Tuesday, 31 July 2018

The case for not making a massive fucking pig's ear of Brexit


Just over ten years ago now I have a nasty break up with an absolutely dreadful woman. I left the house with what I could carry in a Volvo estate and shortly after that I was camping on the floor of a motorcycle garage in Bristol with no heating for about two months while I found work. There was no hot water and being on the dole meant I was hungry more often than not. And you know what? It absolutely fucking sucked.

Eventually I managed to find more stable lodgings in the spare room of a young couple with a baby on the way. Nice people. Total goddamn hippies though. The sort who use spiky plastic balls in the washing machine because detergent is harmful to the environment. Don't ask me. I have no idea where they got that idea from. And you know what? That absolutely fucking sucked too. They didn't like me at all and I don't blame either. 

After about two months of that I was asked to move out. I wasn't really a "communitarian" and I didn't want to go river swimming with them or meet their vegan friends. I wanted war films, death metal and bacon like any self-respecting person would. That though, was not to be. I ended up sharing another house with a former GP who'd been stuck off. I have no idea why but it might have been something to do with the fact he was a scary paranoid schizophrenic who wore Spock robes and sandals. And you know what? That really did fucking suck.

Eventually I landed a pretty tidy job at Airbus where I was able to move into a flat but for several weeks didn't have a TV, a chair or even a bed. I used an inflatable mattress and a £6 duvet from the local Sainsbury's. It wasn't particularly pleasant, especially not having curtains or basic cooking facilities. 

But you know, that's the sort of shit you have to go through when you've lost absolutely everything. That's what happens when you've been made redundant and your relationship breaks down and everything goes all to hell. That, people, is why a "jobs first Brexit" is the sort of thing one might consider giving some consideration to. 

It is entirely reasonable and perfectly normal to think that the EU is a monstrous antidemocratic quasi-empire with a voracious appetite for destroying national sovereignty. Similarly it is a natural response to want to tell them to stick their £39bn up their moist holes. I get that. I understand the impulse and yes some things are a lot more important than cheap flights and freedom from roaming mobile charges. Especially when the furthest you've travelled lately is a small village just outside Croydon. 

But see, thing is, we still have to eat. Just a few weeks ago I was reminded what it's like to be totally bloody skint and it isn't nice. A cup of Oxo gravy for your main meal of the day is a most demoralising experience. I do not want that to become the new normal. Being a broke-ass blogger is not at all fun. 

Here we have to recognise that the EU is a powerful political and economic force and we live right next to it. It isn't a good idea to piss them off. What will piss them off is if we waltz out the door flicking V's at Michel Barnier, telling them how we're going to keep our money and catch all our own fish thank you very much. 

Y'see, if we do that, we assume automatically the legal status of third country. That means we are subject to the full force of EU customs red tape. We are no longer signatories to any of the European aviation agreements, and kicked out all cooperative systems. We lose authorisations on everything from airline spares to chemicals and medicines. 

For some exporters this isn't insurmountable but some product cost millions to re-authorise and there's a considerable amount of time consuming red tape to get through in order to do it. That's easier if you're a corporate - but not so much is you are an SME. We will very rapidly find we need various fixes and solutions that require some kind of cooperation from the EU.

Now, keep in mind we have just utterly shafted the EU by leaving a £39bn shaped hole in their financial plans. What do you suppose they might say to that? Moreover, with international law being what it is, the EU cannot make any unilateral concessions to the UK outside the framework of a formal agreement. It may be able to provide some time limited fixes out of enlightened self-interest but it would make a mockery of the entire system if it extended EU level trade preferences to a non member. They just won't do it. 

So yes, I suppose, this is proof that the EU is an inflexible tyrannical monster - but it will be a mess of our own making. That it is difficult to trade with the EU from the outside should come as no surprise - least of all to Eurosceptics who have spent the last twenty years telling us how African producers can't export to Europe. 

The immediate consequence of this is that with the ports in a state of gridlock there isn't any point even trying to ship goods to the EU. That means factories will have to scale back their production and dump their stocks on the UK market. Initially that sees a collapse in prices but soon after, UK produce loses its economies of scale and we start having to pay through the nose for basics. 

Soon after that, we see consumption of luxury items declining along with the jobs that go with it. People simple won't have disposable income. We then face the secondary issues of tariffs imposed on UK produce along with UK processing plants being frozen out of single market supply chains. Fishing boats won't be able to land their catches in the EU. 

Here we should also note that by losing all of our formal trade agreements with the EU, we also lose access to those we had with other countries until such a time as UK bilateral deals can be negotiated - which could take anywhere up to eight years. 

We should also be very keen to note that the UK government is suffering from a considerable competence deficit. If you at all remember the massive pigs ear it made of the FMD/BSE crisis, imagine how well it will perform when just about every regulatory system, has imploded along with out antiquated customs systems. 

Now you could argue the toss and say none of this will happen. Fine. Stick to your guns if you will but the best researcher in the business disagrees with you, and so does the European Commission. Even just rubbing two braincells together it is possible to arrive at the conclusion that severing 43 years of technical, banking, customs and regulatory cooperation is going to have something of an effect. It is also fair to say that millions of jobs depend on being able to export and many of our production lines depend directionless trade. 

There will be some who vehemently disagree with this analysis but they most likely will be ideologue Tory Breixters and not officials, trade negotiators and analysts who actually do real jobs. But let's park that for a moment. We are still having a furious national debate as to whether a particular approach to Brexit will lead to food and medicines shortages or not. There is something of a clue there. The truth will lie somewhere in between. It won't be Armageddon, but it will be a continual stream of bad news, and that will deter investment into the UK. 

Any way you cut it, terminating all formal relations with the EU is going to hurt. But then the central argument for not making a massive fucking pig's ear of Brexit is that we don't have to make a massive fucking pig's ear of it. We don't have to gamble everything. 

The Leave Alliance, of which I am a part, is the only campaign to have produced a workable comprehensive plan. Our recommendation is to leave via the EEA. And this is not because we are soft brexiteers. We took the view that a vision without a plan is just a pipe dream. In beginning the analysis we first had to ask if the vision was achievable and relevant. That's where we first hit problems. The classic eurosceptic free trade mantra hasn't kept up with the times.

This is largely because free trade does not exist and has not existed for some time. A free trade deal is not free trade. It is regulated trade - and we find that in the era of globalisation the driver of intergovernmental trade talks is regulatory harmonisation.

Being that we have, unlike other countries, spent three decades in a harmonised ecosystem, a lot of our trade has evolved to suit that system. So in departing from that system we must offer a viable alternative. That's where things get messy. This is because of the emergence of global standards and regulations which we discovered have enormous influence on what we'd always assumed were just Brussels regulation. This changes the game entirely. It limits the potential and the economic utility of deregulation.

That then certainly leaves a number of Tory Brexiter ideas out in the cold. We could leave the single market and diverge but this is at a point in history when all of the countries we have eyes on are converging on the global standard with a view to trading with the EU.

We then looked at the constraints of the Brexit process where Article 50 puts time constraints on us. Looking at the extent of EU integration there was never any possibility this could all be done in a hurry. From there we took the view that Brexit is a process, not an event. It became clear that forty years of technical, legal, social, political and economic integration could not be unravelled overnight - and in a great many instances, undesirable to do so. So how do we separate the good from the bad?

We then had to do something that Tory Brexiters have not. We thought about what the EU point of view might be and the red lines it would likely hold us to. It became clear that an FTA would be entirely inadequate as either a destination or a means to manage the process.

We therefore needed a framework. A transition. Given the preparations we would need to make, it would have to be a longer term transition. We are still of the view that Mrs May's "vassal state" transition is not long enough. So it became clear that we needed a departure lounge that avoided any cliff edges. Being that the EEA is an available framework covering all the relevant subject areas, it presents itself as the obvious way to manage it.

But then we enter the extensive discussions about the respective limitations of the EEA. Certainly it is suboptimal, but preferable to the alternatives. As a longer term destination though, the UK would probably find such a solution to be too restrictive for our size.

But then there are plenty of avenues available to us after we resolve the immediate issue of leaving. We could either look to negotiate a new relationship and declare our Efta membership temporary or throw our resources at developing Efta.

Since the referendum our understanding has evolved and we have come to appreciate the EEA agreement for what it is. An adaptive framework with country specific protocols. We can use the system to evolve the relationship. By adding our weight to Efta - a respected entity in its own right, with members able to forge their own trade deals as well as having an enhanced preferential relationship with the EU, we can improve the EEA and re-balance the power equation.

We also took the pragmatic view that if we took the step into the EEA there would be no real incentive for the EU to start a new process and a new comprehensive framework for the sole benefit of the UK. Why bother when we can adapt what we have?

In doing so we would be leaving without a vassal state transition which could end up lasting a decade or more, and we would accomplish the first job of leaving the political union while minimising the economic damage. In respect of that, this would honour the eurosceptic view that we want the best available trade with the EU, just not ever closer union and the final destination of the EU. Given the kind of technical integration which is mutually beneficial, it makes sense to keep the EEA.

But this then raises the vexed question of freedom of movement. Our view has always been that leaving the EU is the primary goal and immigration is a secondary issue and we deal with the issues in that order. Take the win and then address the FoM issue.

Here we find that under Article 112 of the EEA agreement there is a mechanism available to us and a precedent which would begin a political process to adapt freedom of movement. So would this be sufficient? Obviously this does not appease the hard liners - but what we find is that we need a full spectrum policy of varying measures because modern immigration control is not done at the borders. We need an entirely new policy on immigration.

At this point we would be better looking to negotiate with our Efta allies for an EEA wide reform of FoM, where combined with voices from inside the EU, we could be kicking at an open door. The point is, though, that we were never going to resolve all of the issues all at once and it will take continual pressure to keep the Brexit momentum going. What concerns us most is securing the first step - leaving the EU safely.

By taking a harder line we risk either being in a perpetual state of transition only to move to a threadbare FTA, sacrificing substantial trade for ineffectual immigration controls which don't really address what people are really worried about. We do not, therefore, see EEA as "soft Brexit". Rather we see it as the most efficient, clean, smart Brexit, taking into account the polticial obligation we have to Northern Ireland and the desire to remain open to trade with the EU. It works and it beats the alternatives.

Now I know all this technocratic stuff is boring, and people are becoming immune to these dire warnings but it comes down to one simple observation. We can have most of what we want without even risking a cliff edge disaster. If it doesn't work out we can always quit the EEA but I'm betting we wouldn't want to.

In the end you can choose not to believe me, but if I'm right, our manufacturing and services take a major hit and soon after tax receipts collapse triggering another round of major cuts to government services and public sector layoffs. The initial three million jobs lost could escalate to five. And it very well could be your job.

Now you may be one of those bloody minded people who thinks absolute sovereignty is worth it. But you haven't thought it through. It only takes a few missed mortgage payments to be out on your arse and pretty soon you'll be living in a spare room in a house with a couple called Lucy and Baz who wear tie-die t-shirts and Indian pantaloons who have Thursday night poetry readings (with tambourine accompaniment) while their crusty mates snort ketamine off a manky old frisbee. 

Meanwhile your days are a special kind of hell where you spend your days walking between job agencies talking to patronising orange tanned recruitment consultants with immaculately polished claws - all of whom are called Jacqui or Nikki for some inexplicable reason. The rest of the time you'll be sat in the park waiting on giro day because drinking cider and shouting at pigeons is preferable to going back to your dismal magnolia bedroom with no lampshade to read a Dean Koontz novel to the sounds of your moronic housemates listening to 90's era psychedelic trance music.  

I promise you that after three months of that you won't care about sovereignty - and if Field Marshall Rommel himself blitzkreig'd his way through Tunbridge Wells you would welcome it with open arms waving your little red swastika flags to usher in the new regime.

The basic point is that when things get shit they get really shit. And things you didn't think would happen to you... happen to you. Recessions are not fun and depressions less so. We all knew Brexit was a risky business and taking a hit to be out of the EU is worth the risk in my view, but nowhere does it say we have to piss away a £270bn a year trade agreement. 

There's a very real risk that if we leave the EU without a deal and the economy goes south you will have to interact with people and be polite to them because you need their help. You'll have to live with other people and pretend to be interested in whatever tedious shit they're trying to get you into. I've been there. I still have the nightmares. I would take the warnings more seriously if I were you.   

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