Thursday, 1 June 2017

More Brexit drivel from Conservative Home

In a typically mealy-mouthed post on Conservative Home, Allie Renison of the Institute of Directors sets out her position on the possibility of a "no deal" Brexit.

She says "To its credit, ConservativeHome’s series last week on what moving to Most-Favoured Nation (MFN) trade terms with the EU might mean for the UK was not short on technical detail. But I found most of the contributors ended up sketching out a series of deals which the two sides could come to agreement on rather than setting out the implications of relying solely on multilateral-level agreements. This roundabout “just-don’t-call-it-a-free-trade-agreement” way of arguing for a deal is perplexing, given Article 50 presents an opportunity to lay the foundations for one, and in some ways forces the EU’s hand more than it might care to admit".

Let's not beat around the bush here. This is the faulty premise of the Toryboys that we can have a "no deal" Brexit and then post-facto hammer out a number of emergency fixes - which by definition is not the WTO option. How you can then argue in all seriousness that "there is no cliff edge" escapes me. 

Renison praises ConHome for including "technical detail" but it is in fact the usual Toryboy trick of dazzling with bullshit. I'm going to give Renison some leeway in that the constraints of her position means she cannot say that outright. But then she goes on to say:
The talk of “crashing out without a deal” is not some threat in ideological isolation. It exists as a notion largely because of the ambivalence of both UK and EU leaders towards discussion of transitional – or, as I like to call them, “bridging”- arrangements. Moving to WTO terms might not terrify so many businesses if they felt reassured that doing so would be conducted in an orderly fashion, with a minimum 18 month notification period to adapt to the changes that would ensue. But letting two-thirds of the two-year timeframe provided go by without engaging on this crucial issue, letting it go down to the wire and deciding in the last three to six months whether to extend the negotiating period or stick a fork in it all, is where the panic sets in.

We shouldn’t want companies to activate their contingency plans which see jobs relocated and trading activity displaced before they absolutely need to. But this may be inevitable if firms feel no clearer about what happens in April 2019 by next summer (at the latest). It is not simply the WTO ‘option’ which those firms are worried about, but the speed at which it might be thrust upon them. And trying to separate out or predict the differences between a “bare-bones WTO” and “some-level-of-agreement-but-still-WTO” outcome becomes an even more difficult and risky business to bet on.
I may be having some comprehension difficulties here. Any bridging arrangements to a WTO baseline would in fact be a deal - of a sort. What we are speaking of is a scenario where no agreement is reached and the government allows the talks to expire. The Treaties shall cease to apply to the State in question from the date of entry into force of the withdrawal agreement or, failing that, two years after the Article 50 notification. 

It would appear she is arguing that business would need time to prepare and thus any bridging arrangement with the intent of operating without a comprehensive FTA would largely be permission to remain in the EU until a certain date. Unless of course we are talking about moving to this WTO with added extras, which again, by definition is not a no-deal scenario. No deal means no deal

Renison argues that moving to WTO terms might not terrify so many businesses if they felt reassured that doing so would be conducted in an orderly fashion, with a minimum 18 month notification period to adapt to the changes that would ensue. She should know that this is not going to happen and 18 months is not enough. 

More to the point, there is simply no possibility of preparing. The truth is we do not know the full extent of all the administrative difficulties and even though we have a good idea of what might be involved we would have to develop our own regulatory systems and the IT that goes with it. With the best will in the world you are unlikely to see a stable system inside five years. Government IT developments do not exactly have a good track record, especially when you are looking at multiple customs and regulatory systems.

Renison points out "The point of trade agreements is to eliminate the need for costly double testing across borders if regulatory standards are deemed to be equivalent or mutually recognised. Exiting the EU without any agreed substitute for our current regulatory set-up with Brussels would impose a significant cost through new testing requirements in Europe on the UK’s manufacturers, at a time when profit margins are already wafer-thin. “Trust us our rules are still the same right now” in the form of the Great Repeal Bill is not a substitute for a reciprocal regulatory arrangement that would guarantee such continued mutual recognition".

We could go to town on that in that porting regulations onto the UK statute book will require that we develop parallel institutions and there will need to be heavy edits to remove EU institutions from the law. As a piece of legal engineering alone we are looking at years to hammer it out. It would require a massive mobilisation of intellectual assets because we would be looking at just about every strata of law. It's a non-starter. Reshaping our own regulatory bodies to the task would take years.

Renison is right in that these debates are a distraction to the more important debate as what an actual deal should look like, but the reason we keep coming back here is precisely because her Toryboy pals keep resurrecting this zombie idea - and rather than unequivocally stating that we should not under any circumstances consider it, and that no amount of preparation can make it a smooth transition, Renison panders to idea that we can, if forced to, soften the blow. 

Yet again I would observe that business is being let down if this is the best they can get for representation. There is no way to overstate the damage a "no deal" Brexit would do and those representing business should be saying it out loud. There is no "mitigation". There is only disaster recovery. 

But then as much as Renison has clearly not understood what the real world fall out would look like her title premise is faulty. To say that "government must listen to business when preparing for the possibility of a no-deal Brexit" is to say that the camp commandant should listen to the concerns of Jews waiting to go into the gas chamber. That the government would even consider dropping out without a deal is all the proof you need that it has not listened to business and has no intention of doing so. 

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