Richard North, 18/06/2018  

Quite what we are supposed to make of Mrs May's claims of financing additional spending on the NHS from the "Brexit dividend" I don't honestly know.

On the face of it, it is an expression of extraordinary political cynicism by a prime minister who has ceased to have any concern for the truth, but it could just as easily be the act of a deluded woman who has lost touch with any semblance of reality. Either way, this a worrying development – this is not a politician in whom we can have any faith.

My best guess is that we're on the receiving end of a "look squirrel" ploy. Faced with the intractable problems thrown up by Brexit and growing disillusionment with her handling of the process, Mrs May has decided to employ the classic magician's trick of misdirection, diverting attention to the NHS. She then goes further, seeking to create positive linkage between the issues.

That the figure on offer is better than the headline claim on the side of the infamous red bus is also no coincidence. The effect (or the intention) is to restore positive vibes to Brexit, trying to overcome the loss of confidence that has been building up over the months.

It took not more than a few minutes, however, for commentators to deny that there is a Brexit dividend. Even the most optimistic of forecasts suggest that leaving the EU will come at a net overall cost and, if we fail to get a deal from the EU, losses to the economy could run to hundreds of billions of pounds.

By 2023/4, therefore, when Mrs May reckons to be pumping over £20 billion extra a year in real terms to the NHS, the Treasury will be running on air, just trying to finance existing expenditure commitments. Any increased funding will have to come from taxation or borrowing.

If what we are seeing is Mrs May abandoning any attempt to keep her claims in line with anything approximating the truth, then her action would be entirely in keeping with the way the entire Brexit debate is going. Protagonists no longer seem to feel obliged to stick to the fact, and are indulging in crude propaganda in order to make their points.

Another example of this is my one-time friend and colleague Owen Paterson, known famously for declaring that "only a madman would leave the market". Now, in a complete volte face, he is asserting that: "Unless the EU changes its tune substantially any EU trade deal on offer looks as if it will be thoroughly inferior to the WTO Free Trade Option".

Declaring that "it is time that Parliament understood this", he calls in aid a tawdry article in Brexit Central written by none other than Patrick Minford, who in turn refers us to a staggeringly dishonest polemic published by his group, the Economists for Free Trade (EFT), under the heading: "Why a world trade deal exit from the EU will be best for the EU".

What is so difficult for us, though, is that the document relies so many half-truths, errors and outright lies that, properly to dissect it would take multiples of the 14 pages devoted to the original.

Focusing very tightly on one small part of the argument, we have EFT telling us that, when it comes to the UK and EU's trade relations after Brexit, "WTO law is very clear". There can be no discrimination in standards laid down by the EU or the UK. Thus, once a "domestic" standard has been imposed it must be generalised to all foreign countries’ exporters, without discrimination between them.

After Brexit, we are told, companies which want to export to the EU will have to match EU standards and, when they do match these EU standards, "they cannot be discriminated against" – all of which sounds eminently reasonable.

Some standards", the EFT continues, "concern 'behind the border' actions, like the testing of product quality". But this is airily dismissed with the comment that, "if a company wants to export its products to the EU and the EU insists on some such testing or other internal procedures, then the company must follow them in order to sell to the EU market".

What might not be obvious to some, though, is that there is a lie embedded in these statements. Given a "no deal" arrangement, much of this testing is not "behind the border" but at the border. And this is precisely why the WTO option is potentially so damaging. Thousands of consignments daily, which hitherto would have crossed unhindered into the territories of the EU Member States will, post-Brexit, have to be checked.

In some cases, this may only amount to documentation checks but even these alone are enough to cause substantial hold-ups. But, in other instances, detailed inspections and testing will have to be carried out, routinely taking hours and, in respect of some of the testing, days or even weeks.

To get the flavour of how the EFT seeks to deceive, though, we have to dart around the publication, where we happen upon the claim that, where it comes to border checks, "the median developed country lets 98 percent of border traffic go through unchecked … and the remaining two percent checked is cleared within a day".

This, we have already been led to believe, is a situation that pertains globally, on WTO terms, where the EFT relies on spin from a Telegraph journalist on the basis of a comment said to have come from Roberto Azevedo, Director General of the WTO.

The essence of this is that we are supposed to believe that "about half of the UK's trade is already on WTO terms with the US, China and several large emerging nations where the EU doesn't have trade agreements". This, it was asserted that, "it's not the end of the world if the UK trades under WTO rules with the EU".

What was quite deliberately excluded here (and subsequently conceded) is that countries such as the US and China (and many others) do have trade agreements with the EU. What they lack are formal Free Trade Agreements. But where the likes of the US (and China for that matter) have multiple sectorial agreements in areas of mutual concern, the cumulative effect is to serve the same function as FTAs.

In the instance where the UK seeks to trade with the rest of the world, where its relations are bound only by the provisions of WTO rules, we would lack all-important Mutual Recognition Agreements on conformity assessment. Which enables huge amounts of trade in manufactured goods to pass without checks at the borders.

Here, though, we find embedded the ultimate dishonesty. According to the EFF, "leaving without a trade deal does not imply 'walking away' from the Brussels negotiations". There will, they say, "be many other aspects of the new EU-UK relationship that will need to be agreed – eg, airline landing rights".

So, we have a situation here where "no deal" doesn't mean "no deal". Instead, the EU is supposed to allow us to cherry-pick sectorial deals, to cover all those areas where we need agreements in order to facilitate trade – such as MRAs on conformity assessment, cooperation on aviation safety, type approvals of vehicles, and much else.

In the meantime, the UK has resiled on its commitment on budgetary contributions, has abandoned any attempt to maintain regulatory alignment and is insisting on "maximum facilitation" to avoid a hard border with Ireland. there is "no need to negotiate a trade deal with the EU and, hence, the onerous 'backstop'’ requirement falls away".

An assertion that, under these conditions, the EU is going to roll over and agree anything with the UK, simply stretches credulity to breaking point. Yet, only a handful of people are going to penetrate the layers of the EFT arguments and expose them for what they are – specious nonsense.

That, sadly, will not be enough to stop the likes of Owen Paterson – who really should know better – from making absurd statements, and no amount of analysis will turn the tide and dissuade charlatans such as Minford making thoroughly dishonest arguments.

To that extent, the rot starts at the top. There is no credible case to be made that, over the next decade or more, there will be a Brexit dividend. This is not merely a matter of opinion. The overwhelming preponderance of evidence supports the argument that Brexit will impose substantial cost burdens.

For Mrs May then to make claims on the basis of this non-existent "dividend" is more than just an example of episodic dishonesty. By her action, she is legitimising overt political lying at the very highest level. And, if it is acceptable for the prime minister to lie in such fashion, political discourse has sunk to a level where anything goes.

In days gone by, politicians at least made the effort to pretend they believed their own lies. But when such blatant distortion becomes the norm, politics as we know them have ceased to function. The expediency that drives Mrs May to rely on misdirection becomes a wholly destructive force, from which there is no recovery.

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