Thursday, 29 September 2016

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.

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