Monday, 27 February 2017

I hate to say it but John Major is right.

John Major has said today “I have watched with growing concern as the British people have been led to expect a future that seems to be unreal and over-optimistic,” Major said, speaking at the Chatham House thinktank. “Obstacles are brushed aside as of no consequence, whilst opportunities are inflated beyond any reasonable expectation of delivery.”

I have a singular dislike of this individual but what he says is entirely correct. Just lately on the blogs we have been looking at customs systems and inspections. Presently we have an easy ride of it by way of being in the single market but as we become a third country we are bound by all the same rules as third countries which means the inspection workload on French Border Inspection Posts is going to quadruple at the very least.

These such facilities have only just been expanded to cope with existing traffic - a process which has taken a number of years. Meanwhile a Times journo remarks over email "When I mentioned the capacity question to the French department of agriculture in October they gave a somewhat insouciant response that "as article 50 hasn't been invoked we have plenty of time to adapt the facilities as needs be".

This is shaping up to be a major crisis. Without BIP facilities, we need to be under no misunderstanding. Exports to the EU of food products, animal feeds and much else will stop dead. Only if the French (and others) mount a massive development programme will there be any chance of us being able to keep up our exports, and it is quite evident that they are not even going to try. Electorally, it will be very popular with their farmers if the French government just sits on its hands.

I always argued that leaving the EU would be a means to expand and augment our trade but in so doing it was vital to protect existing trade with the EU. In its near total incomprehension of how trade works, this government has recklessly gambled our entire agriculture sector and even though there are a number of new measures that facilitate better trade with the rest of the world, there is little chance it will compensate for what we stand to lose.

The chancellor, Philip Hammond, told a German newspaper recently that if offered a raw deal by the other 27 member states, Britain was “not going to lie down and say, ‘Too bad, we’ve been wounded.’ We will change our model”.

Major, though, said a shift to a low-tax, more deregulated economy, trading on World Trade Organisation rules – as some Brexiters would like – would mean a fundamental rewriting of the economic rules that would be unlikely to win the public’s backing.

“There is a choice to be made, a price to be paid,” he said. “We cannot move to a radical enterprise economy without moving away from a welfare state. Such a direction of policy, once understood by the public, would never command support. It would make all previous rows over social policy seem a minor distraction.”

As yet, there is no indication that we will end up operating to the WTO baseline. It is widely understood that this would be a worst of all worlds scenario. It is not even government policy. There are, however, a number of pinch points where this could happen by accident. In this, Major is quite correct in that we would require a fundamental rethink of the economy.

That may well be what many voted for but it would more than likely make the Thatcher reforms seem as mere tinkering. There will be major fallout. Without a transition it would be nothing short of a disaster. But then even if talks go well and we successfully negotiate our status as a third country, EU member states will likely add in conditions that prevent us from taking unilateral acts establishing us as a European tax haven. Our choices may be limited.

I know it seems like the very last person in the universe we should be listening to is John Major, but this is now the common view among anyone who has ever had any serious involvement in the real business of government. It beggars belief that the panglossian nonsense of Brexiteers goes unchallenged. Brexiteers themselves have given the government a free pass leaving only discredited remainers offering up any serious criticism. Consequently we are sleepwalking into a Brexit nightmare. This could get very very ugly.

No comments:

Post a Comment