Brextremists Sour May's Fudge

The Tory Brextremists could not contain themselves for long. Within 24 hours of finding themselves having to swallow May's Brexit fudge, or risk being completely sidelined along with the DUP, they rushed into print, and on to TV screens to undermine the deal that May had done with the EU, over their heads, and which surrendered ever one of the previous Brexit red lines. But, the fact that this again shows the dissembling nature of the Tories, and particularly their Brextremist wing, as they seek to claim that every statement means the opposite of what it actually says, should show to the EU, just how little they can trust their interlocutors on anything. If the European Council has any sense, having read and listened to the comments by Gove, Davis, Raab and others over the weekend, they will refrain from going ahead with Stage 2 negotiations until such time as May can prove that she and her government are prepared to proceed on the basis of both the spirit and the letter of the deal she signed up to last week.

On Monday, last week, Theresa May was forced to go to Barnier with a deal that involved Britain agreeing to pay £40 billion, as its Brexit Bill, for all those long-term commitments it had previously signed up to; it agreed to a two-year transition period after March 2019, during which Britain would effectively still be in the Customs and Union and Single Market, and continue to pay its £10 billion a year membership fee, and agreed to accept the continued jurisdiction of the ECJ, and during which there would be continued free movement; in order to resolve the question of the Irish Border, it recognised the need for Northern Ireland to remain in the Customs Union and Single Market.

The EU would have accepted that deal, and so would Ireland. It was all set to be signed, until the DUP tugged on May's reins, and told her that she could not sign, because it meant that Northern Ireland would be treated differently to the rest of Britain, with Northern Ireland being tied to the regulations within the EU rather than in the UK. The EU and Ireland were quite happy to leave Britain stewing until after Christmas, until Britain could come up with a deal that satisfied both Northern Ireland and the EU. The DUP, and the Brextremists might want to delude themselves into a belief that that was not the case, and that the EU, needing to do a deal, had made some concession, but it is just that, a delusion. The EU held firm, knowing that Britain needed to move the process forward by Christmas or face a New Year, in which businesses started moving their operations rapidly outside Britain. The fact, is that May and the DUP blinked.

In order to pacify the DUP, and facing the obvious demands from the SNP, and Scottish Tories, as well as from the Welsh Parliament, and the London Mayor, that if Northern Ireland could remain in the Customs Union and Single Market, so could they, May made the final capitulation to th EU, and agreed that not only would Northern Ireland maintain full regulatory alignment with the EU, but so too would the rest of Britain. The DUP got what nominally they had been asking for, but not on the basis they were hoping for. In other words, the DUP had been asking for no divergence between the regulatory regime in Northern Ireland and the rest of Britain, which they now got, but they were not intending for that to be on the basis of Britain as a whole, thereby agreeing to remain in the Customs Union and Single Market, in all but name, which is what May' deal amounts to. But, given the situation, they could not withhold support.

If they had done so, there were only two options. One is that May's government would have fallen, and an election would be likely to bring a Corbyn government to power, as Labour now stands 8 points clear of the Tories. The other, and more likely option would be that, having already capitulated across the piece to the EU over the terms of Brexit, May would have steamrollered over the DUP and the Brextremist wing of her own party, and formed a parliamentary coalition on the deal with Labour, the SNP, and the pro-Europe majority of her backbenches, which would have sidelined the DUP and Brextremists completely. In fact, its in that direction that the EU have been pushing May all along.

The Brextremist wing of May's own party also recognised that reality, and so sang along through gritted teeth with May's tune, all along trying to present things as though the EU had been desperate for a deal, that they had made concessions, and other such nonsense. But, those Brextremists also know something else, which is that we have seen the same process of delusion, fudge, and dissembling by May and the Tories on a whole range of issues, and they expect this to be exactly the same.

In the election campaign, having produced the disastrous manifesto commitment to introduce the Dementia Tax, May was forced to backtrack on it, and effectively disown it. But, having done so, she then made herself look ridiculous by coming out to say that “Nothing has changed, nothing has changed”! And, only a few weeks ago, having committed Britain to entering into a two-year transition period, during which Britain would remain in the Customs Union and Single Market, and continue to pay into the EU budget, and accept the jurisdiction of the ECJ, under pressure from the Brextremists, she then came to Parliament to try to claim that what she had said, was actually not what she had said, that the transition period would, in fact, be an implementation period, that required that the full deal had already been done, and so on.

The delusion and dissembling of the Tories is intermingled with their incompetence. The incompetence of Davis and the other Brexiteers must have seemed to the EU like they were negotiating with a baby over ownership of candy. That was manifest in the performance of of Davis at the Brexit Select Committee last week. His performance provoked Paul Merton, on “Have I Got News For You” to describe him as the thickest person he has come across. David for months has been proclaiming that the government had done detailed studies of the effect that Brexit would have on different sectors of the UK economy. He even described these analyses as “Impact Assessments”. Then when Parliament demanded to see these detailed impact assessments, the government tried to deny parliament that right. It led to the Speaker threatening to hold Davis in contempt of Parliament. Eventually, David provided a number of heavily redacted documents, leading to Parliament demanding the release of the original documents. Eventually, we find out that the 57 detailed sectoral impact assessments do not, in fact exist!

The dissembling nature of Davis' response is shown by the fact that, rather than saying from the start that no such documents exist, he let Hillary Benn ask him if such documents existed for several spheres, to which he said no, before, admitting that the answer was going to be no for any sector he might be asked about! Davis clearly misled Parliament in his earlier statements about their being 57 such impact s on the effect of Brexit, when, in fact, he knew that there were none. Labour should demand that he resign immediately. The importance of such impact assessments is clear. If you are going to know whether a particular form of Brexit deal is acceptable or not, you need to know what effect it will have on the UK economy. To say, as the Brextremists are now doing, that you can't have an impact assessment until you know what the Brexit deal is, is nonsense. The whole point of impact assessments is to facilitate decision making, by examining the consequence of various scenarios. We now know that a full year and a half after the referendum, the government not only has no impact assessments of what various forms of Brexit might have on the economy, but the government itself does not know, and has not even discussed what the end situation of any Brexit might be. They can't do that, because the government itself is split down the middle on what they want that end state to be.

So, now we have Dominic Raab, David Davis and others coming out and claiming that regulatory alignment with the EU does not mean regulatory alignment at all, but means regulatory divergence, by which the UK will feel free to choose whatever regulations it so chooses, and simply say to the EU that these regulations are more or less the same, and aim at the same outcome! That clearly is not what regulatory alignment means, and if that is what the Brextremists want to impose on May as the real meaning of the deal she signed last week, the European Council should walk away from it, and demand that May clarify her position, making Britain wait for Stage 2 negotiations to start until next year, when a firmer form of words can be agreed. The importance of that can be seen from Michael Gove's article, where he states that any agreement that May enters into now, could be simply ripped up by an incoming government. In other words, an incoming Tory government set on a bonfire of regulations, could simply rip up any such agreement, and go its own way, in creating whatever set of regulations it chose, so that the true meaning of regulatory divergence as opposed to regulatory alignment is clear. There clearly is no basis of any kind of long term agreement between the UK and the EU, unless any such deal is signed into international law, by a binding Treaty, and enforceable in international courts, which again makes clear the importance of the continued role of the ECJ.

This also highlights the distinction that the Brextremists have been busy trying to confuse and conflate between a free trade deal, and membership of a customs union, and single market. A free trade deal is a deal established between two countries, or blocs that enables free trade between them in a series of defined goods, and/or services. It does not cover goods and services not specified within the deal. It does not mean, therefore, that there is no border between the parties to such a deal. For example, Canada has recently signed a free trade deal with the EU, for a series of goods, but that does not at all mean that there is no border around Canada, or around the EU, for Canadian goods going one way, and EU goods going the other! It does not mean that there is not border inspection of goods moving in either direction. It simply means that no import duties are imposed on those goods covered within the deal. In fact, it does not mean that other forms of import restriction do not apply, for example, a requirement to meet common standards and regulations, and for which continued border monitoring is required.

The problem for Britain in this regard is quite clear. Unless there is regulatory alignment, meaning that Britain has to have the same regulatory framework as the EU for goods and services, there can be no open border in Ireland. Otherwise, chlorine washed chicken from the US could flood into Britain, head across to Northern Ireland, where it is then processed, or repackaged and sent into the Irish Republic, before being sent out in bulk to the rest of Europe. The EU clearly are not going to accept such a situation. But, a similar thing applies in relation to free trade. Suppose country A, in Africa produces commodity X, at €1 per kilo. It is currently subject to a 40% import tariff by the EU. The EU produces commodity X at a price of €1.30 per kilo. Now Britain wants a free trade deal with the EU. But it also wants to strike up its own deals with other countries. So, Britain imports large quantities of X from A, at €1 per kilo. It adds a profit margin of 10%, so that it sells X for €1.10, and immediately floods the EU with X, undercutting the EU internal market price by €0.20 per kilo, without having to have lifted a finger. No one in their right mind in the EU, is going to agree to such an arrangement.

If Britain wants a free trade deal with the EU, it will have to essentially agree to remain within the Customs Union, so that this kind of subversion of the internal market is not possible. And economically, that is inevitable too. If you are BMW, and you sell Minis into the EU, from Cowley, for example, you will need to have regulatory alignment with the EU, because otherwise, you will not be able to export your Minis to the EU, whether the UK is in or our of the Customs Union and Single market. For Canada, whose main export market is the US, it makes sense to align your regulations with the US, not the EU, but the greatest part of UK exports is to the EU. The Brextremists claim that 70% of UK trade is conducted on the basis of WTO rules, but that is not true. Not only does the UK conduct 40% of its trade with the EU, but also because the EU has itself established free trade deals with a large number of other countries, and trading blocs, the UK's trade with these other countries is also covered by those EU free trade agreements, and not by WTO rules. In fact, around 70% of UK global trade is covered by the EU, or the free trade deals negotiated by the EU. When Britain leaves the EU, it will then have to laboriously renegotiate all of those free trade agreements, assuming that any of these other countries want to sign a free trade deal with a UK economy of just $2 trillion as opposed to the free trade deal they have with the $14 trillion EU economy!

If you are TESCO, you can say to Farmer Giles, “We will buy every potato you can produce, but the condition is that you don't sell potatoes to Fred Bloggs corner shop”, or you might say, “but you must always sell them to us at 10% less than you sell them to anyone else”. If you are the EU, the very size of your economy means that you can do a deal with say, New Zealand that says, we will take all of the lamb you can produce, provide you don't sell it to Britain, or that says, provided you sell it to us for 10% less than you sell it to Britain. And, a whole series of such variants exist, such as we will buy all the lamb you can produce, provided you give us privileged access to sell all of our cars to you, and so on. As a relatively small, and diminishing economy, Britain will lose out in global trade from all such economies of scale. 

The DUP are, in fact, the epitome of this delusion and dissembling on the part of the Brextremists. They understand the importance of continued access to this free trade, but they want to delude themselves into believing that they can continue to have that access without actually being in the Customs Union and Single Market. The DUP Brextremism wants to be outside the Customs Union and Single Market, and yet wants to retain an open Irish border because that is essential to the economic interests of all those Northern Irish farmers whose goods go back and forth across that border! It is the typical position of have cake and eat it that has pervaded Brextremism from the beginning, and its ultimate source, is the arrogant, colonial era mentality that still believes that Britain is a significant global power, to whom the world owes a living, and to whom it will come begging to do deals. The last week has exposed that delusion clearly.

The Brextremists still want to cling to the delusion that they can pull the wool over the eyes of the EU with vague words, and promises. That was never going to happen as, the Stage 2 negotiations firmed up the heads of terms agreed last week, but now that the Brextremists have shown their hand by coming out already to say that they put no store by the words on the paper signed by May last week, there is all the more reason, for the EU leaders when they meet to reject May's ploy, and dissembling. Her fudge is already crumbling before her eyes.