evolving in the right way. Not only has the EU succeeded in its dominion over Europe, its influence has exported the philosophy of common standards and regulations across the globe, with many of the EU's own legal instruments being the basis for developing economies.

In fact, because internationalism and multilateralism works far better than EU supranationalism, the rest of the world is catching up fast, and in some respects overtaking Europe. In this, EU standards have become subordinate to international standards and the EU has become receiver of law rather than a driver of it, with technical regulations made by global bodies, private super regulators and safety organisations. In this we see the involvement of consumer groups, trade unions and corporates, all speaking with each other on global forums, seeking new ways to open up new markets and increase the profitability of supply chains.

In this regard there is a profit motive for established economies to seek efficiency through harmonisation of standards and processes and to a large extent, so far as trade is concerned, the project is almost complete as far as Europe goes. The rest is natural evolution. It does not require EU coercion. The future is already here. Even the much vaunted Digital Single Market is being developed at the global level.

What we are seeing is a global revolution where the EU has served its purpose, has hit a high water mark and is struggling for existential relevance. It has been supplanted and is now engaged in displacement activity. It's never going to be a United States of Europe, it's never going to try leading an intervention again, and the procrastination and delay is never going to see it making a useful contribution to international development ever again.

Moreover, Germany and France are not going to go to war over coal and steel any more than Lancashire and Yorkshire are going to go to war over sheep. Put simply, there is no need for a nation called Europe, and nobody every really wanted that except of our out-of-touch political elites. Its dominance on the international stage is as much a nuisance for the rest of the world as it is the member states. The only thing it's really left with is the assertion that we need the EU for common defence against terrorism and to mitigate the migration crisis.

In this we find arguments that the EU necessarily prevents terrorism in ways multilateral cooperation could not are a little thin, and certainly the EU's dogmatic trade and aid policy in Africa could well be seen as a provoking factor for more migration.

As to the Syrian refugee crisis, well, there's now not much left of Syria. Sooner or later, that war is going to end and people will return. And we will be there to help rebuild. We don't need the EU in order to come to a mutual agreement on managing external borders. In their regard, most of their problems are not our problems, but if asked, I don't think Brits in general would object to assisting. It's just that we have never really been asked.

In more ways than one the EU lacks any kind of democratic legitimacy. The European Parliament is by far from an expression of real people power, it is way down the chain in the global regulatory process and it bypasses national parliaments - which are viewed by nearly all people as the more legitimate seat of power. We could shut down the European Parliament and it would make little material difference to the laws we end up with since the substance is decided by international organisations, embodying global standards.

And that really is the crux of it. As much as business moans about regulation, it's actually the expense and hassle that comes with conformity that they are really concerned with - and they really don't think it through when it comes to what it would cost if things were not standardised. As this blog repeatedly points out, the case for deregulation coming from the eurosceptic dinosaurs is incredibly thin. Especially since standards are now global and there is no competitive advantage in divergence.

On most things I now concede that the europhiles are right and that Brexit will not accomplish what we thought it would, but they will never convince me that the EU is democratic, nor can they persuade me the EU is relevant - or that it can be reformed. I can only really see it through newly educated eyes as a redundant middleman that has long since served its purpose.

Even hardened europhiles freely admit to the EU democratic deficit. Only the hardcore zealots deny it. The answer from them is always "more Europe", saying that we should have an elected EU president and commission and more MEPs. They would like nothing more than to put the finishing touches on their Tower of Babel. But they would never in a billion years have a mandate for that so we are perpetually to be in a state of deadlock.

In that, the future of the EU is only ever discontent, stagnation and divergence as member states start taking unilateral action to address that which the EU cannot agree on - or considers too much of a political hot potato to touch. Essentially, while the EU sort of works and is mostly inoffensive, that which does work eventually will not. It's not capable of adapting and responding at the pace the world now requires.

The answer has never been to remove nations of their decision making ability. Instead it should have been about creating frameworks and forums for cooperation, seeking to enhance wider participation rather than closing off from the world, creating a fortress Europe in the process.

I do not share the eurosceptic view that the EU is heading for a cataclysm and I think the Euro probably can survive yet another global financial shock. I don't think it's going to collapse, and the grim prognostications are overstated. It's just going to slowly wither on the vine until it becomes a dysfunctional shell that increasingly parades its irrelevance.

In the future we will still send diplomats and MEPs but we'll all know full well its pointless and is about as relevant to the world as the Commonwealth is now. In essence, events have overtaken the ideology and there's no putting the genie back in the bottle.

That said, the Eurozone EU will still be with us for a long time and it's always going to be best if we just leave it to do what it needs to do. In that, Efta seems like a good home in that it doesn't rock to boat and it's more politically aligned with the UK's spiritual approach. It allows Britain to get what it needs without causing any of the disruption that the europhile Chicken Lickens predict.

Personally, I can't see what Europe has to lose by having a happier, more at ease Britain having the agility to get what it wants while maintaining first rate relations with the EU with as much of the existing openness as possible. From there if we decide to evolve further out of the EEA then we can do precisely that to the benefit of both parties.

While in the first instance, the Norway Option is suboptimal, it does give Efta the shot in the arm it needs to revise the EEA agreement, so in fact everybody wins from Brexit including non-EU states. Whether or not Britain then ends up in a superior position to the status quo then largely depends on the people of Britain and how they rise to the political challenges. I believe Brits are fully capable of rising to the challenges, and our global connections are stronger now than they ever have been, not least from our immigration and our soft power. I utterly dispute the Europhiles who say we can't do it.

The prime minister has done us an enormous favour in demonstrating just how unconformable the EU is, and how we have to go grovelling to 27 member states just to get peripheral policy tweaks. It really does show how lacking in agility the EU is - and we can't expect that it is any better at securing internal agreement when it comes to forging trade deals on our behalf. We could have secured countless partial scope agreements through multilateralism in the time it has taken for the EU not to complete TTIP.

What this points to is that we need to fully engage at the top tables instead of the middleman, and use our soft power and expertise to form ad-hoc mission specific alliances to enhance trade. Nobody loses by everybody being able to pursue their own specialisms, and there are enough global conventions to ensure that our rights are upheld without the dead hand of the EU. In this we could set about reforming the global regulatory mechanisms and democratising them.

As to domestic politics, I only see us finding a new sense of purpose. By tasking Westminster with a its own trade, aid and foreign policy once again we would see a revolution in politics.

In the final analysis, I don't think we're going to get the Ukip fantasy of an independent sovereign utopia, but I don't think Brexit will leave us any worse off either. It's just a necessary and timely breath of fresh air over European politics, allowing both parties to go the ways they have always wanted to. We have never been enthusiastic members so why not do the necessary thing?

We're not going to see a cataclysm if we leave the EU, we're not going to see massive job losses and we're not going to see a souring of relations. In fact, should we vote to leave most people will be surprised at how little anything changes for a least a decade and just about everybody will wonder what all the fuss was about. Moreover, the Ukippers will be both bewildered and enraged that leaving the EU is not the silver bullet they always thought it was.

I think politics is only going to become more unstable and more toxic if we stay, and I think our exit from the EU is inevitable, so I think now is as good a time as any to do it amicably and carefully and in such a way as it does not antagonise or harm our neighbours. It will be a slow process, it will involve some risk, it will take a lot of work, and it will require a lot of pragmatism and compromise. But what it will do is bring the right kind of political change and a sea change in our political culture.

We have a choice. We can resign ourselves to the status quo because it's easy and convenient and familiar, or we can embrace change, let go of old ideas and open ourselves up to a world of possibilities. As I keep saying, this is not really an economic question. It's a spiritual one.

Do we want to be reluctant members of an archaic supranational construct designed by a technocrat sometime in the last century, or do we want to see a global community of equals acting in the spirit of cooperation rather than coercion? Do we want to set ourselves an invigorating challenge or do we wish to stay at home, watching the TV, continuing to delegate matters of substance to the ring of stars?

As much as anything, I'm bored of the political stalemate and the status quo. I'm tired of mediocrity and shallowness of the EU debate when there is so much more going on in the world. I am sick of hearing the same old arguments from 1975 being recycled and I'm sick to death of persistently reinforcing failures.

This isn't going to go away if we vote to remain. The referendum won't be the end of it and it will continue to toxify politics. So can we please just be done with it and try something different? Do we REALLY want to go through this every twenty years listening to Ukippers moaning about bent bananas? Do we really want our politics to continue boring us to death?

More to the point, do you really want your kids to be having this same debate, rehearsing the same arguments your parents did in 1975? Or is it time for something bigger, better and more interesting? Something more befitting the internet age. I think it is. If the EU was ever going to secure a mandate to be what it wants to be, it would have it by now. It hasn't, so let's let go of the past. Our future lies elsewhere and Britain and Europe will be all the better off for it.

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