Wednesday, 18 July 2018

Brexit Fudge

In my previous post on this subject a month back I said "I really believe that neither side will be served by an final outcome which is half in, half out...that would be the worst outcome for the UK". The white paper which was agreed at the recent gathering at Chequers offers exactly that - it is a complete cop out and fudge.

From the very start of her time as PM, Mrs May has said Brexit means Brexit. On the day she became PM in July 2016 she stood outside 10 Downing St and said :

"There must be no attempts to remain inside the EU, no attempts to rejoin it by the back door and no second referendum. The country voted to leave the EU and, as Prime Minister, I will make sure that we leave the EU".

At the time, I took those words at face value but I am now wondering how sincere she was then or has she changed her mind and bottled out of pushing through some tough policy decisions? I honestly do not understand how she gets from that statement to what is laid out in the white paper.

In the crunch meeting of the cabinet at Chequers in early July, the PM presented her white paper which set out her detailed position on Brexit which prompted the resignation of Brexit Secretary David Davis, Brexit Minister Steve Baker and Foreign Secretary Boris Johnson. It seems clear from the statement of Baker that for several months there has been a secret 'establishment elite' set up by the cabinet office working on a parallel plan to deliver a much softer Brexit to the plan the Brexit Secretary and DExEU had been working on. He calls it EEA-lite.

It feels to me there are some very powerful interests who have decided they want an outcome of 'business as usual' whilst at the same time giving the appearance of delivering on the Brexit vote. I imagine the Chancellor and some senior civil servants such as Olly Robbins and other senior mandarins have been shaping the direction of travel for some time. I have heard it referred to as the 'Hotel California' option where you can check out any time you like but never leave.

This is a plot which would not seem out of place in the 'House of Cards' political drama. I am wondering who is really controlling our PM behind the scenes. Everything is certainly not how it looks on the surface...maybe that is how real politics works, tell everybody one thing whilst secretly planning to do the opposite.

Proposals on Trade

The PM repeats her mantra that we are leaving the customs union and the single market... if she says it enough times it will be true.

The phased introduction of a new Facilitated Customs Arrangement that would remove the need for customs checks and controls between the UK and the EU as if in a combined customs territory, while enabling the UK to control tariffs for its own trade with the rest of the world and ensure businesses pay the right tariff...

This is effectively a plan to remain in the single market for goods but not services which account for 80% of our economy. Mrs May can sell this on the basis of free-flow of goods and no hard border in NI whist seemingly retaining the freedom to negotiate trade deals with other non-EU countries such as the USA. Note the word 'phased'...this is a fudge and designed to get the government past the next election in 2022

A common rulebook for goods including agri-food, covering only those rules necessary to provide for frictionless trade at the border – meaning that the UK would make an upfront choice to commit by treaty to ongoing harmonisation with the relevant EU rules, with all those rules legislated for by Parliament or the devolved legislatures.

This is not a common rule book, it is the EU rule book and any trade deal we want with other countries would have to comply and this ties us indefinitely to the EU and would compromise our ability to strike our independent deals with some of the largest economies - the likes of India, China and US who would likely negotiate deals directly with the EU rather than the UK.

Mrs May has now set out her Brexit stall which, even before it is watered down during further negotiations with the EU, will satisfy neither remainers or leavers. It will be BRINO - Brexit in name only and we will be neither fully in or fully out. What an absolute shambles we seem to have made for ourselves.

In the referendum the question was very simple - do you want to leave the EU or remain in the EU? The outcome was leave but this is now being reinterpreted as leave means half-in and half-out. If that had been a third option on the ballot paper I wonder how many people would have voted for it.

Her judgment is not the best. She called a general election in 2017 which badly backfired and resulted in her party losing their majority. She offered to stay on as PM as long as they wanted her.
She is now gambling again. Maybe she has an addiction problem and needs some help.

The Options

I am really not at all sure where things will go from here.

Parliament breaks up for the holidays next week which will provide some time for all sides to reflect. We voted to leave the EU, Article 50 was triggered last March and most of the MPs accept we will leave but cannot agree on what formula this will take. 

If a Chequers-based deal can be agreed by the end of this year, then this would need to be approved by Parliament. The SNP and Labour would not be in favour and there will likely be a large number of ERG MPs against so I cannot see it getting approval. If rejected then the PM would have to resign and call a general election.

I believe the EU are unlikely to agree the Chequers proposals unless drastically watered down in which case we could move to no deal and leave on WTO rules. After all, our PM has always said no deal is better than a bad deal. This is how we operate with countries outside of the EU and it is the basis for trade between the EU and USA. Of course, it would not preclude a trade deal with the EU at a later date when the economic benefits to both sides became clearer.

However a no deal situation would likewise need the approval of Parliament and may also be rejected with the same result.

There are some calling for a second referendum. In my humble opinion this is a non-starter. This needs to be authorised by Parliament which is very unlikely and, whilst there was overwhelming support for the first, there would be little support for a second. Also, what would be the question asked in a second referendum..surely not the same as the first? A second referendum would not resolve this issue...what then, a third referendum?

This is unravelling at a rate of knots, the government are losing credibility and if something is not done quickly we will face the prospect of a national emergency. It's anyone's guess how this will end up but I honestly cannot see a good outcome from where we are now. 

Maybe time to stockpile some tinned food and get hold of a generator.

As they say, interesting times!


  1. Agree with your summary. Hilarious that those pushing for a 2nd referendum discount the result of the first. So what if Leave wins again? Best of 5?

    I wouldn't be upset if I thought they'd actually started to negotiate with the EU but so far we really have been talking to ourselves and wasting a great deal of time. So buy baked beans and tinned food. The vote was close so a deal has to be done that is a compromise on both sides to have a chance of bringing people together - a bit like most negotiations out here in the real world. Time for that to start. And if the current "leader" can't do it then we need a new one

    1. Agree Rob it has taken so long to get to the start line. First we had Cameron resignation and the leadership (non) contest. Then all the objections to triggering Article 50 from the Lords and the likes of Gina Miller's challenge in the courts. We then had another general election followed by negotiations on Phases 1 & 2.

      Yes, I accept there would need to be some compromises in the trade deal negotiations with the EU but surely you would start off presenting your preferred outcome and work from there rather than present this half-in half-out position which has little support from your own side whether leave or remain.

      I fear the arch-remainer power brokers operating behind the scene will get their way and we will end up with something which resembles BRINO and very little will change to what we have now as members.

  2. I still struggle to understand what the UK has to gain from Brexit. Given for a fact that the major points of the leave campaign have been proven to be lies, it seems to me that you are in for some years of economic struggle that it's totally self imposed. Admitting a mistake and trying to correct it it's not a bad move, the leave campaigners did not have a plan for Brexit. What is sure is that with no Brexit yet active you have had inflation rising, a pound that it's now worth like the Korean Won and several companies leaving the country for good.

    1. Hello Stal. I was hoping the referendum vote would free us from our ties with the EU and we regain sovereignty and control of our borders.

      The result was a big surprise for me and I agree there were no real preparations for a leave vote and it looks like the preparation for 'leaving' has been effectively shaped by people who are strong remainers and who now have the PM onside to deliver a form of 'Brexit' which will be business as usual.

      Yes sterling is weakening (again), businesses are adopting a 'wait n see' but if we end up with BRINO they can carry on much as before.

      I am unsure how it will pan out from here but it looks to me like democracy will be the loser.

  3. When I first read your post, I thought you were coming down on one side, that of a Leaver, but having re-read it, as usual you have taken a balanced view, but expressed that the current situation is untenable, neither serving anyone any good as it leaves us in limbo.
    I was a remainer, but have accepted the choice of the people, although I'm not sure what their choice was as in a certain part of the population I certainly detected a vote against the government at the situation we found ourselves in the years following the financial crisis and anti-government.

    Since the negotiations started, we have been shackled from the start; the media reported every negative (as always only bad news makes good news) and we allowed the EU to take the highground.
    My view of remaining and attempting to create change from within has changed through this process, as i have seen the EU attempt to punish the UK for voting to Leave and use the media to inflict maximum damage on the UK. It has used the same tactics as the Unions of old (to defend the political class in Brussels and the concept of the ever reaching effect of Brussels). It has no interest in reaching the right deal for both parties but gaining a victory for its position for the Top people (some real similarities to the Unions of old & sometimes current e.g. BL/Railways) inflicting maximum damage on the UK even if that means ultimately shooting itself in the foot even if it doesn't realise/acknowledge that.

    However if you have rubbish management (BL/Railways, Civil service, who are self-serving) you will get the result you deserve, which in this case will be the wrong one for both the EU & UK

    1. You make some good points Gareth.

      I think many who voted remain have accepted the referendum decision but there is obviously an element who have not and who are determined to undermine the vote and ensure we have business as usual. It seems almost unbelievable that the Brexit secretary and minister Steve Baker who had been working on this for over a year had no knowledge of the white paper presented at Chequers.

      I do not really have an issue with the EU attempting to 'punish' the UK. It is a natural reaction to an event which threatens their very existence. The problems have arisen due to weak leadership and lack of vision which has permitted the pro-remainer establishment to take control of the process. They have no interest in delivering on the vote but in maintaining the status you say, gaining a victory for its position for the 'Top' people. It reflects where the real power lies in our so-called democracy. The 'little people' do not matter...c'est la vie!

  4. I agree that the with Chequers proposal Mrs May has obviously moved from the position of her Lancaster House speech of 18 months ago. This was a speech very much welcomed by her Brexiteer colleagues. What happened in the meantime? A shadowy group of remainer civil servants? Establishment elite (whatever that means)? Doubtful. More likely, the reality of the situation has sunk in. Brexit as sold to the British electorate is an impossibility.

    1. Impossibility...where there's a will there's a way.

  5. I see 2 problems:
    1) The brexiteers have never been clear and unified in what they want. Having got the vote the duty was on them to standup and define what they wanted. Instead they allowed a Remain MP to become MP.
    2) May has been / is a very weak PM, very much not suited to pushing something of this magnitude through. She then disastrously called an election and lost her majority and ever since has been bullied.

    She really needs to jump or be pushed but everyone probably realises that there is noone to replace her. I can't see any of the Brexiteer leaders being able to step up to the plate and no remainer either.

    I can only see that we need another referendum and then if its still leave then a Brexiteer needs to step up and get it done.

    No idea who that would be though, god forbid Boris or JRM

    1. I think Boris was right not to stand in the leadership election as he is not the sort of person for that role. Which realistically only left Mrs May.

      Agree she is weak, particularly since the shambles of calling the election. The way things are going, I really cannot see her lasting much longer and, as you say, there is not a long queue to replace her but I would think another general election is more likely than another referendum.

  6. If you consider all the attempts to thwart the decision to leave the EU and simply take control of our own laws, borders and trade it really is quite unbelievable. I hate to sound conspiratorial, but I do believe there are powerful forces at work ensuring that this does not happen; all aided an abetted by useful idiots on hard left of course.

    1. I think after the Chequers resignations and the speeches following in the Commons, it is difficult not to think 'conspiracy' behind the events. How the PM moved from what she said in July 2016, repeated in her election manifesto and in countless speeches thereafter to what is in the white something from 'Alice in Wonderland'

      "I don't know what you mean by 'glory,' " Alice said.
      Humpty Dumpty smiled contemptuously. "Of course you don't—till I tell you. I meant 'there's a nice knock-down argument for you!' "
      "But 'glory' doesn't mean 'a nice knock-down argument'," Alice objected.
      "When I use a word," Humpty Dumpty said, in rather a scornful tone, "it means just what I choose it to mean—neither more nor less."
      "The question is," said Alice, "whether you can make words mean so many different things."
      "The question is," said Humpty Dumpty, "which is to be master—that's all."
      (Through the Looking Glass)

  7. What a mess.

    New referendum required, two choices:

    1) Stay in the EU

    2) Hard Brexit

    In the case of 1, within the EU take a greater role to call out all that is wrong with the EU. If countries like Hungary can stop migrants then so can the UK from within the EU.

    In the case of 2, a hard Brexit, then there will be massive disruption, not everything can be traded on WTO, only this morning I heard on R4 that the WTO does not reference Pharmaceutical for example. To alleviate the chaos then two things should be done. Lower corporation tax to 10% and give profitable companies tax relief based on the tariffs they have to pay for goods in/out of the EU, there should be money to do this based on the savings by not paying into the EU.

    On anther subject, can anyone tell me why we cant have a Japan Trade style deal with the EU?

    1. 1) Having triggered Article 50, there is no guarantee it could be withdrawn...we may have to re-apply to join which would need to be approved by all 27 members

      2) The result of the 2016 referendum was leave the EU...I and millions of others are still waiting.

      What are the main features of the Japan trade deal?

    2. I think they would have the UK back with open arms, it would save everyone a lot of trouble and safeguard jobs on both sides of the channel.

      I am surprised that the EU has not offered an olive branch somewhere on the lines that the EU would be prepared to look at freedom of movement which would tip the balance in favour of remain. Actually within EU law member states can already deport people who are economically inactive after 3 months but the UK chose not to implement this.

      Here is a summary of the Japan-EU trade deal.

  8. "There are some calling for a second referendum."
    Strictly speaking this would be a call for a third referendum on EU membership. Those of us old enough will remember the 1975 European Communities membership referendum. The question put was "Do you think the United Kingdom should stay in the European Community (the Common Market)?" and the results were -
    Yes: 67.2%, No: 32.8%
    So you could say make it best of three. Hopefully if it does happen people will think it through and not vote as if its X factor!

    1. At least with Xfactor the contestant who gets the most public votes wins!

  9. My feeling is that a fudge is what the electorate deserve. The original 52/48 vote hardly indicated a consensus for total divorce (without speculating about how many thought they were voting for increased NHS funding). And May's reduced majority in 2017 wasn't exactly a public endorsement of her "no customs union, no single market" approach.

    What has been disappointing are the delays. The three principles announced with such fanfare before Christmas should surely have been identified within weeks of the referendum, and taken into account when analysing solutions for which an extra year would then have been available.

    Whoever is PM, the fact remains that any sort of Brexit will introduce disruption while compensatory benefits are a gamble and will be slow to achieve. May's weakness is her failure to move faster to come up with and argue for a proposal that best balances the minimisation of damage to the country and the creation of new opportunities. It would be bound to look like a fudge, but there would have been more time to turn it into the detail which in the end is what will matter.

    And where is the alternative PM? After all the infighting most other senior Tories are even less credible than May. Except possibly Philip Hammond or Jeremy Hunt, neither of whom would get cross-faction support from the party. Not to mention the further delays created by an election.

  10. Mrs May is only at liberty to do what she can get through parliament (before and after negotiations), which means what she can get her MPs + DUP + any stragglers to agree to. Labour appear to be sitting on the sidelines, with its leadership presumably interested only in gaining power. If she can't do that, there will be an election, a considerable deterrent to toppling the government for any Conservative MPs at the moment.

  11. The essential problem is that on any reasonable-to-a-voter timescale, hard Brexit can only be bad. There's really no way even the most optimistic Leaver can claim otherwise.

    I can accept (though I find it unlikely) that a Hard Brexit might produce economic benefits over the very long-term, after 10-20 years of trade negotiations and some sort of economic realignment towards a new more Singapore style mercantile economy.

    The political problem is that was not put to the British people. We were told we could have our cake (sovereignty and control) and eat it (extra money for the NHS).

    If the Leave campaign had been something along the lines of "Yes it will be incredibly tough, but remember the Blitz" or whatever else might have appealed more honestly to their demographic, I'd have more sympathy to the complaints that Brexit has been thwarted.

    What actually happens is seemingly as soon as anyone goes near the *reality* of Brexit, they realise that it's economically, legally, and practically a nightmare -- not *just* because of the very likely economic consequences but all the knock-on effects (such as leaving pan-European research bodies and so forth).

    So politicians, who are if nothing else attuned to the fickle hypocrisy of the electorate, when they realise this naturally shy away from implementing a Hard Brexit -- particularly Tories, who suspect at the least they'd be handing Jeremy Corbyn a five-year mandate when the economy nosedives, and potentially worse.

    A second Referendum has the downsides you and others have listed. It has one big advantage, which is that we would know the terms of the deal. If more than 50% said "Yes, I accept there is now a big price to pay and I'm willing to pay it" then that would be something, assuming the deal was realistically put to the public.

    I dispute that there was widespread support for the Referendum. Multiple polls have shown that the EU was a minority issue, well down the pecking order of people's concerns. The Leave campaign did successfully co-opt some of those concerns (immigration, low wages, crime, house prices).

    Most people never gave much thought to our membership of the EU -- mostly because despite some faults it worked well. (We've just reported record high employment, again. So much for being shackled to the EU.)

    All that said I agree the current direction is a fudge that will please nobody.

    For very little benefit, like everyone I will lose the right to work and live freely across 20+ countries as an equal citizen -- a huge huge boon that many people would go to war over let alone sign away for no tangible benefit.

    With respect, I wasn't surprised to read you don't hold a passport. I think this is one of the clearest divisions between Leavers and Remainers. The former don't appear to value the *freedom* of being in the EU. The latter can't believe that.

    That said I agree some sort of compromise on Freedom of Movement would have been helpful. I dispute the "economically inactive" implementation would have made much difference -- in the Brexit campaign the "they are taking our benefits" morphed into "they are taking our jobs" for the simple reason that most immigrants are net economic contributors.

    But still, it would have been a start, as famously would have been implementing the immigration rules for non-EU members which we had and ignored, and which is now sending the baby out with the bathwater.

    I didn't have a big problem with the EU-based immigration spike of the early C21. I think it was a one-off, and over time we'd get benefits as East Europe became more well-off and became a stronger market for us. We'd all grow together, as typically happens with free trade. (Look at now-booming Poland.)

    But I accept many think differently. So I'd welcome some sort of Freedom of Movement revision by the EU, and then a second Referendum/no-Brexit.

    1. Thanks for your thoughts on this TI and forgive me if I do not respond to the many arguments you make from the remainer perspective...I am feeling a little down this morning.

      I am sure with arch-remainer Robbins and his team now in charge, the remainers will get as good a deal as they could possibly hope for at the end of this process.

    2. Hey, never a need to apologise to me thanks on replying to comments -- I know how overwhelming that feeling can be, particularly when one disagrees and feels one is running around in circles.

      I was going to put you in my links this afternoon/evening, as your posts have been among the most balanced Leave side posts I've read in our little corner of the Web.

      But if you'd rather not have to deal with more inbound comments let me know and I'll pull out the link, no worries. (I'll probably post around 4-5pm?)

    3. Always happy to be featured on Monevator so please go ahead as planned!

    4. Fascinating to me that one of the factors for "leave" voters was that they never travelled overseas. Analysis after the referendum suggested a over-representation of older voters who might be presumed (not that I have evidence) to have little recent foreign travel on average but it is a surprise if it is true for less old individuals (which is where I count DIY investor).

      But a fair proportion of those 52% will have passports and regularly travel. If a no-deal Brexit starts looking more like the probably outcome I can see a good number of those suddenly in favour of a second referendum. They are not going to be keen on having to queue outside embassies for visas for their holidays, not to mention returning to finding UK driving licences not valid, agreements on mobile phone charges no longer applying, etc. And according to analysts, no-deal would mean no transition period, so it could potentially be soon that there are people booking holidays not knowing the status.

      (Of course businesses are already screaming out for clarity on what regulations will be 1-2 years hence for planning purposes, but it is individuals not businesses who have votes. But there might be a majority feeling that staying in is better than no deal, if there is a possibility of their voice being heard).

  12. I don't think the EU are punishing us. They run a club with benefits - if you can get the benefits without having to join then won't everyone want that?

    Rees Mogg is now saying no deal is the likely option which will please some but I suspect not all leavers.

    For what it's worth I think the simplest option is a referendum with choices being no deal; Norway; remain. Pick your favourite and a second choice then we can get on with it.

    1. I suspect the establishment elite who are now in charge will not permit a no deal situation. They will add a little more fudge and obfuscation and eventually announce a deal, albeit not quite ALL we wanted but 'delivering on brexit' whilst 'preserving jobs' and keeping out economy in good shape. It will be presented as a deal which is good for everyone as 'nobody voted to be poorer'.

      Whether they can get it through a final vote in Parliament is less certain but if not, then a general election...Corbyn would never agree to a second referendum when he has No 10 in his sights.

      The same power brokers 'served' Blair and Brown and will continue to pull the strings behind the scenes in a Corbyn led ca change as they say...

  13. If you are a Leaver, please select your choice below.

    I want Brexit so long as ....

    1) I’m not poorer.
    2) I’m not >20% poorer
    3) I’m not >40% poorer
    4) I’m not >60% poorer
    5) at any price.

    This is the real question.

    1. Nice one Chris.

      I think for me the real question has to be is our democratic system broken and if so, what will replace it?

      I have voted in every general election since 1974 but sadly never again.

  14. I would urge you not to give up. It’s when normal folk give up on the system that loonies have the opportunity to influence and take-over and that should scare us all.
    This has happened on the right (Tory brexit loons) and the left (momentum loons). If the normL folk are engaged in politics that will sweeze out the loons. So please stick with it. I’m thinking you’re not one of the loons.