Saturday, 19 November 2016

March of the Brexit morons

Sixty Tory MPs including seven ex-Cabinet ministers have demanded Theresa May pulls Britain out of the single market and customs union amid fears her Brexit stance could be watered down. Michael Gove, Iain Duncan Smith, John Whittingdale and Theresa Villiers are among the leading Eurosceptics to put their names to the negotiation demand. The politicians have gone public through The Telegraph amid concerns that pro-EU figures in the Cabinet are fighting to soften the Government’s Brexit position.

I haven't seen the full list of names but you can bet it's the usual suspects, half of whom cannot adequately define the single market or the customs union. What has to be said from the outset is that remaining in the customs union is not Brexit and any agreement that sees us remaining in it permanently defeats the purpose of Brexit and puts us in a manifestly worse position than we are in now. Those remainers who think this is the safe option are actually arguing to remain in the EU but with none of the rights associated with membership. The worst of all worlds.

The single market, however, is a different issue where there is no economic advantage to erecting trade barriers yet this is precisely what Tory free traders are advocating. By now there is a quite deliberate refusal to acknowledge non tariff barriers and they are motivated by a desire to leave as quickly as possible with absolutely no regard to the fallout. They are out of touch with reality.

The reason I am not in any great rush to join in the panic though is because Mrs May is in charge and will ignore her sizeable lunatic fringe. For once the official line is a rare example of government telling the absolute truth.

A Government spokesperson said: "We are committed to getting the best possible deal as we leave the EU: one that is unique to Britain, not an ‘off the shelf’ solution. "It's not about binary choices - there is a huge range of possibilities for our future trading relationship with the EU. That's why the Government is painstakingly analysing the challenges and opportunities for all the different sectors of our economy".

The short version is that the still have no idea and still no plan but the subtext is that they are looking for a politically acceptable solution. May cannot come out and say we will stay in the single market nor can she detail any of the concessions we will make specifically because it will enrage her own lunatics. The media takes May's silence as proof she intends to push for a hard Brexit (an increasingly meaningless term) but the reality is that May is not in a position to be erecting barriers and will not be able to negotiate exceptions. Moreover, integration runs so deep that we are not in a position to "take back control" until we have rebuilt the administrative institutions.

When you look ta the physical real world constraints it can only be one way. An interim solution that maintains much of what is already there until we have an idea of what we wish to disentangle ourselves from and how to do it. Mrs May has thus far hinted at a bespoke deal but that does not rule out the EEA as a template or temporary mechanism. It may be that the EEA is the only mechanism available. We can park the EU trade issue because the rest of the Brexit process is complex enough.

In this there may well be a genuinely held intention not to use the EEA but when the technical realities make themselves apparent it will inescapably emerge as safe and sane option. To do it any other way would be to add further complexity, risk and delay. I do not yet think the government has realised this but they will eventually. That they haven't tells us they are still clutching at straws and have yet to define a clear path which actually makes the chances of invoking Article 50 next spring increasingly remote.

That means for the time being we will have to tolerate ludicrous fact free assertions from eurosceptic MPs. Steve Baker, Tory MP and chairman of the European Research Group, said in the Telegraph that “A vote to remain in the EEA or the Customs Union is a vote to be powerless over trade and domestic regulation and therefore poorer than we otherwise can be. “The UK is ideally positioned to catalyse a new global trading system which works for everyone by promoting free and fair trade and defending against predatory practices.”

This is interesting rhetoric, probably lifted from The Leave Alliance, because nobody else has really been speaking of a global trading system - but the facts he deliberately ignores is the fact that it is a rules based system which functions on common regulatory frameworks of which the EU is a member. That means we comply with the same regulation in or out of the EU - which means we are not at liberty to slash and burn what he would call red tape. Having left the EU we get our own voice and veto on the many global regulatory bodies and we would have that even as EEA members.

What that means, in case you needed it spelling out, is that there is absolutely no point whatsoever in leaving the single market. Norway only adopts about a quarter of the EU acquis, most of which overlaps with that "global trading system" he speaks of. More to the point, Norway does have a veto and it does have a say in the rules because it has an independent voice in the making of the rules that the EU adopts from the global bodies. This is a point that has yet to be realised in the Westminster bubble chiefly because of gatekeepers like Baker who go out of their way to exclude voices who do not subscribe to his intellectually stunted extremist ideas.

Further to this Baker has very strong links with the Legatum Institute and is very heavily plugging their work with a view to getting them on the payroll. Personally I think he has a commercial interest in it and there is something bent about this arrangement. I think Baker is a man on the make representing vested interests. I don't think it's above board.

Joe Carberry, co-executive director of Open Britain, a British pro-EU campaign group, said: “The inevitable consequence of leaving both the single market and the customs union is erecting barriers to trade with our closest and largest partner. Those calling for us to do so, need to provide evidence rather than bluster that it will actually increase trade, boost growth and create jobs. Expert opinion, which I know has gone out of fashion, suggests otherwise."

In this, Carberry, as far as the single market is concerned, is absolutely correct. Pulling out of the single market requires major effort which can only result in trade becoming less free and more expensive and the stated advantages simply do not exist. There is no bonfire of regulation and tinkering with tariffs is not going to bring about the free trade sunlit uplands the Tory right imagine.

What Britain actually needs is to work with countries around the world to make our trade with them as barrier free as it is with the EU. Presently the EU is an obstacle to that because it dictates the terms of trade and is fixated with failure prone deals like TTIP. That is why trade has stalled. In order for the UK to improve matters we will have to work within the global system to export the regulatory systems which the UK and EU observe and we won't have a carte blanche to regulate as we please.

Effectively, what Britain needs to do outside the EU is to wrest control of the single market away from the EU and expand it globally. This is already happening but Britain can indeed be a catalyst. Remaining part of the single market is central to that and making any moves to substantially differentiate ourselves from the EU single market is to effectively pull out of the global system which Baker himself advocates.

In this there are parts of EU integration that are also part of the EEA which I would happily dispense with, not least the public procurement system which is turning out to be a one way system for France and Germany to fleece the UK public sector while keeping their own markets closed. I understand probably better than most why the single market is an asymmetrical arrangement, not least because Britain plays by the rules, but for the time being, until we have further developed the global system and bedded down the already massive changes that Brexit will bring, we will have to take the rough with the smooth.

What makes the EEA the right choice is the system of annexes whereby we can constantly renegotiate the relationship and there is a system in place to do exactly that. It allows us to revisit our relationship and gradual evolve out of the EU at our own pace rather than rushing it and making a pigs ear of it. It's a the safe and pragmatic choice. In this we absolutely must resist the zealots in the Conservative party. They are dishonestly risking our global standing and flirting with recession on the basis of a delusion. I remain confident that they will not get their way but we should still call them out for what they are: Morons.

No comments:

Post a Comment