Brexit: give a dog a bone

04/10/2016

So it's The Times political cartoon that tells the story. We know we're leaving and we know that Mrs May has said she intends to use Article 50. There's little more to add.

In the meantime, when it comes to Mrs May telling us that Parliament "will be free… to amend, repeal and improve any law it chooses", I think readers need to be acquainted with the OECD's Code of Liberalisation of Capital Movements.

Originally introduced in 1961, it has much the same effect as the EU's free movement of capital and, like the EU's treaty requirement, this is binding for the 34 OECD countries, including twelve G20 members.

The UK is a full member of the OECD, which puts us in an interesting position when we finally leave. Whether or not we relieve ourselves of the EU treaty obligations, therefore, we will essentially be bound by the same provisions.

The interesting thing here is that when, in 2008 Iceland suspended free movement of capital, using Article 43 of the EEA Agreement, that was not enough. The Icelandic Government also had to apply for a derogation from the code in order to be fully covered.

This brings into high profile the increasing globalisation of regulation. Removing one level simply exposes another.

As I wrote in Flexcit, one can compare Britain with the victim in a horror movie, trapped alive in an as-yet-unburied coffin. Having broken through the lid in a bid to escape, he finds to his consternation that there is another lid over the first.

This "double lid" in respect of capital movement is, on the one hand, the EU treaty obligations and, on the other, the OECD code. The main effect of breaking through the EU/EEA legislative layer is to reveal the second "lid".

Come the day when Mrs May leads us out of the EU, therefore, Parliament will be very far from free… to amend, repeal and improve any law it chooses. Globalisation is here to stay and Parliament had better get used to it. It's had it bone, and there is going to be little for the second course.