Thursday, 29 September 2016

Be glad it was Brexit - the alternatives are worse

There have been a number of political maneuvers to try and block Brexit. I can't say they have given me much cause to worry. On the whole I think parliament understands that the vote must be obeyed. There would be a strong showing for any blocking move were it to go to a parliamentary vote but ultimately it would be defeated. Blocking Brexit would have extraordinary consequences.

There was a vote in parliament to grant a referendum. Parliament brought that act into law. There was a referendum in which Her Majesty's Government spent an inordinate amount of money publishing a guidebook which categorically stated that the government would carry out the wishes of the people.

To then tell half the population that their vote doesn't matter sets a dangerous precedent. It says that your vote will only be respected so long as you vote the right way. What it says is that parliament will not tolerate an entirely legitimate vote which they themselves voted to have. There would be no coming back from that. It would be a confirmation that we are ruled rather than governed. If politics was toxic before the referendum then nullifying the largest political mandate ever recorded would have a profound effect.

There are a number of good reasons to leave the EU but there is one often overlooked reason. Ignoring all the technocratic and economic arguments, the issue of identity is not one that can be casually disregarded. Not wanting Britain to be a subordinate of a supreme government for Europe is a perfectly valid reason. The people's right to define their own society is as close as there is to sacred. Without it we are nothing. 

In that regard, I even find cause to agree with Nicola Sturgeon who in the face of damning economic reports says that independence transcends the practical. If people are willing to fight and die for democracy then they will happily shed a few percentage points of GDP for it - not least when none of that money is going in their direction. If MPs took it upon themselves to overturn such a vote they would be offending a core sensibility and I would expect to see MPs put in the ground because of it. 

And that's also why Brexit must happen. The question has been put to me as to whether Brexit is actually necessary. After all the UK is a blocking influence on the EU which stops runaway federalism and the grim prognostications of leavers don't really pan out. I can imagine that it actually grates with Ukip hardliners that the EU isn't as bad as they say it is. For all the predictions of doom it is still with us and the economy is stable even though it is stagnant. 

But if you cast your mind back to the election last year we saw a potential threat to domestic stability. Had there not been an offer of a referendum we would likely have seen a repeat of the 2010 hung parliament, again in a political limbo of centrist consensus politics. Beneath that was a boiling resentment because the current settlement is one not favoured by the people. 

Had there not been a referendum the issue of the EU would continue to bubble under the surface waiting to bring down yet another government. The fact is that all political settlements are life limited and centrist consensus politics after Blair and Cameron had long outstayed its welcome. The referendum though has lanced the boil. Look at where we are now.

All the signals now point to a soft Brexit. The EU question is one that is settled, Ukip is on the wane, and the Tory right have missed their window of opportunity. I recall just after the referendum Tim Montgomerie saying that the Tory right had more power than they had in decades. And for a very short time that was true. Andrea Leadsom, David Davis, Liam Fox were in the spotlight as frontrunners for John Redwood, Bernard Jenkin, Michael Gove, Owen Paterson and Philip Davies. 

Like Ukip though, their lack of planning and intellectual foundation soon become apparent. If they had a vision and a credible plan between them they could have have captured the Conservative Party in the same way that Momentum have on the left. The problem is that an agenda of "pull out as fast as possible at any cost" is simply not one any of us could allow. 

Though Mrs May has thrown them a bone by putting the three Brexiteers into key positions it is quite clear that they are on tight leash and Mrs May is in charge. It's her way or the highway. And now it seems the Brexiteers are going to be neutered politically. Once Mrs May signs the Article 50 agreement, the sacred cow of the Tory right is out of the picture. Meanwhile, Labour is in full self-destruct leaving a moderate Conservative government to get on with running the country. What is not to like?

Perhaps five years ago I would have been sorely disappointed by this but I have come to actively despise the Tory right for their ignorance, intellectual dishonesty and ideological zealotry. They are the mirror opposite of Jeremy Corbyn, caught up in their delusions with no real connection to the present. That they have been consigned to the political wilderness is a good thing for the country. Moving forward, the left will gradually get their act together. Something will emerge from the wreckage of the Labour party and we can all get on with reshaping the country. 

Had there not been a vote to leave the EU Ukip would still be as strong, the Tory right would still have an axe to grind and David Cameron would still be prime minister. Worse still Cameron would be cock-a-hoop. A vote to remain would have empowered him. You can just imagine him lecturing us all in that oh-so-smug tone. "We had a referendum, the people had their say - we are staying in the EU and we're not going keep banging on it". Or words to that effect.

The consequences would be worse than Brexit. A remain vote would be a licence to rub our noses in it and the bogus reform package would continue to be a political device so that the issue could be ignored completely. I can imagine that this would send Ukip into a civil war but not the entertaining death spiral we see today. A defeat on its core agenda would see a complete reset and reorganisation of an insurgent movement. 

Having had a referendum the issue would be unlikely to die. The referendum would have created a new legion of experienced campaigners and effectively create a new generation of EU obsessives for a cause that would otherwise have died out. The issue would continue to haunt the Conservatives and the toxicity levels would continue to rise. 

Ultimately the Brexit vote was not a vote against immigration and in some respects it wasn't even a vote against the EU. It was a vote for change. Change that could not be secured by any other means. We've heard all the empty promises about EU reform and general elections don't have any real tangible effect. This vote is the only vote in my lifetime that forces the government to have a serious rethink about how we do things. 

What we are going to see is political turmoil descending into farce but that doesn't worry me. I'm not even all that bothered by any Brexit recession. Recessions happen. They come and go. We muddle through. What is happening though is something quite extraordinary.

At the moment I spend most of my time watching what the media does and what politicians are saying. They still haven't grasped the basics but they are tossing around entirely new terminology. Trade and diplomacy is now a hot topic. There is a new lexicon in town and there is a space race to be on top of it all. There is, for the first time in a long time, a serious debate about Britain's place in the world.

So far all we've heard from Liam Fox is platitudes about free trade and openness. Though we know that Fox doesn't actually know what he's talking about and we can be quite jaundiced about it, it is still nonetheless a signal to the world who will take him at his word - and in international politics platitudes, gestures and signals are everything. I'm not especially pleased that Mrs May in one of her first acts on the international stage was to sign the Paris Agreement but it was a signal to the world that we are not retreating from international cooperation. It's a price we have to pay to maintain our presence.

For a time we will have to put on a major international charm offensive. I doubt the forthcoming far east tour of the Red Arrows is unconnected. We will also see the Royal Navy putting in appearances all over the place as power projection. The Hinkley Point deal is also another obligation we could not have backed away from and it gives Mrs May the photo opportunities she needs. Though it may all seem thin gruel from the domestic perspective it is these kind of signals that show our intent. 

Though political competence may be in short supply for the moment, we are only just finding our feet in preparing to take control of policy areas abandoned for decades. Just because we lack that competence doesn't mean that we are not going to acquire it. The lack thereof is a lesson in why we shouldn't have joined the EU in the first place. 

We will have a long road to travel before we start seeing any tangible benefits from Brexit - but I find it most gratifying to see the political establishment scurrying around trying to make sense of it all. At the very least there is a new sense of urgency in government that I haven't seen for a very long time.

We may have missed the opportunity for domestic democratic reform and Brexit is not going to be the transformational influence we had hoped but we are witnessing a new level of engagement and, in a small way, a revival of grown up politics. When this is done and dusted we may not have a new Britain but we will have all the tools to do it. The rest is up to us. 

Brexit: the right change at the right time

The expression "free movement of goods" does not mean free movement of goods. Conditions apply. You are free to move your goods so long as they comply with certain standards and have a proper audit trail. Only when all your ducks are in a row can you freely move goods. It used to be that we inspected goods at the border for compliance but now we have regulatory mechanisms like Authorised Economic Operators where trusted traders become their own customs nodes and goods travel from point to point without interruption.

With modern IT systems based on international methods and regulatory procedures, so long as a there is a mutual recognition agreement in place covering standards, inspections and qualifications, free movement of goods extends well beyond the confines of the EU single market.

At the heart of this is a common set of standards which can come from any number of international organisations - some with official stranding, others being international private regulators where their codes and guidelines are embedded in contracts and quasi-legislation. What's interesting now is that any technical regulation from the EU is not so much clearly defined prose as it is an invocation of global rules and standards - as the EU is obliged, like a hundred other countries, to adopt global rules.

In the past the Brexit debate has been plagued by a misunderstanding of regulation. Mr Dyson constantly complains about power restrictions on his vacuum cleaners. He is in fact complaining about EU regulations that invoke an eminently sensible set of ISO standards that force manufacturers to make more efficient designs. Though I believe this particular set of standards was an EU initiative, they were agreed at the global level - where any nation has the right of initiative - if they're not in the EU. Increasingly we find that moves toward regulatory harmonisation start at the very top of global governance, and while the EU is a major play, it is not the only game in town.

In the global arena the EU is up against the USA, China, India but also a number of global alliances and conglomerates where nations and blocs are just one class of global participant. The internet giants have their own alliance which has as much or more clout than most governments. Trade deals are increasingly built up around rights of investors and resemble corporate contracts. MoUs are now as much a part of intergovernmental trade as they are part of the corporate nexus.

The EU is a shrinking influence in all this. Not through its own making but because the system is expanding. The fish stays the same size, the pond just gets bigger. Rather than being the core of the single market it is a player in much bigger region where goods and services travel freely. The AEO system is global and the E-TIR system is being adopted worldwide. We are now evolving into a state where anybody who chooses to comply (and meets the standard) can participate. The EU does not control accessions. It is being displaced by UNECE.

Behind the scenes with very little fanfare countries like Kazakhstan are being brought into the fold with UNECE and Codex working to bring them up to standard so that they can participate. This is complimented by the WTO Trade Facilitation Agreement where there is a global fund for exactly this kind of economic assistance. Britain is already a large donor and that is where much of our aid spending should go. Rather than attempting to bring Turkey into the EU we would do just as well to look at bringing any number of developing countries into the UNECE/WTO/Codex sphere. In order to achieve free movement of goods and services worldwide we must focus our efforts at the global level.

But this is why talk of leaving the single market is pointless.We could leave the single market but we still have to regulate and we are still obliged to conform to global standards so there is very little point in replicating all that work. Since there is little the European Parliament can do to tinker with such regulations short of vetoing them entirely there is no real worry. Being outside of the EU gives us the necessary powers of veto - but since we will have an enhanced voice at the global level we won't need to use it often.

The idea that we would leave the single market in order to deregulate is one twenty years out of date. Classic eurosceptic believe we can move out of the EU sphere and into a big wide unregulated space where we can do as we please. It simply doesn't exist. Regulatory globalisation and harmonisation of customs is here to stay. And as much as the eurosceptics have the wrong idea, the EU is equally backward in seeking to cordon itself off as an exclusive club.

The main reason the EU is using brute force to get African trade deals to pass is because it sees this organic system as a threat to its existence. And that is not far off the mark. For Britain it then becomes a question of which we would rather prevail; a rapidly expanding organic global system with no central authority or a staid EU dominated system that creaks and groans and only expands in tranches and only ever at snails pace.

In my estimation it's better if nation states can pursue their own natural cultural relationships in order to enhance trade rather than trade being controlled by the EU. While the world is gravitating more toward regional blocs the EU is the only one which insists on trade exclusivity and that's damaging for all EU members. Central to this is the federalist ideology and though some say the federalist ideology inside the EU has been defeated the institutions still work to that archaic design and show no sign of reform. The only thing that may trigger that reform is Brexit.

Some say we should not leave the EU and seek those reforms but we are dealing with a system that does not want to reform along with politicians who don't understand why it needs reform. This explains Mr Cameron's meagre demands. What was needed was a liberalisation treaty whereby member states could pursue their own avenues and negotiate exemptions, moving the EU more toward the Efta model. That though is counter to the EUs ambitions of harder and faster integration.

The very last thing the EU had in mind was reforming to become a more liberal institution. At best we would have seen that much vaunted two speed Europe but that would not have ended EU trade exclusivity nor would it have given the necessary tools we need to reform UK governance. All it would have done is put the UK into stasis while the Eurozone forged ahead with banking and full political union.

If they had intended on pushing none Euro members out into the EEA where they could seek their own trade agreements that might have been sufficient but that was never on the table because the one thing written into the EUs DNA is that once it has control it  never relinquishes it.

By leaving the EU, the UK will retain a deep and close relationship with the EU but will have afforded itself all of the tools it needs to play a more active role in the global community to bring about a global community of equals. A rethink of how we do things is long overdue and we'll be getting the relationship with the EU that we should have had all along. One where we have the necessary exemptions so that the one size fits all approach does not damage our culture and kill jobs.

For the UK, the EU model was never quite the right fit. Britain enjoys a position as a global business hub simply because our business culture is based on the rule of law and sanctity of contracts. We do things by the book. If we sign up the the rules we follow them. Rules on the continent though are more guidelines and aspirations - and this is most telling whenever you go out of major European cities and into the provinces. Britain can't work that way. We need a more flexible relationship and that is what we are getting form Brexit. One that we would not have got any other way.

Brexit does not exclude the possibility of close integration and as the process of globalisation shows, a central authority is not needed to bring about the free movement of goods and services and as for the digital market, this can only really be brought about through global cooperation. A European digital single market has yet to take form but is already being leapfrogged.

As to the free movement of people, that is a more sensitive area. It's a fine aspiration and we should seek to safeguard it but control of it must rest with nation states for their own security and peace of mind. It is unlikely that we will have a rigid and draconian reversion to full border control. It wouldn't work and it would not be popular in the end - but that is an argument we must win rather than imposing it on people without their consent. I would prefer things stayed more or less as they are but the idea that we are not in control of it is unpalatable. Even the hard liners have a point there.

Ultimately I think Brexit will give us all a new sense of urgency to rethink how we do things. If Britain is in control of the rules it takes from Europe and elsewhere then I can see attitudes improving and better relations with Europe - as a partner rather than a subordinate of the EU. I don't see the EU as community. I see it as a bureaucratic rogue non state actor running around making messes, the consequences of which member states have to deal with alone. At least now it must seek our consent and on the international level and we have a better chance at derailing its ambitions of becoming an actor in its own right.

I do not for a moment think that Brexit will come without a price and contrary to what Brexiteers say we are not out of the woods yet. We do have a huge mess to sort out and will have to work twice as hard to make a success of it but in the end I still think it is timely and necessary.

The relationship we wanted with the EU was never going to happen as a member and there was no reason to expect any radical reforms. Once we are out of the EU though we will find that we are better equipped to function in a world very different from the one the EUs founding fathers anticipated. Once we have reacquainted ourselves with the art of governing, we will wonder why we didn't do it sooner.

Brexit: no news is no news

This is a long post to tell you that nothing is happening. "Journalists" are busy inventing content to fill space but all of it is pure speculation built up on half understood concepts taking everything at face value. Boris Johnson and Liam Fox keep saying things but this should not be interpreted as anything other than noise. There is nothing to be read into any of it.

All the real Brexit effort is going on between officials. All of it is happening under the radar. Mrs May will be ignoring the Brexiteers for the same reason everyone else does. They have nothing useful to add. Instead she will be listening to foreign governments, various government departments and special interest groups. They will all be telling her roughly the same thing. If we cannot have single market membership (which is not actually ruled out) then we need as close as possible to it.

That means that officials will be breaking each concern down into various categories where they will in due course conclude that a comprehensive agreement is needed that covers ninety percent or more of the single market. It might as well be the single market but politically Mrs May would prefer to keep that as a fallback position. Politically she needs to cook up something that is single market membership that she can call something else.

She is also taking soundings on freedom of movement. She she knows that we will need a liberal regime that isn't too restrictive simply because a strict regime creates as many problems as it notionally solves. She understands that there is the capacity to inflict considerable damage for little or no gain.

With this in mind her officials will be cooking up a proposal and a time-frame for rolling it out. Diplomats and officials we have never heard of will be exchanging memos with European counterparts to establish the red lines. Some of these will be taken into consideration and worked into the proposal. Some will go up on the board as objects for negotiation. Both sides will be engaged in this process so that we can avoid extensive talks over minutia. The main talks will focus around the red lines and technical hitches. We may have to fold on some considerations in order to secure EU cooperation in overcoming some of the more legalistic difficulties.

This will be a very specific analysis and any reference to Switzerland or Canada will be to examine agreement frameworks to see where the potential crunch points are. The proposal will be very much a British option along with handover arrangements for agriculture and fishing. There will then be an agreement on implementing this agreement.

Whether it flies or not is really up to the EU and what they have in mind. If we are asking for most of what we want, leaving out only a few things we don't while making big asks on immigration I would expect them to decline it. I would. It should not be forgotten that the UK pulling out of various EU projects and peripheral programmes presents the EU with a degree of upheaval and expense and we will be given the choice of either continuing with participation or being asked to pay for the disruption. Given that we would then be paying for something we're not using, we might well concede to continue with participation.

As we go through the list line by line we will be asking where the political or material gain is from withdrawal. In this there is no question of staying in the customs union. If Britain does not have control over trade then it's just not Brexit. What's left will be what we go with.

In order to manage this relationship thought there will need to be infrastructure to monitor and implement it and to manage legacy complications further down the line. It will need a surveillance operation and and an arbitration mechanism. Looking at this as a whole it then starts to look like the EEA. The question for the EU is then whether it wishes to fashion a bespoke treaty infrastructure for the UK alone. It may wish to out of fear that the UK alongside Efta in the EEA could change the balance of power. That one will be a political estimation over which we have no control.

What we can say is that if we are leaving the single market then we will be going the long and expensive way to achieve the same thing as the EEA, adding yet another ring to the diagram above containing only the UK. We will keep up the pretence that we are outside the single market but will will still be tied to the EU regulatory environment, we will still be paying about the same and we will still have a very liberal immigration policy with the EU.

There is only really one reason why we would wish to go to all that trouble. Politics. To pretend we have left both the EU and the single market. Whether the EU will play ball is another matter. I see no reason why they should and were I them I would point out that they the UK can either swallow the lot with a concession on freedom of movement or go the hard way - which nobody serious wants.

This does not mean there won't be a savage public debate about hard and soft Brexit. It's ramping up right now. There will be a war of words. There will be reports of "Tory splits" and there will be high drama. Toys will be thrown out of prams and we may even see a resignation or two from the front benches. None of it, though, will have any bearing on what is being negotiated or how. This will be a purely managerial process trying to ensure maximum damage limitation while trying to save as much political face as possible.

The fact is that the WTO option is not going to happen except by accident through seriously maladministration - and every effort will be made by both sides to ensure that does not happen. There is no Canada Option. There is no Swiss Option. There is either the EEA or a shadow EEA that does the same job. Everything else is just noise for the entertainment of the media.

My own view is that the EEA is the path of least resistance and the path that will bring about the swiftest possible exit - and there is no point whatsoever in reinventing the wheel. The peripheral whinges about the EEA are mainly media mythology - and we would be better off making that case than going through a long and expensive pantomime. So long as we make it clear that the EEA is an interim position then politically it is palatable. If we attempt to do it all at once and set it in stone then we will make a real mess of it.

You can argue the toss over the nuts and bolts of it and make a meal over every nagging complication and you can piss and whine all you like about your own pet Brexit theory, but in the end the labyrinthine complexity and economic reality of Brexit dictates the agenda - and all signs point to a deep and integrated relationship with the EU. The rest is window dressing and everything in between is just politics.

For sure we will get our trade, aid, fishing, agriculture and energy policy back and we will take back control of employment law and most of the things us leavers wanted but the post Brexit-new Jerusalem is something that will have to be fought for and built over many years. Anyone who thought Brexit was the answer rather than the catalyst was kidding themselves. The Brexit that Brexiteers wanted died more than a decade ago. And that's actually no bad thing.

Tuesday, 27 September 2016

The EEA is the only sensible option on the table

If you're Daniel Hannan or one of the libertarian Toryboys you think that Brexit will usher in a new dawn of free trade and light touch regulation. You will frequently cite Singapore or Hong Kong as an example of how things can be. You will of course not mention the vast slums, the slave labour and the shoddy building practices that will see tens of thousands killed come the next earthquake. Nor will you mention that housing for ordinary citizens is cramped and overcrowded.

If you're an average Joe existing on a diet of Daily Express, Telegraph and Breitbart articles you could be forgiven for thinking Brexit will usher in this new dawn. Most people have next to no idea what is regulated, by whom or why. Very few fully comprehend the extent and depth of EU integration. Hardly anybody understands the various systems and regulatory mechanisms that make modern life tick along the way it does. And there's really no shame in that. It's normal.

It's only after three years of intensive examination of regulation that I have any real idea how deep the rabbit hole goes. Even now I am still bumping into new concepts hitherto unexplored. What one finds is that the EU most people are aware of is only the tip of the iceberg and there are many tiers of invisible EU which function as part of a tapestry of treaties, agreements and contracts. There are now volumes of regulations and rules governing things that simply didn't exist when we joined the EU.

In a lot of areas some regulation is better than none at all and if you were going to deregulate you would want to make damn sure you had something of equivalence to replace it with. In most cases we would find that the regulation that exists is eminently sensible. The problem is usually overzealous interpretation or misapplication. The only time anyone pays any particular attention is when it affects them directly. So we must approach Brexit with care.

The issue of Brexit as much a legal and technical one as it is political. It's as easy or as difficult as you want to make it. We could, as some suggest, rip up agreements and let the chips fall where they may but this would have severe consequences politically and economically. It definitely would cause a recession and we definitely would be poorer.

So the question then becomes one of how do we leave without causing extensive damage to our economy and international standing. That is not so easy - especially when the pragmatic conflicts with the political. If we were being ultra pragmatic we simply wouldn't bother leaving the EU. Doing nothing is always the path of least resistance. But that is not acceptable to the majority of people. So now it's up to politics to discern what is. An unenviable task.

The dilemma of politicians is whether to stand up for what is right or whether to bend to irrational demands for no political or economic gain. What most people expect of Brexit is to be out from under the dead hand of technocracy and into a simpler, less bureaucratic world. That though does not exist anywhere - and if it did we would hate it even more than the status quo. So before we go into Brexit talks we need to define what it is we seek to achieve.

For anyone on the right the big red line is trade. We also want to take back control of labour laws. EU rights and entitlements reduce the availability of work and in reality offer no real protection. Legislation cannot replace a competent and active union. There is also no good reason to have a one size fits all agriculture policy and local control of our seas is better for the environment. There are plenty of areas where a reboot of policy would do Britain a massive favour. The converse of this is that there are also a number of opportunities to shoot ourselves in the foot.

With that in mind we need to apply a certain degree of risk management. The juvenile nihilist in me might like to start unplugging things to see what happens but then we have to live with the consequences of whatever we do. And so it stands to reason that we would want to negotiate a flexible agreement whereby we could uncouple from the EU carefully and slowly. We are embarking on major surgery, plucking away at connecting fibres. Were we to look at the list of subject headings for consideration they would span into the hundreds.

We then have to consider the commercial concerns. The single market is not just a free trade area. Not is it merely a region of regulatory harmonisation. There are hundreds of intricate systems to keep it all running and to keep it fair and legal. Losing access to these systems has very real ramifications in terms of quality of life and economic prosperity. To put it in stark terms there is never going to be a full divorce from the EU for as long as it exists. When the EU is our nearest and most integrated trading partner there must be a high degree of convergence and cooperation.

Right now, if the Brexit department is doing its job it will be consulting industry leaders and lobby groups to see what they wish to retain. In this it will become apparent that access to and retention of EU decentralised agencies is extremely important. As much as they are valuable to us we have nothing we could replace them with. By the time any such analysis is complete we will find we want to keep most, if not all and the list of things we do want from the EU will be far larger than the things we don't.

We hear Brexit politicians talk about the Canada Option which is nothing more than a vague aspiration. To understand why this is considered an option you have to examine how Brexiteers think. They think the core component of the EU is the free trade area - which in their tiny minds means an agreement on tariffs. Everything else is considered peripheral and unimportant sundries which can be covered by "transitional agreements". It is only a matter of time before reality intrudes on this quaint interpretation. Britain will need something far more comprehensive.

So we have quite a job on our hands don't we? The chances of sorting all that out in two years are nil. We are talking about forty years of technical evolution conducted by an army of lawyers, politicians and technocrats. To forge an agreement we will start with free trade as a baseline. Then we are in the process of adding on the extras. They will number in the hundreds. Any miscalculation could cause serious and irreversible damage. Our end proposal will be so close to single market membership that it will look very much like actual membership.

This though, is exactly the kind of picking and choosing the EU has largely warned us against. For sure we do not take their opening gambit as gospel and the whole point of negotiations is to overcome red lines. But then we have to consider that to construct the EEA agreement it took eight years. Do we seriously want to devote eight years to producing something similar. More to the point, does the EU? If I were in charge of negotiating for the EU I would be extremely reluctant to reinvent the wheel and negotiate an elaborate agreement only to do what the EEA agreement already does.

The most obvious and most sensible course of action is to take the EEA agreement and negotiate a series of opt outs and waivers using the system of annexes it has. And yes, that includes reforms to freedom of movement. With it being its own entity with its own secretariat there is already the physical infrastructure to administer it and bring measures up for review.

This means we can have a slowly evolving Brexit where the final agreement is not set in stone and miscalculations can be negotiated. The very last thing we want is a static agreement with the EU or we won't be in a better position than EU members. There is no good reason not to use the EEA as a baseline - not least as a means to shorten the process and reduce the uncertainty and disruption.

Critics of this approach are wrong. The fact is that Brexit is too big and too complex to attempt it all in one go, total separation is undesirable and not achievable and in the modern world there is no such thing as regulatory independence. Banking and finance regulation most originates from global agreements, technical standards and industry regulations are not made by the EU and the EU is largely a recipient of regulation rather than the creator of it.

As much as Norway is consulted on new regulation it does have a system for influencing them and it gets more of a say than the UK by way of being an independent voice in the global forums where the rules are made. Britain free of the EU is no longer under the whip of it and can vote according to its own interests.

The EEA agreement is completely in line with Brexit. It takes us out of EU political integration, it gives us our trade policy back and makes us an independent nation in all the ways that matter. The deregulation fantasies of the Tory right are a red herring, immigration concerns can be addressed, and though we will continue to pay into the EU budget there was never any possibility of ending payments and it was grossly irresponsible of Vote Leave to make issue of it.

In most respects the EEA is as close to a silver bullet we are going to get. Doing it some other way may have some peripheral advantages but critics need to spell out what they are and present assurances that the trade off is worth it. They will find the advantages are minimal. They also miss the point.

The point of the EEA is that it does not have to be the final destination of Brexit. It is a living agreement whereby modifications can be made through a dedicated system and the process of Brexit can be continuous until such a times as we are satisfied. If we attempt a big bang Brexit then we could find that there is no going back on our decisions.

The notion that we can design an agreement from scratch ignores the reality that we are negotiating an exit with a lot of baggage to consider. The EEA can form the core of a Brexit settlement and in so doing take a lot of the contentious issues with the potential to derail talks off the table entirely. Doing it any other way would be completely pointless. Our approach should be to minimise the risks while securing maximum flexibility. If we do so we will find that our willingness to keep it simple(ish) will buy is a lot of good will.

The Brexit process is going to require a good deal of cooperation from the EU and will chew up a lot of time the EU would rather be spending in some other way. Brexit is not the only crisis on the radar. Diplomatic run-time is a finite resource and one we can save for the EU by using mechanisms already at our disposal.

If instead we open up every can of worms we create a number of hazards for the EU that could well see other member states engage in mischief making that damages not only the UK but also the EUs ability to function. While the nihilists on the right might like to see that, nobody is served by weakening the EU and exposing it to unnecessary risks.

The only real disadvantage to the EEA is that it is a difficult thing to sell - but that is really the job of politics and politicians. Their profession is to take unpopular decisions. This will require exactly that kind of leadership. We cannot and should not pander to the fantasies of the Tory right nor can we indulge Ukip's dishonest conflation of freedom of movement with open borders. To do so would be a gross act of political cowardice that will cost us dearly.

If the Brexiteers don't like it then that's really their own fault. Throughout the referendum they had every opportunity to produce a plan and it would have bought them a lot of influence. They declined that invitation. If now they find that someone else gets to define Brexit then they should take that up with Dominic Cummings and Matthew Elliott. They had their chance. They blew it.

"More freedom, more influence, and more support for its views"

Writing in Splash 24, a maritime trade journal, regulatory expert Clay Maitland has some interesting Brexit observations that regular readers will chime with.
For those with maritime interests, what happens at the International Maritime Organization, (it favours the American spelling) has relevance, significance, and – in this case – immediacy.

The EU has in recent years attempted to enforce group discipline, under which all EU member states hew to the Brussels party line. This has importance in two areas: decisions made at meetings of the IMO Council, its supreme chamber, and informally, in the give-and-take of consensus.

The United Kingdom (or whatever it may decide to call itself in future) has a more or less automatic elected seat on the council, which, I think, it is in no real danger of losing. But now that it is (note that, yes, I say ‘is’) free of the formal need to consult, and certainly obey, Brussels, there will be a subtle but big change in how decisions are reached, and what those decisions might be.

The second consequence is the reverse: Brussels (or rather Paris-Berlin) will no longer be obliged to consult, and often conform, to the views of Whitehall, and the City of London, as it did until last Thursday. No doubt the EU shipping policy directorate will, this week, be going over what pages to tear out of their briefing books.

Then there’s Greece, and particularly the influential Union of Greek Shipowners and its friend and neighbour, the (London) Greek Shipping Cooperation Committee. The Greek shipping community, and successive Greek governments, have always chafed under the policy whip of Brussels, which to most Greeks translates as ‘Berlin’. While Greece remains a member of the EU, the departure of the UK will be a powerful incentive to reject Brussels’ maritime diktats, at least those it doesn’t like.

Greek governments will have noted the fact that the British ministry of transport will be now be more welcoming to their sometimes nonconformist views on maritime regulation. The converse is also true.

Overall, there will be a paradox: Brussels’ control of a one-size-fits-all policy on maritime policy, at least at IMO, will be considerably diminished, within the bloc itself. Countries like the Netherlands and Denmark, though still charter signatories of the Rome and Maastricht treaties, have powerful maritime, banking and insurance interests. They, along with Greece, are likely to form an influential counterweight to Brussels. And they, after all, are still inside the tent.

So what we are now likely to see, ironically, is a more diminished Britain, except at IMO, where it will have more freedom, more influence, and more support for its views on maritime policy than it has in recent years. Surprise!
Except of course what Clay Maitland has probably not clocked by way of deformation professionelle is the fact that the IMO is not the only International Organisation where we are under the whip of the EU. There's the WTO, ITU, UNECE, Codex, ILO, FAO and ISO etc. And so if his analysis of the UKs position in the IMO is correct, and I believe it is, then it follows that the UK will have "more freedom, more influence, and more support for its views" elsewhere in trade and regulation. By that token it seems the only institution where we are actually weaker is in the European Union. Meh!

Globalisation is not dead. It's changing - and so must we.

Throughout the referendum I was reluctant to use the Daily Express as a source for obvious reasons, but a report from last Thursday is illuminating.
Up and coming nations in Africa and the Caribbean will no longer see any worth in being tied to dictatorial Brussels policies now that the UK is no longer part of the bloc. And they could be about to torpedo the EU’s roll-out of Economic Partnership Agreements (EPA), which are designed to create a free-trade zone between Europe, Africa, the Caribbean and the Pacific.
That is the view of top academics Christopher Stevens and Jane Kennan, from the Overseas Development Institute, who say Brexit has given many governments an excuse to pull out of the deeply unpopular scheme. Tanzania has already ditched a proposed deal between Brussels and the East Africa Community (ECA) countries, citing the “turmoil” engulfing the EU following the Brexit vote and the skewed terms of the agreement.

The country’s Foreign Affairs permanent secretary Aziz Mlima blasted: “Our experts have established that the way it has been crafted, the EPA will not benefit local industries in East Africa. Instead it will lead to their destruction as developed countries are likely to dominate the market.” And now the two trade experts have predicted that a number of other African and Caribbean countries will follow suit, because for most Commonwealth countries Britain is by far the biggest market for their exports.

In an essay on the future of Britain’s trade policy post-Brexit, the pair wrote: “Although some Africa, Caribbean and Pacific signatories have embraced the required policy changes, for many the whole EPA process remains deeply contentious. “The post-Brexit announcement by Tanzania that it will not proceed with the East African EPA is merely the most recent example of delay and backtracking on implementation.”

A number of countries have been stalling on implementing the trade agreements, agreed as far back as 2008, over concerns about the power they will hand to Brussels to meddle in national affairs. And the economists predicted that the Caribbean - held up as the ‘EPA poster boy’ by Brussels bureaucrats - could be the “first to split” and sink another key area of EU trade policy.

Even though Britain is no longer considered a “dominant EU importer” from Africa, Caribbean and Pacific countries it does still “absorb a significant share” of the goods those countries sell, they added. The news comes as Europe’s much-vaunted trade clout withers away, with Brussels staggering from crisis to crisis as it tries to close out a number of flagship deals. 
How much this can be put down to Brexit is uncertain. It may well be a catalyst, a political signal that the EU is on the wane. More likely, it is simply the excuse they've been waiting for. EU deals are considered far too invasive and make far too many demands that are really not the concern of the do-gooding set atop of the EU.

And indeed this further dismantles the oft repeated political meme that pooling sovereignty means greater clout. Bigger trade agreements are more likely to be controversial and drum up popular opposition. The more the EU makes them a flagship enterprise the more likely it seems they are likely to fail. TTIP is now in a salvage stage and many suspect it is stone dead.

The general trend is that the EU approach to trade does not work, the EU cannot deliver on trade and that "clout" is actually viewed as intimidating and a reason to be suspicious. Given that the EU is seeking invasive social reforms inside Africa, and the effects of such deals are asymmetrical there's no wonder African leaders are reluctant.

Underlying this though is something more significant. Trade economist Hosuk Lee-Makiyama says the drawn-out TTIP and CETA experiences demonstrate to would-be trade partners that the EU is a less reliable counterpart in negotiations, less able to agree a deal and less likely to implement a deal when agreed. We are witnessing the death of the big bang trade deal and such a blow means that the EUs days of trade exclusivity are numbered.

In some corners, this is being touted as the death of globalisation and Brexit is the first domino to fall. I'm don't buy it for a moment. It is changing but not dying. What we are seeing is a ramping up of global efforts to remove trade barriers - and in this technology rather than government is making the running. In this, global measures for customs systems are eating into the relevance of the EU.

Common sense and best practice is now driving the regulatory agenda which is no longer in the hands of the EU. UNECE is becoming the more relevant forum for improving value chains and trade profitability. That is not to say that the EU is no longer a power but it has been losing control of the regulatory agenda for some time and Brexit makes it all the weaker. And that's no bad thing.

This blog in the past has made the case that we are witnessing the birth of a new global single market in goods and services where regional regulatory codes are usurped by quasi-legislation. This is a quiet revolution where we see domestic legislative measures taken to ensure that technical regulation conforms to global standards and uses common regulatory platforms. No treaties or trade deals are required. Consequently the absence of trade deals post-Brexit is no indication that globalisation has stalled.

What it means is that trade has developed a life of its own where the process of trade is no longer wrapped up in highly visible packaging. Trade negotiations are now an ongoing continuum where the machine is steered by a process of barely visible, but significant increments. What this means is that nation states can opt into multilateral programmes and participate without opening up their borders to invasive diktats.

What we are now seeing, as per the illustration above, is smaller countries dealing direct with UNECE and Codex in order to enhance their influence over EU internal trade. And this is how Britain will operate post-Brexit, cutting out the middleman entirely. With the upcoming completion of the Trade Facilitation Agreement, the first multilateral trade deal in twenty years, there are now more liberal avenues to bring about greater international cooperation and integration. 

What this means is that going forward, big bang deals like TTIP are not needed. If anything the regulatory convergence in TTIP is to try to meld long established regulatory regimes with differing base philosophies. That was always going to be a nightmare and if the EU achieves anything at all then that is no small achievement. 

The more likely means of achieving the same thing is to simply wait for older regulatory codes to reach obsolescence. In a fast moving world within twenty years the crop of regulation that now exists, based on decades old systems will vanish into the ether. No new agreements are necessary because most nations will by then have agreed to use the same basic templates.

We have heard much in recent months from the EU about completing the single market. I take this as a soft propaganda campaign to convince us Brits to stick around. The problem being that EU measures on services have yet to mature and are now being developed in tandem with global measures. It makes no sense to be subordinated by the EU for the sake of completing the European single market when we can steer that agenda globally.

This is not to say that bilateralism is dead. That too is transforming, where we will increasingly see cooperation agreements between the UK and more culturally aligned allies to act as one on global trade forums. One idea doing the rounds is a CANZUK bloc which I assume to be a more informal Efta - which at the same time does not exclude the possibility of Efta membership. I'll leave you to be the judge of whether that is a worthwhile pursuit, but in a post Brexit world, there are any number of alliance configurations we can explore, none of them mutually exclusive - and can be fashioned on a sectoral basis rather than geographic blocs.

With the dawn 3D printing and similar technologies we will see a major transformation of supply chains as components are increasingly manufacture in situe and on demand. That means our trade concerns will increasingly shift to matters of intellectual property and patents.

This is why classic Gravity Theory might well be going the way of the dinosaur. Innovation centres will be in our gun-sights where geography and market size are not necessarily the driving factors. In this there are already an elaborate web of cooperation agreements between non state actors where a proxy deal can open up a world of opportunity. 

In that regard, whenever I see somebody talking about "trade deals" I tune them out. The real business of trade is happening off the radar. Remainers are going to be cock-a-hoop to see that Liam Fox struggles to get many flagship big bang deals chalked up on the board but that is not to say that Brexit cannot open doors and it doesn't point to failure. We have yet to fully comprehend the trade landscape before us. In this we are better placed than the EU which is still barking up the wrong tree and is failing to learn from the same old mistakes. 

In the end I think we are making the leap at the right time. The EU wasn't going anywhere and there is no real energy behind it. It is a most unloved and unlikeable institution built on a staid ideology from the last century. Right now we are seeing Poland pulling away from "Social Europe" and they are not alone in putting up walls to the EUs social agenda. Africa doesn't want it and nor does Europe. 

If the EU wants to survive is will have to make major institutional reforms and reinvent itself as a multilateral trade entity. Brexit will hasten that process existential enquiry which can only be a good thing, but Britain has better things to do than engage in parochial navel gazing. We have a job to do. With a new energy and a new found sense of urgency there is every reason to believe that Brexit will be a success. Then we will find that reports of the death of globalisation are very much exaggerated.

Monday, 26 September 2016

There was never a good case for remaining in the EU

The above tweet from Andrew Lillico triggered and interesting thought experiment this evening. Lillico has it that Remain lost "cos the case for staying in the EU was weak". I'm not entirely sure that is quite true. They never made a case for staying in the EU beyond how horrible leaving would be. For that reason it deserved to lose. But what case would you make for staying in the EU?

For more or less every stated advantage of being in the EU, you can have the same as part of the single market. There are marginal advantages to membership but they are somewhat bland and procedural and mainly apply to business. So how would you sell the idea to an average voter?

And there's your problem right there. Firstly you have to be honest about what the EU is. It's no good selling the advantages of freedom of movement since most do not take advantage of it, nor does the notion of cheaper holidays make much difference to those who have forgotten what a holiday even is. Nor can we expect people to suffer the democratic deficit for the sake of abolishing roaming charges. Where's the big idea? Where is the vision and what is the direction?

And that immediately puts the remain camp on the back foot. The big idea is a supreme government for Europe with an eventual destination of a single market throughout along with a uniform social policy and deep defence cooperation. The direction of ever closer union has only one destination - the abolition of the nation state. In that regard, had the Remain camp made that case, Mr Lillico would be absolutely right. The case for staying in something like that is weak indeed.

But since they could never be honest about that they could try a different tack. The strongest pragmatic argument for remaining was so that the UK continued to be a frustrating factor in preventing full integration. That is almost a compelling argument but it's a negative premise. What they needed to do was prove that the UK could be a leader in Europe.

To that end, they needed to make good on their acknowledgement that the EU "needs reform" and actually specify what those reforms need to be and how they intended to get them. Throughout the referendum we were told that there was no Brexit plan, but there wasn't a plan for making good of EU membership either. Had Cameron not already blown that by attempting a bogus renegotiation then that might have been a credible avenue. Since Cameron attempted to fob us off, any notion of leading in Europe would have fallen flat. The EU made it quite clear that even basic reforms were off the table.

The basic fact is that there isn't much that's likeable about the EU. There's no real wow factor and there's no energy to it. It's a staid and antiquated project whose champions are long dead. The main cheerleaders for the EU now being the die-hard federalist zealots who manage by some miracle to be even more unlikeable than Brexiteers. When you take a cold hard look at the EU it is a bland managerial device promoted by distinctly uninspiring and uninteresting people along with narcissistic virtue signallers.

Strip away all the technocratic notional benefits that make no real difference to the man on the Clapham omnibus and there isn't much to be said for it. The fact that the local museum is propped up by EU funding is neither here nor there. We all know where the money came from to begin with.

Having thought about it, I can see why they went with Project Fear. Brexit most certainly is fraught with risk and complexity and it very well could have a seriously damaging effect if mishandled. That's the only case I could honestly argue. And that is what they did. In this they can't claim that the message didn't get through. They had every channel open to them. We got the message from every arm of the establishment that Brexit is universally bad and there are no upsides to it. The problem is, the public didn't agree. Brexit complexity simply isn't a good enough reason to stay committed to an unloved political orthodoxy that nobody really ever asked for.

And this is really why the remainers don't get it. They did everything they were supposed to do in the only ways available to them. It just doesn't occur to them that people simply don't want to be in the EU. They invent all the reasons under the sun as to why we voted to leave but in the end, Mr Lillico is in the right ballpark. There's not much to stick around for.

The way forward for Brexit

If you existed on a diet of remainer problematising you would very much get the impression that there are no real benefits to Brexit. In the interim that's probably true and even then the benefits are entirely contingent on how competent the government is - which doesn't inspire me with confidence so far. Howsoever, to every problem, unless you are David Allen Green, there is a solution. The way Green operates is to pretend solutions do not exist. He cannot be unaware of the many solutions presently in circulation thus his latest venture marks him out as a fraud on the make. Anybody can ask cleverdick questions.

But in order to understand Brexit and what talks are likely to achive one has to first acknowledge that if you thought it was complicated then it's even more complicated than that. That much Allen-Green won't know because he already, as far as he is concerned, knows everything. When you look at the scale of the task you come to one inescapable solution. The agreement signed at the end of Brexit talks will not be the end of the process. At best we will have an agreed a framework for continuous departure. Just the list of subject headings is considerable.

So far many are still caught up in the basics being unable to distinguish between the customs union and the single market and have yet to clarify what they mean by single market access. This, though, deals only with trade. Unless we want to be tied up in Article 50 negotiations in perpetuity - for which there is no appetite, the agreement we shall have will be an interim framework where the finer details are not even opened up for discussion. The easiest and most obvious way to get round them is to use the EEA agreement - or a template based on it.

If the aim of the government is to achive Brexit in a single bound they will fail. One hopes the realisation will come before they invoke Article 50 but these are strange times where political competence is not in fashion. Should they fail to realise the necessity for an interim solution then we will be having crisis talks and quite possibly there will be a pause in the proceedings while both sides get their bearings. 

The big assumption in the Brexit debate is member states and the EU are clued up while our own ministers are muppets. We will discover in due course that ignorance is evenly spread. This will be a vast learning process for all involved as the last forty years of technocratic development is brought out for an airing - some of it the subject of public scrutiny for the first time ever. 

In fact, the only way we are going to complete the talks in two years if we have a meticulously planned timetable and a solid grasp of the issues up front. Bureaucracy being what it is though, there is no reason to expect smooth sailing. If we conducted parallel talks we could very well negotiate EEA terms before invoking Article 50. That would buy us time to further prepare which means all the peripheral issues can be confined to the two years. That though may be optimistic so we should be looking to use our leverage to negotiate an extension before even invoking Article 50.  

What makes the EEA the obvious solution is the nature of the agreement. What critics of the EEA miss is that the EEA agreement is not just an agreement on single market participation. It is an interface mechanism with its own infrastructure for constant review and reform for the purposes of entering special conditions, exemptions and reservations. And so there are mechanisms to tailor the agreement to the needs of the UK, be that enhanced controls over freedom of movement or better consultation on regulations. It also takes a number of issues listed above off the table and beyond the reach of those who would like to complicate the proceedings.

If we do it right, by the end of Article 50 talks we will have negotiated an agreement that keeps much of the existing set up in tact but buys us as much time as we need to decide how we diverge from the EU. If we can accomplish that then it will be a very tidy accomplishment. If however we decide to go full throttle, we will spend several years bickering over the finer points only to replicate the mess of agreements Switzerland has while making life more complicated than it needs to be. 

If we approach talks with a view to creating a Brexit safe space or departure lounge we can shelve some of the more thorny issues where there would be serious advantage in consulting Norway and other Efta states to leverage bigger reforms of the EEA and thus weaken the EUs protectionist measures. That would do all of us a favour. Top of the bill would be Rules of Origin. 

In setting out yet more Brexit hurdles, David Allen Green is essentially reinventing the wheel where most of the work has already been done. Far from being the doyen he believes he is, he is several months behind the curve not least because he is not in the least bit interested in solutions. He's just looking for more flies to put in the ointment.

What is needed is to ram home the message that we need a flexible exit and that there is no need to rush it. We've waited decades to leave the EU so we can be patient a while longer. The collective refusal of remainers and Brexiteers alike to confront this reality is why the government is still thrashing around for big bang solutions when there really aren't any. 

The fact is that Brexit is unprecedented and so we will have to work toward brand new solutions to unique problems and we will have to work closely with the EU and the international community to from them. Consequently the bluff and bluster of politicians on all sides should be ignored because we are all in the hands of the technocrats now. We're looking for something amicable, stable and legal. In that regard, political acceptability doesn't really come into it. Through a process of elimination we will have to learn to like what we get. 

Though we lack the necessary collective competence at the moment we will most likely acquire it through this process and build on that in order to decide our post Brexit strategy which has yet to be defined. We will find that the sweeping reforms the Brexiteers have in mind are not so achievable and we will find we are as restrained as the EU in some respects. What should not be forgotten though is that we will for the first time in a long time have the knowledge and the tools to try things differently - and that is at least half the point of Brexit. If the existing set up was working we wouldn't have voted to leave. 

So far as I am concerned, the problematisers are now simply time-wasting. To them a new Brexit complication is just fodder for their own entertainment and self-gratification. Those like Ian Dunt and David Allen Green are like squirrels harvesting nuts for the winter. Hoarding whatever they can find for their stash. It's a cynical game and it's intellectual masturbation. I have no interest in it. Whether these bozos like it or not, Brexit is happening, it's not an unmitigated disaster and there are solutions no matter how hard these frauds attempt to ignore them. When they are as keen on presenting solutions as they are problems I will know they are serious. I will not hold my breath though. I know they aren't. 

Sunday, 25 September 2016

Brexit: hear all, trust nothing

For all the bluster and bravado, most of what we are seeing is theatre. Unhelpful noise. What we do know is that the government does not yet have a position and can make no clear commitments just yet. And though scorn is rightly heaped on Brexiteers for not having a clue, the remainer clique on Twitter are still locked into a hard Brexit narrative and a paradigm that hasn't shifted beyond the stunted bilateralism of yore.

What is forgotten in all this though is that the EU and member states are not much better off either. Signals may pass back and forth but this is a parallel universe to what is being hammered out in the back offices. I rather expect the task is going to be so complex that negotiations around member states preferences are going to play second fiddle to any solution that works and is considered legal within the existing framework. In some respects they're hoisted by their own petard.

They might very well say that they intend to take a tough line on this or that but when it involves opening up yet more messy talks over something that would otherwise be settled, we can expect the power brokers within the EU to squash the minnows and put them back in their place. This isn't going to be the feeding frenzy anyone thinks it is.

For that reason the EEA is the UKs best bet in that it creates the fewest opportunities for trouble makers to redefine it. Though various sources continue to insist the EEA has been ruled out, Mrs May keeps yanking on the leash and I rather suspect that nothing is off the table as yet.

The truth of the matter is that there are simply too many areas to put under the microscope. Some things will have to be sold as seen and some things will be too well established and too mature to even think about severing without a very long period of planning and reflection.

As much as anything this is a vast exercise in project management at the very best we can expect is a framework for transitioning out of the EU. There is no change of hitting it all in one go. There is no WTO option and no reason to believe the EU will wish to devote the best of its trade resources to building a bespoke framework for Britain that will end up much like the one already in existence. 

It is for this this reason I have largely tuned out the Twitter debate between various self-appointed experts. External demands from third countries, the concerns of business and the complexity of the task will dictate the path more than the politicians. Since nobody is in the mood for economic self-harm we can expect a timid agreement even if the rhetoric is bold. Warning shots and refusals just don't seem very credible right now. It is not within their gift to be telling us what the score is just yet. Their own experts have to go through the same process as ours.

To my mind all the logic points to an EEA agreement and Mrs May would have to be steadfastly pro-economic suicide to consider anything else. She has given no outward sign that she is keen on such a destination and so unless she is taking criminally bad advice (which is a possibility) she won't try for a full divorce in one go. In the end though, I think she will have her own sources of expertise. She will not be listening to the Twitterers or the hack-o-sphere. More than likely she will be taking the advice of political strategists working out how to sell chalk as cheese.

Brexiteers have sold Brexit as a clean slate. It's a little naive to believe it is. Though Brexit may be a political reboot, it is far from a clean slate. There are international rules and regulations, single market considerations and masses of contract law and quasi regulation that will restrict our choices for at least a decade. There is no sudden renaissance of fishing for starters. Whichever way Mrs May turns, somebody will be calling it a betrayal. With so many options closing down by the day the biggest job will be selling a Brexit deal that satisfies nobody.

For the time being we just have to watch and wait and see the debate unfold and gradually see the hard Brexit fantasies fall apart. In the meantime the debate is going nowhere. Nothing has changed since this time last month and nothing will be different by the end of October. Nothing said will be set in stone and the EEA will still inescapably be the only rational path. It's just a matter of time until Mrs May reaches that conclusion herself.

Saturday, 24 September 2016

Remainer outrage is pure narcissism

Imagine if all of Europe were united under a single flag. Imagine if we had a common demos and a political dialogue that was similar throughout. Imagine if there were a convergence of aims and culture. Imagine if one language were becoming the norm. Imagine if the majority of people sought to up sticks and live somewhere else in Europe. Imagine if social attitudes were broadly similar. Imagine if good governance were the standard throughout.

That is the EU that remainers think exists. And I suppose among the young in the capital cities of Europe, you can see why they might think that. London especially. Except that Poland is now moving to outlaw abortion. The Greek government is a kleptocracy even by African standards. Homophobia is rampant in Eastern Europe. Were the precious little darlings marching for the EU to actually make use of their right to free movement and go and parade their virtues in the provincial towns of Poland they would likely have bricks thrown at them. This liberal monoculture that remainers seem to think exists simply doesn't.

The fact is that Britain is not Poland. It's not backward illiberal Catholic country and that is why the best of their youth want to come here. A liberal country with a tolerant society. And that's good but the right to freedom of movement is an asymmetrical one since as a rule Brits don't want to move to less developed countries like Bulgaria, Romania and France. The people who do are those who can afford to - and the absence of freedom of movement has never been a serious barrier to those who wanted to.

And this is why Brexit isn't going to knock the UK of the top spot any time soon. People still want to come here so that they can do what they want to do and be who they want to be. It is that which makes the UK a leading creative economy. And that liberalism is not something the EU has done for Britain. Britain has been at the forefront of all of Europe's social and cultural revolutions in recent years.

So what we are seeing among the remainers is a projection. It is a projection of their own sense of moral superiority over those of us who voted to leave. Moreover, it is a chimera. The liberal united Europe they speak of does not exist in any sense. Our precious little darlings are using the EU to project a self-image. Europhilia is narcissism.

And that in some way goes toward explaining Brexit. The EU itself is a political vanity project - the imposition of an economic and social agenda on Europe without consultation or consent. It is built on the assumption that the little people are backward savages who need their liberal elites to tell them how to live. And you know, as someone not opposed to the values of tolerance and openness, I wouldn't mind all that much if it was actually working. But it isn't.

Liberal and tolerant societies evolve. They are not created. You cannot legislate for tolerance. You can only impose and enforce. And that is why the EU is more likely to send the process into reverse. Telling people that their cultures are inferior, and to an extent immoral, is a sure fire way to drum up opposition. The EU has never sought consent. It has used coercion and subversion to extend its tentacles throughout Europe. It has never sought to persuade. It has used every opportunity to rush the agenda. That can never work.

Ultimately it is prosperous and free countries that spawn open and tolerant people. The focus has to be on the creation of wealth. But even in that the EU has stalled. They are out of ideas. The world is seeing a growth in non tariff barriers and the EU shows no signs of being able to break the deadlock. Meanwhile social progress is going into reverse and the Eastern European states are increasingly looking inward for solutions. The EU has no real response to this except to maintain the illusion of unity. Thus the self-image, like that of the remainers, is totally at odds with reality.

This of course it not surprising. To even be employed by the EU or one of the many satellite organisations you must share the delusion. Reality does not intrude. One must be marinated in political correctness and share the ideas and aspirations of the NGOcracy - and in so doing have that same casual contempt for democracy and ordinary people. And that is why Brexit is such a grievous loss to the precious little darlings. It is a living embodiment of their own narcissism - and Brexit deprives them of their emotional comfort blanket. 

This is why it suits remainers to believe the narrative that Britain is somehow devolving into an intolerant nationalism. For them the EU is the only vehicle imaginable in order to promote their so-called progressive values. A rejection of the EU is by proxy a rejection of them ergo the fault is ours, not theirs. What is that if not narcissism in its purest form?

If Europe is ever to be what remainers pretend it is, it will have to evolve without coercion. In this it will be through small increments created by people. A monolithic supreme government will always be alien to democracy. By removing the pretence that a united social Europe exists perhaps we might set upon building an authentic one.

In this I hesitate to use the word "millennials" but it does appear to be they who are most vocal remainers. Whenever these pathetic specimens speak to camera I see largely affluent, cosseted kids who have grown up in a sanitised environment and never once been exposed to adult realities. Their knowledge of the EU and its institutions is thin and they have never been taught anything beyond conformity.

This in some way explains the safe-space phenomenon. It stands to reason that they would prefer a remote corporate entity to manage European governance. Democracy by nature is messy and requires that people argue their case and seek to persuade. An orthodoxy cannot simply be imposed. And that is what frightens them the most - the idea that we might choose something different. They have so little faith in their own ideas that they need an authoritarian entity to keep democracy in check. This is how we sleepwalk into tyranny.

There is a lot to gain by maintaining close relations with the EU and the Brexit process will prove that divergence in most areas is neither possible nor desirable - but for once it will mean than those wanting things a certain way will have to argue their case. If ideas are as good as they say they are, let democracy be the judge. Brexit may not be the revolutionary catalyst many thought it would be but it is a sorely needed shock to the system. It's time these dismal miscreants rolled up their sleeves and started fighting for the world they want rather than waiting to be gifted one in their own image.

The death of grown up politics

Pictured is the S2R-T660 Archangel. The bastard love-child of a Pilatus Porter and a Piper Pawnee. Look at it. An airframe dating back to the late nineteen fifties yet an order has been placed by the United Arab Emirates. Yet their thinking is lightyears ahead of our own. Because look at it again. Look at what it can carry. These days it matters not what the airframe is. What matters is what it can carry and for how long. Here we see some of the most advanced and relatively expensive counter-insurgency weaponry to date.

It's faster than an Apache (£20m each) and has a flight endurance of ten hours. It costs less than $1000 per flight hour. The aircraft itself is as basic as basic gets, it's easily maintained and we could cover more ground for less money. But no, we must have big expensive things.

And when it comes to everything else where we need to improve capacity and value for money we have adopted the same mentality. HS2, Hinkley Point, Severn Lagoon and any number of local big expensive things. A park and ride scheme that nobody asked for maybe?

And this to me speaks to the weakness of our politics. It seems not to matter what we do just so long as we have a big expensive thing. Big expensive thing creates jobs. Big expensive thing ticks the boxes. Then the rest of the time we are pressed into buying small expensive things to make up for the capability gap caused by big expensive thing. Ordinarily small expensive thing would be a small inexpensive thing - but when you need it in a hurry and you need to save face, small inexpensive thing because small and ludicrously expensive thing.

This dynamic is often mistaken for inherent problems that come with government procurement. I think, however, it is indicative of another feature. Political vanity. Hinkley Point is a stop gap so that we can reach our vanity climate change targets. As is the Severn Lagoon. And when we look at defence procurement, it's not about satisfying any real military or practical requirement. It's just about having big boys toys. Fast jets and mean looking helicopters. The brass love them and it keeps the politicians in photo opportunities.

Throughout we have lost any sense of political maturity. Public scrutiny is a dead art. We notionally have MPs to stop governments using public funds to further their political vanity projects but the system of scrutiny has apparently collapsed. MPs are no longer capable of focussing on grown up issues and applying their intellect. Everywhere you look adult areas of policy, Brexit especially, are dominated by show-boating imbeciles playing to the media for political advantage. This is not sustainable if we wish to remain a first rate power in the world.

It was said during the referendum that an issue like the EU was too complex for the public to be able to vote on and that it should instead be left to the deliberative process. What we have seen though is that our politicians on both sides of the divide have an embarrassingly limited notion of what the EU is and what it does - and that they are ill equipped for such a momentous task. And that is why Brexit is necessary. We must shine more light on the fact that our political system is broken and those who slither into positions of influence are in no way fit to govern. Perhaps then we might get round to doing something about it.

We're back to democracy, warts and all

So Jeremy Corbyn is going to win it seems. David Wearing has some worthwhile observations on the choice now facing the Labour party.
The political and cultural theorist Jeremy Gilbert identifies two competing approaches as to how Labour should address the question of electability: marketing and movement-building. The marketing approach treats the electorate as consumers with fixed preferences, where the ideal politician is a polished salesperson armed with a perfectly calibrated retail policy offer. The movement-building approach treats public opinion as a changeable landscape, where elections are won not only by competent politicians but by social forces mobilised in support of a transformative agenda.

As Gilbert notes, the problem with the marketing approach is that it cannot explain how socio-political change happens. Imagine if Sylvia Pankhurst or Rosa Parks had said that “we have to accept where people are” on women’s rights, or “we understand the public’s legitimate concerns” on desegregation. The legacy of those figures, and thousands of activists like them, is a standing rebuke to the oft-repeated, ahistorical nonsense that Labour can achieve nothing with protest, but only by first winning power. In reality, the power to enact serious change can only be won by first preparing the ground through patient and committed grassroots action.
And that is why Corbyn is actually more electable than Owen Smith. He is building a movement. There's a certain fanaticism to it that means it could, in theory, succeed. All of us are utterly sick to death of presentation politics. We're bored of it and we've had two decades of it. There is an appetite for change and an appetite for choice. That in part explains the Brexit vote. Having the same old centrist consensus politicians telling us that their way is the only way is what drove the roar of defiance on the 23rd of June.

And that's why the "Tories for Corbyn" bunch had better shelve their complacency. After all we are headed for some interesting times. There's something about a movement that has a certain appeal. Politics with energy and a coherent agenda is tempting to the dispossessed. Ukip almost tapped into it but a monomania about immigration was never going to break out of the electoral cul de sac. And this is why Ukip doesn't have future.

Now that we are leaving the EU there are few reasons for anybody to stick around. Corbyn offers momentum in the real sense of the word which may tempt some of the old left back while Mrs May will be keen to demolish right wing Ukip by giving them almost everything they want. In fact, it's going to be a tough old time for people with pedestrian centrist views. They are now best represented by the wet lettuce Lib Dems who have nothing at all to say for themselves.

I think though that Mr Corbyn will end up on the rocks. Britain is a small-c conservative country and won't be taken for fools. In basic terms Mr Corbyn is playing Father Christmas promising a while load of free stuff. Moreover, his movement is built on tried, tested and failed ideas. If anyone is trying to take us back to the 1950's it is Corbyn.

One thing I have noticed about Corbyn's younger activists is that they are all about five years or so younger than me. Limp-wristed London types who have a lot in common with the more vocal remain campaigners. They're not actually old enough to remember that socialism really did suck and that government housing leads to violent slums. I am not in a rush to repeat that experiment nor am I keen on experiencing the horrors of British Rail again either. Thankfully, it's still the elders who tend to vote and they won't be as taken in by Corbyn's populism.

In response to Corbyn we will likely see a lot more red meat Toryism in the months to come. That ought to finish Ukip off. Ukip does not have a coherent platform, it cannot build a movement, it lacks the right kind of fanaticism beyond a strong dislike of Muslims and is just as stumped for ideas. Not to mention their new leader has all the charisma of a damp dishcloth while also being thicker than a tractor tyre.

It seems, though, that the biggest crisis in politics is a poverty of ideas. This week Michael Gove and Boris Johnson are pushing to recommission the Royal Yacht, which should be self-evidently moronic. It's such a crass idea that I'm genuinely surprised Ukip didn't beat them to it. Along with such an ideas drought we also have a class of politicians peculiarly unencumbered by an obligation to know what they are talking about. Listening to any prominent MPs talking about Article 50 and you can instantly tell they haven't even read it let alone thought about the implications of their respective proposals.

Just this week we've seen a reverse ferret on the single market from a number of remainer MPs. There's no way this is a genuine position. They just want to signal to their party followers that they have accepted the commonly assumed view that freedom of movement must end. Given that there are mechanisms in the EEA to control freedom of movement this is a deeply irresponsible position to take.

Moreover, it is utterly gutless. Ending freedom of movement will not make a significant impact on immigration and they know it. They need to stand firm and say so. But they won't. They go whichever way the wind blows. It is that basic lack of integrity that gives Mr Corbyn his mandate in the first place.

And this should be deeply worrying. I have never seen anything like it. Loathsome though Tony Blair was, he had an answer for every question. You may well have disagreed with what he said, but everything he said was a considered position. This is an entirely new age of fact free, ideas free, integrity free politics - right about the time when we needed intelligence and integrity above all other concerns. Some months ago I was wondering if politics could become any more crass and banal. I have come to learn that this a question one should never ask.

I made the case during the referendum that this probably would happen. That we would break away from the centrist politics that has plagued us for twenty years. It seems that has come sooner than I expected. It does seem, however, that the political choices will not be palatable ones for a time. Having put politics into deep stasis for twenty years we are going to have to let this virus run its course. It won't be pretty. It will take a new movement with new ideas to get Britain back on track.

Wednesday, 21 September 2016

Brexit rune reading today picks up on something we have known for some time. Business would rather have regulatory stability than sweeping deregulation. Stability guarantees little change in their existing transaction infrastructure and they don't have to plan or train for a new regime. This runs counter to the classic Eurosceptic narrative that business doesn't like regulation.

And this tells us a lot about what we can expect Brexit to look like. As much as influential sources are telling Mrs May that things need to stay the same, we haven't got a replacement regime ready and de-regulatory moves at this point could cause as many problems as the resolve. Meanwhile, when we look at banking and finance regulation we see that much is dictated by global conventions and there is a broad desire to maintain equivalence with the EU. Embedded contractual quasi-legislation may make any divergence impossible.

And so we are back to that basic question again. What is the point of leaving the single market? Business is asking for regulatory continuity and Japan has made it clear that Authorised Economic Operator agreements are important for them along with the European Medicines Agency. One by one we see the demands pile up and the options closed down. Leaving the single market would only serve a function is there were significant parts of it we were looking to ditch but that list is turning out to be quite a short one.

The issue of passporting has become something of a talking point with some sources claiming it essential while others disagree. This has become the linchpin on which the single market debate turns. I have seen estimates that passporting is potentially worth one percent of GDP which is not insignificant - but if push comes to shove we can live without it. The remaining question is whether we gain much in other areas by losing it. Given that eurosceptic theories on trade are at best piss weak, Mrs May is likely to err on the side of caution.

It seems to me that if we are going to leave the single market then it will be for one reason only. To control borders. If that be the case then we're looking at major headaches, long periods of uncertainty and major delays. And given that we will want to see some open agreement on visas on the whole we are looking at only marginal "gains" in that respect.

In this it seems unlikely that Mrs May is willing to inflict a considerable damage on the country simply to appease the lunatic fringe. There are already signs that she has sidelined them. Boris Johnson appears to be getting on with the soft diplomacy and only David Davis is directly involved. Mrs May has him on a tight leash.

So if you were wondering why those grim Brexit prognostications are not coming true its because business has done roughly the same calculations. Single market divergence is barely practical, time consuming and not worth the bother. So it is now a question of whether we will use the EEA mechanism or whether Mrs May will seek to save face by cloning it and calling it something else. She will need to be persuasive in order to get concessions on freedom of movement but as far as most people are concerned, if good sense wins out, then day one of Brexit will be business as usual.

Meanwhile, in the media bubble, the clique of Open Europe, LSE and FT wonks seem to believe that a hard Brexit is the most likely outcome on the basis that nothing else will be politically acceptable. This is more assertion than observable fact. It's difficult to tell if it's political mischief making or sheer spite. There is no evidence to suggest that Mrs May is going to bow to her crackpot eurosceptics and there is no pressure to do so. Labour is no threat and Ukip is yesterday's news. The crackpot fringe are in no position to be making demands.

In the end, the Brexiteers are going to be the disappointed ones. They will get their blue passports and their scraps from the table - but if they wanted it some other way they should have had a plan - and something more substantive than twenty year old free trade mantras. They can't say they were not warned.