Brexit: washing whiter than Mogg

01/04/2018

Certainly, concedes Booker, "the reckless Anglo-French invasion of Egypt in 1956 to reclaim the Suez Canal brought home to us like nothing else that Britain was no longer one of the world’s great powers". As Washington threatened to destroy the pound and Moscow to "shower London and Paris with nuclear rockets", this forced us to make a swift and humiliating retreat.

But, when it comes to leaving the EU, we could have extricated ourselves completely from the EU (freeing ourselves at a stroke from three quarters of all its laws), by simply continued to trade much as we do now by remaining, alongside Norway, in the EEA.

When it comes to Rees-Mogg's idea of a "clean Brexit", though, it seems that ever more people these days are coming to view shutting ourselves out of unrestricted access to by far our largest export market, as potentially an even greater disaster.

Already we hear of many banks and other major industries making "contingency plans" behind the scenes to relocate significant parts of their operations to Ireland or the continent.

For pharmaceuticals, chemicals, aviation, the motor industry and many more, our exclusion from the EU’s fiendishly complex regulatory system, by choosing to leave not just the single market, but also the wider European Economic Area (EEA), will create difficulties that in many cases could prove insuperable.

To the irritation of many of his readers – who are quick to express their views on the comment section attached to the online version of his column, Booker has many times pointed out that most of these problems could so easily have been avoided, if we had chosen to do what most of us voted for in 2016.

We could have extricated ourselves completely from the EU (freeing ourselves at a stroke from three quarters of all its laws), but simply continued to trade much as we do now by remaining, alongside Norway, in the EEA. Our failure to think this through is confronting us with the reality of what that fatal misjudgement made inevitable.

However, as is beginning to emerge, even in the legacy media, even the middle-way option of a free trade agreement (FTA) will have much the "same impact as a 'no deal' in terms of border operations".

This comes from the British Ports Association, which represents 100 ports nationwide, with chief executive Richard Ballantyne declaring that, as far as his members are concerned, there is little difference between the options.

Even with and FTA, "new border controls on UK-EU trade are likely to be unavoidable and that delays at certain ports and important trade gateways are a distinct possibility".

Then, even if border checks in Britain are minimal, Westminster cannot guarantee that European ports will wave products past customs to ease trade. "For EU ports with UK links, full frontier checks, including customs and environmental health standard checks, could have a severe impact upon the UK", Ballantyne says.

Neither is the BPA on its own. The UK Major Ports Group (UKMPG), which represents all the leading ports in the country, is raising similar concerns, calling for "the best possible access to the single market, with minimum disruption to the movement of goods and services at UK borders".

They emphasise that changes to the car industry could badly affect the ports. If supply chains become more domestic and the volume of exports and imports subsequently falls, ports at Bristol, the Humber, Liverpool, Tilbury and Southampton could suffer, as they are relatively dependent on the automotive trade.

As we reported earlier, research by the Chartered Institute of Procurement and Supply has found that one in seven EU companies with UK suppliers have moved part or all of their business out of Britain "to reduce their exposure to any complications resulting from Brexit". Now, the institute warns of "an imminent collapse in the UK's supply chain following Brexit".

Needless to say, there is still an element of fantasy in the response. For instance, the BPA is urging the government to deliver on its frictionless promise by striking "a pragmatic deal with the EU on both customs and regulatory recognition".

It will support anything "that allows both British and European businesses to get their goods across borders as quickly as possible". Ports should "negotiate for the best, plan for the worst, declaring that increased friction to trading routes was "inevitable in any event".

And just to underline the scale of the problem, we are remined that more than 10,000 trucks pass through the UK's roll-on, roll-off ports every day and 390,000 live lambs cross the Irish land border annually. To keep trade flowing, it says, the government must ensure that "any necessary checks be carried out away from the frontier". There, of course, we have the rub. Even if we can organise deferred checks in the UK – which will be possible to an extent – there is no guarantee that EU Member States will be – or can be – so accommodating.

Furthermore, as we keep pointing out, for many sectors the prospect of border controls is the least of their problems. Whether pharmaceutical, chemical, vehicles, aviation or food products, or many more, for the foreseeable future, export will not be permitted.

Even after all this time, these issues have yet to be fully (or at all) understood by either politicians or media. The implications of the UK becoming a third country have simply not registered.

Within industry, though, the message seems to be getting through. According to the Observer (making up for lost time after its extravaganza last week), more than a fifth of manufacturing firms are planning to lay off workers to cope with the costs of Brexit, according to a survey that suggests the sector is already losing business.

Worryingly, eleven percent say that they have already lost contracts, while more than half of manufacturing companies (58 percent) said they planned to increase prices to offset Brexit. Some 46 percent said they had already increased costs to customers in the wake of the Brexit vote. Some manufacturers, we are told, are said to be trying to find suppliers in Britain to replace lost contracts overseas, known as "inshoring".

These, however, are but dress rehearsals for the real thing and, as the implications of settling for an FTA become better known, it is inevitable that there will be a political backlash. The main questions relate to form it will take and how it will be triggered.

Looking at the Brexit timescale, there are several possibilities. The first major trigger point may occur at any time during the transition period, if enough MPs come to understand quite how dangerous an FTA will be.

Probably the only option available to the government will be to see an extension of the transition period, whence we would see the extreme, Rees-Mogg faction splitting off from the Conservative Party, in protest. The result could then see a realignment of centre MPs from both parties, leaving a "moderate party", possibly under new leadership. This would then push for the Efta/EEA option.

The next major trigger – as I see it – will be after the general election in 2022, held after the electorate have experienced the disaster of an FTA. Then I can see a hung parliament and the formation of a four-way coalition (including the SNP), with the government this time pushing to rejoin the EEA, via Efta.

The difference in the scenarios lies between whether there is action before or after disaster strikes, but in each event the outcome takes us closer to an EEA solution. Without that, there is only darkness.

The closer we get to Brexit, the greater the chances of political stresses building. But, if the disaster is not headed off at the pass, then there would seem to be a very high possibility of permanent ruptures in current political alignments, centred on or around the general election.

And out of that, what also seems sure is that the likes of Rees-Mogg will, politically, be dead meat. His "clean Brexit" will be seen for the madness that it really is and, if there is any justice, he will become another sad little political has been. The humiliation will be all his.