Saturday, 6 August 2016

Brexit is not "mission accomplished"

They sell more to us then we sell to them. Or so the story goes. You would think that buys us some considerable leverage in Brexit negotiations. It doesn't. Y'see if we want full rights to the single market then we cannot use market access to various products as leverage. If we want their borders open to our goods then we open ours. We cannot deny them tariff free trade on cars or even offer that as a threat. As far as trade goes we do not have much to barter with.

We also have to pay to leave the EU. As much as we will continue participation in various EU agencies (and pay for them) we will also have forward liabilities for those we pull out of. There is no walking away from that. There is a good chance we will be paying more into the EU budget for at least a decade or so.

There are those on the continent and here at home who think that the EU should push for tough conditions on Britain to head off any domino effect. They want to make an example of us. I would say they don't need to because if procedure and process is followed then we are going to pay a huge price for leaving the EU. Certainly none of the promises made by the Vote Leave campaign will be kept.

I stick by the view that Brexit will cause a recession, as I have said from the outset, but I also stick by the view it wouldn't be as deep or as long as anyone expects. What it does mean though is that we will be borrowing a lot of money just to hand it over to the EU. There will be several unanticipated Brexit penalties. There will be multiple demands followed by fierce rows and in the end we will find we are reliant on the good will of the EU to get any concessions.

Those on the remain side will call it a disaster. They will make huge political capital from it. Britain will not dismantling EU regulations and we won't be looking to add to our burdens by starting reforms to systems that can wait. It will be ten years before we can start looking at the opportunities and even if Brexit really is Brexit, we will still have legacy ties to the EU that mean we are severely restrained and the leverage we have is merely what extra concessions we will allow the EU. So there are going to be some very angry people who thought that Brexit would mean "taking back control".

Where we will have full freedom is in our trade policy. Some suggest that there are countries just ready and waiting to strike a deal with the UK. It's really positive to hear some of the messages from our allies but when you look at what trade is and how it works we find that we don't have that many non tariff barriers we can trade with and tariffs are already inconsequential. If we want market access to Africa then we are going to have to buy it with hard cash and favours rather than trade. And none of this is going to happen quickly. We will suffer in the meantime.

This is really where the serious thinking needs to be done in term s of policy innovations. Some are already drawing up their fantasy Brexit manifestos but it's predicated on what people think we can do with an extra £350m a week or how we can change things free of EU directives. This is naivety.

The problem with directives is that they are instructions to legislate so rather than being EU laws they are our laws. So if you had any ideas about binning something like the Habitats Directive, you have a massive argument with europhile NGOs before you do - and you won't win. By the time we are fully free of the EU I will probably be an old man and much of what is bad about laws we have adopted will be there for another generation.

I even doubt there will be a democratic renaissance as some are predicting simply because there is no coherent movement to demand it. We will find politics just as constrained as before.

So isn't all of this contrary to what I was writing before the referendum? Yes and no. I always said that we shouldn't expect miracles nor can we expect significant divergence, and I always said the process would be bureaucratic. But I also said that Brexit was only the beginning of the process. I think possibly I have previously overestimated how much of an impact Brexit makes. Psychologically it is huge but by the time Article 50 talks are done we won't feel like we have accomplished anything. There will still be a mountain to climb.

In a lot of ways Brexit will feel like paying back war debt. Many will view it as the price of a costly mistake. But the mistake was not leaving the EU. The mistake was joining it. And mistakes have consequences. This is one of them. We will endure a period of anaemic growth without the necessary powers to reinvent economic policy. Brexit dividends will be slim and policy suggestions will likely be as incoherent and absurd as Mr Corbyn's latest offerings. We have lost the capacity for grown up politics.

If you have been watching closely then by now you will have realised that our politicians understanding of the process and the EU in general is slim to none. But that is not an argument for staying in the EU. The fact that we have a supreme government for Europe and our politicians don't know what it is or how it works is very sharp reason to leave. If we lack the capacity for self governance then we will have to nurture it and we will have to endure the consequences of abandoning it in the first place.

With Brexit not delivering on promises we are in for a rough ride politically. This is in part due to the abysmal Vote Leave campaign but we should not take the blame for it. The blame lies squarely with those who took us ever deeper into the EU without once seeking our consent. Repairing the damage will take a very long time.

In this, we will need a new movement with coherent demands and a fresh agenda for undoing what they inevitably do to us in the Article 50 talks. We will have to build up our global reach and our relations with other allies before we have the kind of leverage we need to truly take back control. That is why the focus must be on trade, aid and development and how we relate to the rest of the world. Only when we can gang up on the EU will we have sufficient clout to start making demands. That may take as long as it took to get the referendum in the first place.

This is why the detail matters now more than ever. As much as it's important to know who wants to screw us, it matters more to know how they will go about it. There are those who predicted Brexit would fail and now they are in full swing to make sure it does. There is even danger after Article 50 has been invoked and there is every possibility we could be sucked in by the back door by way of a new treaty after we leave. We must be prepared for that and sound the alarm.

The bottom line is that the battle for democracy is never truly won. There are always threats to it and that is why it requires constant vigilance. Brexit doesn't really settle very much. It's just a significant moral victory. How we turn that into tangible results is another matter entirely. One thing is for certain though. If you thought winning the referendum was "mission accomplished" then you're as mistaken as George W Bush was when he uttered those same words. Politically, the consequences might well be as grave.

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