Friday, 24 February 2017

Brexit: how the Tories will spin their failure

It's a fairly recent thing but I've learned that when it comes to politics talk in the office, it's sometimes better just to shut up and listen. Sometimes it's good to know what people don't know.

What is clear is that those with any detailed knowledge about the process of Brexit are the extreme minority. My colleague today described his impressions of Theresa May which are not too far from where my own views were about the time she became PM.

Superficially there is a lot to like about the PM. She is the new centreground. One that is not hostile to business but one keen to clip its wings. My colleague spoke of the rip off contracts between the government and the rail sector and the unfairness of having awarded train contracts to German manufacturing.

This is where both extremes of UK politics fail to understand Mr Average. Mr Average is not hostile to business like the far left, but nor is he especially minded to tolerate banks and corporates taking the piss. There is room in conservatism for taking a tough line on business to ensure tax is fair and equitable but that does not extend as far as treating business as a magic money tree.

Mr Average is not especially jingoistic, doesn't mind free trade but at the same time does not want to see high value jobs exported. Mr Average is not a socialist, nor is he a neoliberal. Any party finding that centre ground is one that will win and hold on to power.

In that respect, Mrs May has won over middle Britain. Her bossy authoritarianism is actually quite popular so long as there is still room to make a decent living.

If I took no interest in politics whatsoever I would probably find myself in full agreement with my colleague. The problem I have is that I listen carefully to what they say and measure it against reality.

Mrs May is a lady of many masks. What she says to a Davos conference is not what she says to her own party conference. Being two faced is nothing new because the international message is always different from the domestic one but in this she is riding two policy horses. Her approach to Brexit is contradictory to her message abroad.

Mr Average thinks May has taken the right line on Brexit - leaving the EU and the single market. Mr Average thinks that there will be some sort of deal because German car makers will want a deal. You could spell out the potential pitfalls but you'll hear "that can't happen because...".

It's true that a great many European business interests would lose out should we fail to reach an agreement but that is no guarantee against a failed process. While Germany can put the pressure on EU Member States there's nothing they can do to stop May shooting herself in the foot.

The problem we have is that the EU, the single market especially, is an area governed by a set of rules. It lays down conditions for entry that apply to everyone. The UK is now seeking to become a third country. In so doing we move outside the city walls.

Due to the naivety of our government, they will then complain bitterly when the EU points out that there are certain conditions to be met in order to send goods back inside. The press will sell this as the EU being unreasonable whereas in fact the EU will only really be re-stating its own conditions of entry and that the UK has chosen to be outside the club.

In order for us to send goods into the EU we will have to meet their conditions and if we want favourable access then we will have to participate in EU systems and pay our keep. This is what Mr Average doesn't understand.

Mr Average thinks it's quite odd that we should have to pay a fee to trade with the EU when we don't pay to trade elsewhere. Mr Average has not given a nanosecond's thought to how much customs cooperation costs because Mr Average spends his day resetting Linda's password, calling out the boiler repair man, and running the payroll system. Unlike the Mr Norths of this world he is doing his job rather than reading EU regulations and writing blogs during the day.

This is the naivety the government hopes to tap into in presenting the EU as being unreasonable, making it look as though any restrictions placed on us are basically the consequence of trying to do honest business with Johnny Foreigner. Mr Average will probably buy it too.

In the end though, the real reason we will take a hit in trade is because the UK has chosen of its own volition to be outside the system and has declared that it does not wish to partake in the community of integrated European nations.

The government will quite skillfully spin this by jetting off round the world asking other third countries for a photocopy of the trade deals they have with the EU. They will then crow about all the "bumper deals" we're getting from outside the EU. Deals we already had access to. Far from reflecting how incompetent this Tory government is, it will reinforce with Mr Average that the Frogs are being awkward and that there really is more trade to be had outside the EU. Mr Average will find himself shafted by Mrs May and he'll still vote for her.

What we will then see is that the government is forced to take a number of contingency measures in order to paper over the cracks. New infrastructure will be needed to cope with the added port inspections and trade barriers. All this will be farmed out to private companies and the headlines will read "500 jobs created in Brexit boom to EXPAND our container ports". Never mind that the port expansion will be holding areas where armies of customs officials will be needlessly unloading trucks. Anyone who points out this reality will naturally be accused of being a "remoaner" unable to admit that Brexit has worked.

You really have to enjoy the genius of it all. Mrs May will kick Mr Average squarely in the balls and he'll thank her for it and blame the French for any loss of trade. Meanwhile the opposition sits there scratching their arses, oblivious that by the time they are next in power, they will be managing the mountains of public debt created by Brexit while having to prune local services on the quiet. Labour has to carry the can and then they get blamed for increasing public spending. Far from being a democratic revolution we'll be in the same old groove working to the same old narratives.

There is a lot we still don't know about how Brexit will pan out and I rather expect the benefits will be serendipitous externalities that nobody expected. We can expect to see a reshaping, if not a rebalancing of the economy, and it will modify the way we do things for a long time to come. Therein lies the opportunity which is why I still back Brexit, but you can bet your ass Mr Average will be none the wiser at the end of it. I suppose it comes back to the oldest of rules. If voting really changed anything, they wouldn't let us do it.

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