Sunday 1 September 2019

I wouldn't have started from here, at least not now

Loyal readers may be surprised that I have resisted commenting on the unfolding Brexit saga/fiasco/train wreck/opportunity (delete as applicable) for some time. I felt that there wasn't much point in just saying "I told you so at the outset", though I did. I couldn't see how the Irish border issue could be solved from before the referendum and once the negotiation started the way the question was framed seemed to make it totally impossible. Then the "joint report" in December 2017 made it even clearer that we should never have accepted the EU's preposterous "sequencing" of the negotiations which meant that we couldn't talk trade until we were out, thereby requiring the backstop and definitively dooming the Irish border question to failure, since the Tories without the DUP would never have enough votes to carry the day, Labour having decided just to make mischief for the government at every turn, hoping to capitalise politically. I also repeatedly urged that we should walk away from the negotiations in an attempt to reset them, or at least give time for thorough no deal planning, which of itself would increase the chance of an agreement. Readers will know I've been saying all of this since at least 2017, so no point in repeating it. I also conveyed Yanis Varoufakis's point that the EU had set up the negotiation to fail, so our only options were to go for an EEA deal, capitulate or walk away*.

But I just can't resist any longer.

Threatening no deal now does, of course, absolutely make sense, as it just might bring enough movement from the EU side for a deal to be reached which could pass through Parliament. Otherwise there ain't a deal that can pass. I'm assuming that it would be necessary for a fair number of Labour MPs to support any deal to counter the awkward Tories and maybe absent DUP. Which could happen as apparently many Labour MPs from leave voting constituencies regret not voting for May's deal. Taking no deal off the table is in my view daft, as there would be no need for the EU to move while also no chance of getting anything through the Commons. But of course, it carries risk, for the country and for Johnson's government.

One assumes Dominic Cummings has gamed all the possible outcomes and decided many work for Johnson and his party. I personally think it was quite clever from a tactical viewpoint to prorogue Parliament and hold a Queen's Speech, if morally dubious, as this effectively brings on the vote of confidence that the opposition seem reluctant to hold. If Johnson loses either a vote of confidence or the vote on the Queen's Speech I doubt the opposition will be able to put together a government which can win such a vote either, so an election will follow.  It would suit Johnson for an early election to be forced on him, rather than calling it himself. In that election Johnson could be confident of squeezing the Brexit party and, on current polls, could be confident of winning. (But May thought the same). And, depending on what happens when Parliament briefly resumes, Brexit might happen during the campaign. (I'm not arguing that any of that is good, just commenting that it's smart tactically).

Many other foreseeable outcomes would also probably work ok for Johnson, though one outcome probably doesn't: if the election is shortly after a no-deal exit and there is a lot of chaos then the electorate might, entirely reasonably, blame the Tories. But there would be no reason to vote Brexit Party, so that would still help them. And outraged remainers might be more likely to vote LibDem than Labour. Overall such an election would probably swing on the Tories demonstrated incompetence versus fear that Labour's would be worse.

For what it's worth I agree with what Varoufakis said in 2017, that Merkel didn't come to the rescue of the Greeks and won't come to ours. So, while justifiable if two years late to threaten no deal I don't expect the EU to bend, though they might panic and offer more time. But as the most common reaction I hear is "just decide what to do and do it", more time isn't really relevant.

Perhaps the most amusing outcome would be for Parliament to insist that the government seeks a further extension and the EU holds to its stated position and refuses one. While I think that is unlikely it would be consistent with what they've said and entirely understandable. But they still want to sell us those BMWs.

Several months ago I lost what remaining sympathy I had for the Tory Brexiteers when they rejected May's deal, which I would have reluctantly taken and which I felt gave them 80% of what they ever said they wanted. And more recently, why on earth would they say they would not accept the deal, even if the backstop were removed? But then a dawning realisation hit me. It's really quite simple.Under the Withdrawal Agreement, even without the backstop, we are still subject to many EU rules and the whim of the ECJ during the transition. Do I trust them? Well you know I don't trust the Brussels eurocrats, but surely we could trust the Germans? Er, maybe. 50% of the time perhaps. But the French - could we and should we trust the French? Just asking myself that question made me laugh out loud. What on earth would make anyone think that we could trust the French? It's almost a rhetorical question.

So could the day still be saved?  Is the only choice between a poor deal or no deal? Maybe not.

As recently as June Lord Owen was still banging the drum for us leaving via the EEA stagepost**. Owen notes there is no support in the House of Commons for leaving with the available deal or without a deal, yet the single market is designed to include countries inside and outside the EU that are signatories in their own right to the European Economic Area (EEA) agreement. The Bruges Group, a euro-sceptic think tank founded in 1988, has proposed that the UK leaves the EU but remains a member of the EEA "participating provisionally" in the single market. The term "provisional" is important. Since 2014 Croatia has been a provisional member of the single market without ratification. So the UK could do the opposite: leave the EU on 31 October and become a non-EU member of the EEA. Now Owen has long advocated that the UK should assert it's legal right to remain in the EEA pro-tem, but the elegance of doing it this way is that the EU need not concede this claim but only grant the UK "provisional" status. The big advantage behind this way forward is that the provisional status would buy time for the UK and EU to negotiate a free trade deal, but the UK would have actually left and would not be subject to a Withdrawal Agreement in the interim.

This solution is beguilingly attractive and I don't know what the downsides are to even the most hard bitten euro-sceptic. The cost would probably be lower than the divorce payment for starters and could be linked to the completion of a free trade deal. But it may be that European Court would still hold sway over us. However, unlike the backstop situation, we could get out any time. The EEA solution answers some of the Irish border issues, as logically the situation would be no more complex than it is between Sweden and Norway.

But the big plus is the UK would not be a supplicant, as under Article 50. Owen says it would be a proper negotiation, not the take it or leave it approach built into Article 50. I guess this is because the UK would be starting with rights as well as obligations.

I've not read enough about the EEA option to know what the catch is, though I think it doesn't automatically sort out freedom of movement. But it's surprising that it's not had more debate. The Commons voted against it in the indicative votes but I'm not sure how informed that debate was. If it's good enough for Lord Owen, I'd buy it on trust.

And, after all the hot air on the Irish border, maybe I'm wrong in thinking that it's an insoluble Gordian knot. The Tory MP Greg Hands, a cabinet minister in 2015-16 as Chief Secretary to the Treasury, has published a report*** which says that the backstop isn't needed because the border issue can be fixed. Hands led an Alternative Arrangements Commission which went to Ireland several times and Brussels, Berlin and The Hague to explain its proposals, which include a series of "administrative and technological measures" all of which are already in place somewhere in the world today. That last bit is important as the EU has been quite pedantic about needing an available solution, which seems to me to be too restrictive given the particular and unusual features of the specific border. Now much of the solution proposed we've all heard of: a tiered trusted trader scheme similar to that used for the USA-Canada border to cut down on paperwork and checks at the border, for example. But there is one part of their proposal that I hadn't thought of, even though it is startlingly obvious. That is to have "enhanced economic zones" straddling much of the border, with tax breaks and a free trade zone to avoid duties. D'oh! That's so obvious! Indeed, why not, in the limit, make all of Northern Ireland and chunks of the Republic one enormous freeport? OK, that would mean controls on leaving the freeport and it might not be politically possible for that "border" to be in the Irish Sea between the North and mainland UK. But surely a version of it could work?

It would certainly avoid the much publicised problems in the immediate border area of free movement of people, goods and animals such as the farm through which the border anecdotally passes. I'd always felt the only logical way to resolve those local problems would be to agree on redrawing the border, but as logic would get nowhere in such an emotional minefield I viewed it as a non-starter, even for solving a number of very specific local issues affecting a limited number of people.

For what it's worth I believe Hands as well as Owen. These things CAN be solved, but not if the EU insist on the precise solution already having been demonstrated elsewhere and available in full on 1 November like some genie from a lamp, only if it is accepted that the solution will have to be bedded in and evolved over time. There's been a lot of huffing and puffing over the UK's "red lines" but, for me, it's the EU's red lines which have prevented agreement. After all, May conceded on most of hers. Which is just another example of the EU setting up the negotiation to ensure it fails, whether intentionally or not.

I understand and accept that the EU's prime objective is to protect (oh, irony!) Margaret Thatcher's brainchild, the single market. But their subsidiary aim, to demonstrate to other members that they should never contemplate leaving, is probably the bigger factor behind their intransigence. However, now they have a maverick and unpredictable UK PM who is prepared to fight dirty with them and with Parliament, whereas May tried to railroad Parliament while always giving way to Brussels. But time is now very short.

So, if asked what I would do now, it's just like the old Irish joke: "how would you get to X..... well, I wouldn't start from here". At least not now, though I would have started from walk out/no deal 2 years ago.

It's hard to put aside the risks of a sudden no deal exit. But if you can treat it as pure political theatre, it's fascinating.


* well, not repeating itin full but here are some of the relevant references:
25 Oct 2016, in Cold Front at Calais,  I referred to the EU as an "abusive and self-harming partner" behaving like a "psycopathic sado-masochist" and said "if we stay on terms that meant we didn't really leave they would know they could bully us forever"
17 Sept 2017, in Don't Walk Away Renee, I argued it was time to walk out of the negotiations in an attempt to get a proper, rather than sham, negotiation going. If that wasn't possible we wouldn't lose anything and would have more time to plan for the consequences.
8 December 2017, in Reasons To Be Cheerful - or Entangled?, a post laden with dodgy musical references on publication of the joint report on the first phase of the negotiations, I noted that the EU had succeeded in all its negotiating aims and that the Irish backstop risked leaving us entangled in Hotel California, checked out but unable to leave. And implied that the smirk on the face of the Taoiseach told you all you needed to know about how things were going.
Not much seems to have changed in the intervening 20 months though Varadkar has gone from smirking to shifty to looking a bit worried.....

**  David Owen's article Our EU escape route exists already. Europe set it up was in the Sunday Times on 23 June 2019.

*** Greg Hands has been widely publicised, for example "Here's why we don't need the Backstop (by an expert who REALLY knows) in the Daily Mail on 23 Aug 2019


3 comments:

  1. You know Phil the deal we have now with the EU is the best deal, just saying......

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    1. Well DM! I know you say that we don't know what Brexit people voted for but we do know one thing for sure: that 52% voted against that deal. No ifs or buts about that I'm afraid!

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  2. Did folks really go into the polling stations wanting a worse deal than they presently had? No they voted based on lies and misinformation for a worse deal whilst thinking they would be getting a better deal!

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